Penlan Consulting Pty Ltd v Wright

[2010] FMCA 731

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PENLAN CONSULTING PTY LTD v WRIGHT [2010] FMCA 731

BANKRUPTCY – Sequestration order – person incorrectly identified by creditor as debtor – sequestration order set aside.

Bankruptcy Act 1966 (Cth), ss.52, 153B
Federal Magistrates Act 1999 (Cth), ss.102, 104

Vaucluse Hospital Pty Ltd v Phillips (2006) 5 ABC(NS) 330; [2006] FMCA 44

Applicant: PENLAN CONSULTING PTY LTD

Respondent: ANGELA RAEWYN WRIGHT

File Number: SYG 78 of 2010

Judgment of: Barnes FM

Hearing date: 10 September 2010

Delivered at: Sydney

Delivered on: 10 September 2010

REPRESENTATION

Solicitors for the Applicant: CCSG Legal Pty Ltd

Respondent: No appearance

ORDERS

1. The sequestration order made against the estate of Angela Raewyn Wright on 13 August 2010 be set aside.

2. Order 2 made by a registrar of this court on 13 August 2010 requiring the applicant creditor’s costs to be paid from the estate of the respondent debtor be vacated.

3. The creditor’s petition presented by the applicant on 18 January 2010 be dismissed.

4. It having been conceded by the petitioning creditor that Angela Raewyn Wright is not and was not indebted to it and was wrongly named in the Local Court proceedings that led to the judgment that formed the basis for the Bankruptcy Notice and in the Creditor’s Petition it is directed that the entry on the National Personal Insolvency Index against the name of Angela Raewyn Wright that refers to the Creditor’s Petition in which the petitioning creditor was Penlan Consulting Pty Ltd (ITSA reference NSW50473659) be removed from the Index.

5. The applicant notify the Official Receiver of the orders made today by close of business on Friday 10 September 2010.

6. The applicant notify the court of the address for Angela Raewyn Wright by close of business on Monday 13 September 2010.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 78 of 2010

PENLAN CONSULTING PTY LTD

Applicant

And

ANGELA RAEWYN WRIGHT

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. This is an application filed on 19 August 2010 by Penlan Consulting Pty Ltd (Penlan) which seeks orders that the sequestration order made against the estate of Angela Raewyn Wright on 13 August 2010 be “set aside pursuant to section 153B(1)” of the Bankruptcy Act 1966”.  Penlan was the petitioning creditor. 

2. The application is made on the basis that Angela Raewyn Wright is not a debtor of Penlan.  She was incorrectly named as a defendant in the proceedings in the Local Court of New South Wales that led to the judgment that formed the basis for the Bankruptcy Notice, in the Bankruptcy Notice and also in the Creditor’s Petition.  In other words, a person who was not indebted to the petitioning creditor was made bankrupt by a sequestration order made in her absence.  The application is made by Penlan on an ex parte basis. 

3. As explained in the affidavit of Chris Trieu, the solicitor of the applicant, sworn on 17 August 2010, the correct debtors are a Mr and Mrs Wright, but the Mrs Wright who is the correct debtor has a different middle name.  The evidence is that the applicant creditor intended that Angela Teresa Wright be named as a defendant in the original Local Court proceedings and in the Bankruptcy Notice and Creditor’s Petition. 

4. Interestingly, there is evidence before the court, by way of affidavits, of service on “Angela Raewyn Wright” in relation to the Bankruptcy Notice and Creditor’s Petition. However it is conceded that the person served was not “Angela Raewyn Wright”. According to the solicitor for the applicant, it was only after the sequestration order was made that it was discovered that in the initial Local Court proceedings and in all other documents the incorrect middle name had been used for Mrs Wright who is said to be a debtor. He explained that this had occurred because an owner’s property inquiry had listed a number of persons with the same first and last name. While this showed that the Mrs Wright said to be a debtor (Angela Teresa Wright) was a co-owner of the property which matched the title search, the name Angela Raewyn Wright appeared directly above that name. It appears that the name Angela Raewyn Wright was incorrectly inserted in the statement of claim instead of the name Angela Teresa Wright.

5. In these circumstances, as Angela Raewyn Wright is not a debtor of Penlan, it is clearly appropriate that the sequestration order should not remain in place. 

6. The application is brought as an application for an annulment. However, as discussed with the solicitor for the applicant, it is apparent that this is a case in which it is more appropriate that the court of its own initiative (see s.104(3) of the Federal Magistrates Act 1999 (Cth)) treat this application as a review of the exercise of power by a registrar under s.102(2) of that Act.

7. There are circumstances in which it is more appropriate to deal with the matter by way of a review of the sequestration order such as to result in an order setting aside the sequestration order.  The factors relevant in relation to whether to set aside a sequestration order rather than to annul the bankruptcy are considered at length in Vaucluse Hospital Pty Ltd v Phillips (2006) 5 ABC(NS) 330; [2006] FMCA 44.

8. I am satisfied that this is a case meriting review of the sequestration order having regard to the fact that Angela Raewyn Wright should never have been made bankrupt by the Creditor’s Petition in question. The proceedings were filed and prosecuted in a timely fashion. I have had regard to the circumstances which led to the sequestration order and the fact that this Ms Wright is not a debtor of the petitioning creditor.

9. When the matter was first before the court, I raised with the solicitor for the applicant the fact that there would be an entry on the National Personal Insolvency Index maintained by the Insolvency & Trustee Service of Australia that revealed that there had been a creditor’s petition in relation to Angela Raewyn Wright.  It was conceded that there was a need to ensure that this entry was removed as this Ms Wright was not properly the subject of the Creditor’s Petition. 

10. Tendered in evidence before me is a copy of an email from the Information and Registry Office of ITSA which advises that entries on the National Personal Insolvency Index can be removed if the court directs removal of a particular entry, mentioning the particular name and providing the reason.

11. I intend to make an order to that effect and also to provide a copy of my judgment to ITSA which indicates that the entry should be removed because Angela Raewyn Wright was at no time a debtor of the petitioning creditor, Penlan. Hence it is appropriate that the reference to the Creditor’s Petition be removed from the National Personal Insolvency Index.

12. Out of an abundance of caution, I observe that this is, in effect, a de novo hearing. The applicant has conceded that Angela Raewyn Wright is not and was not at any time a debtor of it. On that basis, the requirements of s.52 of the Bankruptcy Act 1966 (Cth) are not met and it is properly conceded by the applicant that the sequestration order should be set aside.

13. In addition, I consider it appropriate to set aside the order for the payment of the creditor’s costs by Angela Raewyn Wright and to dismiss the Creditor’s Petition, as well as make a direction for removal of the entry from the National Personal Insolvency Index against the name Angela Raewyn Wright. 

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Barnes FM

Date:  23 September 2010