REASONS FOR JUDGMENT

1                     This is an appeal from a Federal Magistrate who dismissed an application by Mr Khoa Dang Nguyen.  The application was for annulment of Mr Nguyen’s bankruptcy.  Mr Nguyen also sought an order from the Federal Magistrates Court that a caveat which had been placed over property owned by him at 16 Dalgety Street, Dandenong, be removed. 

2                     The circumstances in which the application came to be made to the Federal Magistrates Court can shortly be summarised.  On 28 May 2008, Commonwealth Securities Limited obtained judgment in the Magistrates Court of Victoria against Mr Nguyen in the sum of $15,963.89 plus amounts for interest and costs.  That judgment was not satisfied.  On 3 August 2008 a bankruptcy notice was, according to the evidence, served on Mr Nguyen. 

3                     There is then evidence which Mr Nguyen disputes (a dispute which I do not need to resolve for the purposes of this appeal), that on 30 September 2008, he telephoned the solicitors then acting on behalf of Commonwealth Securities Limited to raise issues relating to the bankruptcy notice.  On 1 October 2008 he agreed to make payments of the money owing by instalments.  On 6 October 2008 he agreed verbally to a caveat being lodged over the property to secure the debt.  On the same day, that is, 6 October 2008, the solicitors confirmed by letter Mr Nguyen’s agreement to the lodging of the caveat and provided him with documentation whereby he might acknowledge the charge. 

4                     For reasons that do not emerge from the evidence, nothing then appears to have occurred until 20 October 2008 when a creditor’s petition was served.  On 20 November 2008, a sequestration order was made by the Federal Magistrates Court in the absence of Mr Nguyen.

5                     It was common ground that, on 13 January 2009, Mr Nguyen made contact with the trustee appointed to his estate.  He attended the trustee’s office on 20 March 2009.  He was advised and reminded of the requirement that he lodge a statement of affairs. After some delay, he complied with that requirement. 

6                     The application to the Federal Magistrates Court to annul the sequestration order was not made until 20 November 2009.  The application was heard by O’Dwyer FM on 7 December 2009 and was dismissed.  Mr Nguyen’s principal argument before the Federal Magistrate was that he had not been served with the bankruptcy notice or the creditor’s petition.  He went so far as to tell the Magistrate that the deponent to the affidavits of service of those documents had committed perjury.

7                     The Federal Magistrate noted that the deponent of the affidavits, Mr Daryl West, had not been required to attend for the purposes of cross-examination on his affidavits, and the Magistrate said that he could identify no reason why he should not accept the affidavits and the truthfulness of their contents.  His Honour also noted that the relevant provision of the Bankruptcy Act 1966 (Cth), namely, s 153B(1), was a discretionary provision.  He determined that even if he had otherwise been satisfied that there was a proper basis for setting aside the sequestration order, he would not have been minded to do so, given that Mr Nguyen had delayed  making an application for annulment for at least 10 months after he became aware that the sequestration order had been made.  His Honour also noted that there was no challenge by Mr Nguyen to the underlying judgment debt. 

8                     Mr Nguyen waited for some six months before making application to this Court for leave to file and serve a notice of appeal out of time.  On 11 June 2010, Goldberg J ordered that time be enlarged and the present appeal was filed. 

9                     The only ground of appeal was that Mr Nguyen had not been served with the counterpart bankruptcy notice, a certified extract of a court order, creditor’s petition and supporting affidavit.  In the course of his submissions this morning, Mr Nguyen restated the essential arguments that he had advanced in the Federal Magistrates Court.  He asked that the hearing of the appeal be adjourned so that Mr West could be required to attend before the court for cross-examination and he disputed conflicting evidence of service and subsequent conduct by him which was suggestive of his knowledge of the bankruptcy notice and the sequestration order.  He said that he had come to the Federal Magistrates Court uninformed and unprepared.  He just wanted to know how to annul his bankruptcy.  He agreed that the Federal Magistrate’s reasons disclosed no appellable error of law.

10                  I have some sympathy with Mr Nguyen’s predicament.  He has been confronted with a demand for interest payments and fees by his trustee which far exceed the debt which led to the bankruptcy notice being issued and the sequestration order subsequently being made.  To some extent he is the author of his own misfortune.  He has failed to act in a timely way in relation to many procedural matters which he accepts should have been pursued once he was aware of the fact that a bankruptcy notice had issued and a sequestration order made. 

11                  The duty of this Court on appeal is not, however, to enter into such matters.  It is to determine whether there has been any error demonstrated on the part of the Federal Magistrate which warrants the intervention of this Court. I have carefully examined the Federal Magistrate’s reasons and I can detect no such error.  Accordingly, the appeal should be dismissed with costs.

Associate:

Dated:         6 October 2010