Federal Court of Australia

Aquamore Credit Equity Pty Ltd v Maroon (No 2) [2024] FCA 14

ORDERS

THE COURT ORDERS THAT:

1.    The estate of Nadia Maroon be sequestrated under the Bankruptcy Act 1966 (Cth).

2.    The applicant creditor’s costs be paid from Nadia Maroon’s bankrupt estate in accordance with the Bankruptcy Act 1966 (Cth).

3.    The applicant provide a copy of these orders to the Official Receiver within two business days.

THE COURT NOTES THAT:

1.    The date of commission of the act of bankruptcy by Nadia Maroon is 17 December 2021.

2.    A consent to act as trustee signed by Sean Magnus Wengel has been filed under section 156A of the Bankruptcy Act 1966 (Cth).

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

STEWART J:

Introduction

1    Before the Court is a creditor’s petition for the sequestration of the estate of Nadia Maroon. Ms Maroon is the mother of Christopher, Allan and Michael Maroon whose estates were sequestrated by orders made by me on 13 November 2023. At that stage, no sequestration order was sought against Ms Maroon, but such an order is now sought.

2    Further background to the circumstances giving rise to the debts underlying the creditor’s petitions, and the proceedings, appear from my reasons for judgment published as Aquamore Credit Equity Pty Ltd v Maroon [2023] FCA 1399. Familiarity with those reasons is assumed in what follows.

Application for an adjournment

3    Since shortly after the proceeding was commenced, Ms Maroon was represented in it by Donna Moscardo of Moscardo Lawyers. Ms Moscardo filed a notice of address for service and a notice stating grounds of opposition to the creditor’s petition in February 2022.

4    After the sequestration orders were made against Christopher, Allan and Michael, on 30 November 2023 by email to my associate, the applicant’s solicitors requested a listing of the matter in order to seek a date for a final hearing of the creditor’s petition against Ms Maroon. The email noted that the creditor’s petition will lapse on 18 January 2024.

5    At a case management hearing on 4 December 2023, Ms Maroon was represented by Mr Eardley of counsel who was instructed by Ms Moscardo. At that hearing, I listed the hearing of the creditor’s petition against Ms Maroon for 16 and 17 January 2024. Mr Eardley told me that he was going to see Ms Maroon the following day or the day thereafter. He also said that she was unwell, but he did not know how well or unwell she was (T10:20). Mr Eardley also said that he and Ms Moscardo would not be available on the contemplated dates in January 2024, and he was also not available on 19 December 2023 which I had also offered him (T12:34). I ordered that Ms Maroon file and serve short submissions in opposition to the creditor’s petition by 8 January 2024.

6    On 3 January 2024, Ms Moscardo filed a notice of ceasing to act in accordance with Form 8 of the Federal Court Rules 2011. Attached to the notice of ceasing to act was a notice of intention to cease to act in accordance with Form 7. That notice is dated 13 December 2023. Rule 4.05(1) provides that if a party’s lawyer terminates their retainer, the lawyer must serve on the party a notice of intention of ceasing to act in accordance with Form 7.

7    From the facts stated in the previous two paragraphs, I infer that Mr Eardley and Ms Moscardo met with Ms Maroon shortly after the case management hearing on 4 December 2023 and, amongst other things, advised Ms Maroon of the listing of the matter for final hearing on 16 and 17 January 2024. In any event, the knowledge of Ms Maroon’s lawyers of the listing is to be imputed to her. Also, I infer that Ms Moscardo acted as she was required to do under r 4.05(1) and served her notice of intention to cease to act on Ms Maroon. On that basis, Ms Maroon was aware from since at least about 13 December 2023 that Ms Moscardo was going to, or was at least likely to, terminate her retainer.

8    On 15 January 2024, my associate wrote to the parties, including to Ms Maroon’s personal email address recorded in the notice of ceasing to act, pointing out that Ms Maroon had not filed and served submissions by 8 January 2024 as required and reminding the parties that the matter was listed for final hearing the following day.

9    Late in the afternoon of 15 January 2024, my associate received a reply from Ms Maroon’s email address, although the reply itself was said to be from Melissa Borovali who described herself as Ms Maroon’s daughter. The email stated that Ms Maroon’s representatives ceased to act on 3 January 2024, it had been impossible to arrange alternative representation in the first two weeks of January, Ms Maroon had received documents that day that she could not understand and she cannot proceed without the advice of a lawyer, and that Ms Maroon is very ill and cannot attend court. The email asked the Court to adjourn the hearing so that Ms Maroon can arrange further legal advice and representation.

10    My associate immediately replied to Ms Borovali saying that any application for an adjournment would have to be made at the hearing the following day, supported by evidence.

11    Approximately 15 minutes before the scheduled listing of the matter on 16 January 2024, my associate received an email stating “Please see attached”. Attached to the email was a document apparently signed by Ms Maroon stating the following (as written):

On 6 January 2024 (10 days ago) I received an email from my lawyers informing me that they had now ceased to act for me in the Federal Court proceedings. (attached is a copy of the Notice of Ceasing to Act).

There has been no opportunity for me to engage further legal advice and representation given that this has occurred during the holiday period.

It was only after receiving an email from the court at around 10am on 15 January 2024 (yesterday), that I became aware that the matter was previously before the court on 4 December 2023. I had no knowledge of that day and what occurred on that day until receiving the transcripts yesterday from the Court. I had no knowledge of the orders made that day which included submissions to be filed by me (the respondent) by 8 December 2024.

I am currently ill with symptoms of Pneumonia and unable to attend Court on the 16 and 17 of January 2024.

I kindly ask the court to Adjourn the matter on 16 and 17 January 2024 so that I can arrange further legal assistance and attend to my health.

12    When the matter was called, there was no appearance by Ms Maroon.

13    Mr Koch of counsel, who appeared for the applicant, relied on r 30.21(1)(b)(i) in pressing for the matter to proceed notwithstanding Ms Maroon’s absence. No doubt that attitude by the applicant was driven at least in part by the fact that the creditor’s petition will lapse within a few days.

14    There is no proper application for an adjournment before the Court – an email to the judge’s chambers is not a proper means of making such an application. Nevertheless, I will consider what Ms Maroon has said in the document she sent shortly before the hearing by email. On considering that document, I am not satisfied that there is any justifiable basis to adjourn the hearing. In doing so, the matters that should be considered in the context of an adjournment application include: (a) the explanation for the adjournment; (b) the detriment to other parties; and (c) the detriment to the court and other litigants – this is not an exhaustive list. See Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175.

15    The first difficulty is that there is no evidence in an admissible form supporting the adjournment application. The emailed document is not an affidavit.

16    In any event, what is said in that document falls hopelessly short of justifying an adjournment. The obvious inference that Ms Maroon had notice of the withdrawal, or at least likely withdrawal, of Ms Moscardo in the middle of December 2023 is not dealt with. No details of what efforts were made to find alternative representation are given. It is said that Ms Maroon did not know of the listing of the matter for final hearing before 15 January 2024, but the obvious inference that her lawyers told her of that listing is not dealt with. Nor is it explained how or why I should ignore that her lawyers’ knowledge of the listing is imputed to her. Hopelessly inadequate details of Ms Maroon’s apparent illness are given, and they are not backed up by any medical evidence.

17    In the circumstances, I consider that the basis presented for the requested adjournment is particularly weak.

18    Against that, the detriment to the applicant in adjourning the proceeding is obvious. The creditor’s petition would lapse and the applicant would have to start again with the process of a bankruptcy notice and so on. That would cost time and money. The creditor’s petition has been delayed for several years while the Maroons pursued proceedings in the Supreme Court of New South Wales. Further delay would be unduly prejudicial.

19    In short, the hearing must proceed.

The grounds for sequestration

20    I am satisfied that the formal requirements that enliven the power to order the sequestration of the estate of Ms Maroon have been met.

21    The bankruptcy notice BN254214 dated 22 September 2021, in the prescribed form, was obtained in respect of final judgments that, taken together, amount to far more than the statutory minimum of $5,000 prescribed by s 41(1) of the Bankruptcy Act 1966 (Cth).

22    When the bankruptcy notice was issued, a period of more than six years had not elapsed since each of the judgments in question: Bankruptcy Act, s 41(3).

23    The bankruptcy notice had attached to it copies of the two judgments: Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144; 225 FCR 458 at [35].

24    The bankruptcy notice was served on Ms Maroon on 24 September 2021, which was within six months of it being issued: Bankruptcy Regulations 2021 (Cth), r 10.

25    Ms Maroon committed an act of bankruptcy for the purposes of s 40(1)(g) of the Bankruptcy Act by failing to comply with the bankruptcy notice by 17 December 2021, being the time fixed for compliance with the notice.

26    At the time of the act of bankruptcy, Ms Maroon was either personally present or ordinarily resident in Australia, and in any event had a dwelling-house in Australia: Bankruptcy Act, s 43(1)(b)(i) and (ii).

27    The creditor’s petition was presented within six months of the date of the act of bankruptcy and relates to a debt exceeding $5,000: Bankruptcy Act, s 44(1)(a) and (c).

28    The creditor’s petition was accompanied by an affidavit of search pursuant to r 4.04(1)(a) of the Federal Court (Bankruptcy) Rules 2016 (Cth).

29    The creditor’s petition has not lapsed because by orders made by Markovic J on 7 October 2022 it was extended under s 52(5) of the Bankruptcy Act by the maximum period of 24 months until 18 January 2024.

30    The applicant has filed and served affidavits of final search and affidavits of final debt in accordance with r 4.06 of the Bankruptcy Rules.

31    In the circumstances, the applicant has established the matters required by s 52(1) of the Bankruptcy Act and it “has a prima facie right to a sequestration order”: Toyota Finance Australia Ltd v Youssef Berro [2022] FCA 497 at [33].

32    In the absence of any appearance by Ms Maroon, the matters raised in her notice stating grounds of opposition are not pressed and need not be dealt with. The applicant has established the grounds for the making of a sequestration order and there are no reasons for the exercise of a discretion against making such an order. In any event, for the sake of completeness, I recorded that for the reasons set out in the applicant’s submissions dated 15 January 2024 I am satisfied that the grounds of opposition would have no merit.

33    For those reasons, the estate of Ms Maroon should be sequestrated.

Associate:

Dated:    16 January 2024