NAB Limited v Satchithanantham (No.2) [2009] FMCA 229 (11 March 2009)

Last Updated: 25 March 2009

FEDERAL MAGISTRATES COURT OF AUSTRALIA

NAB LIMITED v SATCHITHANANTHAM (No.2)

[2009] FMCA 229

BANKRUPTCY – Bankruptcy petition – previous unsuccessful challenge to bankruptcy notice – no reason for looking behind judgment debt – no good reasons for declining to make sequestration order – sequestration order made.

Bankruptcy Act 1966 (Cth), ss.41(7), 52(2) Federal Magistrates Court Rules 2001 (Cth), r.13.03C(1)(e)

NAB Limited v Satchithanantham [2008] FMCA 1464 National Australia Bank v Satchithanantham [2009] NSWSC 21 Satchithanantham v NAB Ltd [2008] FMCA 940 Satchithanantham v National Australia Bank Ltd [2009] FCA 198 Satchithanantham v NAB; Thambiappah v NAB [2008] NSWSC 1097 Satchithanantham v National Australia Bank [2008] NSWCA 168 Satchithanantham v National Australia Bank Ltd [2008] HCASL 586

Applicant:

NATIONAL AUSTRALIA BANK LIMITED (ABN 12 004 044 937)

Respondent:

THAMBIAPPAH SATCHITHANANTHAM

File Number:

SYG 2118 of 2008

Judgment of:

Smith FM

Hearing date:

11 March 2009

Delivered at:

Sydney

Delivered on:

11 March 2009

REPRESENTATION

Counsel for the Applicant:

Ms N Bearup

Solicitors for the Applicant:

DibbsBarker

Counsel for the Respondent:

No appearance by or on behalf of the Respondent

ORDERS

(1) A sequestration order be made against the estate of THAMBIAPPAH SATCHITHANANTHAM.
(2) The applicant creditor’s costs, including all reserved costs, be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).
(3) Note that the date of the act of bankruptcy is 1 July 2008.
(4) The applicant must within 2 days give a copy of this order to the Official Receiver in Sydney.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY

SYG 2118 of 2008

NATIONAL AUSTRALIA BANK LIMITED (ABN 12 004 044 937)

Applicant

And

THAMBIAPPAH SATCHITHANANTHAM

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. This is a creditor’s petition filed on 15 August 2008 by the National Australia Bank Limited (“the Bank”) against Mr Satchithanantham. The petition was adjourned several times, pending the outcome of an appeal by Mr Satchithanantham from my previous judgment, in which I refused his application to set aside the Bank’s bankruptcy notice (see Satchithanantham v NAB Ltd [2008] FMCA 940).
2. On the last occasion that I adjourned the petition, which was 22 December 2008, Mr Satchithanantham appeared in person. He received a copy of my written order, adjourning the petition for hearing today at 10.15 am. I therefore have no doubt that he has been on notice of today’s listing, and that he was aware of the fact that the Bank was likely to seek to proceed with the petition in his absence if he did not attend.
3. The reasons for my previously adjourning the petition were explained in my judgment given on 15 October 2008 (see NAB Limited v Satchithanantham [2008] FMCA 1464). Although I was not satisfied that Mr Satchithanantham had any prospects of success in his grounds of opposition to the petition, I considered that it was appropriate for him to be allowed to pursue his appeal in relation to the bankruptcy notice before the determination of the petition.
4. The hearing of the appeal occurred before Edmonds J on 27 February 2009. I am informed that Mr Satchithanantham was in attendance on that day, when his Honour dismissed the appeal and indicated that he would publish his reasons on 11 March 2009 at 9.30 am, which is today. I am informed that Mr Satchithanantham did not attend before Edmonds J today, and there was no communication to that Court nor to the Bank’s legal representatives to explain his absence.
5. Today in this Court, there was no appearance by Mr Satchithanantham between 10.15 am and 11.00 am, when I am now delivering judgment. He has not appeared, nor given any explanation for his absence to the Bank’s legal representatives or to the Court. I consider that it is appropriate to proceed in his absence, pursuant to Federal Magistrates Court Rules r.13.03C(1)(e).
6. I am satisfied that the debt relied upon in the petition, being the $10,000 costs order made by James J on 12 December 2007, remains outstanding in its entirety. I am satisfied that Mr Satchithanantham committed the act of bankruptcy relied upon in the petition, when he failed to pay that debt before the expiry of the time provided under the bankruptcy notice, as automatically extended by s.41(7) of the Bankruptcy Act 1966 (Cth) up to and including the date upon which I refused Mr Satchithanantham’s application. That date was 1 July 2008. I am satisfied as to the other matters required to be established under the Bankruptcy Act and Rules before the making of a sequestration order.
7. Although Mr Satchithanantham has not attended today to present submissions in support of his notice of opposition, I have considered all the grounds set out in his notice, including additional contentions which are made in his three affidavits filed in support. In my opinion, none of the contentions made in opposition to the petition have merit. Essentially most of the contentions repeat the arguments which I addressed in relation to the bankruptcy notice, and rejected. All of my reasoning has been left undisturbed by the judgment of Edmonds J (see Satchithanantham v National Australia Bank Ltd [2009] FCA 198).
8. Moreover, as his Honour’s judgment notes at [12], Mr Satchithanantham has been unsuccessful in all of his litigation subsequent to my judgment in July 2008. His application for special leave to the High Court against the costs order of James J was refused on 10 December 2008 (see Satchithanantham v National Australia Bank Ltd [2008] HCASL 586). His motion in the Court of Appeal, attempting again to appeal from James J’s order, was refused by Campbell JA on 14 July 2008 (see Satchithanantham v National Australia Bank [2008] NSWCA 168). His appeals against Macready AsJ’s judgments, which dismissed his two proceedings against the Bank, were dismissed by White J on 26 September 2008 (see Satchithanantham v NAB; Thambiappah v NAB [2008] NSWSC 1097). The lack of substance in those claims is therefore clearer on the evidence now before me than it was last year. I do not consider that the existence of any of that litigation, or of the claims which Mr Satchithanantham attempted to pursue in them and might attempt in the future to pursue again, provides grounds for me to refuse to make a sequestration order today.
9. Mr Satchithanantham’s wife had a partial success in her opposition to the Bank’s possession suit in a judgment given on 6 February 2009 by McCallum J (see National Australia Bank v Satchithanantham [2009] NSWSC 21). I am informed that the Bank has not appealed, but that Mrs Satchithanantham has foreshadowed an intention to appeal. However, as has now been made abundantly clear in numerous Supreme Court judgments, Mr Satchithanantham had, and has, no legal interest in the subject matter of those proceedings.
10. Mr Satchithanantham’s evidence in support of his notice of opposition to the petition is more extensive in one respect than it was in his application to set aside the bankruptcy notice. He now tenders the full transcript of the proceedings before James J on 11 and 12 December 2007, which led to the making of the costs order upon which the petition is based. His submissions also make more clearly his contention that James J miscalculated the Bank’s legal costs orders when arriving at the $10,000 costs order. I consider that it is appropriate for me to address this further evidence.
11. As I explained in my earlier judgment, James J dismissed an appeal by Mr Satchithanantham against a decision of Malpass AsJ, which refused Mr Satchithanantham’s second attempt to be joined as a party in the possession suit against his wife. His orders awarded costs against Mr Satchithanantham, which he quantified at $10,000 “on an indemnity basis” and made payable within 28 days. His Honour’s reasons for making the costs order, and for its calculation, can be found at page 13 of the transcript for 12 December 2007:
    • HIS HONOUR: It is very rough but I have arrived at that figure by adding together $4398.45, which was the solicitor’s assessment of costs, the solicitor’s costs up to 10 December of $2530 and counsel’s memorandum of fees of 6 December. An estimate was given by the solicitor that further costs would be between $1400 and $3600. That figure was, in fact, exceeded largely due to the fact that argument on the applications extended over two days rather than one.
    • I accept that the costs claimed have all been incurred. On the other hand, I consider that I should give some recognition to the fact that the costs claimed exceed the estimate that was communicated to Mr Satchithanantham and that it was not his fault that the matter was reached only late in the day of 11 December and the proceedings had to be adjourned part heard to the following day. Selecting a rough figure I have selected $10,000 for costs.
12. An understanding of his Honour’s calculation requires consideration of the affidavit of the Bank’s solicitor, which was before his Honour. From this, it is clear that his Honour took into account the Bank’s costs solely relating to the appeal from the decision of Malpass AsJ, which was commenced on 19 October 2007, and did not include any amount of costs relating to earlier or other applications by Mr Satchithanantham. The affidavit showed that the Bank had incurred solicitors’ fees and disbursements between 19 October 2007 and 10 December 2007, totalling $4,398.54 excluding GST, and also incurred barrister’s fees for work between 26 October 2007 and 20 November 2007 of $2,530 including GST. It is these two amounts which should be understood as being referred to by James J in the first sentence of the transcript. In addition, as the transcript indicates, his Honour took into account an estimate of up to $3,600 additional costs after 10 December, which had been foreshadowed to Mr Satchithanantham in a solicitor’s letter of 10 December 2007. Mr Satchithanantham had, therefore, been on notice that the Bank would be seeking a costs order of up to $10,528.54.
13. His Honour received evidence of the actual costs of the Bank incurred over the period between 10 and 12 December 2007, which had been greater than originally estimated due to the fact that the proceeding involved an adjournment to a second day. These additional actual costs were on a piece of green paper, which his Honour received as an exhibit, but which is not before me. It apparently showed that the Bank’s total actual costs exceeded $13,000. However, his Honour arrived at his fixed costs amount of $10,000 by reference to the amounts of costs foreshadowed to Mr Satchithanantham, thereby heavily discounting the Bank’s actual costs notwithstanding that costs were awarded on an indemnity basis. On the evidence now before me, I am affirmatively satisfied that James J’s $10,000 costs order was not based on any error of fact, as is contended by Mr Satchithanantham in his opposition to the present petition.
14. I am therefore not satisfied that any of the additional evidence put before this Court by Mr Satchithanantham in opposition to the petition advances any of his grounds which challenge the debt owed to the Bank. I remain of the opinion that he has not raised any reason for looking behind the judgment upon which the bankruptcy notice and petition are based.
15. The only other new contention which I need to address is a contention by Mr Satchithanantham that he has offered to pay ‘the alleged judgment’ by instalments. However, there is no evidence that his offer was ever accepted by the Bank, and indeed Mr Satchithanantham says that it was rejected. Moreover, Mr Satchithanantham has made no attempt to make any payments by way of instalment, as is now established by the affidavits of debt. I do not consider that these circumstances provide any reason for the Court to exercise its discretion under s.52(2) of the Bankruptcy Act to decline to make a sequestration order today.
16. Mr Satchithanantham has not put before the Court any evidence suggesting that he might be able to pay his debts, nor that there is any other good reason for declining to make a sequestration order, or for further adjourning the petition. I therefore propose to make a sequestration order today.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Smith FM

Associate: Lilian Khaw

Date: 19 March 2009