Kiprovski v Ace Office Furniture Pty Ltd

FARRELL J: 1 This is an application which was lodged on 16 February 2017 by Mr Daniel Kiprovski seeking to have set aside a bankruptcy notice, BN211456, issued at the request of the respondent, Ace Office Furniture Pty Limited, on 20 January 2017 in the sum of $62,542.41. 2 The debt on which the bankruptcy notice relies is the aggregate of amounts payable under certain orders made by Judge Driver in the Federal Circuit Court of Australia on 19 February 2016 in proceedings SYG 2792/2015. The orders require Mr Kiprovski to pay damages to Ace Office Furniture pursuant to the Australian Consumer Law s 236, being Sch 2 of the Competition and Consumer Act 2010 (Cth) in the respective sums of $3,269.43, $13,750, $12,682.50 and $5,500 (in relation to certain invoices said to have been issued by Mr Kiprovski), $24,000 (in additional storage and occupancy costs in relation to furniture ordered to be distributed by Ace Office Furniture) and interest up to judgment in the amount of $3,340.48. Judge Driver also ordered that Mr Kiprovski pay Ace Office Furniture's costs of and incidental to those proceedings on an indemnity basis. 3 In proceedings SYG 2792/2015, Ace Office Furniture claimed that: (1) It sells and distributes office desk chairs produced by a China based company (IGO); (2) Mr Kiprovski provided consultancy services to Ace Office Furniture whereby he solicited orders for IGO products on behalf of Ace Office Furniture; (3) Mr Kiprovski represented to it that he had obtained certain orders from clients for IGO products; and (4) Based on those representations, Ace Office Furniture placed orders with IGO pursuant to which IGO manufactured products for which there was in fact no client, Ace Office Furniture rented additional premises in order to store those products when they were shipped to it by IGO and it paid commissions to Mr Kiprovski pursuant to invoices issued by him. 4 It appears that Mr Kiprovski did not attend the Federal Circuit Court at the time that the matter came on for hearing. The orders were therefore made in the absence of Mr Kiprovski. 5 In Mr Kiprovski's application to this Court, he has sought orders setting aside the bankruptcy notice on the basis that the debt claimed in it does not exist or ever existed. In his supporting affidavit, Mr Kiprovski makes a number of claims, which include that the claims made by Ace Office Furniture in the Federal Circuit Court were fraudulent and an abuse of process. 6 Mr Kiprovski has been put on notice of today's hearing and I am satisfied that that occurred pursuant to a letter dated 21 July 2017, sent by Ace Office Furniture's solicitors to Mr Kiprovski. That letter attached the orders which were made in his absence on 20 July 2017. Those orders established a timetable for the provision of his evidence and for the parties to provide written submissions ahead of the date set for the hearing, which is today. That Mr Kiprovski received this letter is clear, due to the email which he sent in response to Colleen Hall, an employee of Ace Office Furniture's solicitors. 7 In an email sent to the Court on 28 September 2017 at 5.44 am (which appears to forward an email of the same date sent at 7.41 am), Mr Kiprovski claimed (among other things) that the bankruptcy notice and statement of claim had to be served on him directly but were not. As pointed out by Ms Whitaker, counsel for Ace Office Furniture, it is plain that Mr Kiprovski did receive a copy of the bankruptcy notice, since the "orders sought" part of the application which he filed on 16 February 2017 bears a handwritten endorsement of the words "served on me on 03/02/2017" after the words "bankruptcy notice". While Mr Kiprovski has attended one case management hearing before me in relation to the application to set aside the bankruptcy notice and he has filed two affidavits, his email of 28 September 2017 indicates that he does not recognise these proceedings "in anyway, shape or form". 8 I have been advised by counsel for Ace Office Furniture, that when Mr Kiprovski did not appear today at 10.15 am, her instructing solicitor contacted Mr Kiprovski at the mobile phone number set out in his application. Mr Kiprovski answered the call and stated his intention not to appear today. 9 At today's hearing, counsel for Ace Office Furniture tendered a search of the Federal Circuit Court's file which indicates that Mr Kiprovski has taken no action to seek to set aside the orders made by Judge Driver in his absence. This is despite this matter being touched on at a case management hearing before me at which Mr Kiprovski was present. 10 During today's hearing, I noted that I would take into account the recent decision of the High Court in Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28 in which the High Court considered the circumstances in which a bankruptcy court exercising jurisdiction under s 52 of the Bankruptcy Act 1966 (Cth) will "go behind" a judgment in order to be satisfied that the debt relied upon by the petitioning creditor is truly owing. In general, the Court will do this more readily where there has not been a contested hearing and the judgment has been obtained in the absence of the debtor. Thus, if I do make orders setting aside the bankruptcy notice, Mr Kiprovski will have an opportunity to seek the exercise of the Court's discretion under s 52 in his favour if Ace Office Furniture petitions for a sequestration order. 11 In all of the circumstances, I am satisfied that Ace Office Furniture's application pursuant to r 30.21(1)(a)(i), that Mr Kiprovski's application be dismissed, should be acceded to. I am also satisfied that it is appropriate to award indemnity costs against Mr Kiprovski and in favour of Ace Office Furniture, in relation to the case management hearing held on 20 July 2017 and of today, due to Mr Kiprovski's failure to attend either hearing. I therefore order that: (1) The application filed on 16 February 2017 be dismissed. (2) Mr Kiprovski pay the respondent's costs in relation to the case management hearing on 20 July 2017 and of and incidental to today on an indemnity basis. (3) Otherwise, Mr Kiprovski pay the respondent's costs on the ordinary basis. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell.