“Initially Mr McClymont argued that the creditor’s petition had not been verified as required by the Federal Circuit Court (Bankruptcy) Rules 2006. However, it is clear that the petition was properly verified as required by the rules and affidavits of debt and search were both filed before the registrar for the purposes of the making of the sequestration order.
Mr McClymont ’s main argument is that the petitioning creditor is not owed the debt claimed in the creditor’s petition. Alternatively, if it is owed, the existence of the debt has not been proved to his satisfaction.
There appears to be no dispute that Mr McClymont incurred a credit card liability with Westpac Banking Corporation. The petitioning creditor’s evidence is that Westpac provided a credit card facility to Mr McClymont in January, 2008. On 17 December, 2012 the credit card facility was closed and at that time $33,707.29 was owed by Mr McClymont to Westpac.
On 3 January, 2013 Westpac wrote to Mr McClymont and gave him notice that the debt which he owed Westpac had been assigned to the petitioning creditor. The letter provided:
Notice is hereby given to you that Westpac Banking Corporation ABN 33 007 457 141 trading under its own name and as Bank of Melbourne and/or Challenge Bank, including its subsidiaries and related bodies corporate (individually and collectively referred to as “Westpac Banking Group”) has assigned to ACM Group Ltd ABN 86 127 181 097 all its legal and beneficial right, title and interest in and to the Debt.
Accordingly, you are hereby directed to pay the Debt to ACM Group Ltd or as it may in writing direct. Please ensure all the payments are made directly to ACM…
For the purposes of this Notice of Assignment, the Debt means any amount owing to become owing by you to Westpac Banking Group in connection with the above account on or after the date hereof including all interest, credit and other charges payable by you to Westpac Banking Group pursuant to the Agreement between you and Westpac Banking Group and (where legal proceedings have been commenced against you and a Court Judgment has been obtained against you) includes the balance of any Judgment Debt also obtained.
Soon after receiving notice of the assignment from Westpac, Mr McClymont received correspondence from the petitioning creditor. He responded to that correspondence and required the petitioning creditor to provide him with “BONA FIDE PROOF (in good faith and without deceit) your claim is lawful and valid”. He required the petitioning creditor to complete what is described in his affidavit as a “CREDITOR DISCLOSURE STATEMENT”.
The petitioning creditor did not engage in Mr McClymont ’s demands but rather instituted proceedings in the Magistrates Court of Queensland at Longreach. Mr McClymont purported to defend those proceedings by filing a conditional notice of intention to defend on 30 August, 2013. In that document his grounds of defence are stated as follows:
1. The First Defendant JOHN DAVID MCCLYMONT , the person is not me, my name is John David McClymont , I am a living breathing being, a sovereign Australian.
2. The interest rate claimed at 13% per annum in later 21.49% and 13.49% – this is a breach of the Usury, Bills of Lading, and written Memoranda Act 1902, No 43 “must not exceed eight per cent per annum”
3. THE ASSIGNMENT – Item 10 – “the bank assigned “ – ACM Group has purchased the debt, so ACM please provide the wet ink original contract.
4. I sent ACM a letter on 10th July, 2013 – attached
5. I would like ACM to present the wet ink original copy of the contract that they have with the first defendant and John David McClymont .
Mr McClymont sought further and better particulars of the petitioning creditor’s claim and that request was answered by a letter from the petitioning creditor’s lawyers to Mr McClymont dated 26 September, 2013. He was provided with a copy of the relevant statements of his account for the period between 18 July, 2012 and 17 October, 2012. He received a copy of the notice of assignment dated 3 January, 2013 (to which I referred earlier).In the course of the hearing before me Mr McClymont confirmed that he had indeed established a credit card facility with Westpac and that the account had been closed. He also confirmed that when the account was closed there was an outstanding balance owed by him to Westpac. Mr McClymont agreed that he had not paid Westpac for the indebtedness that he had to it when the account was closed.
Mr McClymont argued that because Westpac had (presumably) sold his debt to the petitioning creditor, it had already been paid what it was owed and Mr McClymont ’s debt had been discharged. He argued that Westpac should account to him for the amount it received for the debt from the petitioning creditor because it was Mr McClymont’s signature on the credit contract that created the asset that Westpac sold or assigned to the petitioning creditor. Having created the asset by his signature, it was his asset and Westpac was not entitled to sell it.
Mr McClymont does not accept that he could be indebted to the petitioning creditor when he has not entered into any contract with it. His demand to see the “wet ink original contract” with the petitioning creditor reflects his belief that he is only indebted to Westpac and that Westpac has been paid by the petitioning creditor.
The difficulties with Mr McClymont ’s case are obvious. Absent a contractual prohibition upon assignment, Westpac was entitled to assign the benefit of its contact with Mr McClymont to the petitioning creditor. It was not Mr McClymont ’s signature to the credit contract that created the asset that Westpac assigned to the petitioning creditor. It was the bundle of rights bestowed upon Westpac by the contract with Mr McClymont , the most significant of which was perhaps, the right to be paid. Payment by the petitioning creditor to Westpac upon the assignment (assuming that occurred) was not a repayment of Mr McClymont ’s debt to Westpac, but rather was the consideration for the assignment between Westpac and the petitioning creditor. Such an assignment is perfectly legitimate and has long been the subject of legislative provision. The assignment is effective against the debtor once notice of it has been given to the debtor. Thereafter, only the assignee can give a good discharge for the debt: s.199 of the Property Law Act 1974 (Qld):
(1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice—
(a) the legal right to such debt or thing in action; and
(b) all legal and other remedies for the same; and
(c) the power to give a good discharge for the same without the concurrence of the assignor.
Upon the assignment, the assignee becomes entitled to sue, in his or her own name, to enforce the rights which are the subject of the assignment. Until notice of the assignment is given to the debtor, the assignment operates in equity only, but the assignee may nonetheless maintain an action to enforce the rights assigned: Thomas v National Australia Bank Ltd  QCA 525;  2 Qd R 448.
The petitioning creditor was perfectly entitled to commence proceedings to enforce the rights assigned to it from Westpac. This ground of opposition to the petition must fail.
Mr McClymont also advanced several other arguments. I deal with these in no particular order.
Firstly, he submitted that he has “forwarded an instrument directing an Electronic Funds Transfer (EFT) to set-off the Credit Card Statement balance”. During the hearing, Mr McClymont elaborated on this submission. He referred to certain numbers, codes, and financial events purportedly involved in an EFT process. I failed to understand McClymont ’s submissions in this regard. However, what is apparent from the evidence is that on or about 5 September, 2012 Mr McClymont gave a cheque to Westpac for the then outstanding balance of his credit card account ($31,445). The cheque was drawn upon an account styled JD & LL McClymont with the Westpac Bank. The cheque appears to have been signed by Mr McClymont . It appears to have had the words “EFT ONLY FOR DISCHARGE OF DEBT” and “WITHOUT RECOURSE” written on it, although when that was written on it is not entirely clear. The cheque was not honoured when presented for payment because, according to the evidence, the account upon which it was drawn was closed. Copies of relevant parts of Mr McClymont ’s Westpac account statements verify those transactions.
Mr McClymont argues that because the cheque had the words “EFT ONLY” on it, the credit to his account (which occurred when the cheque was deposited to his account) could not be reversed. He referred to various provisions of what was described as the “Civil Code”. It was difficult to follow his argument in that respect, particularly because the “Civil Code” to which he referred was apparently part of the laws of the United States of America. He suggested that those laws applied here in Australia. He did not support his argument that those laws applied in Australia with any authority. It is difficult to see that they do.
In any event, it is difficult to see how his argument that the cheque, marked as it was, could discharge Mr McClymont ’s liability to Westpac if it was dishonoured upon presentation.
Mr McClymont also suggested that by delivery of a promissory note he had been able to expunge his liability to Westpac and therefore to the petitioning creditor. His argument in that regard was entirely misconceived.
Mr McClymont made several submissions in regard to the order of the Magistrates Court of Queensland at Longreach. These included that the Magistrates Court is “not a chapter 3 court”, that Westpac was not included in the application as an “originating contractor”, and that there was “possible collusion” in those proceedings. The arguments are, however, misguided. There is nothing to suggest that the Magistrates Court lacked jurisdiction under the Magistrates Courts Act 1921 (Qld) to make the order that it did against Mr McClymont . Nor is there evidence of the alleged “possible collusion”. I have already addressed the issue of Westpac’s position in relation to the contract.
Mr McClymont ’s remaining arguments include the submission that ACM purchased an “ultra vires” debt from Westpac and also that he is “not named in any alleged agreement that is purported to have been entered into between Respondent and Applicant”. As I indicated above, there is evidence that the benefit of the creditor-debtor relationship between Westpac and Mr McClymont has been assigned to the petitioning creditor. Certainly notice of such an assignment has been given.
Mr McClymont does not demonstrate any proper basis for resisting the making of a sequestration order against his estate. The petitioning creditor has proved an act of bankruptcy and has complied with the more formal matters to be attended to under s.52(1) Bankruptcy Act 1966. I am satisfied that the debt is still owing.
The order of the registrar was properly made. Consequently, this application for review of that decision should be dismissed with costs.
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