Bankruptcy - reviewing a sequestration order

From Legalpedia Qld
Jump to: navigation, search

A sequestration order is an order made by a court which makes a person bankrupt. This factsheet sets out the process for applying for a review of a sequestration order made by a Registrar of the Federal Circuit Court.

Before you decide whether to challenge a sequestration order by seeking a review, we suggest you consider the consequences of bankruptcy (see the Australian Financial Security Authority's website).

In this factsheet:

  • "creditor" means the person who is owed money and brought the initial creditor's petition.
  • "court" means the Federal Circuit Court.

Review

Most creditors petitions filed in the court are heard by a Registrar. The decision of a Registrar can be reviewed by a judge of the court if either party asks for this to happen.

An application for review is heard by way of a hearing de novo. This means that the judge will listen to the matter again from the beginning. The judge will then decide whether all the requirements for the making of a sequestration order are met. This means that to be successful in a review application you will need to have grounds to oppose the creditor's petition. See QPILCH's factsheet Bankruptcy - Opposing a creditors petition for more information on possible grounds.

Time limits

An application for review of a sequestration order must be made within 21 days from the date of the initial order. While you can ask the court for an extension of time, there is no guarantee that one will be given. If you are out of time to make an application to review a sequestration order, you may like to think about whether you have grounds to apply for an annulment of your bankruptcy (see QPILCH's factsheet Bankruptcy - Applying for annulment).

Costs

Even if you are successful in your application for review of the sequestration order, you may still be required to pay the legal costs of the other party, particularly if the creditor can show that the grounds on which you opposed the creditors petition during the application for review could have been raised when the creditors petition was originally heard by the Registrar.

How to apply

An application for review of a sequestration order can be made orally by asking the Registrar for their decision to be reviewed at the hearing where the sequestration order was originally made or by making a written application afterwards.

To make a written application you will need to complete the following forms:

Application

When you are preparing the Application for Review, you will be the Applicant and the creditor who brought the original creditors petition will be the Respondent. Under the Part D 'Orders sought' section of the form, you will need to set out the orders you would like the Judge to make. For example:

  1. The orders made by Registrar Smith on 1 January 2015 in proceeding BRG00/2015 be set aside under section 104(3) of the Federal Circuit Court of Australia Act 1999 (Cth).
  2. The creditors petition be dismissed.
  3. There be no order as to costs.

Notice to creditors

You will also need to prepare a Form 12 - Notice to creditors. This notifies your creditors that you are applying for a review of the sequestration order. You must give a copy of this Notice to every person/company you owe money to, not just the creditor who brought the original creditors petition.

Filing

Filing is the process of lodging your forms with the court and getting them stamped. You will need to do this once you have completed them. You can file your documents online or in person at the Federal Circuit Court Registry.

There will be a filing fee payable to lodge your application, though in certain circumstances you can apply for the fee to be waived. See QPILCH's factsheet Fee waiver guide - Federal Circuit Court for more information.

Serving your documents

You will need to serve (give) a stamped copy of your Application for Review, and any other documents you file, on the original creditor. This needs to be done within 7 days of the day you file the documents in the court.

You will also need to give a copy to your trustee in bankruptcy and make sure to give a copy of the Notice to all of your creditors. Your trustee and creditors need to be served with these documents at least 7 days before the hearing of the application.

Other documents & evidence

As stated above, you will need grounds to oppose the creditors petition to be successful in your application for review. If you filed documents to oppose the petition in the first instance you should review these documents to make sure they are sufficient to show that a sequestration should not be made against you (see QPILCH's factsheet Bankruptcy - Opposing a creditors petition for further information about the documents you should have filed).

If you did not file any documents, or insufficient documents, you will need to do so before the hearing of your Application for Review. In these circumstances, you will need permission of the court to file new evidence by way of affidavit in the review proceedings. You should prepare all the necessary documents, including a comprehensive affidavit and take the completed documents to the first hearing and ask the judge for permission to 'read and file' them during the hearing.

Financial advice

For free financial counselling you can contact:

Contact us

The information in this resource is for general information purposes only. If you would like help with a legal problem, you may be eligible for assistance from a LawRight service or clinic.


For more information about the help available, and the process for applying for help, please contact LawRight by:

Email: admin@lawright.org.au
Telephone: 07 3846 6317
Fax: 07 3846 6311
Postal address: LawRight, PO Box 3631, South Brisbane, Qld 4101
Website: LawRight

LawRight does not provide legal advice over the phone.