Abignano; in the matter of Abignano v Wenkart - [1999] FCA 1695

FEDERAL COURT OF AUSTRALIA
Abignano; in the matter of Abignano v Wenkart [1999] FCA 1695
BANKRUPTCY – application by debtor to adjourn hearing of creditors’ petition in order to initiate Part X proceedings – whether Part X proceedings bona fide
IN THE MATTER OF GENNARO ABIGNANO & GENALLCO PTY LTD
GENNARO ABIGNANO & GENALLCO PTY LTD v THOMAS RICHARD WENKART
NG 8467 of 1998
MADGWICK J
29 OCTOBER 1999
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 8467 OF 1998

IN THE MATTER OF GENNARO ABIGNANO & GENALLCO PTY LTD

BETWEEN:

GENNARO ABIGNANO
First Applicant

GENALLCO PTY LTD
Second Applicant

AND:

THOMAS RICHARD WENKART
Respondent

JUDGE:

MADGWICK J

DATE OF ORDER:

28 OCTOBER 1999

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The application, brought by the Respondent, to adjourn the hearing of the creditor’s petition be dismissed.
2.The respondent is to pay the applicants’ costs.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 8467 OF 1998

IN THE MATTER OF GENNARO ABIGNANO & GENALLCO PTY LTD

BETWEEN:

GENNARO ABIGNANO
First Applicant

GENALLCO PTY LTD
Second Applicant

AND:

THOMAS RICHARD WENKART
Respondent

JUDGE:

MADGWICK J

DATE:

29 OCTOBER 1999

PLACE:

SYDNEY

REASONS FOR JUDGMENT
(revised from transcript)
HIS HONOUR:

Yesterday there was an application by the respondent debtor for the adjournment of the hearing of a creditor's petition seeking his bankruptcy. I refused the application and indicated I would give my reasons for such refusal today. These are those reasons.
The application for an adjournment was based on the fact that the debtor had, on the eve of the date of the application for the adjournment, initiated steps to have his apparent insolvency dealt with under Part X of the Bankruptcy Act1966 (Cth) (“the Act”). On the day before the adjournment application he had executed an authority under s 188 of the Act to put his property under the control of a controlling trustee.
The principles which should govern an application of this kind are not in doubt. The Court has a general discretion to adjourn the hearing of a petition; if authority is needed, that is to be found in Re Martyn and Martyn; Ex parte Capes (1929) 1 ABC 176. The Court will often view favourably an adjournment of the hearing of a bankruptcy petition on the application of a debtor in order to enable the creditors to consider "a fair and bona fide Part X proposal" as Merkel J put it in Re Bendel; Ex parte Lippman [1996] FCA 262. The reasons why that is so are obvious enough. The infliction of the status of bankruptcy on a person is a sufficiently serious step that the Court will strongly lean to avoiding it if that is reasonably and fairly possible.
Factual background
In order to put the circumstances of this case in some perspective it is necessary to refer very briefly to but a few aspects of what has been long, tortuous, expensive and grimly fought litigation…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Abignano; in the matter of Abignano v Wenkart

Details

AGLC: Abignano; in the matter of Abignano v Wenkart [1999] FCA 1695
Case: [1999] FCA 1695
Decision Date: 28 OCTOBER 1999

CaseChat Overview and Summary

This case involved an application by the respondent, Abignano, to adjourn the hearing of a creditor’s petition brought by Wenkart. The matter came before the court following a long-standing and contentious dispute between the parties, which resulted in a judgment debt of over $1.3 million. The debtor argued that the petition had formal defects which were incurable and that the application to amend the petition should not be granted. The court had previously granted leave to amend the petition on the condition that the hearing of the substantive matter would be adjourned pending the outcome of an application for special leave to appeal to the High Court.

The primary legal issue the court had to decide was whether the debtor’s application to adjourn the hearing of the creditor’s petition should be granted. The court had to consider the principles governing applications of this kind, including its general discretion to adjourn the hearing of a petition, and whether it was appropriate to view favourably an adjournment to enable creditors to consider a fair and bona fide Part X proposal.

The court dismissed the debtor’s application to adjourn the hearing of the creditor’s petition. The court held that it would not grant the adjournment as the debtor had not established that it was reasonably and fairly possible to avoid the serious step of inflicting the status of bankruptcy on a person. The court also noted that the debtor had not demonstrated that the adjournment would be in the interests of justice. The court ordered that the respondent pay the applicants' costs.

Orders

Orders of the court

1. The application, brought by the Respondent, to adjourn the hearing of the creditor’s petition be dismissed.

2. The respondent is to pay the applicants’ costs.

Background

Background to the litigation

The principles which should govern an application of this kind are not in doubt. The Court has a general discretion to adjourn the hearing of a petition; if authority is needed, that is to be found in Re Martyn and Martyn; Ex parte Capes (1929) 1 ABC 176. The Court will often view favourably an adjournment of the hearing of a bankruptcy petition on the application of a debtor in order to enable the creditors to consider "a fair and bona fide Part X proposal" as Merkel J put it in Re Bendel; Ex parte Lippman [1996] FCA 262. The reasons why that is so are obvious enough. The infliction of the status of bankruptcy on a person is a sufficiently serious step that the Court will strongly lean to avoiding it if that is reasonably and fairly possible.Factual background In order to put the circumstances of this case in some perspective it is necessary to refer very briefly to but a few aspects of what has been long, tortuous, expensive and grimly fought litigation between the parties. The judgment debt, amounting to over $1.3 million, originated from a judgment of Hunter J of the New South Wales Supreme Court given in September 1997 and from the assignment of rights, the subject of one of the judgments ultimately pronounced by his Honour, to the petitioning creditors. Appeals were brought from that judgment by the debtor to the New South Wales Court of Appeal. Ultimately a bankruptcy notice was served on the debtor on 5 March 1998. On 28 August 1998 Hill J extended time in this Court for compliance with the bankruptcy notice until thirty days after delivery of judgment by the Court of Appeal in the relevant appeals. The Court of Appeal delivered its judgments on 6 October 1998 so that the time for compliance with the bankruptcy notice expired on 5 November 1998 and an act of bankruptcy was thereby and then committed by the debtor. The creditor's petition was issued on 30 December 1998 and served on 15 January of this year. It came on for hearing before me on 5 May 1998 when, by agreement between the parties, certain attacks on the petition having to do with its form were debated. It appeared in the course of argument that there were defects in the petition of a formal character. The debtor submitted that the defects were such that they were not curable and, there being no petition, there could be no amendment of it or, alternatively, that the application made by counsel for the petitioning creditors to amend the petition should not in the exercise of the Court's discretion be granted. By this time an application for special leave to appeal to the High Court against the decisions of the New South Wales Court of Appeal had been made. I held against the debtor on both scores and granted leave to the petitioning creditors to amend the petition which was then and there done. That leave was granted upon the basis that the further hearing of the petition, as to a substantive matter in opposition to the petition that had been foreshadowed, would be adjourned to enable the parties to know the outcome of the application for special leave in the High Court.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MADGWICK J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: MADGWICK J

Full text does not contain this section.

BETWEEN:	GENNARO ABIGNANO First Applicant
GENALLCO PTY LTD Second Applicant
AND:	THOMAS RICHARD WENKART Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 8467 OF 1998

JUDGE:	MADGWICK J
DATE:	29 OCTOBER 1999
PLACE:	SYDNEY