American Express Australia Limited v Kerr (No.2)

American Express Australia Limited sought a sequestration order against Joye Maree Kerr, contending that Kerr was unable to pay debts. The Federal Court of Australia was tasked with determining the validity of the application and the appropriate course of action under the Bankruptcy Act 1966 (Cth). The central legal issue was whether Kerr's financial situation met the criteria for a sequestration order under the Act. This involved examining whether Kerr had committed an "act of bankruptcy," which is defined under section 45 of the Act as failing to pay a debt of $5,000 or more when the creditor demands payment. The court also needed to consider whether the applicant had provided sufficient evidence to support the application.

The court found that Kerr had indeed committed an act of bankruptcy by failing to pay a debt of $26,776.37 to American Express Australia Limited. The evidence provided by the applicant was deemed sufficient to substantiate the claim. The court concluded that Kerr was unable to pay her debts as they fell due and that a sequestration order was warranted. The court ordered that a sequestration order be made against Kerr's estate, that the costs of the application be paid from Kerr's estate, and that the applicant must notify the Official Receiver in Sydney of the order within two days.