Australian Litigation Fund Pty Ltd v Mearns (No.3)

Australian Litigation Fund Pty Ltd sought an order against the respondent, Mearns, to have him declared bankrupt. In response, Mearns applied for an adjournment of the hearing of the creditor’s petition and for a declaration that the appointment of a trustee in bankruptcy would be the acquisition of property on other than just terms. The court considered whether to adjourn the hearing, whether the appointment of a trustee would amount to the acquisition of property on other than just terms, and whether costs should be awarded.

The court found that the respondent’s application for an adjournment was not justified as there were no exceptional circumstances to warrant it. It also found that the appointment of a trustee in bankruptcy was not the acquisition of property on other than just terms. The court reasoned that the Bankruptcy Act 1966 was designed to provide a mechanism for the fair and orderly distribution of a bankrupt’s assets and that the appointment of a trustee was a necessary part of that process. The court also found that the respondent’s application for a declaration was an abuse of process and awarded costs to the applicant.

The court dismissed the respondent’s application for an adjournment and for a declaration and ordered the respondent to pay the costs of the applicant. The court found that the respondent’s applications were an abuse of process and that the appointment of a trustee in bankruptcy was not the acquisition of property on other than just terms. The court also found that the respondent’s application for an adjournment was not justified as there were no exceptional circumstances to warrant it. The orders of the court were that the respondent’s application for an adjournment of the hearing of the creditor’s petition for 28 days is refused, that the respondent’s application for a declaration that “in the circumstances of this matter the appointment of a trustee in bankruptcy would constitute, as against the opponent, the acquisition of property on other than just terms contra s.51(xxxi) of the Constitution” is dismissed, and that the respondent pay the costs of the applicant in relation to the notice of motion as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.