BBC Hardware Ltd v Boutros, Charlie

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 7035 of 1998

BETWEEN:

BBC HARDWARE LTD
APPLICANT

AND:

CHARLIE BOUTROS
RESPONDENT

JUDGE(S):

MADGWICK J

DATE OF ORDER:

31 MARCH 1998

WHERE MADE:

SYDNEY

SHORT MINUTES OF ORDER

THE COURT ORDERS THAT, BY CONSENT:

The sequestration order made on 4 March 1998 is annulled.

The petition be listed in the Registrar's list for 15 April 1998.

There will be no order as to the costs of the application.

The applicant creditor is to pay the Trustee's costs assessed in the sum of $500.00.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 7035 of 1998

BETWEEN:

BBC HARDWARE LTD
APPLICANT

AND:

CHARLIE BOUTROS
RESPONDENT

JUDGE(S):

MADGWICK J

DATE:

31 MARCH 1998

PLACE:

SYDNEY

REASONS FOR JUDGMENT
(revised from transcript)

HIS HONOUR: This is an application to annul or to set aside a sequestration order made on 4 March 1998. The applicant was the petitioning creditor, and the sequestration order was obtained on the faith of an affidavit by one of its officers that the debt that lay at the heart of the act of bankruptcy was still unpaid as at 3 March 1998. However, there was an error in the records, and the fact that on 25 January that debt had in fact been paid by the respondent debtor had not come to the notice of the deponent of that affidavit. A more senior officer of the applicant creditor has attested to these matters and on very proper legal advice has brought this application. The trustee offers no objection thereto provided his costs are paid.

A supporting creditor, the Fair Trading Administration Corporation, also appears and the Court has been informed that it has arranged with the respondent debtor a compromise and a timetable for payment of the alleged debt which caused it to be a supporting creditor. The supporting creditor offers no objection to the annulment of the sequestration order, but that creditor and the debtor jointly ask the Court not to dismiss the petition but to leave it on foot pending the expiration of that timetable. No other creditor having come forward and, the Trustee, apparently feeling confident enough that none is likely to, to have consented to this
application, subject to costs, it seems to me to be a proper exercise of discretion by the Court that I proceed as I am asked.

Accordingly I order that, by consent, the sequestration order made on 4 March 1998 is annulled. The petition will be listed in the Registrar's list for 15 April 1998 for consideration. By consent there will be no order as to the costs of the application. However, also by consent, the applicant creditor is to pay the Trustee's costs assessed in the sum of $500.

I certify that this and the preceding one (1) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick

Associate:

Dated: 31 March 1998

Solicitor for the Applicant: Appleby & Nilson

Date of Hearing: 31 March 1998

Date of Judgment: 31 March 1998

The Federal Court of Australia was presented with an application by BBC Hardware Ltd against Charlie Boutros. The crux of the matter was the annulment of a sequestration order issued against Boutros on 4 March 1998. BBC Hardware Ltd, the applicant, sought to have this sequestration order annulled on the basis of an error in the records which had led to the issuance of the order. The error pertained to the status of a debt that was central to the act of bankruptcy, which had in fact been settled by Boutros prior to the date the order was made. This issue was brought to the court's attention by a more senior officer of BBC Hardware Ltd, who, following proper legal advice, submitted the application for annulment.

The court had to consider whether it was appropriate to annul the sequestration order given the error in the records and the subsequent actions taken by the parties. The court was also required to decide on the appropriate costs implications of the annulment. The trustee did not object to the annulment provided his costs were covered. Additionally, a supporting creditor, the Fair Trading Administration Corporation, which had negotiated a payment plan with Boutros, also did not oppose the annulment but requested that the petition not be dismissed but rather left pending the completion of the payment schedule. As no other creditors came forward and the trustee seemed content with the situation, the court found it appropriate to exercise its discretion in favour of the annulment, subject to the agreed costs.

In conclusion, Justice Madgwick annulled the sequestration order made on 4 March 1998 by consent of all parties. The petition was to be listed for further consideration on 15 April 1998. There would be no order as to the costs of the application itself, but BBC Hardware Ltd was to pay the Trustee's costs assessed at $500. The sequestration order was annulled, but the petition was left on foot pending the resolution of the supporting creditor's arrangements with Boutros.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 7035 of 1998

BETWEEN:	BBC HARDWARE LTD APPLICANT
AND:	CHARLIE BOUTROS RESPONDENT
JUDGE(S):		MADGWICK J
DATE OF ORDER:		31 MARCH 1998
WHERE MADE:		SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 7035 of 1998

JUDGE(S):	MADGWICK J
DATE:	31 MARCH 1998
PLACE:	SYDNEY

Solicitor for the Applicant:	Appleby & Nilson
Date of Hearing:	31 March 1998
Date of Judgment:	31 March 1998