Bettles in the matter of Novak

[2007] FMCA 1505

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETTLES IN THE MATTER OF NOVAK [2007] FMCA 1505

BANKRUPTCY – Where bankrupt has not filed Statement of Affairs – whether orders relating to dividend should be made.

Bankruptcy Act 1966, ss.77, 146

Stubberfield; Ex Parte John Robert Rees [1999] FCA 1862

Applicant: JASON WALTER BETTLES

File number: SYG2250 of 2007

Judgment of: Raphael FM

Hearing date: 14 August 2007

Date of last submission: 14 August 2007

Delivered at: Sydney

Delivered on: 14 August 2007

REPRESENTATION

Solicitors for the Applicant: Sally Nash & Co

ORDERS

1. The distribution of dividends to those creditors who have proved their debts in the bankrupt estate of Peter Novak proceed in accordance with Division 5 of Part IV of the Bankruptcy Act, 1966, as if the bankrupt had filed a Statement of Affairs and that creditors had been stated to be those creditors in it pursuant to Section 146 of the Bankruptcy Act, 1966, as amended.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2250 of 2007

APPLICATION BY JASON WALTER BETTLES IN THE MATTER OF PETER NOVAK

Applicant

REASONS FOR JUDGMENT

1. There comes before me an application by Jason Walter Bettles, the trustee of the bankrupt estates of Peter Novak and his wife Vicki Novak, for an order pursuant to s.146 of the Bankruptcy Act 1966 (the “Act”) that the distribution of dividends amongst the creditors of the bankrupt estate of Peter Novak who have proved their debts proceed in accordance with Division 5 of Part 6 of the Act as if the bankrupt Peter Novak had filed a statement of affairs and those creditors had been stated to be creditors in it.

2. The trustee, Mr Bettles, moves on an affidavit sworn by him on 19 July in which he details the fact that he was appointed trustee pursuant to a sequestration order made on 23 October 2003 by Registrar Segal of this court.  He indicates that Vicki Novak filed a statement of affairs and was discharged from her bankruptcy on 25 November 2006.  He indicates that the two bankrupts were in partnership in an air-conditioning business and he provides a copy of Mrs Novak’s statement of affairs and correspondence which he has had with Peter Novak, none of which appears to have been answered.  At the conclusion of the exhibits to his affidavit he provides accounts which, even given the rather generous estimate of costs to finalise and the legal costs involved in this particular application, would result in a dividend to creditors of .9448 cents in the dollar.

3. It would seem to me that the only way in which the trustee can obtain any more information than that he already has concerning the affairs of the debtor is to cause him to be examined pursuant to s.77 of the Act. But I understand that in order to do this considerable expense would be involved which would reduce any dividend. The failure of a bankrupt to complete a statement of affairs renders him liable to prosecution and also continues the bankruptcy for a period of three years from the date of actual filing.

4. I have had regard to the decision of the Federal Court in Stubberfield; Ex Parte John Robert Rees [1999] FCA 1862 and in all the circumstances I am satisfied that it is appropriate that an order under s.146 be made as soon as possible so that the creditors who have been found (and there are a considerable number of them) may be paid the substantial dividend that is likely to arise.

5. In those circumstances I make orders in accordance with the short minutes of order initialled by me and placed with the papers.

I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 

Date: