Bankruptcy - Bankruptcy notice - Stay of execution - Injunctive order restraining disposition and encumbrance of a debtor's assets - Whether existence of order at time of issue or time of service of bankruptcy notice or during period for compliance necessary to enable the "equity" invalidating the bankruptcy notice to be raised.
Jenkinson, O'Loughlin and Sackville JJ. Sydney 16 October, 1996
IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG570 of 1996 GENERAL DIVISION )
On appeal from a judgment of a single justice of the Court
BETWEEN: SYLVIA BOSCOLO
Appellant
AND:BOTANY COUNCIL
Respondent
CORAM: Jenkinson, O'Loughlin and Sackville JJ.
PLACE: Sydney
DATE: 16 October, 1996
MINUTES OF ORDER
THE COURT ORDERS THAT:
The appeal be dismissed.
The respondent's costs of the appeal be paid by the appellant.
The trustee's costs of appearance on the hearing of the appeal be costs and expenses of the trustee within s.109(1)(a) of the Bankruptcy Act 1966.
(Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.)
IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG570 of 1996 BANKRUPTCY DIVISION )
On appeal from a judgment of a single justice of the Court
BETWEEN:SYLVIA BOSCOLO
Appellant
AND:BOTANY COUNCIL
Respondent
CORAM: Jenkinson, O'Loughlin and Sackville JJ.
PLACE: Sydney
DATE: 16 October, 1996
REASONS FOR JUDGMENT
JENKINSON J.
Appeal from an order dismissing the appellant bankrupt's application for review of a Deputy Registrar's exercise of power to make a sequestration order against the estate of the bankrupty under s.52(1) of the Bankruptcy Act 1966.
The respondent had procured the issue on 26 August 1994 of a bankruptcy notice to the appellant which was served on 21 January 1995. The bankruptcy notice was founded on a final order of the Land and Environment Court of New South Wales for costs of a proceeding between the parties in that Court. The sum payment of which was alleged in the notice to be due was $4553.78 and that sum included interest to 24 August 1994. The appellant did not comply with any of the requirements of the bankruptcy notice, but on the hearing of the petition of the respondent which was founded on that failure of compliance the appellant submitted, before Einfeld J. and before this court, that the existence at the time of issue of the notice and during the period within which compliance with its requirements might have been made of an order of the Family Court of Australia restraining the appellant from "transferring, assigning or further encumbering by way of mortgage or charge or otherwise" a parcel of land of which she claims the fee simple ownership brought about the result that the failure of compliance did not constitute an act of bankruptcy. In support of that submission…
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.
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AGLC
Boscolo v Botany Council [1996] FCA 897
Case
[1996] FCA 897
Decision Date
CaseChat Overview and Summary
Sylvia Boscolo appealed against a judgment dismissing her application for review of a Deputy Registrar's exercise of power to make a sequestration order against her estate under s.52(1) of the Bankruptcy Act 1966. The respondent had issued a bankruptcy notice to Boscolo on 26 August 1994, which was served on 21 January 1995. The notice was founded on a final order of the Land and Environment Court of New South Wales for costs of a proceeding between the parties in that Court. The sum payment of which was alleged in the notice to be due was $4553.78 and that sum included interest to 24 August 1994. Boscolo did not comply with any of the requirements of the bankruptcy notice. Boscolo submitted that the existence at the time of issue of the notice and during the period within which compliance with its requirements might have been made of an order of the Family Court of Australia restraining her from "transferring, assigning or further encumbering by way of mortgage or charge or otherwise" a parcel of land of which she claims the fee simple ownership brought about the result that the failure of compliance did not constitute an act of bankruptcy. Boscolo relied upon a passage from the reasons for a judgment of a Full Court of the Federal Court of Australia in Wiltshire-Smith v. Mellor Olsson (1995) 57 F.C.R. 572 at 584-587. The Full Court held that a court order imposed on some only of the debtor's property, which has the "same practical effect" as the appointment of a receiver, should be "recognised as a relevant circumstance sufficient to disentitle a judgment creditor from proceeding immediately to execution". Boscolo's appeal was dismissed and her costs were ordered to be paid by her. The trustee's costs of appearance on the hearing of the appeal were ordered to be costs and expenses of the trustee within s.109(1)(a) of the Bankruptcy Act 1966. The court held that Boscolo's appeal should be dismissed with costs as there was no evidence to support her submission that the Family Court order prevented her from paying the amount claimed in the bankruptcy notice before the expiration of the 28 day period allowed for compliance with its requirements. The evidence before the trial judge as to Boscolo's assets and liabilities was of the values and amounts in May and June 1996, not in January and February 1995. The only asset (other than cash at bank and household and personal effects worth in the aggregate less than 1000) which might in January and February 1995 have been a source of funds for payment of the amount claimed in the bankruptcy notice was the land subject to the Family Court order said to be worth $125,000 and constituting security for a debt of about $55,000 to a bank. Boscolo's liabilities aggregated about $65,000. There was no evidence as to the income of Boscolo at that time. There was no evidence by Boscolo that she would have sought an advance in order to comply with a requirement of the bankruptcy notice. The evidence did not justify a conclusion that a hypothetical lender would have made the required advance, or a conclusion that Boscolo would have sought such an advance.