Commonwealth Bank of Australia v Casella

[2000] FCA 1518

FEDERAL COURT OF AUSTRALIA

Commonwealth Bank of Australia v Casella [2000] FCA 1518

BANKRUPTCY – creditor’s petition – whether hearing of petition should be adjourned – whether debtors have good prospect of success in appeal against judgment refusing extension of time to challenge bankruptcy notices – whether debtors have good prospect of success to set aside consent judgment – whether debtors have good prospect of success in claims against applicant – whether debtors entitled to dismissal of petition – whether sequestration orders should be made against each of the estates of the debtors

Bankruptcy Act 1966 (Cth), ss 43, 52

House v The King (1936) 55 CLR 499, followed
Lovell v Lovell (1950) 81 CLR 513, followed
Jarrett v Westpac Banking Corporation Ltd [1999] FCA 425, followed
Ling v Enrobook Pty Ltd (1997) 74 FCR 19, followed
Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691, followed
Bourke & Another v Beneficial Finance Corporation Ltd (1993) 47 FCR 264, followed

Monroe Schneider Associates (Inc) & Another v No 1 Raberem Pty Ltd & Others (No2) (1992) 37 FCR 234, applied

Rozenbes v Kronhill (1956) 95 CLR 407, applied
Re Majory; Ex parte debtor v FA Dumont [1955] Ch 600, applied
Second Life Decore Pty Ltd v Controller-General of Customs (1994) 53 FCR 78, followed
Williams v Spautz (1992) 174 CLR 509, cited
Bayne v Blake (No2) (1909) 9 CLR 347, followed

COMMONWEALTH BANK OF AUSTRALIA v DOMINIC CASELLA AND LILLIANA CASELLA
W7054 of 2000

RD NICHOLSON J
27 OCTOBER 2000
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W 7054 of 2000

BETWEEN:	COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) APPLICANT
AND:	DOMINIC CASELLA AND LILLIANA CASELLA RESPONDENTS
JUDGE:	R D NICHOLSON J
DATE OF ORDER:	27 OCTOBER 2000
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1.The application by the respondents for adjournment of the hearing of the creditor’s petition be dismissed.

2.The application by the respondents for dismissal of the creditor’s petition be dismissed.

3.A sequestration order be made against the estates of each of the respondents.

4.The applicant’s costs (including any reserved costs) be taxed and paid out of the estate of each of the respondents in accordance with the Bankruptcy Act 1966 (Cth).

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W 7054 of 2000

BETWEEN:	COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) APPLICANT
AND:	DOMINIC CASELLA AND LILLIANA CASELLA RESPONDENTS

JUDGE:	R D NICHOLSON J
DATE:	27 OCTOBER 2000
PLACE:	PERTH

REASONS FOR JUDGMENT

1. The applicant brings an amended creditor’s petition seeking a sequestration order under s 43 of the Bankruptcy Act 1966 (Cth) (“the Act”) against the estates of each of the respondents.

2. At a stage of the proceeding when the respondents were legally represented, notice of their intention to oppose the creditor’s petition was given on the following grounds:

   1.The applicant is a secured creditor whose security has a value in excess of the debt claimed under the creditor’s petition;

   2.The applicant (sic – respondents) disputes the valuations that the creditor seeks to rely upon in relation to the various properties held by the creditor as securities;

   3.The respondents dispute the amount of debt claimed in the creditor’s petition as the applicant has realised some of its securities;

   4.The unsecured balance of the debt is not sufficient to support a petition by the applicant;

   5.The respondents are, in any event, solvent.

3. On the hearing of the amended creditor’s petition, when the respondents had ceased to be legally represented, application was made to stay the creditor’s petition until the full determination of an appeal against a decision given on 14 September 2000 refusing a motion brought by the respondents pursuant to O 77 r 8 of the Federal Court Rules seeking review of a decision of a Deputy District Registrar made on 12 May 2000 to set aside bankruptcy notices in respect of them.  The application also sought a stay until full discovery occurs of all documents and records held by the applicant and until a full independent inquiry into the records is completed.  These matters were stated at their most succinct in affidavits filed on behalf of the respondents which ask that the stay be until the following events have occurred and/or are finalised:

   (a)a full accounting report on all loan documents and accounts including a legal analysis of all loan and guarantee documents which according to the solicitors of the applicant are over 2,500 documents, such a report taking at least three months to complete;

   (b)the full determination of a chamber summons to set aside the original consent judgment in the Supreme Court of Western Australia being CIV 1924 of 1998 consolidated with CIV 2060 of 1998;

   (c)the full determination of an appeal against the decisions of Justice R D Nicholson on the 14 September 2000 not to re-instate Mr and Mrs Casella’s application to set aside and/or stay the bankruptcy notice against them – being Appeal W 159 of 2000;

   (d)the full determination of application W 160 of 2000 in which the respondents have sued the applicant and others for $6,000,000 in liquidated damages and over $100 million in unliquidated damages.

   Matters relied on in petition

4. Section 52(1) of the Act requires that at the hearing of a creditor’s petition, the Court shall require proof of (inter alia) the matters stated in the petition.  The petition states that the respondents owe the applicant the amount of $2,397,899.95 (“the Sum”) being the balance owing pursuant to a judgment obtained with interest and costs by the applicant against the respondents in the Supreme Court of Western Australia on 8 December 1999.  It further states the applicant holds security to the value $883,231.72 and particularises the security in the form of property.  It states there is an unsecured debt of $1,514,668.23.

5. Section 43(1)(a) of the Act provides that, subject to the Act, where a debtor has committed an act of bankruptcy the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor. The acts of bankruptcy relied upon in the petition are the failure by each of respondents to comply with the requirements of a bankruptcy notice duly served on each of them or to satisfy the Court that he or she had a counter-claim, set-off or cross-demand equal to or exceeding the Sum which could not have been set up in the action in which the judgment was obtained. The relevant bankruptcy notice was issued on 7 March 2000. It relied on the Supreme Court judgment of 8 December 1999. It was served on the first named respondent on 29 March 2000 so that his act of bankruptcy was committed 21 days after service of that notice namely 18 April 2000. The bankruptcy notice was served on the second named respondent on 3 April 2000 so that her relevant act of bankruptcy was committed on 23 April 2000.

   History of petition

6. Each of the respondents applied to the Court to set aside the bankruptcy notices.  On 12 May 2000 those applications were dismissed by a Deputy District Registrar.

7. On 26 and 20 June 2000 respectively the respondents were served with the petition.

8. The first return date for the petition was on 18 July 2000.  The respondents were ordered to file and serve a notice of appearance and the applicant was given leave to file and serve any further affidavit material.

9. The second return date for the petition was 1 August 2000.  The respondents, having filed a notice of appearance on 20 July 2000 and appearing through their counsel, attempted to hand up to the District Registrar a motion to review the decision of the Deputy District Registrar made on 12 May 2000 dismissing the applications to set aside the bankruptcy notices.  This was sought to be supported by an affidavit from the first-named respondent (Mr Casella) in which he sought review of that decision on the grounds that a person appointed to appear for him had not appeared; the applicant held security for a value greater than the amount of the debt alleged owing; the applicant was well protected by inter-company mortgages and equitable charges providing adequate security; and the respondents had made endeavours to refinance the debt and would be able to continue their efforts to seek alternative finance.  No mention was made in this affidavit of any action being commenced by the respondents against the applicant for damages. 

10. The District Registrar dismissed the application on three grounds, the relevant one being that he considered he lacked jurisdiction.  He adjourned the hearing on the basis the respondents were granted leave to oppose the petition on grounds that the valuations were incorrect and the applicant had additional security.

11. On 15 August 2000 the solicitors for the respondents filed the notice of intention to oppose the petition (previously referred to) together with Mr Casella’s second affidavit.  It did not contain any evidence concerning the financial position of the respondents as had been required by the orders of the Registrar made on 1 August 2000.  It also did not make any reference to a potential claim against the applicant by the respondents.

12. On the third return date for the petition, 5 September 2000, the solicitors for the respondents sought and obtained leave to cease to act for them.  A further adjournment was granted and orders made to enable the respondents to file an affidavit as to valuations and their financial position.  The applicant was given leave to amend the petition.

13. The fourth return date for the petition was 15 September 2000.  On 13 September 2000 the respondents brought a notice of motion seeking to review the decision of the Deputy District Registrar made on 12 May 2000 dismissing the applications to set aside the bankruptcy notices.  The motion was dismissed by me on that date and reasons for my ruling published.  I also declined to make orders further adjourning the hearing of the petition.  At the hearing before the District Registrar orders were made under s 35A of the Federal Court Act 1977 (Cth) adjourning the petition to a judge on 21 September 2000.

14. On 19 September 2000 the applicant’s solicitors were served with a notice of appeal from the judgment made by me on 14 September 2000.  The applicant has given notice of its intention to apply to strike out the appeal on grounds that no leave was obtained by the respondents nor does the motion purport to seek leave to appeal so that the appeal is incompetent and should be dismissed.  It is the further intention of the applicant to contend that the appeal is frivolous or vexatious or an abuse of process.

15. At the fifth return date on 21 September 2000 before me the hearing of the petition was adjourned until 11 October 2000.  On that date after receipt of written submissions on behalf of the applicant and the formulation of objections to three of the respondents’ affidavits, the matter was further adjourned to 12 October 2000.

16. The second-named respondent (Mrs Casella) did not appear at the bar table.  Mr Casella appeared at the hearings from 21 September 2000 with the exception of that held on 12 October 2000.  Conditional leave was given to Mr S Carew-Reid to assist Mr Casella in the presentation of the respondents’ case.  That leave was withdrawn on 12 October 2000.

    First Supreme Court action

17. The Supreme Court action on which the bankruptcy notices are based was commenced by the applicant in October 1998.  The Supreme Court action was numbered CIV 1924 of 1998 and was heard together with proceeding CIV 2060 of 1998 apparently being a proceeding instituted on behalf of the respondents.  It was brought against the respondents as second defendants and five corporations or entities which it is not disputed represented the interests of the respondents and of which they were the directors.  The statement of claim against each of the defendants was to the effect that the defendants other than the respondents had been granted accommodation by the applicant on terms and conditions which included the provision of securities and guarantees including guarantees executed by the respondents.  It was pleaded that there had been default in payment of the amounts due and payable pursuant to the accommodation advanced, such that the indebtedness (now represented by the Sum) arose.

18. In the defence it was admitted the respondents and other defendants had executed the guarantees.  However, it was denied they were legally binding upon them because of economic duress.

19. On behalf of the respondents a counter-claim was made to the effect that certain securities were void and of no effect and that the deeds of guarantee were likewise void and of no effect.  A claim for loss and damage was also made in respect of what was alleged to be a breach by the applicant of a duty of care at common law not to act otherwise than in accordance with the terms of a document described as “the Bolland Agreement”.  The counter-claim particularised that the applicant knew or ought to have known that the respondents and other defendants would suffer loss if the plaintiff did not allow the defendants to permit the third, fourth and fifth defendants to complete and market their developments in an orderly fashion in accordance with the terms of the Bolland Agreement.  The applicant’s defence to the amended counter-claim denied the existence of the Bolland Agreement or any breach of it and other allegations.  The Bolland Agreement, upon which the case for the respondents now seeks to rely, was therefore at the core of the issues in the claim and determined by the judgment concerning that claim.  It therefore does not have the character of fresh evidence.

20. The Supreme Court action was entered for trial on 12 October 1999.

21. On 20 October 1999 the solicitors for the respondents and other defendants proposed a settlement to the applicant.

22. A Deed of Settlement was executed by all parties to the Supreme Court action on 29 October 1999.  It was agreed that in consideration of the applicant agreeing to discharge the securities and agreeing to refrain from prosecuting the Supreme Court action, the defendants would pay to the applicant a settlement sum by bank cheque within 60 days after the execution of the settlement deed (cl 3.1).  It was provided in cl 12 that the defendants would take independent legal advice prior to entering into the settlement deed and that, by their execution of it, acknowledged they had taken such advice.

23. Pursuant to terms of the Deed of Settlement the applicant withdrew a caveat which it held over a property at 69 The Esplanade, South Perth in order that the respondents could discharge the mortgage held in favour of the St George Bank over that property and subsequently re-lodged a caveat over the property.

24. The respondents failed to produce within 28 days of date of execution of the Deed of Settlement evidence of financial approval.  Accordingly consent orders were lodged at the Supreme Court on 29 November 1999 pursuant to O 43 r 16 of the Supreme Court Rules.  Judgment was obtained in the Supreme Court action on 8 December 1999.

25. On or about 10 February 2000 the respondents and other defendants in the Supreme Court action applied to stay execution of a writ of possession of the secured properties.  That application was dismissed on 14 February 2000.

26. The first reference to the respondents disputing the validity of the judgment obtained in the Supreme Court action was an affidavit of Mr Casella sworn 7 September 2000.

    Second Supreme Court action

27. On 15 September 1999 Miller J in the Supreme Court of Western Australia refused injunctive relief to the respondents and other defendants in the Supreme Court action. They had sought an order pursuant to the provisions of s 138 of the Transfer of Land Act 1893 (WA) for the removal of the caveat lodged against 69 The Esplanade, South Perth. In the alternative they sought a mandatory injunction compelling a withdrawal of the caveat. In a further alternative they sought in return for the immediate withdrawal of the caveat, the provision of a second mortgage to the applicant to secure the sum of $1.5 million over the properties of the various defendants but not including the property at 69 The Esplanade, South Perth.

28. Miller J in the course of his reasons stated that the validity of the equitable charges and mortgages were being challenged in the proceeding on the basis they were procured under “economic duress and unconscionable conduct on the part of the plaintiff, and alternatively that they lacked corporate benefit”.  Further in the course of his reasons he stated he was satisfied that the caveat lodged by the applicant was not lodged for any improper purpose as contended for the respondents and other defendants.  He found it to be far from a case of lodgement “as a blackmailing device” and found that prima facie the indications were that the applicant lodged the caveat purely for the purpose of protecting its position under the securities in question and for none other.  In weighing the balance of convenience for injunctive relief he said he could not state from the material before him that the claim of the applicant to an interest in the property appeared to be without foundation.  He therefore dismissed the application for removal of the caveat and other relief sought.

    Third Supreme Court action

29. On 6 October 2000 Parker J in the Supreme Court of Western Australia dismissed with costs to be taxed an application by the respondents to set aside the consent judgment entered on 8 December 1999.  The application was brought by way of chambers summons and was found to be incompetent.

30. In support of the Chambers Summons the respondents filed an affidavit of

    
    

    Mr S Carew-Reid.  It was in identical form to an affidavit sworn by him in this proceeding on 6 October 2000.  Parker J in the Supreme Court action ordered that the affidavit filed by Mr Carew-Reid be removed from the Court record.

    Federal Court proceeding

31. The respondents as first applicants and the respondents on behalf of the defendant companies in the Supreme Court action have filed an application in the Federal Court seeking damages against the applicant, the applicant’s legal representatives and other persons on 52 named grounds.  The application is stated as being brought pursuant to the Trade Practices Act 1975 (Cth), s 52. A claim is made for liquidated damages in the sum of $10,000,000.00 for the loss of 69 The Esplanade, South Perth and, in the alternative, an order sought returning ownership of property to the respondents. A stay in respect of the sale of 69 The Esplanade is sought. Additionally, unliquidated damages are claimed together with special damages, loss of profits, loss of future earnings, exemplary damages and other matters.

32. This is the application referred to in par (d) of the formulation of the grounds on which the stay of the creditor’s petition is sought.  As has been seen, in that formulation the quantum of damages sought is substantially greater.

    Stay application

33. The stay application brought by the respondents seeks to have the hearing of the creditor’s petition adjourned until the occurrence or finalisation of certain events set out in pars (a) – (d) above. The power of the Court to grant such an adjournment derives from s 33(1)(a) of the Act. The power is in the discretion of the Court so that the Court must look for factors in the evidence upon which the discretion to adjourn may be grounded. This occurs in the context where a creditor has a prima facie right to a sequestration order if the matters set out in s 52(1) of the Act are established. To consider whether there are any such matters in connection with this application it is therefore necessary to examine the issues raised by pars (a) – (d) as the grounds for an adjournment.

    Adjournments to allow appeals – pars (b) and (c)

1. With reference to par (b), there has already been a decision in the Supreme Court of Western Australia dismissing the respondents’ application to set aside the consent judgment.  That was the third Supreme Court action.  It has been found to be without merit.

2. The appeal against my decision on 14 September 2000 has not yet been heard.  The decisions there made involved an exercise of judicial discretion.  This is governed by established principles.  It is not enough that the appellate Court considers that it would have taken a different course to the primary judge.  It must appear that some error has been made in exercising the discretion:  House v The King (1936) 55 CLR 499 at 504 – 505; Lovell v Lovell (1950) 81 CLR 513 at 519; Jarrett v Westpac Banking Corporation Ltd [1999] FCA 425. The respondents do not bring forward to the Court any argument to show that the exercise of discretion was in any way in error. There is no case made that an appeal against these decisions will be based on genuine and arguable grounds. The result is the Court is left without any base on which it could conclude that there is any prospect that leave to appeal will be granted or that an appeal in respect of these decisions would succeed.

   Existence of a claim: pars (a) and (d)

3. The existence of a set-off, cross-demand or counter-claim will often be a “sufficient cause” for a Court to dismiss a petition in exercising its discretion: s 52(2) of the Act and Ling v Enrobook Pty Ltd (1997) 74 FCR 19 at 25. The same principle is applicable to an application for adjournment of the petition. The question in both cases is whether the debtor has good prospects of success. This involves consideration of the prospects of success of the respondents in the Federal Court action.

   Fraud

4. At the heart of the claim are those allegations which go to the manner in which the consent of the respondents was obtained for the judgment entered on 8 December 1999 in the first Supreme Court proceeding.

5. In order for a consent order to be set aside for fraud (and hence for a case of duress or undue influence in that respect to be made out), it is necessary that the allegations of fraud be made with specificity and with particularity:  Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 700. The plaintiff is required to allege facts which establish reasonable prospects of success by pleading, inter alia, that since the judgment the plaintiff has discovered fresh facts which raise a serious question to be tried:  Spies at 700. It is not enough that the circumstances of the debtor have changed or that the debtor has changed his or her mind since the giving of the consent: Spies at 700. What is required is allegations of fresh evidence which was not available and could not have been discovered with reasonable diligence before a judgment was delivered: Bourke & Another v Beneficial Finance Corporation Ltd (1993) 47 FCR 264 at 271. In Monroe Schneider Associates (Inc) & Another v No 1 Raberem Pty Ltd & Others (No2) (1992) 37 FCR 234 at 241 it was said by the Full Court (Spender, Gummow and Lee JJ):

   “It is not disputed on the present appeal that the law in Australia is to the same effect as that described by Lord Bridge [in Owens Bank Ltd v Bracco [1192] 2 AC 443]. The stringent principles established by the authorities to confine the jurisdiction have been summarised by Gordon QC at 376-377 as setting the following requirements:
              “(a)     evidence newly discovered since the trial;

   (b)evidence that could not have been found by the time of the trial by exercise of reasonable diligence;

   (c)evidence so material that its production at the trial would probably have affected the outcome; and when the fraud charged consists of perjury, then:

   (d)the evidence must be so strong that it would reasonably be expected to be decisive at a rehearing, and if unanswered must have that result.”

6. Applying these considerations adapted to the circumstances of the case it can be said that:

   (a)There is no evidence of fraud, only allegations unsupported and ordered in another court to be removed from the record.

   (b)All of the material on which the respondents rely was available to them long before the settlement of the first Supreme Court proceeding or the granting of the consent judgment.

   (c)The contents of the respondents’ affidavits are irrelevant to the allegations they are endeavouring to make out in the Federal Court action.  They are not so material that their production at a trial in the proceedings would have an effect on the outcome of those proceedings.

   (d)To the extent that the fraud which the respondents charge consists of perjury, the contents of the affidavits raise no arguable case. 

7. The position is therefore that:

   (i)There is no fresh evidence which has come to light since the granting of the consent judgment in the first Supreme Court proceeding which was not available for judgment in that action was granted.

   (ii)None of the allegations of fraud based on duress and undue influence and other vitiating matters have been asserted with any specificity or particularity.

   (iii)The allegations which have been made have been found in another court to be scandalous, scurrilous and vexatious allegations only and, as they appear before this Court, have no basis in any evidence.

8. Furthermore, allegations that both or either of the respondents did not sign guarantees is demonstrably false on the evidence of admissions in the Supreme Court action.

9. In the light of these considerations it can be said that the respondents do not have any good prospects of success at the core of the claim in this Court.

   Solvency

10. Paragraph (a) of the matters relied upon by the respondents in their case for adjournment seeks time to enable a legal and accounting analysis to be carried out on documentation.  There is evidence that in the first Supreme Court action the applicant made extensive discovery of documents in excess of 2,456 in number.  In that context, the respondents cannot successfully place reliance upon the matters raised by par (a).

11. Additionally, there is no evidence to support a finding that the respondents have a good prospect of establishing solvency or incorrectness in the Sum.  The evidence is overwhelmingly to the contrary.

    Improper purpose and abuse of process

12. A range of other claims are directed to the motives of the applicant.  These include a claim that the applicant had an intent to injure the respondents’ reputation and business or trade.  This is an allegation of improper purpose constituting an abuse of process.

13. In Rozenbes v Kronhill (1956) 95 CLR 407 the High Court accepted the five propositions enunciated in Re Majory; Ex parte debtor v FA Dumont [1955] Ch 600. As there appears, an abuse of process will be constituted when court proceedings are used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage and not for the purpose for which the proceedings are properly designed and exist. It is purpose rather than motive which is relevant. A proceeding will be an abuse of process if, quite apart from its merits or prospects of success, it is brought as a means of obtaining some advantage for which the proceeding is not designed: Second Life Decore Pty Ltd v Controller-General of Customs (1994) 53 FCR 78 at 85; see also Williams v Spautz (1992) 174 CLR 509 at 526-527. There is no evidence to support the claims in these respects. Indeed, there is an entire absence of evidence to support any finding that the respondents would have a good prospect of success in relation to a claim of improper purpose.

    Malicious prosecution

14. The claims of the respondents in the Federal Court action also include a claim of malicious prosecution.  However, it is a complete answer to such a claim that it may be shown that when the petition was presented there was a good petitioning creditor’s debt and an act of bankruptcy:  Bayne v Blake (No2) (1909) 9 CLR 347 at 353. On the evidence this is the case here. The respondents do not show that they have a good prospect of establishing a want of reasonable and probable cause for the prosecution or that a malicious spirit motivated the proceeding against them.

    Misleading or deceptive conduct

15. The claims also include a claim for deceptive or misleading conduct.  Again, there is no evidence which would enable the Court to conclude that the respondents have a good prospect of making out a case in that respect in relation to the applicant.

    Other claims

16. The remainder of the claims in the Federal Court action do not go to matters affecting the foundation of the creditor’s petition.  So far as they may go towards showing that the respondents have a likelihood of succeeding in claiming damages, no case is made out that there are such reasonable prospects of success.

17. Accordingly, having had regard to these matters I do not consider the respondents have succeeded in making out a case which would entitle the Court to exercise its discretion to stay the application for a creditor’s petition.

    Whether petition should be dismissed

18. Section 52(2) provides that if the Court is satisfied by the debtor “that for other sufficient causes a sequestration order ought not to be made” it may dismiss the petition. The task of a court exercising its jurisdiction and power under this subsection is to be guided by principles similar to those which a court would when asked to set aside a judgment procured by fraud: Bourke at 727. The “sufficient causes” upon which the case for the respondents relies in seeking a dismissal are those matters upon which reliance was placed in seeking an adjournment of the hearing of the petition. Those matters have been found to fail to sustain a case for the exercise of the court’s discretion in favour of an adjournment. Likewise, they fail to support the exercise of the discretion to dismiss the petition.

    Application for order on petition

19. Section 52(1)(a) provides that the court must require proof of the matters stated in the petition and for this purpose the court may accept the affidavit verifying the petition as sufficient. There is no reason not to accept the petition.

20. Service of the petition is proved:  s 52(1)(b).

21. I am accordingly satisfied that the respondents committed the acts of bankruptcy alleged in the petition as amended.  The act of bankruptcy of the first-named respondent occurred on 18 April 2000.  The act of bankruptcy of the second-named respondent occurred on 23 April 2000.

22. Further, there is the requisite evidence that the debts on which the petitioning creditor (the applicant) relies is or are still owing.

23. Being satisfied with proof of the matters which s 52(1) of the Act requires proof, the Court will therefore make a sequestration order against each of the estates of the respondents.

I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice R D Nicholson.

Associate:

Dated:             27 October 2000

Mr Casella appeared on behalf of the respondents
Counsel for the Respondent:	Mr J L Sher
Solicitor for the Respondent:	Corrs Chambers Westgarth
Date of Hearing:	11 and 12 October 2000
Date of Judgment:	27 October 2000