Commonwealth Bank of Australia v Robson

The matter of Commonwealth Bank of Australia v Robson was heard in the Federal Court of Australia. The Commonwealth Bank sought to set aside a personal insolvency agreement (PIA) that had been approved by the debtor's creditors. The debtor, Geoffrey Anthony Shannon, opposed the application on the basis that the creditors had voted in good faith and that the Court should not interfere with their decision. The Bank argued that the trustee had erred in his valuation of the Bank's debt and that this had affected the outcome of the creditors' vote.

The legal issues before the court were whether the trustee had properly exercised his discretion in evaluating the Bank's debt and whether the composition was unreasonable, or not calculated to benefit creditors generally, such that it should be set aside. The court found that the trustee had not properly evaluated the Bank's debt and that this had affected the outcome of the creditors' vote. The court also found that the composition was unreasonable and should be set aside. In making this decision, the court considered the amount of the composition as compared with the debts owing by the debtor, the nature of the relationship between the debtor and those creditors who voted in favour of the composition, and whether any payments had been made to creditors or to the Trustee of the bankrupt estate.

The court set aside the PIA, made a sequestration order against the debtor's estate, and ordered that the Bank's costs be payable from the debtor's estate. The court also appointed Maxwell Prentice as the trustee of the debtor's bankrupt estate and noted the date of the bankruptcy as 21 May 2013, being the date of the debtor's statement of affairs.