Cooley, T.L. v Westpac Banking Corporation - [1995] FCA 282

IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE
STATE OF VICTORIA
GENERAL DIVISION No VP 134 of 1994

Re: TERRENCE LAMBERT COOLEY

Debtor

Ex parte: WESTPAC BANKING CORPORATION

Creditor

Coram: Olney J

Place: Melbourne

Date: 3 May 1995

MINUTE OF ORDERS

THE COURT ORDERS THAT:

A sequestration order be made against the estate of the debtor Terrence Lambert Cooley.

The petitioning creditor's costs of and incidental to the petition including any reserved costs be taxed and paid in accordance with statute.

THE COURT NOTES:
Date of Commission of act of Bankruptcy - 18 November 1993
Trustee: Paul Anthony Pattison

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

IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE
STATE OF VICTORIA
GENERAL DIVISION No VP 134 of 1994

Re: TERRENCE LAMBERT COOLEY

Debtor

Ex parte: WESTPAC BANKING CORPORATION

Creditor

Coram: Olney J

Place: Melbourne

Date: 3 May 1995

REASONS FOR JUDGMENT

The petitioning creditor seeks a sequestration order against the estate of the debtor.

The petition was presented on 11 February 1994 and was served on 26 March 1994. For various reasons which are not presently relevant the hearing of the petition was adjourned on a number of occasions. It was finally heard by me on 24 April 1995 when I reserved my decision.

On 8 July 1994 Paul Anthony Pattison a registered trustee in bankruptcy within the meaning of s 5 of the Bankruptcy Act (the Act) consented to act as the trustee of the estate of the debtor in the event that he becomes a bankrupt.

On 10 February 1995 an order was made pursuant to s 52(5) of the Act that the period at the expiration of which the petition will lapse be a period of 24 months commencing on the date of presentation of the petition.

In the petition the petitioning creditor claimed to be a creditor of the debtor in respect of a debt of $957,625.64 pursuant to a guarantee dated 29 January 1991 given by the debtors to the petitioner.

The petition asserts that the debtor committed the following acts of bankruptcy:

(a)On 18 November 1993 he signed an authority under
s 188 of the Act (s 40(1)(i)).
(b)On 3 December 1993 a meeting of his creditors was called pursuant to such authority (s 40(1)(j)).
(c)On 21 December 1993, having been required by a special resolution of a meeting of his creditors so called to present a debtor's petition within 7 days, he failed without sufficient cause to present such petition within the time specified in the resolution (s 40(1)(b)).

On 27 July 1994 the debtor filed a notice of intention to appear at the hearing of the petition and to oppose the same on the ground that the petitioning creditor is not a creditor of the debtor or alternatively, the debtor has a counterclaim, set-off or cross-demand equal to or exceeding the balance of the debt owed by the debtor to the…

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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Details

Case: [1995] FCA 282
Decision Date: 3 May 1995

CaseChat Overview and Summary

The case of Cooley, T.L. v Westpac Banking Corporation concerns a petition for a sequestration order filed by Westpac Banking Corporation against Terrence Lambert Cooley. The Federal Court of Australia, sitting in the Bankruptcy District of the State of Victoria, heard the matter on 24 April 1995, with Olney J delivering the judgment on 3 May 1995. The primary legal issue before the court was whether the petitioning creditor had proven the necessary elements for a sequestration order, specifically if a demand under the guarantee had been made to render the debtor liable.

The court considered the petitioning creditor's evidence, which included an affidavit by Edward John Cumper, a Senior Manager of Recoveries at Westpac, stating that a demand under the guarantee was made on 22 September 1993. However, the debtor's counsel raised several objections, including the lack of a signature on the notice of demand, no evidence of the person making the demand being authorised, and the absence of proof regarding the manner of service of the notice. The debtor also argued that the testimony of Cumper was hearsay. Despite these objections, the court found that the petitioning creditor had sufficiently proved the service of the demand through other admissible evidence presented at the hearing, such as the debtor's statement of affairs and the minutes of the creditors' meeting.

The court concluded that the petitioning creditor had met the requirements under the Bankruptcy Act to prove the matters stated in the petition, including the service of the petition and the ongoing debt. Given the debtor's failure to provide any counter-evidence or challenge the presented facts, the court found that a sequestration order should be made against the debtor's estate. The court ordered a sequestration against the debtor's estate and appointed Paul Anthony Pattison as the trustee. The petitioning creditor's costs were to be taxed and paid according to the Act.

Orders