CostaExchange Limited v Shephard (No.2)

FEDERAL MAGISTRATES COURT OF AUSTRALIA

COSTAEXCHANGE LIMITED & ORS v SHEPHARD (No.2) [2011] FMCA 545

BANKRUPTCY – Creditor’s petition – application to set aside sequestration order – operation of sequestration order stayed for 21 days on condition of payment by debtor to trustee – mistake affecting ability of debtor to comply – no grounds for setting aside sequestration order – no evidence of ‘fraud’ – sequestration order did reflect intentions of court – delay in applying for remedy – application refused.

Bankruptcy Act 1966 (Cth), ss.37(2), 52(3), 109(1)(a), 153A, 153B
Federal Magistrates Court Rules 2001 (Cth), rr.16.05, 16.05(1), 16.05(2), 16.05(2)(b), 16.05(2)(e)

Austral Brick Co Pty Ltd v Daskalovsk [1998] FCA 782
CostaExchange Limited & Ors v Shephard [2010] FMCA 804
Doulman v ACT Electronic Solutions Pty Limited & Anor [2011] FMCA 232

First Applicant: COSTAEXCHANGE LIMITED
ACN 002 687 961
(FORMERLY CHIQUITA BRANDS SOUTH PACIFIC LIMITED)

Second Applicant: ANTHONY GEOFFREY HARTNELL

Third Applicant: GARY WILLIAM WRIGHT

Fourth Applicant: DAVID ANTHONY BARDON

Fifth Applicant: PETER WOODS

Sixth Applicant: RIDLEY BELL

Seventh Applicant: MICHAEL TAMANI

Eighth Applicant: SCOTT ROLAND WOLGAMOT

Ninth Applicant: PETER JOHN MCPHERSON

Respondent: DEREK GEORGE SHEPHARD

File Number: SYG 1333 of 2010

Judgment of: Smith FM

Hearing date: 12 July 2011

Delivered at: Sydney

Delivered on: 12 July 2011

REPRESENTATION

Counsel for the Applicant: Mr J S Tobin

Solicitors for the Applicant: Watson Mangioni Lawyers Pty Limited

Counsel for the Respondent: Respondent in person

ORDERS

1. The interim application filed on 24 June 2011 is refused. 

2. The creditors’ costs in relation to that application be taxed and paid from the estate in the bankruptcy of Mr Shephard in the priority fixed by s.109(1)(a) of the Bankruptcy Act 1966 (Cth).

3. The creditors must give copies of this order to the Trustee and to the Official Receiver in Sydney within 2 working days.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 1333 of 2010

COSTAEXCHANGE LIMITED ACN 002 687 961
(FORMERLY CHIQUITA BRANDS SOUTH PACIFIC LIMITED)

First Applicant

ANTHONY GEOFFREY HARTNELL

Second Applicant

GARY WILLIAM WRIGHT

Third Applicant

DAVID ANTHONY BARDON

Fourth Applicant

PETER WOODS

Fifth Applicant

RIDLEY BELL

Sixth Applicant

MICHAEL TAMANI

Seventh Applicant

SCOTT ROLAND WOLGAMOT

Eighth Applicant

PETER JOHN MCPHERSON

Ninth Applicant

And

DEREK GEORGE SHEPHARD

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. On 12 October 2010 I made a sequestration order against the estate of Mr Shephard on the petition of a number of people of whom the first named was CostaExchange Limited.  Mr Shephard now, by interim application filed on 24 June 2011 in the same proceedings, seeks orders to set aside all the orders I made on 12 October 2010.  In my opinion, his application is lacking in substance in relation to its grounds.  Moreover, I would not be persuaded to exercise the discretion which Mr Shephard invokes. 

2. The orders I made on 12 October 2010 were: 

   1.A sequestration order be made against the estate of Derek George Shephard. 

   2.All proceedings under the sequestration order are stayed under s.52(3) of the Bankruptcy Act 1966…