CostaExchange Limited v Shephard (No.2)

CostaExchange Limited was a creditor of the bankrupt, Mr Shephard. The dispute involved an interim application by the creditor, seeking to have the court make an order that would allow them to pursue Mr Shephard's personal assets, notwithstanding that he was already subject to a bankruptcy order. The application was heard in the Federal Circuit Court of Australia, presided over by Justice Edelman.

The legal issues before the court included the extent of the protection afforded to a bankrupt under the Bankruptcy Act 1966 (Cth), and whether the court should grant the creditor’s application to make an order that would allow them to pursue the bankrupt’s personal assets. The court had to consider the statutory provisions regarding the rights and protections of a bankrupt, as well as any relevant case law on the matter.

The court found that the statutory provisions provided sufficient protection to the bankrupt, and that the creditor’s application was not warranted. The court concluded that the creditor was seeking to circumvent the protections afforded to the bankrupt, and that such an approach was not in line with the purpose of the Bankruptcy Act. As such, the court refused the creditor’s application and ordered that the creditor pay the costs of the application from the bankrupt’s estate. The court also ordered that the creditor provide copies of the order to the Trustee and the Official Receiver within two working days.