Darcey, P.m. v Pre-term Foundation, The - [1988] FCA 280

3UDGMENT KO. -T....EX.,

BANKRUPTCY - creditor's petition - discretion to dismiss on grounds of futility - debtor member of religious order - 12 years' standing - sworn vows of poverty - no assets - debt incurred on
court order for costs.
Bankruptcy Rules r . 20
Lewis' Australian Bankruptcy Laws 8th Ed. pp.77-78
In Re Leonard.Ex parte Leonard. [l8961 1 QB 473
In Re Bette. Ex parte Betts. [l8971 1 QB 50
Bayne V Blake (1909) 9 CLR 360

Re Hay (1914) 110 LT 47
In Re Field (A Debtor) [l9781 Ch. 371
PATRICK AICHAEL DARCEY and THE PRE-TERM FOUNDATION

23 May 1988
=ea1 No. Q520 of 1986
Fox, Wilcox and French JJ.
Sydney

IN THE FEDERAL COURT 1
OF AUSTRALIA 1
NEW SOUTH WALES 1
DISTRICT REGISTRY 1
GENERAL DIVISION

1 Appeal NO. G520 of 1986

B E T W E E N : DARCEY MICHAEL PATRICK
Appellant
and
THE PRE-TERM FOUNDATION
Respondent

MINUTE OF ORDER

JUDGES MAKING ORDER: FOX, WILCOX AND FRENCH JJ.
DATE OF ORDER: 23 MAY 1988
WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The appeal be dismissed.
Note: Settlement and entry of orders is set out in Order
36 of the Federal Court Rules.

IN THE FEDERAL COURT )

OF AUSTRALIA )
NEW SOUTH WALES )
DISTRICT REGISTRY 1

GENERAL DIVISION ) Appeal NO. G520 of 1986

B E T W E E N : DARCEY MICHAEL PATRICK
Appellant
and
THE PRE-TERM FOUNDATION
Respondent

CORAM: FOX, WILCOX, FRENCH JJ.
23 MAY 1988

REASONS FOR JUDGMENT

FOX J. :

The Court will deliver judgment in this matter now. I

will ask Mr Justice French to deliver the first judgment.
FRENCH J. :

This is an appeal from an order of a judge of this Court

sequestrating the estate of the appellant on the petition of the

respondent. The respondent's petition relied upon non-compliance

with a bankruptcy notice wherein demand was made for payment of

$4,076.96, being moneys due under a judgment obtained in the Local

Court of New South Wales on 6 December 1985.

Upon the hearing of the petition there was before the

Court a notice of opposition filed by the appellant together with a supporting affidavit sworn by him. These had been filed on the

day before the hearing and therefore two days outside the minimum

time required by r.20 of the Bankruptcy Rules. However no point

was taken on this account.

.
L .

In so much of his affidavit as was admitted into

evidence, the appellant told the Court that on 1 January 1986 he

had entered an order of Catholic religious known as the Mother of

God Brothers. As appears from its rules, this is a voluntary

association of Roman Catholic Laymen living in community. ~ t s

expressed objects are as follows:-

"...the glory of God; the sanctification of its Members,

embracing freely the Gospel counsels of chastity,
poverty, obedience; evangelisation; the charitable care

of handicapped men and other wounded persons."

The Order has received official recognition according

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.

Keep reading for free

Create a free CaseChat account to read Darcey, P.m. v Pre-term Foundation, The and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [1988] FCA 280
Decision Date: 23 Jul 1988

CaseChat Overview and Summary

The appeal was brought by Michael Patrick Darcey against The Pre-term Foundation. The case originated from a creditor's petition for bankruptcy against Darcey, who was a member of the Mother of God Brothers, a Catholic religious order. The dispute centred on whether the court should dismiss the petition on grounds of futility, given Darcey's vow of poverty and lack of assets. The Federal Court of Australia heard the appeal, with Justices Fox, Wilcox, and French delivering the judgment.

The court had to decide if the bankruptcy petition should be dismissed because it would be a futile exercise, considering Darcey's status as a member of a religious order who had taken vows of poverty and had no personal assets. The primary issue was whether the court could dismiss the petition based on the futility of bankruptcy, despite the absence of assets, and if Darcey's vows could be considered sufficient evidence of his poverty. The court also had to determine whether the Pre-term Foundation was a juristic person with standing in the matter and if there was any evidence that the Foundation was not acting in good faith.

The court reasoned that while Darcey's affidavit and the Brother General's affidavit indicated his lack of assets due to his vows, this alone was not sufficient evidence to prove his poverty. The court cited previous cases, such as Bayne v Blake and In Re Field (A Debtor), which established that a debtor's claim of destitution is not enough to dismiss a bankruptcy petition. The court held that it could not dismiss the petition on the grounds of futility as it was not in a position to ascertain the presence or absence of assets at the time of the petition. The court also found no evidence to support Darcey's allegation that the Foundation was not acting in good faith. Therefore, the appeal was dismissed.

Orders