DCT v McCormick (No.2)

In the Federal Court of Australia, the case of DCT v McCormick (No.2) involved a sequestration application brought by DCT against Bryan McCormick. The dispute centred on the enforcement of a judgment debt owed by McCormick, with DCT seeking to have McCormick declared bankrupt. The primary legal issue before the court was whether McCormick's failure to comply with a court-ordered payment plan constituted an act of bankruptcy, thereby justifying the sequestration of his estate.

The court was required to interpret the relevant provisions of the Bankruptcy Act 1966 and determine whether McCormick's actions met the statutory criteria for an act of bankruptcy. The court held that McCormick's non-compliance with the payment plan amounted to an act of bankruptcy under section 43(1)(b) of the Act. The court emphasised the seriousness of failing to adhere to a court-ordered payment arrangement, which it deemed to be a deliberate disregard for the court's authority.

Consequently, the court ordered the sequestration of McCormick's estate, with the costs of the application to be paid by McCormick from his estate. The sequestration order and the costs order were to be stayed for seven days to allow McCormick an opportunity to appeal the decision. The court’s decision underscores the importance of adhering to court orders and the potential consequences of non-compliance for debtors.