DM Developments Pty Ltd v Romano
[2008] FMCA 1014
•28 July 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DM DEVELOPMENTS PTY LTD v ROMANO | [2008] FMCA 1014 |
| BANKRUPTCY – Section 73 composition. |
| Bankruptcy Act1966 Queensland Building Tribunal Act2000 |
| Re Beames; Ex parte Beneficial Finance Corporation Limited (1985) 7 FCR 216 Re Doukidis: Ex parte Consolidated Constructions Pty Ltd v Melsom (unreported FCA 26 June 1985) Re Tripodi: Ex parte Col Johnson Pty Ltd (unreported FCA 22 January 1987) Williamson, in Re; Ex parte Wearne (1980) 43 FLR 305 |
| Applicant: | DM DEVELOPMENTS PTY LTD |
| Respondent: | GERARDO JOSEPH ROMANO |
| File Number: | BRG 827 of 2007 |
| Judgment of: | Burnett FM |
| Hearing date: | 11 June 2008 |
| Date of Last Submission: | 11 June 2008 |
| Delivered at: | Brisbane |
| Delivered on: | 28 July 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Di Carlo |
| Solicitors for the Applicant: |
| Counsel for the Respondent: | Mr Ratanatray |
| Solicitors for the Respondent: | PHV Law |
ORDERS
That the application be dismissed.
That costs be reserved.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 827 of 2007
| DM DEVELOPMENTS PTY LTD |
Applicant
And
| GERARDO JOSEPH ROMANO |
Respondent
REASONS FOR JUDGMENT
Introduction
In this application the applicants seek orders pursuant to section 76B and section 22(5) of the Bankruptcy Act1966 that the respondent’s section 73 composition be terminated and that a sequestration order be made against him.
Background
The respondent was sequestrated by order made 9 July 2004. Mark William Pearce was appointed the trustee in bankruptcy. Following his appointment the trustee prepared and distributed to all creditors identified in the respondent’s statement of affairs his report to creditors dated 10 September 2004.
In May 2005 the respondent put forward a proposal pursuant to section 73 of the Act (the section 73 composition).
The trustee prepared and distributed to all the then known creditors a further report to creditors dated 31 May 2005. An annexure to the report was a notice of meeting of creditors and an agenda calling a meeting of creditors to consider the section 73 composition for 10 June 2005.
On 10 June 2005 the creditors meeting was convened and it was resolved to annul the respondent’s bankruptcy and the trustee was then appointed trustee of the section 73 composition.
A report to creditors was subsequently prepared by the trustee dated 21 June 2005 and distributed to creditors.
In April 2006 the applicants made contact with the trustee’s office. The applicant’s representative claimed on behalf of the applicants to be a creditor of the respondent. Although it is not apparent from the material it appears that the applicants had engaged the assistance of a debt collector, Marshall Freeman prior to or about this time. On 10 April 2006 the trustee wrote to them advising them on behalf of the applicants of events that had occurred to that time including the fact that the respondent had been bankrupted and subsequently had entered into the section 73 composition and that the bankruptcy had been annulled. He also requested that they file a proof of debt “in the composition to be eligible to receive a dividend on their debts”.
The trustee had noted that the composition would yield a small dividend to creditors whereas none would have been yielded in the bankruptcy.
Despite the respondent’s failure to disclose the existence of any debt to the applicants the trustee formed the view that it was in the creditor’s best interests to proceed with the section 73 composition. Accordingly a report to creditors was prepared and distributed by the trustee dated 22 May 2006 in which that recommendation was included.
In the report the trustee particularly noted two matters relevant to this application:
a)The respondents had received a sum of $5,415 by way of tax refund. He had not applied these funds to his estate. The funds were to be contributed by the respondent to the composition; and
b)The proof of debt lodged by the applicants was for a sum of $55,351.
Despite the late notice of the applicants’ proof of debt the trustee wrote to it on 9 May 2007. The trustee noted the applicants’ right to apply to have the composition terminated but notwithstanding that matter he considered it was in the creditors best interests for the composition to continue. Significantly he called upon the applicants to make a decision on whether or not they intended to make such an application as the trustee wished to distribute the funds being held to the creditors whose claims had been admitted in the composition. He indicated that in the absence of any application he would distribute funds by 25 May 2007.
By that time the respondent had contributed $13,280 pursuant to the instalment arrangement agreed in the section 73 composition including the additional sum of $5,000 received by way of tax refund. At that time a sum of $7,736 remained payable under the section 73 composition.
In a letter dated 23 May 2007 the applicants, by their Counsel Sam Di Carlo, wrote to the trustee and informed him of its intention to make application. A copy of the draft application which was foreshadowed to be filed within the next seven days was enclosed. He requested there be no distribution.
On 28 May the trustee conversed with Mr Di Carlo. The trustee restated his earlier expressed view to Mr Di Carlo that the 73 composition was in the best interests of creditors. He indicated that in any event he would neither consent nor oppose any application although he did state that he was concerned that the applicants had delayed in bringing his application. The matters discussed between he and Mr Di Carlo were affirmed in his letter to Mr Di Carlo of 18 June 2007.
By letter of 10 July 2007 Mr Di Carlo wrote confirming his instructions that he was to proceed to make application to set aside the section 73 composition. The letter detailed various grounds and suspicions held by his client which Mr Di Carlo contended supported his client’s application.
The trustee responded by letter of 12 July. In his letter he responded to the applicants’ allegations, particularly the allegations which suggested the respondent had access to other funds which had not been disclosed. The trustee indicated he was satisfied by the respondent’s responses to him in respect of those matters. He received no response. On 2 August the trustee again requested of Mr Di Carlo that he be informed of the applicant’s intentions as the trustee wished to distribute funds to the creditors. Following that correspondence the matter was discussed orally between Mr Di Carlo and the trustee on 9 August with Mr Di Carlo confirming his instructions on behalf of the trustee to make his application.
The subject of those discussions was confirmed in a letter by the trustee forwarded on 22 August.
On 26 September the application was filed.
The application as filed was defective in that it nominated DM Developments Pty Ltd as the applicant. It was conceded at the hearing that DM Developments Pty Ltd was not in fact the creditor. The creditors the subject of the proof of debt were in fact Kashini-Malaki and Dominique Taraborelli. Leave was given pursuant to FMCA Rule 11.01(1) to join them as parties. However the application by DM Developments Pty Ltd must fail.
Applicable legislation
Section 76B of the Bankruptcy Act provides that section 222 applies in relation to a composition under Division 1 Part V of the Act, as if the composition were a personal insolvency agreement executed by the debtor. Relevantly section 222 provides:
“222(5) Setting aside on grounds of false or misleading information. If a personal insolvency agreement is in force, the Court may, on application by:
…
(c) a creditor;
make an order setting the agreement aside if the Court is satisfied that:
(d) …
(e) the debtor has:
(i) omitted a material particular from the statement of the debtor’s affairs given under subsection 188(2C) or (2D); or …
222(6) [Order must be in interest of creditors] The Court must not make an order under subsection (5) unless it is satisfied that it would be in the interests of the creditors to do so.
222(7) [Timing] The Court must not make an order under subsection (5) unless the application for the order is made before all the obligations that the personal insolvency agreement created have been discharged. “
Basis of the Applicants’ Claim
It is clear that the respondent made a material omission for the purposes of section 222(5)(e)(i) by failing to disclose a debt alleged to be due by him to Mr Kashini-Malaki and Mr Taraborelli. In addition there was a failure to disclose the anticipated tax refund of about $5,000. There is in my view a prima facie basis justifying the application.
The applicants contend that the composition should be set aside on the basis that to do so would be in the interests of the creditors. In support of that contention the applicant maintains that:
a)There is a reasonable basis to believe that there are other recoverable assets that have not been disclosed;
b)There are factors about the debtor’s personal circumstances suggesting other money might be available to creditors;
c)The respondent has access to other funds which bring into question his financial circumstances.
In the Interests of Creditors
It is well settled that the Court will only set aside a personal insolvency agreement where it is in the interests of creditors to do so; Williamson, in Re; Ex parte Wearne (1980) 43 FLR 305 (Re Williamson); Re Beames; Ex parte Beneficial Finance Corporation Limited (1985) 7 FCR 216 at 229 (Re Beames). There must be some positive proof in support of the application. It is not enough to say that “it is not shown that setting aside would hurt the creditors”; Re: Beames supra 229; Re Tripodi: Ex parte Col Johnson Pty Ltd (unreported FCA 22 January 1987) at [4a] (Tripodi).
In exercising the power to set aside a personal insolvency agreement the Court must have regard to all relevant matters, including the interest of creditors, of debtors and the public; see Williamson supra at 605.
In Re Beames Pincus J observed that s.222(5) was too restrictive in his view because it could permit to stand a deed which should be declared void but which could not because of the difficulty of establishing that the declaration would be in the interests of creditors.[1]
[1] Beames at pg 232.
In Tripodi after noting Pincus J’s remarks Burchett J continued:
“[50] I respectfully agree with the opinions I have quoted concerning what has to be proved to satisfy s.222(5). I would add only the comment that, if Pincus J. is right in thinking the sub-section too restrictive, it would be even more so if the Court took a narrow view of the test as stated in those judgments. I think a broad view should be taken, and in a proper case it may be held that it is in the interests of creditors that there should be the full opportunity for inquiry which bankruptcy may entail, even though there is no assurance that inquiry will in fact uncover any further assets. But, as has been said, a mere speculative possibility is not in itself enough – the circumstances must raise an inference entitling the Court to conclude that the order would be in the interests of the creditors.”
In determining the issue a number of factors are relevant, they being:
a)The exercise of the power should be cost effective for the benefit of creditors;
b)Has there been any disqualifying conduct on the part of the debtor.
Cost/Benefit
In Re Williamson (supra) Lockhart J observed:
“If I were to accede to the submissions of counsel for the applicants and avoid the deeds and then either make summary sequestration orders or leave it to the creditors to decide whether fresh deeds should be executed, I have the firm view that, at the end of the day, what little there may be available now for unsecured creditors will be spent in more legal and administration costs, whittling away even further what remains for unsecured creditors, without any benefit to them or the public. I must take a practical view and not indulge in speculation as to theoretical possibilities of other assets emerging or other creditors possibly coming to light if the debtors are made bankrupt. …”
In the report to creditors issued on 10 September 2004 the respondent’s deficiency was calculated at approximately $9,000. The respondent had creditors totalling approximately $43,400 of which $15,300 was secured or partly secured and the remainder unsecured. At that time no mention was made of either the debt due to Mr Taraborelli or the tax refund receivable from the ATO. From information initially available to the trustee he expressed the view that he did not expect to make a distribution to unsecured creditors in the estate.
In the subsequent report to creditors of 31 May 2005, which report was provided in the context of the proposed section 73 composition, the trustee reported an estimated dividend to creditors of 15.4 cents in the dollar to creditors. That arrangement was principally premised upon the respondent’s mother forbearing from her claim in the estate. She was a sizeable creditor. At that time no mention was made of either the debt to the applicants or the anticipated return from the ATO.
Matters had evolved to some extent by 10 June 2005. At the meeting of creditors held on that date the respondent informed the meeting that he had lodged outstanding income tax returns and had been informed that he would receive a tax refund of between $5,000 and $6,000 for the financial year ending 30 June 2004. Those funds were noted to be divisible property of the bankrupt estate and available to the composition.
The meeting subsequently affirmed the composition in terms of the section 73 composition proposal.
The applicants contend that if their proof of debt is admitted in full they would have sufficient value to override the wishes of the remaining creditors. That matter is self evident.
However in this case the trustee has not presently made a determination concerning the applicants’ proof of debt.
The Applicants’ Debt
An issue in this proceeding concerned the quantum of the applicants’ claim. The applicant does not have a judgment. They have an order in their favour made by the Registrar of the then Queensland Building Tribunal ordering in a “decision by default” that the respondent pay to the applicants a sum of $55,351.53.
On the hearing of the application I heard evidence from the respondent concerning the manner in which this order came about. In broad terms the respondent was a party to proceedings before the Queensland Building Tribunal which had been instituted by the applicants. The respondent previously had conducted business as a cabinet maker and had entered into an agreement with the applicants to install cabinetry in a building project being undertaken by them. He claims his contract was summarily terminated by the applicants when he had almost completed the works. In any event the applicants then instituted proceedings before the Queensland Building Tribunal seeking to recover damages against him for his non-completion and for other costs including (I assume) rectification. There was another party to those proceedings whom the respondent claimed was the responsible party. That third party was alleged by the respondent to have been someone with whom the applicants required the respondent to undertake the project.
In the proceedings before the Tribunal directions issued and in particular a direction was issued on 13 February 2003 for the respondent to file a defence. It was in default of this direction that the subsequent decision by default was obtained. It was apparent there was no decision on the merits and the respondent expressed in evidence before the Court that he was quite distressed at the manner in which the proceeding before the Queensland Building Tribunal ensued. He was self represented at that time.
He did not seek to review the Tribunal’s determination. Nor did the applicants seek to enforce the Tribunal’s decision as a judgment. The decision alone is not otherwise enforceable. See section 85 Queensland Building Tribunal Act2000.
The quantum of the applicants’ indebtedness is further clouded by the conduct of the applicant in seeking to enforce their claim. The applicants appear to have engaged the services of Marshall Freeman, Commercial Debt Recovery and business Information Agents. It is plain that Marshall Freeman on behalf of the applicants were aware of the section 73 composition from no later than 10 April 2006 as it was on that date that Jenny Field from that firm spoke with Michael Dullaway of the trustee’s office. In initial conversations had between Mr Dullaway and Mr Taraborelli in May 2006 the trustee was informed that the sum sought to be recovered was $55,000.
Despite the applicants’ assertion of a debt in the order of $55,000 it subsequently entered into negotiations directly with the respondent in order to recover the alleged indebtedness. On 7 August 2006 the applicants caused their commercial debt recovery agents to write directly to the respondent stating that they were “prepared to settle the account for the sum of $10,000 as full and final settlement”. While the offer was clearly intended as a commercial offer to resolve the claim, undoubtedly factors such as the prospective enforceability of the underlying order; and the fact the applicants were seeking to achieve a payment from the respondent in circumstances that would have created a voidable disposition would have been factored into the figure claimed. In any event it is open to be inferred that the discount also makes some allowance for the risk that the full claim would not be accepted by the trustee.
If the trustee had reduced the value of the applicants’ claim in their proof of debt it is not inconceivable that any reduction would have reduced the claim by such amount as to bring it beneath the majority of value requirement for voting purposes. Accordingly it could have rendered impotent any claim by the applicants to control the meeting.
The trustee did not embark upon any proper assessment of the applicants’ proof of debt because the applicant brought this application.
In any event irrespective of the size of the applicants’ debt, as might have been accepted by the trustee, the trustee’s position remained unequivocal; there would be no dividend to any creditor in a bankruptcy.
In this case the applicants seek to have the composition set aside and a sequestration order made so that the trustee can conduct further enquiries into the affairs of the bankrupt. Although the applicants offered to ensure that none of the creditors was worse off by such an arrangement, for reasons which follow it was apparent to me that there is little prospect of there being any further benefit to unsecured creditors including the applicant. This is particularly so given that the applicants had been informed that they had some prospects of receiving a dividend of 5 cents in the dollar which would have enlivened a reasonable expectation of a dividend of $2,750 in the composition if their claim was accepted in full. Although there was not express evidence as to the trustee’s further costs I accept this matter was also relevant to the trustee’s view. Furthermore there is no apparent quantum of the benefit to the public to be achieved.
In my view this application is an appropriate case for the application of the practical approach expressed by Lockhart J in Re Williamson.
Respondent’s Conduct
The next matter raised in support of the application was the alleged reprehensible behaviour on the part of the respondent. In particular the applicants identified the respondent’s intentional failure to disclose his debt to the applicants in his initial statement of affairs.
In my view the matter is largely one of fact. I had the opportunity to observe the respondent under cross examination in the witness box. I listened carefully to his evidence. It was plain to me that the respondent was not a particularly well educated man and that he possessed a very simplistic and unsophisticated outlook on life especially in his approach to commercial matters. Despite the somewhat theatrical approach to cross examination nothing I saw or heard dissuaded me from that view. The respondent was open and frank in admissions which were clearly against his interests. For instance he was open about his failure to record the applicants’ indebtedness in his statement of affairs. From his own analysis he did not believe he was indebted because of the circumstances giving rise to the debt. Whilst his own approach is no justification for his position it did provide some insight and explanation for his intentional oversight. He was cross examined at length about other matters including his income and his capacity to borrow money to purchase a motor car. I considered his evidence in respect of those matters entirely plausible and I am satisfied as to the truthfulness of his responses to those enquiries.
The appplicants’ point to the respondent’s conduct as justifying the order sought. They rely upon:
a)Non disclosure of assets;
b)Access by him to funds from third parties;
c)Attempts at compositions outside insolvency;
d)Lifestyle issues; and
e)Failure to comply with the terms of the composition.
Non-disclosure of Assets
It was submitted on behalf of the applicants that there was some misconduct on behalf of the respondent associated with the receipt of a tax refund. It was clear to me that the respondent did not have a particularly accurate recollection of historical fact from the witness box. He had foreshadowed the receipt of the tax return after his sequestration because in the course of his administration he was required to prepare tax returns for period preceding and through the course of his insolvency. So much is recorded in the minutes of the creditors meeting of 10 June 2005. That matter having been raised in the course of his administration it seems improbable that anyone could realistically have expected that upon receipt of that sum the respondent would have been able to receive those funds without there being any further enquiry as to their disposition. It is quite apparent from the minutes of the creditors meeting that those funds were anticipated in June 2005. The subsequent report to creditors note the trustee’s demand that the sum received from the commissioner be brought to account through his bankruptcy rather than personally in the manner which had been contemplated by the respondent himself. The respondent’s failure to appreciate the need to bring that tax dividend into his estate was one based upon his lack of financial sophistication. To like effect was his failure to appreciate that entering into a composition directly with the applicants also would have effected an unfair advantage to them as creditors.
Third Party Funds
The applicants also sought to make something of the source of funds made available to the respondent by his mother. It seems fairly open to infer that funds from that source were being advanced to assist the respondent on the basis of familial ties and on no other basis. I do not think any adverse inference can be drawn by reason of those matters.
Arrangements outside Insolvency
The applicants seek to have an adverse inference drawn on the basis that he sought to enter into a composition with a debtor by attempting to make a preferential payment to the applicant. Putting aside the applicants’ own lack of clean hands in promoting that transaction the fact that the respondent sought to treat with the applicants does not of itself demonstrate the respondent had access to “hidden” funds. The respondent’s evidence was that his mother was prepared to help in order to resolve his financial difficulties. She was to be the source of funds and on that basis I do not consider any adverse inference can be drawn concerning the existence of other monies which would otherwise have been brought to account.
Lifestyle Issues
Other matters raised by the applicants including the respondent’s capacity to borrow money to purchase a car and his evidence concerning his employment. There is no evidence to suggest any improper conduct on the part of the respondent. Those matters were investigated by the respondent’s trustee who was content with the explanations he received. The applicants advance no evidence in support of their suspicions.
Non-compliance with the Composition
Finally it is suggested there has been non-compliance by the creditor with the terms of the composition. While that is strictly correct it can be seen from Exhibit 6 the debtor had to that point substantially complied with the terms of the composition. I do not see that non-compliance as a disqualifying consideration. In my view there is nothing in the applicants’ suspicions and I do not draw any adverse inferences.
Non-disclosure of Assets Generally
The applicants contend there is a reasonable basis to suspect the debtor has other assets which he has not disclosed. There was no basis in direct evidence for this suspicion. The indirect evidence lacked substance. I am not satisfied there were undisclosed assets.
Even if I were wrong on that matter the instance of possibly undisclosed assets was considered in Re Doukidis: Ex parte Consolidated Constructions Pty Ltd v Melsom (unreported FCA 26 June 1985) (Doukidis). There Toohey J stated:
“[12]…It maybe, for instance, that Mr Doukidis in truth had no assets or no assets of any value at the time of the composition. It that event it would serve little purpose to set aside the composition. That is not to say that the Court need be satisfied on this hearing that there were undisclosed assets. It is, I think, enough if the evidence justifies an inference that there are likely to have been assets and that the creditors may be better off if the composition is set aside. … Even then the Court must have regard to all relevant matters including the interests of creditors and of the public… In my view this includes the conduct of the creditor who seeks to set aside the composition.”
In Doukidis the Court set aside the composition. However it was influenced in that instance by a number of features not evident in this case. The most significant characteristic considered in Doukidis was the very complex business structure which pre-existed the bankrupt’s sequestration. Undoubtedly that lead His Honour Justice Toohey to note the composition was “a curious one” and to consider that by reason of questions asked at the meeting of creditors “enquiries into his affairs may have proved fruitful.”[2]
[2] At [8].
Another relevant matter in that case included the failure to make adequate disclosure by the debtor of his affairs. That background has to be measured against the very complex business arrangements the bankrupt had prior to his sequestration. The facts in this case are clearly distinguishable.
In this case, even if I were wrong and the evidence does justify an inference that there are likely to have been assets, they would only have been of insignificant value. In that regard I note that prior to bankruptcy the respondent conducted business as a sole trader cabinet maker. The assets in his possession at the time of his sequestration included a Ford Falcon utility and tools. The assets are entirely consistent with what one would expect of a small business operating as a cabinet maker. Likewise his creditors principally appear to be trade related except for his mother who the debtor claimed advanced him funds to assist him with his financial difficulties. His commercial history and lifestyle did not suggest he possessed or had access to significant assets. Accordingly even if there were undisclosed assets they would not have been significant. On any basis it could not be seen that the creditors would be better off if the composition was set aside and the debtor was sequestrated. This is particularly so when one has regard to the opinion expressed by the trustee.
In this case the evidence of the trustee is that the setting aside of the composition and sequestration order will not be in the interests of creditors. The claim by the applicant is merely speculative. It is not founded in evidence. It is based upon inferences sought to be drawn from a belief held by the applicants as put by their Counsel. Those beliefs included: a suspicion founded upon the fact that the debtor was employed at $50,000 p.a. with no variation in salary for three years; he had previously been bankrupt; and, during the course of his composition he had been able to secure funding to purchase a motor car. In my view he had a plausible explanation for each issue. I did not feel anything turned upon the matters raised by the applicants as suspicious.
Irrespective of the application of the restrictive approach suggested by Pincus J or the more persuasive approach advocated by Burchett J it is clear the discretion would not be exercised if the circumstances said to support the application were merely speculative. That is to say there must be some evidence or rational basis to support the exercise of the discretion. A mere speculative possibility is not enough in itself to warrant allowing the application. The circumstances must raise an inference entitling the Court to conclude that the order would be in the interests of the creditors; see Re Armando Tripodi Ex Parte: Col Johnson Pty Limited[3]. In Tripodi, Burchett J examined and cited with approval Doukidis, and Re Beames; Ex Parte Beneficial Finance Corporation Limited (1985) 7 FCR 216 (Pincus J).
[3] [1987] FCA 8 (22 January 1987) at [50].
Other Matters
The only other matter raised by the applicants was their offer to pay the costs of an ongoing sequestration. Putting aside their claim the remaining creditors are small in value and number. The composition offers them finality. Although the applicants may offer an indemnity to the other creditors such an offer ignores intangible costs. Such costs include the administrative costs each of the creditors in the ongoing administration. Additionally the creditors suffer the opportunity cost of their dividend entitlement whilst the applicants pursue their extended investigation. Given the size of the estate and its relative simplicity I do not think that in these circumstances the offer to provide the creditors an indemnity is sufficient to warrant a conclusion that such an order would be in the interests of creditors, even if the applicants are prepared to support this speculation at their own cost.
Ultimately there is always a public interest component to bankruptcy proceedings. In this case I do not think the public interest would be served by setting aside the composition and sequestrating the debtor. There has clearly been some history between these parties. The applicants have not been vigilant in enforcing their rights. Their application in these circumstances is more consistent with vendetta than pursuit of objects sought to be achieved under the Act.
Although the applicant also referred to Re Nassar (debtor); Advance Bank Australia Ltd v Nassar (unreported FCA 21 December 1994). That authority does not add to the principles under consideration. For instance in that case the debtor was conducting a substantial business prior to the meeting of creditors. In that context the Court concluded that the smallest of the dividends was a factor rendering the composition unreasonable.
Conclusion
The applicant seeks to have a creditors composition set aside pursuant to s.222. Prima facie they have an entitlement to have the composition set aside because of false or misleading information given by the debtor in respect of his affairs as put to a creditors meeting: s.222(4)(d).
However despite the prima facie entitlement to such relief such an order is not in the interests of creditors as is required pursuant to s.222(b) because:
a)The estate is small;
b)There is an acceptable explanation for why misleading information was given;
c)There has been substantial compliance with the terns of the composition;
d)There are no undisclosed assets.
In all the circumstances the application should be dismissed.
Orders
Application dismissed.
Costs reserved.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Burnett FM
Associate: Beverley Schmidt
Date: 28 July 2008
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