DuluxGroup (Australia) Pty Ltd v Hado (No 3)

In the matter of *DuluxGroup (Australia) Pty Ltd v Hado (No 3)*, Judge Jarrett of the Federal Court of Australia considered a creditor's petition for sequestration filed by DuluxGroup (Australia) Pty Ltd against Mr. Hado. The dispute arose from a default judgment obtained by DuluxGroup in the Magistrates Court of Victoria for goods sold and delivered, which formed the basis of a bankruptcy notice and subsequently the creditor's petition. Mr. Hado contested the petition, arguing he had not purchased or received the goods in question.

The primary legal issue before the Court was whether Mr. Hado had committed an act of bankruptcy by failing to comply with a bankruptcy notice, thereby justifying the making of a sequestration order. This required the Court to determine the validity of the underlying debt upon which the bankruptcy notice was founded, particularly in light of Mr. Hado's assertion that he never ordered or received the goods. The Court also considered whether Mr. Hado had presented sufficient evidence of solvency to resist the petition.

Judge Jarrett found that while a credit agreement and a guarantee and indemnity were executed by Mr. Hado, the evidence did not establish that he personally ordered or collected the goods for which DuluxGroup claimed payment. The Court accepted Mr. Hado's evidence that he had never attended the relevant store and found that the documentation produced by DuluxGroup did not demonstrate his liability for the goods. Crucially, the Court found no evidence of actual, ostensible, or implied authority for Mr. Lumani, who appeared to have collected the goods, to act as Mr. Hado's agent in ordering them. Consequently, the Court was not satisfied that the debt claimed by DuluxGroup was properly established against Mr. Hado.

Accordingly, the Court ordered that the sequestration order made on 20 February 2020 be set aside and that the creditor's petition filed on 10 January 2020 be dismissed.