El-Saedy, Hamdy Hussein v Dixon, Thomas William Frederick

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 8401 of 1997

In the matter of Magdy Mohamed Hussein and
   Sabria Hussein

BETWEEN:	HAMDY HUSSEIN EL-SAEDY APPLICANT
AND:	THOMAS WILLIAM FREDERICK DIXON RESPONDENT
JUDGE:		WHITLAM J
DATE OF ORDER:		17 JULY 1998
WHERE MADE:		SYDNEY

THE COURT ORDERS THAT:

1. The notice under s 139ZQ of the Bankruptcy Act 1966 dated 27 October 1997 is set aside.

DECLARES THAT:

1. The transaction pursuant to which a debt of $30,000 due by the bankrupt Magdy Mohamed Hussein and Sabria Hussein to the cross-respondent was forgiven is void against the cross-claimant.

AND ORDERS THAT:

1. The cross-claimant recover judgment against the cross-respondent for $45,000 on the cross-claim.

1. The cross-respondent pay the cross-claimant’s costs of the cross-claim.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 8401 of 1997

In the matter of Magdy Mohamed Hussein and
   Sabria Hussein

BETWEEN:	HAMDY HUSSEIN EL-SAEDY APPLICANT
AND:	THOMAS WILLIAM FREDERICK DIXON RESPONDENT

JUDGE:	WHITLAM J
DATE:	17 JULY 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

This is an application under s 139ZS of the Bankruptcy Act 1966 (“the Act”). The respondent is the trustee of the estate of Magdy Mohamed Hussein and his wife Sabria Hussein (“the bankrupts”) pursuant to a sequestration order made on 14 October 1992.

The s 139ZQ notice required the applicant to pay to the respondent an amount of $30,000. It impugned the transfer by the bankrupts of land at Toongabbie to the applicant on 19 August 1992. The notice alleged, in effect, that the applicant had paid only $100,000 of the consideration of $130,000 stated in the relevant instrument of transfer.

In the affidavit accompanying his application, the applicant said that the sum of $30,000 in question had been satisfied by his treating as repaid an equivalent sum previously lent by him to the bankrupts.  The respondent has cross-claimed for (1) a declaration that the transaction pursuant to which such a debt was forgiven is void against him, and (2) an order that the applicant pay him the sum of $30,000 plus interest.

The male bankrupt is the older brother of the applicant.  The chronology of relevant events is straightforward.

The bankrupts operated a petrol station and food store at Randwick.  They “walked out” of this business on 6 June 1988, which, according to their respective statements of affairs, is the date they were last able to pay their debts as they became due.

Beginning in 1988, the applicant lent the bankrupts various sums of money.  By the end of September 1990 the bankrupts owed the applicant in total an amount of $30,000.  A solicitor, Nick Milios, prepared a “loan agreement”, which the applicant and the bankrupts signed on 27 October 1990.  Mr Milios appears to have witnessed the parties’ signatures.  This is a confusing document.  It records the agreement of the applicant to lend the bankrupts the sum of $30,000 and…