Eton, P.H. v Draney, P.W

[1990] FCA 506

IN THE FEDERAL COURT OF AUSTRALIA ) QB l080 of 1990

GENERAL DIVISION 1

BANKRUPTCY DISTRICT OF THE SOUTHERN) DISTRICT OF THE STATE OF OUEENSLAND)

RE:  PETER HOWARD ETON

(Debtor)

EX PARTE :  PETER WILLIAM DRANEY AND
BEVERLY JUNE DRANEY

(Creditors)

MINUTE OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	14 SEPTEMBER 1990
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

1.    The application for annulment be dismissed.

NOTE:  Settlement and entry of orders is dealt with in Rule
124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA	1	QB 1080 of 1990
GENERRL DIVISTON	)
BANKRUPTCY DISTRICT OF THE SOUTHERN	1
DISTRICT OF THE STATE OF OUEENSLAND	1

RE:  PETER HOWARD ETON

(Debtor)

EX PARTE:  PETER WILLIAM DRANEY AND
BEVERLY JUNE DRANEY

(Creditors)

CORAM: PINCUS J.

PLACE: BRISBANE

m: 14 SEPTEMBER 1990

REASONS FOR JUDGMJINT

This is an application for annulment of a bankruptcy arising from the filing of a petition by the debtor, Mr. Eton, and its acceptance by a Deputy Registrar on 22 August 1990. The ground of the application is that on that date (22 August) there was pending a creditors' petition for sequestration issued by the present applicants, Peter William and Beverley June Draney.

The applicants obtained judgment against the bankrupt on 26 March 1990 in a sum of over $400,000 and subsequently took bankruptcy proceedings. Their petition for sequestration was filed on 27 July 1990 and was returnable on 16 August 1990. However, it had not been disposed of at the date of filing of the debtor's petition for the reason that the debtor had filed an affidavit under s.41(7) of the

Bankruvtcv Act 1966 and the hearing consequent upon that step had been adjourned to 24 August 1990: the debtor's petition was filed two days before that hearing was to be held.

It should be mentioned that bankruptcy proceedings
have also been taken in respect of the same judgment debt
against the debtor's wife but nothing appears to turn on that.

Counsel for the applicant argued that the

bankruptcy, consequent upon acceptance of the debtor's
petition, should be annulled as an abuse of process, relying
upon Clvne v. Devutv Commissioner of Taxation (1984) 154 CLR

589. It was held in that case that the power to annul given by S. 154(1) might be exercised at such a bankruptcy as this, where the debtor's petition is filed for a "purpose foreign to the nature of the process in question". In that case, the purpose was to shorten the relation back period.

Here the debtor has given evidence of his purpose.

He says in effect that he filed the petition under pressure

the relation back period. from his wife. There is no evidence that he wished to shorten In Edelsten v. Deputv Commissioner of Taxation

(1989) 86 ALa 257, the Full Court discussed the scope of the

High Court's decision in Clvne. In Edelsten's case there was a finding that a purpose of filing the petition was to reduce the prospect that earlier transactions entered into by the debtor could be set aside. That was attacked by argument on

appeal, the appellant being unrepresented. But the attack was not based on any suggestion that if the purpose was found, the order for annulment was wrongly made. The case is therefore indirect authority for the view that harbouring a purpose of reducing the prospect that earlier transactions entered into could be set aside is sufficient. To that extent, the case is some authority for the extension of the doctrine of Clvne's case.

Here, however, I can see no ground on the evidence for finding the existence of a purpose of such kind as to be a ground of annulment. It must often happen that people file their own petition for reasons which are partly personal or emotional rather than based upon calculation and that seems to have been so here. Although, as it seems to me, the debtor's resistance to the creditors' petition was genuine, his having abandoned that resistance because his wife was tired of the pressure being exerted by creditors does not show that he had any improper purpose. Clvne's case is no authority for the view that filing a debtor's petition during the pendency of a creditor's petition is prima facie an abuse of process.

The application for annulment is dismissed.	I certify that this and the
two preceding pages are a true copy of the reasons for judgment herein of his Honour Mr. Justice Pincus.
Date /v / ? S D .