Fiacon Property Services Pty Ltd v Ashourian

Fiacon Property Services Pty Ltd (the creditor) applied to the Federal Court of Australia for a sequestration order against Mr. Ashourian (the debtor) based on the debtor's alleged failure to comply with a bankruptcy notice. The bankruptcy notice was issued on the basis of a judgment obtained by the creditor against the debtor.

The central legal issue before the Court was whether the preconditions for making a sequestration order, specifically the debtor's failure to comply with the bankruptcy notice, were satisfied. This required the Court to determine if there were substantial reasons for questioning whether a debt was genuinely owed to the petitioning creditor behind the judgment upon which the bankruptcy notice was founded.

Judge Manousaridis found that the debtor had raised substantial reasons for questioning the existence of the debt. The Court concluded that the creditor had not discharged its burden of proving the existence of the debt owed to it. Consequently, the creditor's petition for a sequestration order was dismissed.