Gotsios, Re J. Ex Parte Zweiger Nominees Pty Ltd

[1986] FCA 521

NOT FOR DISTRIBUTION

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Thrre a r e tzo matters f o r s m s l d e r a t l u n b e f c r ~ the

Court. "h2 debtor is saekina an adjirurnment of che hearlnu

or' the pe t l t ion and the pccicionlng credi tor is sceking leave

t o amend the pet i t i f in bj- substituting paragraphs 2 and 4 to

xhat appears current ly in the pet i t ion. These txo matters

a r e , t o surne extent, inter-mixed. I propose t o d e a l f i r s t

wi th the appl ica t ion for the leave t o amend.

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being souqht at the time. H a T l r l q t-euard to the diff lcultlea

I encountered -,-esterday 1 r l tr-Tinff C O understand =hac the

matter xas a l l about. and althoutrh an appllcatlon xas made to

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amend the p'etition ysstsrdal;,	I =as ncjt in a position t;	l
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consider that, so I adJr;urned che matter CG todar and L

strongly ad~ised the debtor CG have legal representation or

representation of some kind here toda:;.

At preaenc, pak-&gcaglls L and 4 Gf the pstltlun are

almost meanlngles5 and paraqkaph 4 ialls to comply with the

requirements of Form 5 of the Bankrkptcl; Rules xhlch requlre

the petition to set out the nature and dat'e or dates of the

act or acts of bankruptcy relied upon. The petition as

presently framed does not do so at all. It mere12 makes

reference to the sEr;-ing of a bankruptcy notlce on 23 June

19%. It does not say xhether the notice =as a l4 day

notice. a 21 da? notice or any other perid. Lfioklng at the

petition, it is complete13 inpossihle to work out ;;hen the

act of bankruptcy ;as committed.	,	.:
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Ibutice or' proposed awrdments has he'en qlven to the

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solicitors €or the debtor i.ih 12 represented today by counsel

and in all the circumstances I chmk Lt 1s appropriate to

give l e a x to amend the pstition in thc- form souaht and to

dispense Glth further veriflcatlon and ser;-ice of the

petition as amended. But, hecause of the nacure of the

amendments xhich are far more than merely a clerlcal

amendment, the Court should refuse to award to the

petltioning credltor costs xhich xere reserved yesterday.

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I curn tfi cons1ili-k che qurstlon of thc ad?ournmenc.

The debtor apparently carr1ss m a manufaccuring busmess cd

manufaccurlng spsrtzear under the name Jim-Jam. In July G €

last year he cntcred ints a deed of arrangement xith his t .I

creditors but that deed gas terminated this year =hen the

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current petitioning srsditor obtained a judgment agalnst the

debtor in the sum of approximatsly $24,0irO. Bpplylng a

presumption OT compliance a t h the requlremenca of the

Bankruptc-I Act, one drass the inference that that debt =as

incurred afcsr the desd of arrangemenc =as entered into.

The judumcnt #debt upon dhsh the petition is

founded zas made on 21 A p r l l 1 3 S . the bankruptcy notice =as seri-ed on 23 June 13SG and the act of bankrUptC:J occurred on

7 J u l y 1386. " h e debtor qave e-Gldence on oath in support of

the application f o r the adjournment and hls eyidence is to

the effect that he owes about $lGO,GOO; he has stock on hand

of about $120.000 and 1s owed about $75,irOO by other debtors.

He desires to keep on manufacturing to try and trade out of

that debt position and if need bs to seek a Fart X

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arrangement in the very near fucure.

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It xas uracd upon me by counsel for che petitioning

credlcor that In real1t:r the debtor =as instjlvent. The past I. I I. ;

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history disclosed the facc chat It iJaj most unlikely that the debtor ssuld trade Gut c,f lils surrc-nt E.lnanclal posltlon and that the Court should contlnue a c h ths hrarlnq of the

petitllsn xhich, II prwed. should' support the making of a

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sequestratlun order, among other thinus tfi prstc-ct the oubl lc

ueneral1;- and rjetjple who arc l l k e l > - L o deal a t h the debtor,

and also tu prr;-ent ths dsbtor from dlzalpatlnu his assets.

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The+ are ztronu araurnsnts but. I n n:i oplnlon, thls 1s a cas-?

;;here there should be some aalournmenc	for a relatively short
perlod, thc reason being that chls	1s a case =here the

judgment xas early this p a r , the act of bankruptcy was In

July of this year and yesterday	Gag the first return date of
the hearing of the petition.

I have already made some comments about my

assessment of the debtor. ljns has certain doubts about his

abilities as a busmessman to conduct hls business adequately

to trade out of hls current financial posltlon. It is true

that at the moment he is faclnq charges L n connection zith

cheques zhlch =ere dishonoured. Those cheques are related t o

the judqment obtaincd by the petitlonlng creditor aualnst the

debtor. Ijespite all those factors, In che Exercise of m:r

discretion, I consider that che debtor should be gls-en some

short time to enable the matter to stabilise co some extent

so that zhen che matter comes on for hearing again before

thls Court, the Court xi11 be in a position to have a better

understanding of the xhole matter, and if need be, to proceed

with the hearing of the petitlon zhhlch now is in a proper

form.

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creditor are reserved.

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