GOULSTON v Twycross

[2014] FCCA 1299

FEDERAL CIRCUIT COURT OF AUSTRALIA

GOULSTON v TWYCROSS [2014] FCCA 1299

Catchwords:
BANKRUPTCY – Creditor’s petition – where judgment debt upon which bankruptcy notice based above statutory minimum for the making of a sequestration order – where no repayment plan in evidence – where act of bankruptcy committed – where proof of other matters required by Bankruptcy Act satisfied – whether to make sequestration order.

Legislation:  

Bankruptcy Act 1966 (Cth) ss.52, 153A

Applicant: BRETT GOULSTON

Respondent: COLIN TWYCROSS

File Number: SYG 1170 of 2014

Judgment of: Judge Raphael

Hearing date: 16 June 2014

Date of Last Submission: 16 June 2014

Delivered at: Sydney

Delivered on: 16 June 2014

REPRESENTATION

Solicitors for the Applicant: Spencer & Co Legal

For the Respondent: In person

ORDERS

1. A Sequestration Order be made against the estate of Colin Twycross.

2. The Applicant’s costs be fixed in the amount of $4,996.07 and paid from the estate of the Respondent in accordance with the Act.

3. Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days

THE COURT NOTES

1. The date of the act of bankruptcy is 17 February 2014.

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT SYDNEY

SYG 1170 of 2014

BRETT GOULSTON

Applicant

And

COLIN TWYCROSS

Respondent

REASONS FOR JUDGMENT

1. There came before the court this morning an application for a sequestration order based upon a creditor’s petition presented to the court on 30 April 2014.  The debtor, Mr Twycross, appeared in person.  He referred the court to an affidavit filed on 20 May 2014 in which he indicated that, whilst he agreed that he owed the money alleged by the applicant in the bankruptcy notice and the petition, he had suffered from some serious medical conditions which had prevented him from working and thus prevented him from making an arrangement with the creditor.

2. He told the court that he had recently got to a stage where he was able to go back to work and he felt that if the creditor’s petition was adjourned or dismissed he would be able to repay what is, in effect, not a very large debt of some $8,000 plus costs.  In his affidavit, Mr Twycross also made some comments concerning the debt itself, but those are matters which have already been considered in another place and his affidavit does not indicate anything which would entitle the court to go behind the judgment.

3. The court is always reluctant to make sequestration orders for small amounts but, on the other hand, a creditor who has a judgment and has complied with all the necessary requirements of the Bankruptcy Act 1966 (Cth)[1] is prima facie entitled to a sequestration order, provided the amount is in excess of the statutory limit of $5,000.00.  Mr Twycross was unable to satisfy the court, either through his affidavit or through his discussions with me, that there was any firm plan for repayment of the debt and, indeed, this was unlikely given that he has only been back at work for a short time.

   [1] The Act.

4. However, in the court’s view, it would be best to bring this matter to a conclusion sooner rather than later so that any costs not outweigh the value of the judgment and make it more and more difficult for Mr Twycross to satisfy his obligations. It is for those reasons that the court has decided not to grant any adjournment of the petition or to set it aside. The court would remind Mr Twycross that there are provisions in the Act which allow him to come to an early annulment of his bankruptcy, either by paying the whole of the debt and costs, in which case the annulment is automatic pursuant to s.153A of the Act, or by coming to an arrangement with his creditors, which can be done through his trustee.

5. I am satisfied the respondent committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters required by s.52 of the Bankruptcy Act. I make a sequestration order against the estate of Colin Twycross. I order that the applicant’s costs including reserved costs, if any, be taxed and paid from the estate of the respondent in accordance with the Act. I order that the applicant’s costs be fixed in the amount of $4,996.07 and paid from the estate of the respondent in accordance with the Act; under the Bankruptcy Regulations, a copy of this sequestration order be given to the Official Receiver in Sydney within two days.  The court notes the date of the act of bankruptcy is 17 February 2014.

I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Judge Raphael

Associate: 

Date:  19 June 2014