Hedrlin, Re J. - [1986] FCA 44

IN THE FEDERAL COURT OF AUSTRALIA	)
1

NEW SOUTH HALES DISTRICT	REGISTRY	1	No. 448 of 1983
1
GENERAL DIVISION	)

JOSEPH HEDRLIN

Bankrupt

MINUTE OF ORDER OF THE COURT

Judse makins

order: Burchett J.

Where made:

Sydney

Date of order:

February

1986

THE COURT ORDERS THAT:

(1) The

application

for

annulment

of the bankruptcy be

dismissed.

( 2 )	The bankrupt pay the costs of the	trustee and the
petitioning creditor.

NOTE:

Settlement and entry of orders is dealt with in Rule 124

of the Bankruptcy Rules,

2 .

Since then, there have been at least half a dozen

applications for annulment, and at least one further appeal to

the Full Court. The present application for annulment was said

to be

on a

ground new and different from grounds previously

taken. It was said that a sequestration order ought not to have

been made, because the debtor was, in fact, able to pay his

debts.

Mr. Hedrlin presumably relies on the decision

Sarina (1980) 32 A.L.R.

596.

With engaging frankness, he declares that

he had no

intention of paying the petitioning creditor's debt, and does not

intend ever to pay it, but that he was able to pay and that his

ability to pay provided a defence.

In support of this defence,

he has referred to his employment, although he declined to accept

that it could accurately be described by that name. Rather, he

preferred to say that he was engaged

in "helping" his wife in her

business, and indeed that

he helped in certain other businesses

as well. He says that by these means, though not working regular

hours, he was

in receipt of income.

He also referred to three particular properties,

that

is, pieces of

real estate, one at Wentworth Falls which was

his wife's name, one at Coffs Harbour which he says was

in the

joint names of his wife and himself, and one at Surry	Hills which
was in his wife's name.

. . ..

. '

4 .

items

did

say

that the

figures

were

approximate.

The

statement

affairs

showed

the

amount

owing

unsecured

creditors, according to part 2,

which was a

list of unsecured

creditors furnishing the names of some eight different creditors.

The total amount was shown as

$261,000 in the summary. Likewise

'in the summary. the amount by which the secured debts due

, creditors exceed the value of the securities, according to part

3 , was shown a3 $230,000.

Liabilities were totalled at $491,000

by reason of the addition of those figures.

In the same summary, assets were shown at, firstly,

property specified in part

5, $2.

(Part 5 is the section which

sets out details of property, most of the details

in the form

being completed "nil", and the details for cash in hand being completed at $2, which was also the total.) Other property was

shown at nil. The amount

by…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hedrlin, Re J.

Details

AGLC: Hedrlin, Re J. [1986] FCA 44
Case: [1986] FCA 44
Decision Date: 18 Feb 1986

CaseChat Overview and Summary

The case of Re J. Hedrlin involved the bankrupt, Joseph Hedrlin, who sought to have his bankruptcy annulled. The application was dismissed by Burchett J. in the Federal Court of Australia, New South Wales District Registry. The primary legal issue before the court was whether the sequestration order should have been made, given the bankrupt's assertion that he was capable of paying his debts. The bankrupt argued that his ability to pay provided a defence, citing his employment and ownership of certain properties. However, the court scrutinised the bankrupt's statement of affairs, which showed significant liabilities and minimal assets, leading to the conclusion that the bankrupt had not demonstrated his ability to pay.

The court examined the evidence presented by the bankrupt, including his income from helping his wife in her business and the value of the properties he claimed to own. Despite the bankrupt's declarations, the court found that the statement of affairs did not support his claims of financial capability. The court held that the bankrupt had not established a valid ground for annulment of the bankruptcy and dismissed the application. The court further ordered that the bankrupt pay the costs of the trustee and the petitioning creditor.

The reasoning of the court was grounded in the evidence presented and the legal framework governing bankruptcy. The court found that the bankrupt had not met the burden of proving his ability to pay, and therefore, the sequestration order was properly made. The dismissal of the application and the order for costs reflect the court's determination that the bankrupt's application was without merit.

Orders