JG Liddy, RJ McClenahan and IA Simic T/As Taylor and Scott Lawyers v Melhem (No.2)

The parties to this proceeding were JG Liddy, RJ McClenahan and IA Simic, trading as Taylor and Scott Lawyers, as the petitioning creditors, and Melhem, the debtor. The dispute concerned a creditor's petition seeking the sequestration of Mr Melhem's estate. The matter came before Judge Barnes in the Federal Court of Australia.

The primary legal issue before the Court was whether to make a sequestration order against Mr Melhem's estate, notwithstanding his failure to appear or file any defence to the creditor's petition. The Court was required to consider the requirements for making such an order in circumstances where the debtor had not contested the petition.

Judge Barnes reasoned that the absence of an appearance or defence by the debtor did not absolve the Court of its obligation to be satisfied that the requirements of the *Bankruptcy Act 1966* (Cth) had been met. However, in this instance, the Court was satisfied that the debt was due and payable, that the debtor had committed an act of bankruptcy, and that the petition had been properly presented. Accordingly, the Court made the sequestration order.