Legge v Mackinlays
[2007] FMCA 223
•2 March 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LEGGE v MACKINLAYS | [2007] FMCA 223 |
| BANKRUPTCY – Annulment of sequestration order – principles – whether sequestration order ought not to have been made – failure to make full financial disclosure – discretionary factors. |
| Bankruptcy Act 1966, ss.5(2)&(3), 74, 109(1)(a), 153A, 153B, and 154 Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth), r.7.04 |
| Baker v Rigg [2005] FCA 1760 Boles v Official Trustee in Bankruptcy [2001] FCA 639 Byczko v Sheahan [2001] FMCA 120 Cheung v Maxims Entertainment Pty Ltd [2002] FMCA 348 Hudson v Whalan [1999] FCA 189 Lockhart v DCT (2005) 59 ATR 540; [2005] FMCA 641 Mahmoud v The Owners’ Corporation Strata Plan No 811 [No.3] [2006] FMCA 1742 Plant v Ken Smith Electronics Pty Ltd & Anor [2000] FMCA 7 Re Almassy [1999] FCA 1004 Re Burlock; Burlock v Commissioner of Taxation (1994) 49 FCR 522 Re Ditford; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 Re Frank; Ex parte Piliszky (1987) 16 FCR 396 Re Ginnane; Ex parte Ginnane (1994) 60 FCR 429 Re Gollan; Ex parte Gollan (1992) 40 FCR 38 Re Papps; ex parte Tapp (1997) 78 FCR 524 Re Williams (1968) 13 FLR 10 Sandell v Porter (1966) 115 CLR 666 Stankiewicz v Plata [2000] FCA 1185 |
| Applicant: | GEOFFREY SPENCER LEGGE |
| Respondent: | MACKINLAYS |
| File Number: | PEG 159 of 2006 |
| Judgment of: | Lucev FM |
| Hearing date: | 9 November 2006 |
| Date of Last Submission: | 9 November 2006 |
| Delivered at: | Perth |
| Delivered on: | 2 March 2007 |
REPRESENTATION
| Applicant: | Mr. Legge in person |
| Counsel for the Respondent: | Ms. L. Horwood |
| Solicitors for the Respondent: | Mackinlays |
| Counsel for the Official Trustee: | Mr. A.F. Carles |
| Solicitors for the Respondent: | Carles Solicitors |
ORDERS
The Application be dismissed.
The costs of the Respondent and the Official Trustee be taxed and paid out of the Bankrupt’s estate in the priority fixed by s.109(1)(a) of the Bankruptcy Act.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 159 of 2006
| GEOFFREY SPENCER LEGGE |
Applicant
And
| MACKINLAYS |
Respondent
REASONS FOR JUDGMENT
The application
This Application is an application for annulment of a sequestration order under s.153B of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) filed by Geoffrey Spencer Legge (“the Bankrupt”) on 21 June 2006 (“the Application”).
Evidence before the Court
Affidavits
The affidavits before the Court are:
a)Geoffrey Spencer Legge sworn 12 June 2006 (“the Bankrupt’s affidavit of 12 June 2006”);
b)Heljo Cameron sworn 10 August 2006;
c)Heljo Cameron sworn 15 August 2006;
d)Geoffrey Spencer Legge sworn 29 August 2006 (“the Bankrupt’s affidavit of 29 August 2006”);
e)Alistair Robert MacKinlay sworn 4 October 2006 (“Mr MacKinlay’s affidavit”);
f)Heljo Cameron sworn 5 October 2006 – attaching the updated report of the Official Trustee, written pursuant to Rule 7.04 of the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) (“Official Trustee’s Report”)[1], (which supercedes her previous affidavits) (“Ms Cameron’s affidavit”); and
g)Alan Francois Carles sworn 1 November 2006 (“Mr Carles’ affidavit”).
[1] Attached as Annexure “A” to Ms Cameron’s affidavit.
Submissions
The written submissions before the Court are:
a)“Applicant’s Written Submissions” – filed by the Bankrupt on 6 November 2006 (“the Bankrupt’s Submissions”); and
b)“Official Trustee’s Outline of Submissions” – filed on behalf of the Official Trustee on 7 November 2006 (“Official Trustee’s Submissions”).
Background facts
The Bankrupt became bankrupt on 22 March 2004 by sequestration order issued pursuant to a creditor’s petition filed 16 February 2004 by Mackinlays Solicitors (“Mackinlays”).
Mackinlays were not the only creditor of the Bankrupt. Several Proofs of Debt were submitted to the Official Trustee in Bankruptcy (“Official Trustee”). Not all of the Proofs of Debt submitted have been accepted by the Official Trustee: see the detail of the Proofs of Debt set out at paras. 11-16 below. However, the Bankrupt appears to only contest the validity of the debt owed to Mackinlays.
There is very little detail before the Court regarding the state of the Bankrupt’s financial affairs at the time the sequestration order was made in March 2004. It appears that the Bankrupt filed a Statement of Affairs with the Insolvency and Trustee Service Australia (“ITSA”) on 7 April 2005, however only 3 pages of the Statement are before the Court with the only information provided being that of past and expected income.[2]
[2] Mr Carles’ affidavit: see Annexure “H”.
The Bankrupt was one of three directors of the company JJG Nominees Pty Ltd (in Liquidation) trading as ADS Automation (“the company”).[3] The company was wound up by an order obtained on 3 February 2003.[4] The winding up of the company resulted in legal action between the directors in the District Court of Western Australia (“the District Court”) and both of the other directors have submitted Proofs of Debt against the bankrupt estate: see para.11(a) and (c) below.
[3] Official Trustee’s Report, para. 1.1.
[4] Official Trustee’s Report, para. 1.1.
The Bankrupt did not defend the action taken by Mackinlays which gave rise to his bankruptcy.[5] The Bankrupt gave reasons in submissions to the Court (but did not give evidence concerning the matters giving rise to those reasons) for not defending that action, namely:
a)he was “under a lot of mentally – physically I was a bit of a wreck actually”;[6] and
b)“As all of this closing of the company took a heavy toll on me personally, I basically made some unwise decisions in not defending MacKinlays court action”.[7]
[5] Transcript, p.4; Bankrupt’s Submissions, p.4.
[6] Transcript, p.4.
[7] Bankrupt’s Submissions, p.4.
No previous application has been made by the Bankrupt in relation to the sequestration order, such as an application to set aside, prior to the current application to annul.
Bankrupt’s affidavit of 12 June 2006
The Application was supported by an affidavit sworn by the Bankrupt on 12 June 2006 (“the Bankrupt’s affidavit of 12 June 2006”). Both the Application and the Bankrupt’s affidavit of 12 June 2006 state that the basis for the Application to annul is that:
Evidence has become available (letters and invoice) that show an error in fact. The original applicant presented detail that was incorrect showing and claiming monies were owed by me.[8]
Attached to the Bankrupt’s Affidavit of 12 June 2006 are:
a)a Statement of Account dated 29 April 2003 from Mackinlays addressed to “Mr G Legge ADS Automation” at a Willeton address referring to various accounts between 12 March 2003 and 29 April 2003 showing a total due of “$2,984.04”, plus a handwritten annotation referring to an indecipherable account, the sum due for which is $4,265.80, bringing the total due by the Bankrupt to Mackinlays to $7,249.84;
b)an account dated 29 April 2003 from Mackinlays to “Mr G Legge ADS Automation” at the same Willeton address showing an amount of $724.41 due and payable within 7 days (which sum is included in the Statement of Account referred to in (a));
c)a letter dated 17 September 2003 from Mackinlays to “Mr G Legge” (at the Bankrupt’s home address) referring to an invoice dated 21 July 2003 for payment of an outstanding account in the sum of $7,053.89; and
d)a Local Court of Western Australia Summons in which Mackinlays Solictors are the plaintiff and the Bankrupt (whose home address is given) is the defendant in a claim for $7,053.89, with costs etc increasing the amount to $7,307.84.
[8] Bankrupt’s affidavit of 12 June 2006, para. 2.
Proofs of debt
The following are the Proofs of Debt against the Bankrupt submitted to the Official Trustee:
a)14 February 2005 – Mark Jeffery Simonsen – $66,550.19;
b)20 April 2005 – Mackinlays Solicitors – $8,179.35;
c)28 April 2005 – James Bell – $16,875.00;
d)2 May 2005 – Lawton Gillon – $6,802.15;
e)3 May 2005 – Santa Maria College – $4,901.00; and
f)11 May 2005 – Esanda Finance – $10,977.03.
Admitted
At the date of the hearing, 9 November 2006, the Proofs of Debt submitted by Mackinlays (only $7,501.00 admitted), Lawton Gillon, Santa Maria College and Esanda Finance had been admitted by the Official Trustee[9]. These Proofs of Debt come to a total of $30,181.00.
[9] Official Trustee’s Report, para. 3.2.
Unresolved
The Proof of Debt submitted by James Bell and part of the Proof of Debt submitted by Mark Jeffery Simonsen were unresolved at the date of the hearing.[10] At the time the Official Trustee’s Report was filed on 5 October 2006 there was insufficient documentary evidence for the Official Trustee to make a decision in relation to the latter proof.[11]
[10] Official Trustee’s Report, para .3.3.
[11] Official Trustee’s Report, para. 3.3.
The Proof of Debt submitted by Mr Bell is in relation to a judgment debt against all three directors of the company and it was unresolved as the Official Trustee was of the opinion that the amount should be reduced to represent one third of the total judgment debt rather than the half that was claimed.[12]
[12] Official Trustee’s Report, para. 3.3.
The amount of $51,875.00, which is the portion of the Proof of Debt submitted by Mr Simonsen which has not been rejected by the Official Trustee, see para. 16 below, remains unresolved as it is the subject of District Court proceedings. The Official Trustee’s Report states:
The outcome of the District Court proceedings is critical to the administration of the bankrupt estate as Mr Simonsen’s proof of debt represents the largest debt in the bankrupt estate. If it is not admitted it is possible that a 100c dividend may be payable after realisation of the assets of the bankrupt estate;[13] and
The outcome of the District Court proceedings may determine whether or not this proof is to be admitted.[14]
[13] Official Trustee’s Report, para. 1.1.
[14] Official Trustee’s Report, para. 3.3.
Rejected
A portion of the Proof of Debt submitted by Mr Simonsen, relating to AGE Automation, was rejected by the Official Trustee. The amount rejected was $14,866.00.[15]
[15] Official Trustee’s Report, para. 3.4.
District Court proceedings
The District Court proceedings were not expected to be conducted until 21 November 2006[16] and the Court has not been advised of a judgment being delivered in those proceedings at the time of writing these reasons.
[16] Official Trustee’s Report, para. 1.1.
Other assets and liabilities
The Bankrupt is a registered joint proprietor with his spouse of a house in Shelley (“the property”) where he currently resides.[17] According to the Official Trustee’s Report, the property is the only asset of the bankrupt estate.[18] The property was valued at $320,000.00 in April 2005[19] and the estimated value at the time of the hearing was $530,000.00.[20] Critically, there is no evidence before the Court of the value of the house at the time the sequestration order was made.[21]
[17] Official Trustee’s Report, para. 1.3.
[18] Official Trustee’s Report, para. 1.3.
[19] Official Trustee’s Report, para. 1.3.
[20] Latest kerbside valuation – Official Trustee’s Submissions, para. 18.
[21] Transcript, p.7.
A mortgage over the property exists and currently secures a debt in the amount of approximately $130,000.00.[22]
[22] Official Trustee’s Report, para. 1.3.
As to the Bankrupt’s share of the equity in the property, Counsel for the Official Trustee said:
So based on that [April 2005] valuation Mr Legge’s half share of the equity was $95,000.00. So you would have to infer that one year, or 13 months earlier, his equity was something less than that and we don’t know precisely what his equity was, or indeed how quickly his equity would have been realisable given that he was only a one-half owner in the property.[23]
[23] Transcript, p.7.
The Official Trustee’s Submissions note that the Bankrupt’s current share of the equity, based on the latest kerbside valuation would be approximately $200,000.00, which would, if realisable, be sufficient to pay out the bankruptcy in full. This would result in an annulment under s.153A of the Bankruptcy Act.[24]
[24] Official Trustee’s Submissions, para. 18.
The Official Trustee has already obtained orders in the Federal Magistrates Court declaring that it is a 50% beneficial owner of the property and providing for vacant possession of the property.[25] The Official Trustee is awaiting the result of this application before it takes any action relating to the sale of the property.[26]
[25] Official Trustee’s Report, para. 1.3.
[26] Official Trustee’s Report, para. 1.3.
The Bankrupt indicated that he had an income of $28,000.00 over the previous 12 months at the time he completed the Statement of Affairs filed with ITSA on 7 April 2005. The Statement also indicated that the Bankrupt expected to receive the same amount of income in the 12 months following the filing of the Statement of Affairs.[27]
[27] Mr Carles’ affidavit: see Annexure “H”.
At the hearing the Bankrupt said the only other liabilities he had were his electricity and telephone bills.[28] No evidence was given in relation to the amounts of these bills.
[28] Transcript, p.5.
Statutory framework
Section 153B of the Bankruptcy Act provides that:
If the Court is satisfied that a sequestration order ought not to have been made … the Court may make an order annulling the bankruptcy.
The onus is upon the Bankrupt to show that the sequestration order ought not to have been made.[29]
[29] Re Papps; ex parte Tapp (1997) 78 FCR 524 at 531 per O’Loughlin J (“Re Papps”).
It became clear at the hearing that the Bankrupt had the mistaken assumption that the onus was now upon the Respondent Mackinlays to prove that he was insolvent at the time the sequestration order was made.[30]
[30] Transcript, p.8.
The Bankrupt also stated numerous times,[31] and it is evident from the Application[32] and the Bankrupt’s affidavit of 12 June 2006,[33] that the Bankrupt believed that the grounds for obtaining an annulment were to show an ‘error in fact’.
[31] Transcript, pp.2 and 5.
[32] The Application, para. 3.
[33] The Bankrupt’s affidavit of 12 June 2006, para. 1.
These two factors may explain why the Bankrupt failed to provide the Court with any evidence showing his financial situation at the time the sequestration order was made. The Bankrupt simply produced evidence in relation to the debt owing to Mackinlays, which he disputes.
Principles – whether a sequestration order ought not to have been made
The principles in relation to whether a sequestration order ought not to have been made were considered in a recent decision of this Court in Mahmoud v The Owners’ Corporation Strata Plan No 811 [No.3][34] as follows (footnotes included):
[34] [2006] FMCA 1742 at paras. 54-55 per Lucev FM.
54. Much has been written on the expression “ought not to have been made” in s.153B of the Bankruptcy Act.[35]
[35] See Re Williams (1968) 13 FLR 10 at 23 per Gibbs J; Re Ditford; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 350 per Gummow J (“Re Ditford”); Re Ginnane; Ex parte Ginnane (1994) 60 FCR 429 at 445-446 per Ryan J (“Re Ginnane”); Re Gollan; Ex parte Gollan (1992) 40 FCR 38 at 40-41 per Spender J (“Re Gollan”); Re Frank; Ex parte Piliszky (1987) 16 FCR 396 at 403 per Fisher J (“Re Frank”); Hudson v Whalan [1999] FCA 189 at paras. 9-12 per Sackville, North and Hely JJ (“Hudson”); Stankiewicz v Plata [2000] FCA 1185 at paras. 19 and 20 per Drummond, Sackville and Dowsett JJ (“Stankiewicz”); Boles v Official Trustee in Bankruptcy [2001] FCA 639 at paras. 16 per Emmett J, (Katz and Conti JJ agreeing) (“Boles”); Baker v Rigg [2005] FCA 1760 at para. 23 per Wilcox J (“Baker”); Plant v Ken Smith Electronics Pty Ltd & Anor [2000] FMCA 7 at para. 3 per Raphael FM (“Plant”); Byczko v Sheahan [2001] FMCA 120 at paras. 12-14 per Raphael FM (“Byczko”).
55. The following principles can be distilled from the various writings:
a) the Court considers the case not only as disclosed at the time the sequestration order was made, but as it would be had all the true facts been before the Court;[36]
b) the true facts include those known at hearing of the annulment application to have existed at the time the sequestration order was made;[37]
c) an order should not be annulled unless the Court was in the circumstances bound not to make it;[38]
d) a bankrupt whose assets exceed debts at the date of the sequestration order will ordinarily be entitled to an annulment of bankruptcy, subject to the giving of undertakings to pay the costs of:
i) the petitioning creditor, and
ii) the administration by the Official Trustee,
and provided the assets are realisable, sufficient to pay the debt, within a relatively short time;[39] and
e) even if the Court is satisfied that a sequestration order ought not to have been made, it has a residual discretion not to annul the order.[40]
[36] Re Williams at 23 per Gibbs J; Stankiewicz at para. 19, per Drummond, Sackville and Dowsett JJ.
[37] Re Ditford at 305 per Gummow J; Re Ginnane at 445-446 per Ryan J; Re Gollan at 40-41 per Spender J; Stankiewicz at para. 20 per Drummond, Sackville and Dowsett JJ; Re Boles at para. 16 per Emmett J (Katz and Conti JJ agreeing); Baker at para. 23 per Wilcox J; Byczko at para. 12 per Raphael FM.
[38] Re Frank at 403 per Fisher J, followed in Hudson at paras. 10-11 per Sackville, North and Hely JJ; Boles at para. 16 per Emmett JJ (Katz and Conti JJ agreeing); Baker at para. 23 per Wilcox J; Plant at para. 3 per Raphael FM.
[39] Re Gollan at 41-42 per Spender J; Stankiewicz at paras. 29-30 per Drummond, Sackville and Dowsett JJ. See also Sandell v Porter (1966) 115 CLR 666 at 670 per Barwick CJ.
[40] Re Williams at 23 per Gibbs J; Stankiewicz at para. 20 per Drummond, Sackville and Dowsett JJ; Re Frank at 403 per Fisher J, followed in Hudson at paras. 10-11 per Sackville, North and Hely JJ; Re Boles at para. 16 per Emmett J (Katz and Conti JJ agreeing); Baker at para. 23 per Wilcox J; Plant at para. 3 per Raphael FM; Byczko at para. 14 per Raphael FM.
Solvency
Section 5(2) of the Bankruptcy Act provides:
A person is “solvent” if, and only if, the person is able to pay all the person’s debts, as and when they become due and payable.
Section 5(3) of the Bankruptcy Act provides:
A person who is not solvent is “insolvent”.
It was submitted by the Official Trustee that it is very difficult for a bankrupt to obtain an annulment unless a bankrupt can show that he was solvent.[41]
[41] Official Trustee’s Outline of Submissions, para. 9 citing Re Burlock: Burlock v Commissioner of Taxation (1994) 49 FCR 522 at 530 per Black CJ, Sweeney and Ryan JJ.
The Bankrupt in seeking annulment and in order to fulfil the required onus, must put before the Court all relevant material concerning his financial affairs so as to enable the Court to properly assess the Bankrupt’s financial position based upon the full facts and circumstances.[42]
[42] Re Papps at 531 per O’Loughlin J; Cheung v Maxims Entertainment Pty Ltd [2002] FMCA 348 at para 12 per Raphael FM; Lockhart v DCT (2005) 59 ATR 540 at 542-543 per McInnis FM; [2005] FMCA 641 at para 12 per McInnis FM.
The Official Trustee had endeavoured to make it known to the Bankrupt that he would be required to show that he was solvent in order to obtain an annulment. Counsel for the Official Trustee referred to paragraph 1.3 of the Official Trustee’s Report relating discussions with the Bankrupt following a directions hearing in 29 August 2006:
In discussions outside the court the solicitor for the Official Trustee indicated to the bankrupt that he would ordinarily need to show that he was solvent in order to obtain an annulment. It was suggested to the bankrupt that he may wish to consider filing further affidavit material addressing any other creditor claims which are disputed.[43]
[43] Transcript, p.6.
No further information was provided to the Court by way of filing after this discussion.[44] The Bankrupt’s oral submissions concerning the issue of solvency at the time the sequestration order was made were as follows:
a)that the Bankrupt had sold his Applecross property and was “more flushed with funds at that time than I had ever been”;[45]
b)that the Bankrupt had obtained the property at a good price;[46]
c)that there was never a default on the mortgage on the property;[47]
d)similarly, that his power and telephone accounts were never disconnected;[48] and
e)that the Bankrupt had not defaulted on the payments to Esanda – “the leased vehicle money was always drawn every month”.[49]
In relation to the other Proofs of Debt submitted by creditors, the Bankrupt went on to say:
…all those creditors happened after the bankruptcy action was taken…[50]
[44] Official Trustee’s Report, para. 1.3; Transcript, p.6-7.
[45] Transcript, p.6.
[46] Transcript, p.8.
[47] Transcript, p.8.
[48] Transcript, p.8.
[49] Transcript, p.8.
[50] Transcript, pp.5 & 8.
The Bankrupt did not address his ability to sell the property in a timely fashion at the time of the sequestration order for the purpose of paying his creditors, nor did he address the actual value of the property at the time the sequestration order was made. There is no evidence as to whether, at or about the time the sequestration order was made, the property might have been able to be sold or financed or re-financed in such a way as to allow the Bankrupt to pay debts as and when they became due and payable.
The Bankrupt’s affidavit of 12 June 2006 refers to evidence (and the accounts and letters referred to in para. 10 above, are appended to the Bankrupt’s affidavit) that allegedly “show[s] an error in fact” in that the “original applicant [Mackinlays] presented detail that was incorrect showing [and] claiming monies were owed by me.” Apart from that bald assertion and the attachment of the above-mentioned documents, there is nothing to indicate that the monies (presumably the monies referred to in the documents) were not owed by the Bankrupt.
At the hearing, the Bankrupt submitted that the relevant accounts were not his, but that of the company. This was said to arise from the fact that they bore his name, followed by the company name,[51] and that it was the company on whose behalf the relevant litigation was being pursued. Even if that were true it makes no difference, for there is no evidence that the Bankrupt was not personally liable to pay the company’s debts, non payment of which resulted in the grant of the sequestration order based upon an order of the Local Court of Western Australia in fact regularly obtained. Indeed the evidence before the Court indicates that the Bankrupt was liable for those debts, and that they were incurred in relation to his solicitor’s costs for actions in the bankruptcy jurisdiction of this Court taken against the Bankrupt personally.[52]
[51] Transcript, p.3 & 9.
[52] Mr. Mackinlay’s affidavit, paras. 2-11 and annexure ARM2.
In the circumstances, the Bankrupt has failed:
a)to provide evidence of a full and frank disclosure of his financial circumstances; and
b)to persuade the Court that the sequestration order ought not to have been made.
The Application must therefore be dismissed.
Discretionary factors
The Court may also refuse to exercise its discretion to annul a sequestration order. Two factors which may be considered in this regard are:
a)delay; and
b)the giving or offering of undertakings by the Bankrupt,[53] including whether there is any proposal for payment of the fees or charges incurred by the Official Trustee.[54]
[53] Stankiewicz at para. 32 per Drummond, Sackville and Dowsett JJ.
[54] Re Almassy [1999] FCA 1004 at para. 27 per Mansfield J.
The inordinate amount of time which passed for this application to be filed after the date the sequestration order was made, over two years, is a factor which the Court takes into account when determining whether to invoke its discretion to annul. The Bankrupt gave two reasons for the delay:
a)that he was unfamiliar with the procedure;[55] and
b)he had difficulty obtaining records from the liquidator appointed to the company.[56]
[55] Transcript, p.4.
[56] Bankrupt’s Submissions, p.3; Transcript, p.3.
Unfamiliarity with procedure might afford some basis for delay, but not for two years. There is a plethora of material available on this Court’s website,[57] and on that of the Insolvency and Trustee Service Australia[58] to assist a bankrupt. In any event, two years is simply too long a delay, particularly where the Bankrupt has failed to put on affidavit the reason for the delay and his full financial circumstances.
[57] See
[58] See
The company records are irrelevant. Personal solvency is in issue here, and in that regard the Bankrupt has failed to lead any relevant evidence. Even if the company records were relevant, there is no evidence before the Court as to the nature of the alleged “difficulty” in obtaining records.
There is no evidence that the Bankrupt has given or offered any undertaking of any kind.
Taking into account the above factors, and having regard to the approach of the Bankrupt in the proceedings, which was to attack the debt found to be owing to Mackinlays, and only that debt and not the other debts owing, rather than addressing the issue of personal solvency, the Court does not consider it appropriate to exercise any discretion in favour of the Bankrupt.
Conclusions
For the reasons set out above the Court concludes that:
a)the Bankrupt has failed to prove that the sequestration order ought not to have been made and therefore the Application must be dismissed; and
b)in any event, the Court ought not exercise its discretion to annul the bankruptcy.
Orders
The Court orders that:
(1)The Application be dismissed.
(2)The costs of the Respondent and the Official Trustee be taxed and paid out of the Bankrupt’s estate in the priority fixed by s.109(1)(a) of the Bankruptcy Act.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: Jacky Semler
Date: 2 March 2007
3
16
2