Ling v Enrobook pty Ltd

Noel Ling sought to appeal against a sequestration order made against him by Lehane J in the Federal Court of Australia. The respondent, Enrobook Pty Ltd, had obtained a judgment against Ling in the Supreme Court of New South Wales for unpaid rent and outgoings, leading to Ling's sequestration. The appeal centered around whether there was "other sufficient cause" under s52(2)(b) of the Bankruptcy Act 1966 for the sequestration order not to be made, considering Ling's claim against the Commonwealth of Australia for negligent misrepresentation, the existence of a Mareva injunction, and a prior pending petition by the Commonwealth. The Full Court found that the primary judge had not erred in dismissing the appeal. They noted that while a debtor's legitimate claim against a third party might, in some circumstances, amount to "other sufficient cause," the authorities did not support the notion that there is a public interest in allowing debtors to prosecute litigation generally. The Full Court also found that the Mareva injunction did not prevent Ling from paying the judgment debt, thus not constituting a valid defense against the bankruptcy notice. The appeal was dismissed, and the respondent's costs were ordered to be paid from Ling's estate.