Loustas C. v Pattison P.A
[1992] FCA 749
•16 Sep 1992
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IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION ) BANKRUPTCY DISTRICT ) OF THE STATE OF VICTORIA
) No. VX 275 of 1989
RE : CONSTANTINE LOUSTAS A Debtor
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EX PARTE: PAUL ANTHONY PATTISON ! .l Applicant
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IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY DISTRICT ) OF THE STATE OF VICTORIA
) No. VX 276 of 1989
RE : ARTHUR LOUSTAS A Debtor
EX PARTE: PAUL ANTHONY PATTISON Applicant
Coram: Olney J Place: Melbourne Date: 16 September 1992 together and with only minor variations raise basically the respective applications. The two applications have been heard same issues. The deeds required each debtor to pay the sum of $25,000 by equal quarterly instalments of $2,083.33 commencing on 21 March 1990 with the final payment due on 21 December 1992. The evidence shows that there were some minor problems from time to time with respect to prompt payment of instalments but EX TEMPORE JUDGMENT
These two applications are brought pursuant to paragraph 236(1)(b) of the Bankruptcy Act by the trustee of two Deeds of Arrangement made on 21 December 1989 (the deeds) in relation to the affairs of the separate debtors who are involved in the
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nothing of any great importance occurred until early this.year ! when the March payments were not made by either debtor. Nor have the June payments been made, and indeed, the debtors do not contemplate paying the September payments which fall due in a few days time.
The trustee instituted these proceedings on 27 May 1992 at a time when the debtors were in default to the extent of the payment due in March. It is unfortunate that it has taken so long to get to court because I think it gives a false perspective to the extent that it is said that it is now only
default has continued over quite an extended period. The three months until the scheme is due to expire whereas in fact trustee has an obligation to administer the scheme set up by the deeds, and in view of the circumstances as they arose, it was not only proper but it was his duty to take what was his only available step, to seek termination of the deeds.
In affidavits filed today and sworn yesterday propositions are put forward by each debtor that he can pay the balance of the .
money now outstanding and subsequently to become due under the deeds by instalments of $500 today, $1,000 on 16 October, $1,000 on 16 November and $5,832 (or whatever the odd amount might be) on 21 December.
It is said in respect of each debtor that the final payment will be funded, if needs be, from a third party source. In one case from a friend and in the other case from the debtor's
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relative who is in Greece. ! Each of the debtors was cross-examined on his affidavit evidence and particularly in respect of his now claimed employment which in the case of Arthur Loustas is said to have commenced about one and a half months ago, and in the case of Constantine on 5 August. They are both said to be employed by Rhodes Tavern which apparently is a restaurant business conducted in partnership by three individuals one being the wife of Arthur Loustas, and the other being business associates of Mrs Loustas.
Constantine Loustas had some difficulty in remembering the circumstances whereby the Rhodes Tavern cqe to make a payment on his behalf in September of last year and after prompting from the bench was able to remember that he had asked his brother to make the payment out of the tavern account although, as it is said, the tavern did not start business until April of this year. Cross-examination also revealed that in the case of both debtors, funds from the tavern have ._
been resorted to on other occasions without any real arrangements being made for the repayment: of the moneys advanced. Indeed there is some evidence that the two partners of Mrs Arthur Loustas in Rhodes Tavern also provided funds earlier on to assist with payments due under the deeds.
Given the stated earnings of the two debtor6 and taking into
account the earnings of the wife of Constantine Loustas I have grave reservations .that the proposals put forward can be met. l
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No explanation has' been offered as to where the funds indicated are to come from given the relatively short period over which the payments are to be made. Having regard to the amount of earnings that each is said to have such an explanation is called for. Although it is said by each debtor that he will be able to meet all his obligations from his own resources, each says he will be able to call in the aid of a third party but there is no corroborative evidence as to the availability of any such funds.
The debtors are in effect asking the Court to vary the scheme agreed to by their respective creditors. I do not understand
it is the function of the Court to impose upon creditors a
different agreement from that which they have accepted.
Indeed, in February of this year a meeting of the creditors of
Constantine Loustas was called following an earlier default
that had been made and it was only following a promise that
the outstanding payment would be made that day that the motion
to terminate the deed of arrangement was defeated. In my view
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the present proposals are unsatisfactory.
I have grave doubts as to whether I have been told the whole
story concerning the employment relationships of the two debtors and I am of the view that if these deeds are allowed to continue there is a very real possibility that come 21 December 1992 the position will not be much different from what it is now. I believe that this justifies me in coming to
| G ! | the conclusion that the deeds cannot be proceeded with without |
| ! | undue delay to the creditors and in my view the trustee has made out the case sought to be made and I order that the deeds of arrangement be terminated. |
| The trustee has included an application for a sequestration order against the respective debtor's estate in each application as contemplated by subsection 236(3) of the Bankruptcy A c t . Having ordered that the deeds be terminated it is appropriate that I forthwith make the sequestration orders sought and I so order. Dean Royston McVeigh of Frank | |
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| appointed as trustee of each estate. | |
| The applicant's costs of the applications should be taxed and paid in accordance with the statute. |
I ~ c e r t i f y that t h i s and the preceding 5 pages i s a true copy o f t h e E x Tempore Judgment of t h e Honourable M r
Just ice Olney
Mr G. Parncutt (instructed by Hussey & Co.) appeared for the
applicant.
Mr A. Ellis (instructed by Zaparas Dandanis Pty) appeared for the debtors.
Date of Hearinq: 16 September 1992 Place: Melbourne Date of Judament: 16 September 1992
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