Nathan v Burness (No 2)

The case of Nathan v Burness (No 2) involved an application by Mr Nathan for the annulment of his bankruptcy, which was predicated on the assertion that the default judgment used to obtain it was not obtained in a proceeding. The case was heard in the Federal Circuit Court of Australia. Mr Nathan argued that the second version of the default judgment, which differed slightly from the original, was not valid because it was obtained after the proceeding had concluded, and that the differences between the versions precluded reliance on the later version for the purposes of issuing a bankruptcy notice.

The court was required to determine whether the second version of the default judgment was valid, whether the valuation of the security in the creditor's petition was capricious or excessively low, whether the creditor's failure to comply with temporal requirements under the rules could render the sequestration order invalid, and whether other discretionary considerations supported the annulment of the bankruptcy.

The court held that the second version of the default judgment was valid as it was obtained in a proceeding, and that the differences between the two versions were immaterial. The court further held that the valuation of the security in the creditor's petition at nil value was not capricious or excessively low, as the true value was unascertainable. The court also held that the creditor's failure to comply with temporal requirements under the rules did not render the sequestration order invalid, and that other discretionary considerations did not support the annulment of the bankruptcy.

The court dismissed the application for annulment of bankruptcy with costs.