Nguyen v Lion Finance Pty Ltd

[2012] FMCA 880

FEDERAL MAGISTRATES COURT OF AUSTRALIA

NGUYEN v LION FINANCE PTY LTD & ANOR [2012] FMCA 880

BANKRUPTCY – Application to set aside sequestration order under r.16.05 of the Federal Magistrates Court Rules or to extend time for and review sequestration order made by a registrar or to annul bankruptcy.

Bankruptcy Act1966 (Cth), ss.52, 153B
Federal Magistrates Act 1999 (Cth), ss.102, 104

Federal Magistrates Court Rules, r.16.05
Federal Magistrates Court (Bankruptcy) Rules, rr.2.03, 7.03, 7.06

Austral Brick Co Pty Ltd v Tome Daskalovski [1998] FCA 782
Bulic v Commonwealth Bank of Australia Ltd (2007) 5 ABC(NS) 122; [2007] FCA 307

Cheung v Maxims Entertainment Pty Ltd [2002] FMCA 348

Diners Club Pty Ltd v Vitler [2005] FMCA 1374
Grundy v Wattyl Australia Pty Ltd [2002] FCA 1480
Khan v Kerr [2007] FMCA 512
Lockhart v Deputy Commissioner of Taxation (2005) 59 ATR 540; [2005] FMCA 641
Nathan v Burness (No 2) [2011] FCA 289
Re Papps; Ex parte Tapp (1997) 78 FCR 524
Re Sarina; Ex parte Council of the Shire of Wollondilly (1980) 43 FLR 163; [1980] FCA 66

Rigg v Baker (2006) 155 FCR 531; [2006] FCAFC 179
Sanders v Knudsen [2004] FCAFC 305
Sanders v Sanders [2003] FCA 1079

Applicant: TRI DUC NGUYEN

First Respondent: LION FINANCE PTY LTD
ACN 095 926 766

Second Respondent: KATHERINE ELIZABETH BARNET IN HER CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF TRI DUC NGUYEN

File Number: SYG 1682 of 2012

Judgment of: Barnes FM

Hearing date: 31 August 2012

Delivered at: Sydney

Delivered on: 31 August 2012

REPRESENTATION

Counsel for the Applicant: Mr Folino-Gallo

Solicitors for the Applicant: Law Shoppe

Solicitors for the Respondents: Jones King Lawyers

ORDERS

1. The application is dismissed.

2. The applicant pay the costs of the first respondent as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.

3. The applicant pay the costs of preparation of the affidavits sworn for the second respondent as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 1682 of 2012

TRI DUC NGUYEN

Applicant

And

LION FINANCE PTY LTD
ACN 095 926 766

First Respondent

KATHERINE ELIZABETH BARNET IN HER CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF TRI DUC NGUYEN

Second Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. By application filed on 2 August 2012, the applicant, Mr Nguyen, seeks in the alternative that a sequestration order made by a registrar of this Court on 4 April 2012 be set aside under r.16.05(2)(a) of the Federal Magistrates Court Rules; that the sequestration order made by the Registrar be reviewed and set aside under s.104 of the Federal Magistrates Act 1999 (Cth) and the creditor’s petition dismissed; or that his bankruptcy be annulled under s.153B of the Bankruptcy Act1966 (Cth).

2. In support of his application the applicant relies on an affidavit sworn by him on 31 July 2012 and filed on the same date, an affidavit of a solicitor, Timothy James McGrath, sworn on 30 August 2012 attesting to how it came to be that some creditors were given short notice of the hearing and numerous affidavits of service notifying creditors of these proceedings.  Some of these creditors were only notified very recently and were not given the seven days notice provided for in rr.7.03(3) and 7.06(5) of the Federal Magistrates Court (Bankruptcy) Rules. 

Rule 16.05

1. The primary basis for the application is a claim that the sequestration order ought to be set aside under r.16.05(2)(a) of the Federal Magistrates Court Rules. The court has power under r.16.05(2)(a) to vary or set aside a judgment or order after it has been entered if the order is made in the absence of a party.

2. It was submitted for the applicant that this rule could apply in bankruptcy proceedings and that it should be applied in this case in circumstances where the sequestration order was made in Mr Nguyen’s absence on the first return date.  Reliance was placed on what was said to be Mr Nguyen’s unchallenged affidavit evidence that he only became aware of the Local Court judgment that formed the basis for the bankruptcy notice and the creditor’s petition after the making of the sequestration order.  There was said to be no evidence that the Local Court statement of claim was posted to and/or received by him at the time of those proceedings.  

3. However it is not disputed that there was personal service on Mr Nguyen of the creditor’s petition on 9 March 2012.  Mr Nguyen also attests to service of the affidavit verifying the creditor’s petition and the affidavit of service annexing the bankruptcy notice prior to the hearing of the creditor’s petition as attested to in the affidavit of personal service sworn by Sosicena Toa on 20 March 2012.  No issue is taken about the content of the bankruptcy notice.  It included a copy of the judgment of the Local Court.

4. Mr Nguyen’s evidence is that when he received the creditor’s petition in March 2012 he assumed the documents did not relate to him because they referred to Lion Finance Proprietary Limited and he had not heard of Lion Finance (to which a debt due to GE Personal Finance Pty Ltd had been assigned).  He assumed there must be a mistake and did nothing further.  He did not appear on the date the matter was before the court.  The sequestration order was made on 4 April 2012.  Mr Nguyen filed the present application on 2 August 2012. 

5. The authorities relied on in support of the proposition that r.16.05 should be applied in these circumstances are, as was conceded by the solicitor for the applicant, cases which expressed the view that in particularly narrow and unusual circumstances it may be appropriate to apply r.16.05 or the Federal Court Rules equivalent. Thus in Austral Brick Co Pty Ltd v Tome Daskalovski [1998] FCA 782 Emmett J canvassed the possibility that the Federal Court could exercise such a power where the matter came before the court very soon after the order was made and there had been no administration of the bankrupt estate (and see Diners Club Pty Ltd v Vitler [2005] FMCA 1374 in which the bankrupt was not personally served with the creditor’s petition).

6. However, even if r.16.05 can apply, it is not appropriate to apply such a provision in circumstances where the bankrupt was served with the creditor’s petition and these proceedings were not commenced shortly after the sequestration order had been made in the absence of any administration of the bankrupt’s estate (see the affidavits of Charmaine Rodrigues sworn on 10 August 2012 and Katherine Brown sworn on 24 August 2012 and 30 August 2012 in relation to administration of the estate). I am not satisfied that it is appropriate in the circumstances of this case that the sequestration order should be set aside under r.16.05.

Review of a registrar’s decision

1. In the alternative, it is sought that the Court should review the decision of the registrar, set aside the sequestration order and dismiss the creditor’s petition. The registrar has power under s.102 of the Federal Magistrates Act to make a sequestration order. Under s.104(2) a party may seek a review of the registrar’s decision within the time prescribed by the rules of the court or within any further time allowed in accordance with the rules of the court.

2. The time for bringing an application to review a decision of a registrar is, by virtue of r.2.03(1) of the Federal Magistrates Court (Bankruptcy) Rules, 21 days from the date of the exercise of power by the registrar. That may be extended by virtue of s.104(2)(b) of the Federal Magistrates Act. However, such an extension of time would ordinarily be refused if an adequate explanation for the delay and any prejudice caused by the delay had not been offered (see Grundy v Wattyl Australia Pty Ltd [2002] FCA 1480 at [6] – [10]).

3. I have borne in mind that special circumstances do not need to be shown, but the court must be positively satisfied that it is proper to grant the extension of time.

4. It is relevant to have regard to any action taken by the applicant in the time that has passed as well as any prejudice to the respondent.  The mere absence of prejudice is not enough to justify an extension of time.  The merits and likelihood of success of the substantive application are also relevant in considering whether an extension of time should be granted.  The length of the delay is relevant. 

5. In this case there was a considerable delay.  The application was brought nearly four months after the date of the sequestration order.  There have been costs incurred in administering the bankrupt’s estate during that time as is evident from the material before the Court relied on by the petitioning creditor and the Trustee.  In particular there is affidavit evidence from Ms Hoskinson, Ms Rodrigues and Ms Brown in relation to what has occurred in relation to the administration of the bankrupt’s estate. 

6. The argument in support of the application for an extension of time relies, to some extent, on what was said to be the applicant’s lack of awareness of the Local Court judgment prior to service of the creditor’s petition and his assumption that the creditor’s petition did not relate to him.  However these things relate to events that happened prior to the sequestration order being made.  They do not explain the delay thereafter. 

7. The applicant gave evidence that it is his usual practice to collect mail at the end of the week and that when he does so he discards any mail as junk mail which either has no addressee or, if addressed to him, appears to be from a sender unknown to him.  In that context he stated that some time in or about early to mid-April 2012 he noticed a large envelope in his mail box.  Notwithstanding his usual practice, he opened the envelope and saw that it contained a letter from the Trustee, a copy of which is annexed to Mr Nguyen’s affidavit.  It advised of the sequestration order dated 5 April 2012.  I am satisfied that, as a result, the bankrupt became aware, at least by mid-April 2012, that on 4 April 2012 a sequestration order was made against his estate.  The letter stated clearly: “You were made bankrupt on that day”.  The letter also advised Mr Nguyen that Ms Barnet was the Trustee of his estate.  A copy of the sequestration order was enclosed.  He was informed about his obligation to complete a statement of affairs. 

8. Mr Nguyen organised to attend the Trustee’s office on or about 8 May 2012.  He attended a meeting on 9 May 2012.  He was provided with some clarification of the role of the Trustee and informed about the need to complete a statement of affairs.  It was explained to him that this was because the Trustee would need to know “how much you owe creditors and, for us to know how much you need to pay to get out of bankruptcy, you need to fill out the form”.  He was informed that all his creditors were to be listed in the statement of affairs.

9. Mr Nguyen was also told that his property vested in the Trustee and that “basically” the Trustee owned his house.  He was offered help if he had language difficulties.  There is some suggestion to that effect in the affidavit evidence for the respondent.  Some concern was expressed on the part of the Trustee.  However the affidavit that the applicant swore and filed in these proceedings does not involve any declaration by an interpreter.  It was witnessed by a solicitor.  There is no suggestion that Mr Nguyen does not understand English to the extent necessary to complete an affidavit of reasonable complexity.

10. Mr Nguyen also gave evidence that he then made an appointment to see a solicitor at a firm called Victor Lawyers in Cabramatta.  The solicitor advised him to complete the statement of affairs.  He did so and returned it about 12 June 2012.  There was further correspondence with the Trustee.

11. It was not until 17 July 2012 that Mr Nguyen had a meeting with a different lawyer and obtained a valuation of his home.  He claims that until he was advised by his current solicitors he was not aware of the effect of the sequestration order or that he could seek review.  There is no explanation for why the applicant obtained a different lawyer.  He instituted these proceedings on 2 August 2012. 

12. There is a partial explanation for the delay insofar as the time from the 17 July 2012 until 2 August 2012 would not be excessive.  However that was a considerable time after the sequestration order was made.  There is no explanation beyond the statement that Mr Nguyen was not aware of the effect of the sequestration order or that he could seek review of the registrar’s decision for his failure to take any steps to discover at an earlier stage the options available to him in relation to the sequestration order.

13. By the time these proceedings were commenced the Trustee had started taking steps towards the administration of the estate in the broad sense.  A considerable amount of time had passed. 

14. I have also had regard, as is discussed further below, to the grounds that are relied on in support of the application to set aside the sequestration order. 

15. While not specified in the application, as far as one can divine the applicant’s contention in the context of a hearing de novo of the creditor’s petition would in essence involve a reliance on s.52(2)(a) of the Bankruptcy Act on the basis that the Court should be satisfied by the debtor that he is able to pay his debts or, possibly, that under s.52(2)(b) for other sufficient cause a sequestration order ought not to be made. When I endeavoured to clarify the basis on which the applicant sought review it was suggested, in effect, that the basic ground was solvency and that the other matters relied upon as grounds for annulment were matters that went to the discretion of the Court.

16. There are four grounds relied on in support of the annulment application.  Insofar as it might be said that they provide other sufficient cause that a sequestration order not to be made, while Mr Nguyen claimed that he was not served with the process in the Local Court proceedings it is not in dispute that, as he conceded, he was served with the creditor’s petition and accompanying affidavits.  His lack of knowledge about the Local Court judgment prior to that time and his belief that it did not relate to him are not such as to warrant not making a sequestration order.  Nor does the allegation that such lack of service of the process in the Local Court proceedings infected the bankruptcy notice, the creditor’s petition and the sequestration give rise to an arguable basis on which a sequestration order should not be made.  No authority was cited in support of the proposition that a sequestration order should not be made merely because of ignorance of the proceedings which resulted in the judgment which formed the basis for the bankruptcy notice where the creditor’s petition and the accompanying documents, including a copy of the judgment that formed the basis for the bankruptcy notice, had been served on the debtor.

17. There is no suggestion of any challenge to whether the underlying debt was due to the creditor.  There is no evidence of any attempt to set aside the Local Court default judgment. The debt is still outstanding. 

18. Insofar as there is some suggestion that there were alternative means of “recovering the judgment”, that is not a basis on which a sequestration order ought not to be made.  No authority was cited in support of such proposition. 

19. In effect, what this comes down to is that the basis on which it is sought that the sequestration order should be set aside is that the applicant (who bears the onus) can satisfy the Court on the evidence before the Court that he is able to pay his debts. 

20. However the fundamental difficulty that faces the applicant in these proceedings, and a significant factor militating against any extension of time, is that he has not put before the Court what I can be satisfied is a complete and full and frank disclosure of his financial position.  It is simply not possible to determine on the evidence before me whether the applicant is able to pay his debts in the sense considered in Re Sarina; Ex parte Council of the Shire of Wollondilly (1980) 43 FLR 163; [1980] FCA 66 (when one turns to the alternative of annulment) whether the circumstances are such that the sequestration order ought not to be made (see Sanders v Knudsen [2004] FCAFC 305 and Sanders v Sanders [2003] FCA 1079 at [22] in relation to s.52 and Re Papps; Ex parte Tapp (1997) 78 FCR 524 in relation to s.153B).

21. When one turns first to the statement of affairs, there is a disclosure of credit card debts with which the respondent took issue. I place no emphasis whatsoever on the fact that the credit card debts are disclosed as assets as well as debts. I see that as a simple mistake. Such debts were disclosed. There may be an issue about the amount of the debts in light of the subsequent affidavits of service of the creditors, but I would not see that as of great significance were there otherwise sufficient disclosure for the applicant to establish that he is able to pay his debts within the meaning of s.52(2)(a) of the Bankruptcy Act. It is also the case that there is evidence that a repayment due under a mortgage due on the same day as the sequestration order was made was dishonoured. I see that as relevant as part of all the circumstances, but not, of itself, as conclusive.

22. What is of more significance is that in Mr Nguyen’s statement of affairs and his affidavit evidence in support of this application, he has not purported to put before the Court all of his financial circumstances.  He does give some evidence in relation to his assets and his employment.  However the evidence before the Court about other creditors, including the evidence of Mr McGrath in his affidavit sworn on 30 August 2012, makes it clear that Mr Nguyen’s affidavit evidence does not amount to a complete disclosure of his financial position. 

23. In his affidavit sworn on 31 August 2012, Mr McGrath attested to the fact that a credit search was conducted in relation to Mr Nguyen.  A credit search reveals only overdue accounts.  It does not reveal all indebtedness.  In this case the credit search revealed debts that were not disclosed by the applicant either in his statement of affairs or in his affidavit evidence.  He has not explained why there was an incomplete disclosure of his liabilities.  This raises a concern that the credit search may not, in fact, constitute a complete disclosure of his liabilities.  There is no subsequent evidence from Mr Nguyen clarifying his financial position. 

24. When an applicant fails to put before the court complete evidence in relation to his financial position, it is not possible for the court to be satisfied within s.52(2)(a) of the Bankruptcy Act that he is able to pay his debts or that a sequestration order ought not to be made within s.153B of the Act.

25. As to the evidence that is before the Court, I concede that there is evidence to indicate that the applicant may not have understood precisely what was involved in the Trustee having title to his property and that he did take steps to list his real property for sale.  That would indicate some willingness to realise assets within a reasonably short time.  However a mere excess of assets over liabilities does not suffice.  In relation to the amount that may be realised on sale of the property, I place very little weight on the sales inspection report relied on by Mr Nguyen.  The sales report did not include an agent’s opinion as to the current estimated selling price or price-range of the property.  It simply calculated the agent’s remuneration if the property were to be sold at a particular amount.  I have had regard to the valuation of the property. 

26. However, even allowing for the fact that the sale of property might realise an amount more than the debts that have been disclosed by Mr Nguyen, the difficulty is that the Court cannot be satisfied that this is the full extent of the applicant’s indebtedness. In circumstances where the additional debts emerged after inquiry by the Trustee and following a credit search and having regard to the history of overdue and unpaid debts now revealed I could not be satisfied that it was sufficiently arguable that the applicant was able to meet his debts within s.52(2)(a) of the Bankruptcy Act to extend the time for review of the sequestration order. In particular there is now evidence that there are additional overdue loans not previously disclosed. The credit search revealed five loans disclosed as overdue going back to 2009 and through to June 2011.

1. I consider these matters to be of particular significance in relation to the application to extend the time to apply to review the sequestration order having regard also to the delay in making the application and the limited explanation provided for the delay. 

2. In all the circumstances, I am not persuaded that the Court should extend the time for the making of the application for review. The application for review should be refused. The evidence is, in any event, such that I would not be satisfied on the evidence before the Court that the petition should be dismissed under s.52(2)(a). I note in that respect that the onus would be on the applicant and that the court has a discretion.

Annulment

1. In the alternative, it is sought that the bankruptcy should be annulled under s.153B of the Bankruptcy Act. Again, the difficulty that faces the applicant in this respect is that, as explained in oral submissions, annulment is sought primarily on the basis that the sequestration order ought not to have been made because the applicant was solvent and able to pay his debts as they fell due. The above remarks about the absence of full disclosure are equally applicable in this context.

2. I have borne in mind that in considering whether a sequestration order ought not to be made the court is not limited to the evidence disclosed at the time of the hearing of the creditor’s petition.  Regard can be had to all the evidence now before the Court and the matter considered on the basis that the true facts were before the registrar at the time of the making of the sequestration order. 

3. However I have also borne in mind that, as pointed out in the submissions for the respondent, a court “ought not to have made” a sequestration order only if bound not to make the order.  In Rigg v Baker (2006) 155 FCR 531; [2006] FCAFC 179 at [63], French J, as he then was, addressed the fact that it is for the applicant to bring himself within s.153B and to satisfy the court that the sequestration order ought not to have been made. It was pointed out that the court seeks to ascertain the actual state of affairs at the time the sequestration order was made, to look at the facts before the court then and the facts that are now shown on the hearing of the application to have been in existence at that time. It is necessary to determine whether, on those facts, the court is satisfied the sequestration order ought not to have been made and then to consider whether to exercise the discretion to annul the bankruptcy.

4. As indicated, it is well-established that full and frank disclosure must be made by a bankrupt on an annulment application.  Insofar as it was submitted by the solicitor for the applicant that full and frank disclosure had now been made, I am not able to be satisfied that that is the case.  Rather, the applicant made limited and incomplete disclosure in his statement of affairs.  He made limited and incomplete disclosure in his affidavit evidence.  As a result of a credit search conducted by his solicitor, further overdue debts have come to light.  These have now been disclosed in the course of providing an explanation for late service of creditors with notice of these proceedings.  This does not constitute full and frank disclosure.  It is incumbent on an applicant to put before the court all relevant material in relation to his financial affairs.  Importantly, there is no suggestion in evidence from the applicant that there has now been full disclosure.  There is simply no evidence from the applicant to that effect.  The applicant has not filed any affidavit in recent times advising the Court that there is now a complete disclosure of all his financial affairs. 

5. It is not sufficient for a debtor to come to the court with an initial partial disclosure of liabilities and an increasing disclosure over time.  I note in that respect that there is evidence that the Trustee recently became aware of an additional debt based on a proof of debt from a creditor not previously disclosed.  The subsequent notification of additional creditors located through a credit search conducted by the solicitor for the applicant gives the Court no confidence that it has full information before it. 

6. The applicant has not satisfied the burden placed on him under s.153B of the Bankruptcy Act having regard to his failure to make appropriate disclosure (see, in that respect, Re Papps and the more recent decisions in Cheung v Maxims Entertainment Pty Ltd [2002] FMCA 348, Lockhart v Deputy Commissioner of Taxation (2005) 59 ATR 540; [2005] FMCA 641, Khan v Kerr [2007] FMCA 512, Bulic v Commonwealth Bank of Australia Ltd (2007) 5 ABC(NS) 122; [2007] FCA 307 and Nathan v Burness (No 2) [2011] FCA 289).

7. In these circumstances, even if it could be said that the evidence presently before the Court was such as to suggest that the applicant is able to pay his debts, I cannot be satisfied that this evidence represents his actual financial position. Hence I cannot be satisfied that the sequestration order ought not to be made. That is also relevant to the court’s discretion under s.153B of the Bankruptcy Act.

8. Ground 3(iii) in the application, which relates to solvency, is not made out.  It is not necessary to address the other part of that ground which seems to suggest that it was up to the petitioning creditor to provide the registrar with information, including about the applicant’s ownership of real property.  No authority was cited in support of that proposition.  If relevant, it would be relevant only in relation to discretionary factors.  The difficulty is that I cannot be satisfied, on the evidence before the Court, as to the financial circumstances of the debtor.

9. Ground 3(i) of the application is a claim that the sequestration order ought not to have been made as the applicant was not served with the process in the Local Court proceedings.  This is not a basis for annulling the bankruptcy.  There was a default judgment and a creditor’s petition.  The applicant concedes that he was served with the creditor’s petition. 

10. Insofar as it is contended in ground 3(ii) that the failure to serve the applicant with the Local Court process resulted in a denial of procedural fairness which infected the bankruptcy notice, the creditor’s petition and the sequestration order, what was necessary as the basis for the bankruptcy notice was a judgment.  There was such a judgment.  No issue is taken in relation to the applicant’s indebtedness under that judgment.  No challenge has been made by way of an attempt to set aside the judgment.  The issue that is raised about the applicant not having been aware of service of the underlying statement of claim that led to the Local Court judgment is not such as to establish a basis on which the sequestration order ought not to have been made or the bankruptcy annulled.  The applicant conceded that he was personally served with the creditor’s petition attaching a copy of the bankruptcy notice to which was attached a copy of the Local Court judgment.

11. I have dealt with ground 3(iii).  Ground 3(iv) is that the sequestration order ought not to have been made because there were alternate means of recovering the judgment debt from the applicant.  This is not a basis on which a sequestration order ought not to be made.  The fact that there are alternative methods of debt recovery is not a basis for not making a sequestration order or for an annulment.  No authority was cited in support of this proposition. 

12. Even if the fact that there are alternative methods for recovering the debt may be something that the court could have regard to in the exercise of its discretion, this is not a case in which this factor is such as to satisfy me that the court that made the sequestration order was bound not to make the sequestration order.  The discretionary factors do not arise in this case as the ground on which the sequestration order ought not to have been made is not established. 

13. That makes it, strictly speaking unnecessary to consider other discretionary factors.  I note however that there is a proposal to pay, by way of an oral undertaking from the solicitor, the debt owed to the petitioning creditor.  There has been no undertaking in relation to payment of the fees or charges incurred by the Trustee in the course of the administration or an undertaking to pay the petitioning creditor’s costs (although the latter may be intended).  I also note that it is now apparent that the applicant did not fully disclose his financial affairs in the statement of affairs.  I make due allowance for the claims that are made in relation to his lack of English language ability.  I do not see that as a complete explanation for a failure to disclose all of his creditors, although I accept that the way in which he disclosed the credit card debts in the application may well be reflective of a failure to understand the precise headings of the form.  However Mr Nguyen was told clearly that he had to disclose all of his creditors.  

14. For the sake of completeness and because it was addressed in submissions, I note that I would not place any weight on the fact that the applicant instructed a real estate agent after he was made bankrupt, insofar as reliance was placed on that by the respondent.  I accept that this reflected a misunderstanding as to the rights of a trustee in bankruptcy.  Also, in the absence of evidence as to the time at which the water rates were outstanding and the precise circumstances, in circumstances where the applicant has been told that the trustee owned his property, no great weight should be placed on the fact that he failed to pay the water rates.  I mention these matters only because they were matters initially relied on by the respondent and quite properly addressed by the applicant.  As indicated, there are more significant obstacles in the absence of full and frank disclosure of the applicant’s financial situation and the limited undertakings that have been offered in relation to the court’s discretion to annul the bankruptcy. 

15. In all the circumstances, it has not been established that the sequestration order ought not to be made or that the Court should exercise its discretion under s.153B(1) of the Bankruptcy Act to make an order annulling the bankruptcy. Accordingly, the application should be dismissed in its entirety. I will hear submissions in relation to costs.

I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Barnes FM

Date:  24 September 2012