Nudd v Weir, in the matter of Weir

[2000] FCA 223

FEDERAL COURT OF AUSTRALIA

Nudd v Weir, in the matter of Weir
[2000] FCA 223

TREVOR DAVID NUDD v PAULINE DOROTHY WEIR, IN THE MATTER OF PAULINE DOROTHY WEIR
N 7942 OF 1999

GYLES J
SYDNEY
7 MARCH 2000

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 7942 OF 1999

BETWEEN:	TREVOR DAVID NUDD APPLICANT
AND:	PAULINE DOROTHY WEIR, IN THE MATTER OF PAULINE DOROTHY WEIR RESPONDENT
JUDGE:	GYLES J
DATE OF ORDER:	7 MARCH 2000
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.        The petition is dismissed.

2.        The applicant to pay the respondent’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 7942 OF 1999

BETWEEN:	TREVOR DAVID NUDD APPLICANT
AND:	PAULINE DOROTHY WEIR , IN THE MATTER OF PAULINE DOROTHY WEIR RESPONDENT

JUDGE:	GYLES J
DATE:	7 MARCH 2000
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is an opposed petition for sequestration of the estate of Pauline Dorothy Weir (“the respondent”) based upon an act of bankruptcy as provided for by s 40(1)(d)(ii) of the Bankruptcy Act 1966 (“the Act”), namely, that execution has been issued against her under process of a court and has been returned unsatisfied. 

2. On 17 March 1999 Trevor David Nudd (“the applicant”) obtained judgment in a Local Court against the respondent in the sum of $24,308.69, and thereafter issued a writ of execution.

3. Evidence shows that the writ of execution was returned “expired”.  This was one out of five alternatives – the others were “satisfied”, “executed”, “at the judgment creditor’s request” and “at the Registrar’s instructions”.  The judgment creditor received a letter dated 12 May 1999 from the office of the Sheriff that was described as “notice that levy has not been made”.  It stated the following explanation:

   “I have not made a levy under the above mentioned Writ of Execution for the following reasons:

   Execution attempted at 42 Garden Street, Eastlakes on 12/05/1999.

   Demand made not paid.  Debtor owns insufficient goods to seize that would pay out debt if sold at auction.  Debtor motor vehicle leased.  I suggest you try for debtor’s real property, please advise.”

4. On 24 January 2000 the default judgment was set aside by the Local Court,  the respondent alleging payment before action.  The applicant does not now pursue the debt claimed. 

5. The respondent argues that the notice from the Sheriff does not establish execution has been returned unsatisfied within the meaning of the section. It was also put on her behalf that when the judgment debt on which the execution was based has been set aside the applicant cannot satisfy s 52(1)(c) of the Act in that the debt on which the petitioning creditor relies is not owing, and that, in any event, the Court should be satisfied of “other sufficient cause” why a sequestration order ought not to be made within the meaning of s 52(2)(b) of the Act.

6. The applicant says that the respondent is otherwise indebted to him in the sum of some $389,737.31 for monies lent.  There is no judgment for this amount.

7. Whether, on these facts, the alleged act of bankruptcy has been established is by no means clear, as a comparison of Re Greenland;  ex parte National Westminster Finance Australia Ltd (1990) 21 FCR 247 and Re Ousley;  ex parte Deputy Commissioner of Taxation (1994) 48 FCR 131, and the authorities referred to in each of them, illustrates.

8. It seems to me that the most natural application of s 52(1)(c) of the Act is to the debt alleged in the creditor’s petition rather than to some other debt which the creditor later alleges. In the present case, it was the judgment debt which was relied upon. That having been set aside, a sequestration order should not be made.

9. I do not need to resolve the issues because, in my opinion, it would not, in any event, be appropriate to make a sequestration order.  The writ of execution was in aid of a judgment which was later set aside and which, because of the issue of payment, should never have been entered.  I am satisfied that that is sufficient cause why a sequestration order ought not to be made in this case.

10. The petitioning creditor can pursue his rights in relation to other monies alleged to be owing in the normal way, as can the supporting creditor, which has its own petition for hearing.  I do not consider it is appropriate to contemplate substituting a petitioner in proceedings with such an insecure foundation.

11. The petition is dismissed.  The applicant should pay the costs of the respondent.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated:             7 March 2000

Solicitor for the Applicant:	Mr J Teasdale of PW Turks and Associates
Solicitor for the Respondent:	Mr N McCaffery of Crichton-Brownes
Date of Hearing:	8 February 2000
Date of Judgment:	7 March 2000