Perish, A.A.

[1994] FCA 893

JUDGMENT NO. . , ssea

IN THE FEDERAL COURT OF AUSTRALIA )

)

FEW SOUTH WALES DISTRICT REGISTRY ) No. NP 930 of 1994

1

GENERAL DIVISION 1

BETWEEN :	ALBERT ANTHONY PERISH
AND :

2 NOVEMBER 1994

=SONS FOR JUDGMENT

LOCKHART J.

This is the hearing of a petition for sequestration of the estate of Albert Anthony Perish. The matter was last before the Court on 23 August 1994 when Mr Perish, who represents himself (as he then did), sought an adjournment of the petition so that he might obtain further evidence and put matters in place to enable his creditors to consider either an informal arrangement of his affairs or a formal arrangement under Part X of the Bankruptcy Act 1966. The adjournment was opposed by counsel for the petitioning creditor, Gatenby Bros Pty Limited, a creditor in the sum of at least $65,000.

adjourned before then) was a very strong one but I was

I granted the adjournment sought by Mr Perish and I gave reasons on that occasion why I did so. I need not recite what I said except certain of the comments which I made. I said that the case put by the petitioning creditor to refuse a

further adjournment (the petition already having been

prepared to give a short adjournment to Mr Perish so that he could gather proper evidence to put to the Court on matters that would go to the question of the dismissal of the petition or any further adjournment of it. I then gave certain directions as to the filing by Mr Perish of affidavits. Those directions were not complied with, but Mr Perish has handed up to the Court today an affidavit sworn by himself of yesterday's date, when the matter was in the list but could not be reached until today, and I have read the affidavit and the annexures to it on the basis that it is proper material to read for the purposes of this proceeding. I have taken it all into account.

Mr Perish is, as I understand it, seeking either a dismissal of the petition or a further adjournment. He wishes to pursue certain litigation in which he says he has strong prospects of success relating to a number of matters including a claim for theft of timber from a property which he owned on

the New South Wales north coast. Litigation is inherently

uncertain and the litigation that is suggested here has

certain prospects of success, but it is certainly not a case in which it could be said that the action was likely to succeed, nor indeed that it was likely to fail.

The fact is, on the material I have, including a report
from Messrs Ferrier Hodgson, chartered accountants, to
creditors of Mr Perish that Mr Perish is obviously insolvent,

which he does not dispute. Ferrier Hodgson assessed that the likely dividend in bankruptcy, on the material they had when they wrote the report, would be something in the order of 22 cents in the dollar under a Part X arrangement, 40 cents in the dollar in an informal arrangement, and something less in bankruptcy.

I gather from what has been said and I am prepared to accept it as true from Mr Perish that the report has been sent to his creditors and some of them have responded in favour of supporting an informal arrangement.

I have seen the list of creditors; they are numerous but the two major creditors are the petitioning creditor and a company, Millmaster Feeds, owed $80,000 together with interest that may have accrued thereon. Those two creditors represent $145,000 out of a total of $308,000. I round off the figures.

I have also been told by counsel for the petitioning creditor

that the next major creditor, Joseph Mercica NSW Pty Limited,	owed $50,000, supports the petitioning creditor. There is no
evidence before me as to the attitude of that creditor. I think the fair course for me to take is to simply not make any assumptions about whether that creditor would or would not support the petitioning creditor.
A solicitor, Mr Beverly, appeared yesterday for Millmaster Feeds to support the petitioning creditor. The solicitor was unable to be present today, which is the adjourned date from yesterday. Counsel for the petitioning creditor informs me that he has been informed by Mr Beverly that Millmaster Feeds supports the petitioning creditor who resists any further adjournment of the petition and seeks a sequestration order.

The case is an unfortunate one. Mr Perish does not want

to be bankrupt and he has said to me that he genuinely feels that he could, if he is allowed to pursue this litigation and conduct his affairs as he thinks proper, create a situation where the creditors may be paid in full or at any rate substantially more than they would be paid in bankruptcy. He states the reasons for his misfortune are circumstances beyond his control and due to the acts and defaults of others. No- one wishes to make a person bankrupt, but the fact is, as I have said, Mr Perish is insolvent and insolvent to a substantial degree. The two major creditors seek to make him

bankrupt. They account for nearly 50 per cent in value of his

debts.

It is obvious from that that if they maintain their present stance, and every indication is that they will do so, a Part X arrangement must fail, because it could not obtain the requisite majority in value. I cannot see how an informal arrangement could possibly work unless all creditors agreed to it, or at least all creditors, except perhaps for a minimal number in value who would not have sufficient debts to support the presentation of a bankruptcy petition. That is academic in this case because the petitioning creditor alone is owed $65,000. Unfortunate though it is, it seems to me that the only course that can reasonably be taken by the Court in all the circumstances is to proceed to make Mr Perish bankrupt.

If, subsequent to the bankruptcy, he is able to convince the trustee in bankruptcy that there is some benefit to be gained by having his affairs taken outside bankruptcy with the consent of his creditors, then that is a course which can still be taken. However, I do not take that into account to any great degree at all in deciding what is the proper course to take. I note also that proposals have been on foot for some years by Mr Perish to endeavour, no doubt in all good faith, to have the assent given by his creditors to some form of informal arrangement, but they have come to nothing as yet. It does seem to me to be a case where it would not be right in

the exercise of the Court's discretion to allow the funds and	assets of Mr Perish that remain to be used to pursue recovery
of further assets without that decision being taken by someone who represents the creditors in charge of his affairs, namely, a trustee in bankruptcy.
Accordingly, I decline to adjourn the petition further. I have read the formal documents that are customarily relied upon in support of a bankruptcy petition. I am satisfied that the debtor committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters of which section 52(1) of the Act requires proof. I make a sequestration order against the estate of the debtor and order that costs including reserved costs and the costs of 23 August 1994 be taxed and paid according to the Act.

I certify that this and the

preceding five (5) pages are a true copy of the reasons for judgment herein o f the Honourable Mr. Justice Lockhart.

Associate: a,&& Dated: 2 November 1994

The debtor appeared in person.

Counsel for the Petitioning Creditor:	Mr D M Bernie
Solicitors for the Petitioning Creditor:	Coleman & Greig
Date of Hearing:	2 November 1994
Date of Judgment:	2 November 1994