Pieper, Maria Christina (the Bankrupt) Paul Bernard Cummins

IN THE FEDEIWL COURT OF AUSTRALIA )

5ENTm-L D I V I S I O N I

APPLICATION FOR ANNULMENT

RE - NARIA CHRISTINA PIEPER

THE BANKRUPT

Applicant

PAUL BERNARD CUMMINS

Respondent

JUDGE

MAKING

ORDER:

Ri ley

DATE OF ORDER:	25 November 1977
WHERE MADE :	Sydney

ORDERS

1. That the bankruptcy be annulled.

That the respondent pay

the

appl icant ' s t axed

costs

and

i n c i d e n t a l t o t h e a p p l i c a t i o n f o r

annulment

and

her taxed

costs

( i f

any)

a n d i n c i d e n t a l t o

the

p e t i t i o n f o r

seques t r a t ion o rde r .

or t

. ..

l	i
REASONS FOR JUDGMENT

This

an appl ica t ion

Mrs.

Maria Chris t ina Pieper

f o r

annulment of her bankruptcy, primarily

t h e

ground

t h a t

the sequestrat app l i can t d ivo rced he r

ion order

ought

not

have been

made.

The

husband.

H e

was

o rde red t o pay he r cos t s ,

assessed

and

agreed

a t

$750,

t o h e r o r h e r s o l i c i t o r .

H e

then

d i d pay

$700 t o t h e s o l i c i t o r

who

was

a c t i n g f o r h e r

when

t h e

d e c r e e n i s i

was

made.

second so l i c i to r ,

former

par tner

t h e first, later recovered

d e f a u l t judgment

a g a i n s t M r s .

Pieper

f o r $703.78

i n r e s p e c t

t h e same

cos ts .

t h a t judgment

founded

t h e c r e d i t o r ' s p e t i t i o n

on which

t h e a p p l i c a n t

was

made

bankrupt.

H e

s a id

i n

ev idence

be fo re

m e ,

"It is

a opposes

s i t u a t i o n t h a t

I do no t appl icat ion for annulment .

l i ke ,

bu t

t h e s i t u a t i o n " ;

and

her

Mrs.

Pieper i s a

Spanish lady

who

came

t o A u s t r a l i a ,

unab le

t o

'speak

E n g l i s h , excel lent .

i n

1 9 6 0 .

Today h e r command of

English

is competent t r u s t h e r s e l f t o d e a l u n a i d e d w i t h

but

not

Not

unnatura l ly

she

does

not

l e g a l

document

("I d i d n o t

know

a c t u a l words

what

it means")

and

t akes t he s ens ib l e cou r se

of handing

t o a

s o l i c i t o r f o r a d v i c e

and

necessary act ion.

1963

she

married

John

Pieper.

The

marr iage

did

not

prosper,

and

she

sought

legal

advice.

H e r first

s o l i c i t o r was

M r .

Feeney,

who

conducted

m a t t e r f o r h e r i n t h e

Ch i ld ren ' s

Cour t

i n

1970.

abou t

Ju ly

1 9 7 1 M r .

Feeney

was

jo ined in par tnersh ip , under the

name

Bond

Bond,

M r .

C m . i n s .

( L a t e r

t h e r e

was

t h i r d

p a r t n e r ,

M r .

Clare ,

who

d ied some

time

ago and

who

played no p a r t i n t h i s

s t o r y . 1

M r . On 14 December 1972 Bond & Bond on Mrs. P iepe r ' s

Feeney

introduced

Mrs.

P i e p e r t o

M r .

Cummins.

behalf

f i l e d

i n the Family

Law

Div is ion of the

Supreme

Court of

-2-

New

South Wai

p e t i t i o n f o r d i s s o l u t i o n

her

marriage.

From a

f i l e of

papers produced

subpoena by

M r .

Feeney and

admitted in evidence

behal f o f the appl icant wi thout ob jec t ion

a p p e a r s t h a t t h e p e t i t i o n

was

signed by

M r .

Cummins

and

c e r t i f i c a t e r e l a t i n g t o r e c o n c i l i a t i o n

w a s

given

him,

t h e

address for does not properly understand the concept of par tnership

service being shown as Bond & Bond.

M r s . Pieper

when

asked whether she

knew

what

par tner was , she rep l ied

“Yes,

work

toge the r“ ; bu t

s a t i s f i e d t h a t s h e

knew

t h a t t h e

name

Bond

had

some

connect ion with her proceedings for divorce.

She pa id t he

firm $20 on

December

1 9 7 2 and was

given one of

t h e firm’s both Mr. Feeney

rece ip ts .

There

i s no

doubt

the

evidence

that

and

M r .

Cummins

advised her and acted for her

in the p roceedings for her d ivorce , though she regarded

M r .

Feeney

a s h e r s o l i c i t o r

and

M r .

Cummins

a s someone who

worked

with and

f o r M r .

Feeney

and,

when

M r .

Feeney

was

absent , took h i s p lace .

I am 31 March 1 9 7 3 she was a c l i e n t of Bond & Bond and became indebted

th’e o p i n i o n t h a t f o r a l l

work

done on her behalf

t o

f o r t h a t

work

t o t h e p a r t n e r s h i p ,

and

tha t the conduct ing of

the divorce proceedings

was

pa r tne r sh ip t r ansac t ion .

On 30 March 1973 Messrs. Feeney, Cummins and Clare

en te red i n to

deed of

d i sso lu t ion of

par tnersh ip .

The

deed

p rov ided t ha t t he pa r tne r sh ip o f

Bond

should

dissolved

a s a t 31 March 1973.

Clause

read

fo l lows:

“ A l l t h e r i g h t

t i t l e and

i n t e r e s t of

LAWRENCE BERNARD

FEENEY

and

MAURICE

BRIOT

CLARE

i n t h e p z r t n e r s h i p

t o t h e f o l l o w i n g , t h e

name

Bond

Bond,

the goodwill

of Bond & Bond,

t h e Lease of Bond & Bond,

t h e f i l e s

and

registers

Bond

Bond,

t h e f u r n i t u r e o f

Bond

Bond,

t h e l i b r a r y o f

Bond

Bond,

the ou ts tanding

debts

Bond & Bond and t h e work and (sic) progress

i n Bond

& Bond,

excepting one

chair,

one

book-case,

two

picture’s and one table

hereby ass igned to

Cummins

‘ I .

It was

agreed tha t as f rom

1 April 1973

M r .

Cummins

should carry

the

p rac t i ce

o f

Bond 6 Bond,

unde r

t ha t name, alone.

It was

- 3-

a - -	a l so	p rov ided	t ha t	M r . matters	Feeney	should	remove	the	f i les r e l a t i n g	t o
8 ,

:	cer ta in	scheduled	(which d id	no t	i nc lude	Mrs.	P i e p e r ' s
I

matter) ,

complete

those

matters, and

completion

account

" the par tners o f

Bond

Bond"

f o r t h e p r o f i t c o s t s .

13 July 1973

M r .

Cummins

w r o t e t o

Mrs.

Pieper

" R e

your divorce" asking for

$50

account o f the cos ts o f

Bond

t o d a t e .

August

the respondent husband f i led an answer.

10 August a r ep ly was

f i l e d , s i g n e d

by M r .

Cummins.

M r .

Feeney

had gone par tnersh ip ; bu t he

overseas for

w h i l e a f t e r t h e d i s s o l u t i o n

t h e

I '

had

re turned

about August,

when

r ece ived i n s t ruc t ions

of which he told

Mr.

Cummins

from

Mrs.

P iepe r abou t t ry ing t o

se t t le

the d ivorce .

On 30

August

Bond & Bond wrote t o Mrs.

Pieper saying

t h a t

va lua t ion of her p roper ty

would

have

t o be ob ta ined for

t he hea r ing

(which was

due

1 2 September)

and

asking whether

evidence

h&d been given

in the Met ropol i tan Chi ldren ' s Cour t

hearing

September

1970.

These

matters

had

doubt

been

, I

l	overlooked in t he confe rence	which M r .	Cummins had had with	Mrs.
Pieper on 27 August.

I 1

On 6 September M r . Cummins telephoned Mrs. Pieper .

She

t o l d him

she was

g o i n g t o g e t

M r .

Feeney

t o act

for her because ,

he says ,

"She

d i d n o t

l i k e m e

i n t h e s e n s e

was

too cold about

t h e

matter".

(Mrs.

P i e p e r s a y s t h a t

M r .

Feeney

had

telephoned

her

ear l ier

t o s a y t h a t h e r c a s e

was

comipg on and

t h a t h e

would

f i n l s h

it f o r t h ings t ha t he

h e r . )

M r . had arranged

Cummins

expostulated,

saying

amongst

other

conference with counsel for

September, and asked her to telephone

him

September as

t o h e r

i n t en t ions .

She

d id

no t

do so, and i n t h e meantime on 6 September,

unbeknown t o Mrs.

Pieper , M r .

Feeney f i l e d a notice of change

s o l i c i t o r and

s t a t e d t h a t h e ,

"of

Meagher

D e Coek

s o l i c i t o r s " ,

-4-

was now r e c e i v e d t h a t n o t i c e

t h e s o l i c i t o r

a c t i n g f o r

Mrs.

Pieper.

M r .

Cummins

September

and

10 September Bond &

Bond w r o t e t o

Meagher De

Coek

telling them the s ta te of

p repa ra t ion fo r t he ca se , s ay ing t ha t Bond '&

Bond

exerc ised

l i e n

on t h e i r c o s t s " , and t h a t Bond

f i l e

"because of your previous conduct in respect of

Bond would

send

t h e i r a c c o u n t t o

Mrs.

P ieper shor t ly .

1 2 September

deed of set t lement

was

e n t e r e d i n t o

between the

husband

and

wife.

Mrs.

P iepe r ' s

s igna tu re

was

witnessed by

Mr.

Feeney.

t h e same

day

d e c r e e n i s i f o r

d i sso lu t ion of	the	marr iage	was	made.	The	court ordered i n t e r
a l i a

"5.

Tha t

t he cos t s

o f

t he

wife assessed

and

agreed

a t t h e

sum

of seven hundred and

f l f t y d o l l a r s

($750.00) be paid by the husband

t o t h e w i f e

o r t o t h e s o l i c i t o r f o r t h e w i f e

on	o r be fo re

31s t December

1 9 7 4 "

1 2 September Bond

& Bond w r o t e t o

Mrs.

Pieper

enclosing an account for costs and dlsbursements which

showed

t h a t t h e t o t a l

amount

s a i d t o b e

due

was,

a f t e r a l l o w i n g f o r

$20

a l ready

paid,

$369.14.

The

p a r t i c u l a r s began

with

costs

arranging

conference and tak ing ins t ruc t ions

a t

tha t conference

December September 1974 and a conference with counsel.

1 9 7 2 and ended with an attendance

a t c o u r t

On 18 September

Meagher

D e Coek

w r o t e t o

Bond

s a y i n g t h a t t h e

let ter of

1 2 September had been

r e f e r r e d t o

them and

t h a t M r s .

P ieper

" i n s t r u c t s

t h a t s h e r e q u i r e s

you

t o t a x h e r b i l l " .

September

1974 John Pieper wrote to

M r .

Feeney

follows :

"Further

our

lephone conversat

ion of

even date

enc losed p lease f ind

cheque for

$700

i n f u l l

s e t t l emen t

on account submitted in respect of divorce

and

t r ans fe r o f Un i t

4 / 1 1

Manion

Avenue,

Rosebay".

The

te lephone conversa t ion re fer red to

was

one

between

M r .

Pieper

and M r .

Feeney,

during which they agreed that

i f

M r .

P ieper

made

-5-

I !

immediate

: payment

$100 Mr. Feeney

would

that

amount

i n f u l l s a t i s f a c t i o n o f h i s w i f e ' s c o s t s o f

t h e

divorce

and conveyancing cos ts to be incur red in the t ransfer

M r .

P i epe r ' s

in terest

i n t h e f a m i l y u n i t ,

which had been provided

f o r i the Supreme Court.

the deed of sett lement, the deed having been approved

Mr. Pieper

had

got

touch

with

M r .

Feeney

in an endeavour to

comply

w i t h t h e c o u r t ' s o r d e r a n d i n t h e

b e l i e f t h a t

M r .

Feeney,

whom

he had seen

i n c o u r t

1 2 September,

was Mrs.

P iepe r ' s solicitor.

It is no t

sugges t ed

t ha t

Mr. Feeney

l	d i d n o t	receive	t h e $700.	M r .	Cummins	says	tha t	he	h imsel f	has
I ,

received

p a r t o f t h a t

amount.

26 September Bond

& Bond w r o t e t o Meagher D e Coek.

Mr.

Cummins had learned,

from Messrs. White

blurray

Carew,

M r .

P i e p e r ' s s o l i c i t o r s , o f t h e

payment

$700

t o Mr.

Feeney.

The

le t ter

r e f e r r e d t o t h e a c c o u n t f o r

$389.14

r ende red t o

Mrs.

Pieper on

1 2 September

( i n f a c t

it was

account for

$369.14)

and,

obvio'usly

s u b t r a c t i n g t h a t

amount

from

$150, a r r i v e d a t

the

assumpt

ion

tha t

Mr. Feeney

intended

"to

make

( s ic ) $360.86

f o r t h e

work

done

you

since 6th September

1974".

then

mentioned

Mrs.

P iepe r ' s exp res sed i n t en t ion t o r e tu rn t o Spa in t o

l i v e ,

and

s a i d t h a t i f s h e d i d

it would

d i f f i c u l t t o f i n d

h e r ,

serve h e r ,

and

recover money from

her.

It then

sa id :

"AS you of t h e work performed by t h i s firm we

have co l lec ted the

moneys

a l r e a d y i n r e s p e c t

V70Uld

l i k e t o

know

whether

you

a r e p r e p a r e d t o

pay from

t h e amounts

r e t a i n e d

you

of our cos ts o f say

$300.00,

are

c o n f i d e n t t h a t

t axa t ion ou r cos t s

w i l l exceed

t h e sum of $389.14.

a l s o w i s h t o

know

whether you

w i l l ho ld the

sum

$389.14

i n y o u r t r u s t a c c o u n t

ra ther than have those

moneys

p a i d t o

Mrs.

Pieper

t h a t we

can ensure tha t

will

get ou r cos t s . "

It was during the cross-examiriation of

t o t h i s

le t ter

that the fol lowing quest ions and answers

M r .

Cummins

before

r e l a t e d :

"Q.

You,

i n f a c t , were prepared a t one

s t a g e

t o

a c c e p t

sum

considerably

less- t h a n t h a t

which you

subsequent ly sought to

recover

from

Mrs.

Pieper?

-6-'

That

c o r r e c t .

And

i n f a c t ,

a t one stage I suggest you were

p repa red t o sp l i t wha t

M r .

Feeney had recovered

more o r less down

the middle?

That is c o r r e c t , so we

would not

here

today".

Nothing further happened (except

that

on 4 November

Bond

wro te t o

Meagher

D e Coek

compla in ing t ha t t he

le t ter

September had not been answered and

making

v a r i o u s t h r e a t s )

unt i l 31 Pieper as fo l lows: -

January

1975.

t h a t d a t e

Bond

w r o t e t o

Mrs.

"Pur suan t t o s ec t ion

1 2

the

Conveyancing

A c t

1 9 1 9

a s amended t h a t t h e p a r t n e r s h i p o f

and

o t h e r A c t s ,

you

a r e h e r e b y n o t i f i e d

Lawrence

Bernard Feeney,

Paul

Bernard Cumins

and

Maurice Briot Clare t rading as

Bond & Bond was dissolved f rom the

1st Apr i l 1973.

The

p a r t n e r s h i p a s s i g n e d a l l

its

r i g h t s

and

i n t e r e s t

t o Paul Bernard Cummins

t r a d i n g a s

Bond

Bond.

You

a r e h e r e b y n o t i f i e d t h a t y o u r d e b t t o t h i s

firm

as shown the du ra t ion

the a t tached account incur red dur ing

the o ld f i rm of -Bond

Bond

and

t h e

new

f i rm of

Bond

is due and payable.

Ne your ear l ies t convenience" .

look forward to

payment

t he s a id accoun t

a t

Mr.	Cumins ident i f ied " the a t tached account" in ev idence before

me:

it is p a r t of

Exhibit

I t was da ted 30 January

1975

and

covers work from an unspecified date in

done

in connec t ion wi th

Mrs.

P i e p e r ' s d i v o r c e s u i t

December

1972

e a r l i e r t h a n

1 2

December

up t o and

including

9 September 1 9 7 4 .

It s tops

there

and

does

not inc lude ,

d id the account da ted

1 2 September

1 9 7 4 ,

items

up to documents

and

inc luding

1 2 September

1 9 7 4 .

Otherwise,

the two

cover

t h e same work,

though

t h e earlier one gives

p a r t i c u l a r s

i n

some

c a s e s

d i f f e r e n t

d a t e s .

The

charges

made

by t h e two documents may be analysed

as follows:

- 7-

1 2 Sept. 7 4

30 Jan. 75

Disbursements	39 .14	42.82	1 .
I

Costs

"exceeding

but

say"

350.00

c o s t s

336.14

Percentages

added

283.82

To ta l

389 . l 4

662 .78

d a t e

t o

Amount

p a i d

20.00

$369.14

Amount due

$642 -78

It was

probably about th i s

time

( though her best

r e c o l l e c t i o n

is t h a t it was

i n or

about December

1 9 7 4 ) t h a t Mrs.

Pieper took the account she had received from

Bond

t o

of f icer o f

the Fami ly

Law

Divis ion of

the

Supreme

Court.

H e

s a i d

appea red t o be t oo l a rge i n

view

of t he

amount

a l ready

p a i d by between Bond & Bond and M r . Feeney's

M r .

P ieper , and advised her to seek to have

adjus ted

firm.

She accordingly

took

it t o Mr. everything".

Feeney,

who

t o l d h e r " n o t t o w o r r y , t h a t h e

would

f i x

3 March 1975 Bond & Bond wro te t o

Mrs. Pieper

demanding

payment

$642.78

within seven days and

threatening

proceedings.

On 9 June

1975 Mr. Cummins wrote

again.

This

l e t te r

r e f e r r e d t o p r e v i o u s

demands

and went on

"As you

are aware, the debt

relates

t o work

done

and moneys t o September

pa id dur ing the per iod

from

December

1 9 7 2

1 9 7 4 ,

when

you

apparent ly withdrew this

f i rm 's ins t ruc t ions and presumably

you

l n s t r u c t e d

Mr.

Feeney

t o act on

your beha l f i n t he

Proceedings

against

your

then

husband.

As you

a r e

a l so , aware , t he l ega l p rac t i ce and bus iness

known

as Bond

Bond

is and has been since

1st April

1973

c a r r i e d on by Mr.

Cummins o n l y .

P r i o r

t o

t h a t

da t e t he busmess had been ca r r i ed

Messrs.

L. B. Feeney, M. B. Clare

and P. B. Cummins, who by

agreement made

30th March

1973 absolutely ass igned

t o Mr.

Cummins,

all

o f t h e i r r e s p e c t i v e

r i g h t t i t l e in te res t as they may

and

i n t e r e s t i n t h e s a i d b u s i n e s s , i n c l u d i n g

a l l

deb t s due t o t he f i rm and such r i gh t ,

t i t l e

and

have

had

i n o r i n

respect

t o t h e

s a i d

work

done and

moneys

paid and such debt then

owing by given not ice of that ass ignment , and

you

t o t h e f i r m .

You

have

previously

been

you	are hereby

g iven fur ther no t ice o f such ass ignment , pursuant to

-8-

se c;n It 1s our content ion

1 2 o f

t h e

Conveyancing A c t 1919 (as mended)

anc

:ou

a r e r e q u i r e d t o p a y t h e d e b t t o

M r .

Cummins.

tha t he ~ s , t h e

only person

e n t i t l e d t o

payment

o f t he

sum

of $642.78 including

such debt and

the only

person who can give

you a

v a l i d

f o r

i t s

I '

r e c e i p t

payment."

It t h e n s a i d t h a t

"the debt due

you

t o M r .

Cummins"

remained

unpaid, act ion

would be

commenced

wi thour fur ther no t ice .

Mrs.

Pieper .d id no th ing about tha t

l e t te r ,

f o r

two

reasons :

she

re l ied

M r .

Feeney 's

assurance

that

"he

would

f i x

everything", and she

w a s

u r g e n t l y a r r a n g i n g t o v i s i t h e r m o t h e r ,

I '

who was got in touch wl th

s e r i o u s l y ill, in

Spa in .

Be fo re

she

l e f t

f o r

Spa in ,

she

Mr.

Feeney

b u t g o t

de f in i t e i n fo rma t ion

from

him

though he did ask whether she had paid

Bond

anything

and,

being

told

she

had

paid

them $50, soundly

advised

h e r t o

pay

them

more.

(She

ma in ta ins

t ha t

she

has

pa id

them

$50,

but other evidence

her having paid

than

$20 i s

lacking.)

She

arranged

with

her

former

husband

that

during

her

absence he

would

a t t e n d t o a n y

matters

t h a t a r o s e t h r o u g h h i s

own

s o l i c i t o r s ,

White,

Murray

Carew.

A f t e r Mrs.

Pieper re turned

from Spain

a summons

f o r

t he a l l eged deb t

was

served on

her .

the advice of

her

former

husband she i n s t ruc t ed h i s so l i c i to r ,

M r .

Murray

h%ite,

Murray

& Carew, as a bankruptcy not ice

t o a c t

he r beha l f .

When

subsequent

documents

such

' l

were served on her she

gave them t o

M r .

Murray,

b e l i e v i n g t h a t h e

was

a t t e n d i n g t o t h e m a t t e r

and

t h a t

she

herself

need

nothing.

There

i s

evidence

as t o how it

came a b o u t t h a t t h e n e x t e v e n t d isagreeably surpr i sed

was

khat she

w a s

accordingly

about

1 4 September

1 9 7 7 t o receive

te legram from the Off ic ia l Receiver informing her that

sequestrat ion

order

had

been

made

aga ins t

he r .

M r .

Cummins,

t rue ,

s a i d i n h i s a f f i d a v i t o f

October

1977 t h a t on

November

197t

he wso te d i r ec t . t o

Mrs.

P i e p e r t e l l i n g h e r h e

was

g o i n g t o s i g n

judgment

i f

t h e

money

was

not paid within seven days; but the

-9-

I	letter itself was not	produced,	and M r . Cummins on 22 December
, r -

1 1

1976 signed an

app l i ca t ion

fo r

t he

i s sue

o f

a bankruptcy

not ice

i n which

s t a t e d , a s t h e

accompanying

cer t i f ica te o f . judgment

showed,

t h a t

judgment had been obtained by

him

i n t h e

Distr ic t

I	Court on 1 5 October 1976.	It w a s a d e f a u l t judgment f o r $642.78
1

t h e p l a i n t i f f ' s

claim and

$ 6 1 . 0 0

c o s t s , making

t o t a l of

1 $703.78.

The

course of the proceedings in bankruptcy

was

a s

follows: a bankruptcy

not

ice

dated

23 December

1976 r e q u i r i n g

t h e

payment

$715.35

( i . e .

$703.78

p lus $11.57

interest) was

duly served

on Mrs.

Pieper on 2 1 January 1977; a c r e d i t o r ' s

p e t i t i o n by Mr.

Cummins r e tu rnab le on

9 August was

duly presented

on 2 1 March, c o n s i s t i n g o f f a i l u r e t o

a l l e g i n g a

debt of

$715.35

and

act

bankruptcy

comply

o r b e f o r e

February with the

bankrup tcy no t i ce ; t he pe t i t i on

was

duly served on

Mrs.

Pieper

on 5 April;

August

Mrs.

Pieper did not appear and

was

no t

r e p r e s e n t e a , b u t t h e p e t i t i o n i n g c r e d i t o r

was

unable to p rove

service

o f t h e p e t i t i o n

and

ad jou rned t he fu r the r hea r ing t o

8 September;

and

tha t da t e , t he re be ing aga in

appearance

f o r Mrs.

Pieper,

though she had been duly Served with

order of

adjournment,

and Rule

having been complied with, Franki

J.,who

had

before

him

on ly t he ev idence t he e f f ec t o f

which

have

summarized

in t h i s pa rag raph ,

made

seques t r a t ion o rde r .

Mr. Cummins has

taken proceedings against

M r .

Feeney

i n

r e s p e c t o f o t h e r m a t t e r s , b u t n o t i n r e s p e c t o f

any

p a r t o f

t h e $700.

H e was

advised by counse l

t o

sue

Mrs.

P iepe r

i n s t ead ,

and

began the proceedings which led to her bankruptcy.

I n h i s a f f i d a v i t o f

October

1977 M r .

Cummins

s t a t e d

h i s c l a im thus :

- l0-

"1 s a y t h a t

e n t i t l e d to moneys

pursuant

t o t h e

deed of t h a t t h e debt Ka5

d i sso lu t ion of

the

... par tne r sh ip

... and

been

val i d ly ass lgned t o

m e and

t h a t

...

Feeney has no legal

interest

whatsoever

t h e c o s t s

and disbursements of the appl icant due to

the f i r m of

Bond

& Bond,

s o l i c i t o r s , o f

which I am

t h e s o l e p r a c t i t i o n e r " .

I n h i s

le t ter

31 January quoted above he wrote

t o

Mrs. Piepe r o f "your deb t t o t h i s f i rm account incur red dur ing the dura t ion of the o ld f i rm of

shown

the a t t ached

Bond

Bond and the

new f i r m of Bond & Bond".

The at tached account

shows

t h a t t h e c o s t s c h a r g e d

for

work

done "during the durat ion

of the old f i rm of

Bond

Bond",

i.e.

before

1 April

1973,

amounted

t o $144.63

o r ,

i f t he

appropr i a t e

75% is added,

$253.10.

Again,

i n

t h e

l e t t e r

June 1975, from which also

have quoted above

(and ir, which d i s so lu t ion o f pa r tne r sh ip a r e mi s - s t a t ed ) , he r e f e r r ed t o " the

the p rov i s ions

c l ause

of the deed of

sum

$642.78

including such debt" and the words "such debt"

appear to

mean

t h e d e b t

owing

Mrs.

P i e p e r t o

Bond

& Bond a t

t h e

d a t e

the deed of

d i s s o l u t i o n .

# .

In evidence,

M r .

Cummins

s a i d t h a t

became

e n t i t l e d

t o t h e d e b t

owed

t o t h e

"old firm" of Bond & Bond under c lause

t h e deed of

disso lu t ion .

Clause

ass igns

the

"outs

tanding

debts" of Bond & Bond and the "work and (scil.

in ) p rogress"

of Bond & Boad.

According t o

t h e a c c o u n t

f o r

$642.78

a t tached

t o t h e

let ter of

January

1975,

Mrs.

P ieper ' s ou ts tanding debt

f o r c o s t s a s

a t t h e d a t e

d i s s o l u t i o n was

$253.10 and the

balance

($389.68)

w a s

a t t r i b u t a b l e t o

work

i n p r o g r e s s

o r ,

i n t h e

words

o f t he Pa r tne r sh ip

A c t

(N.S.W.)

1 8 9 2 ,

t r a n s a c t i o n

begun

b u t u n f i n i s h e d a t t h a t d a t e .

September

1974 Mr.

Pieper had paid

Mr.

Feenep $700 in t he c i r cums tances

have

described.

That

payment

" the

cos ts

o f

the

wi fe"

was

clearly

made

M r .

Pieper,

in pursuance of the order of the

Supreme Court, on behalf of Mrs. Pieper.

KO n o t i c e of t h e

-11-

..the

ass ignment

fected

by c lause 2 of the deed

dissolut ion

had then

been

gzven

t o h i m o r t o h e r .

M r .

Cummlns

admitted

I n

ev idence t ha t t he

same

c o s t s were

covered by the

$700

a s were

covered by

t h e

$642 .78 ,

though the former

sum

may

also have

covered

conveyancing

cos

a r i s ing a f te r

the

decree

n i s i .

The

payment

t o Mr.

Feeney discharged

Mrs.

Pieper

from t h e d e b t t o

the par King v. Smith

tnership:

Lindley

on 4 C a r . & P.

Par

tnership,

13th

edn, 108; 172 E.R.

173,

251 ;

(1829),

629.

I f it be

a rgued t ha t

only discharged her from the debt of $253.10, leaving

the balance

$389.68

as a debt s t i l l owing t o t h e

"new" f i r m ,

I '

t h e n t h e l a t t e r d e b t

would

n o t e n t i t l e

M r .

Cummins

t o p r e s e n t

c r e d i t o r ' s

p e t i t i o n :

Bankruptcy

A c t

1 9 6 6 ,

s . 4 4 ( 1 ) ( a ) .

I n

opinion

seques t ra t ion o rder ought no t to have

been

made

and

would

not have been

made

had the learned judge

I .

who

made

it been

aware

t h e

a c t u a l

s t a t e

o f

a f f a i r s before

a s

t h e y

appear

from the evidence which has

been

put

me:

I n re Dunn,

(1949) Ch.

6 4 0 ,

646 .

I . shou ld

add

t h a t

the da t e

the s eques t r a t ion

order Mrs.

Pieper

owed

debt secured on the matrimonial

home,

an unsecured debt of

$100,

and

o ther debts apar t f rom the

a l l e g e d d e b t t o

Mr.

Cummins.

There is evidence

that

the

unsecured

debt has been paid and that payments are

t o d a t e

t h e

mortgage

account,

which

in the mortgagee's opinion has been

ma in ta ined s a t i s f ac to r i ly .

H e r

former

husband

has

wr i t t en

t o

h e r p r e s e n t s o l i c i t o r s t h a t , i f t h e a l l e g e d d e b t

rea l ly payable

t o Bond & Bond,

he will

pay it.

The O f f i c i a l Receiver's r e p o r t

conta ins no th ing adverse to

Mrs.

Pieper .

opinion this bankruptcy should be annul led

and

t h e r e

i s no reason

why

i n my

d i s c r e t i o n I

shou ld dec l ine t o

annul it.

order

tha t

the

bankruptcy

annul led ,

and

t h a t

t h e

. a

-12-

respondent Paul Bernard Cummins pay the applicant's taxed costs

of and incidental to the application and her taxed cos;ts (if any)

of and incidental to the petition for a sequestration

order.

IN THE PEEEPIL COURT OF

AUSTRALIA

)

GENEPAL D I V I S I O N

No.

NSW

5 5 3 of

1977

APPLICATION FOR

ANNULNENT

PIARIA

C H R I S T I N A P I E P E R

THE B-ANKRUPT

Applicant

PAUL

BEPsJARD

CU!4XINS

Respondent

JUDGE

NAKING

ORDER:

Ri ley

DATE

O W E R :

25 November

1 9 7 7

W E R E MADE :

Sydney

ORDERS

That the bankruptcy

annulled.

2. That the respondent pay the appl icant ' s t axed cos ts

of and and her t axed

i n c i d e n t a l t o

t h e app l i ca t ion

for

annulment

costs

( i f any) of

and inc identa l

t o

t h e p e t i t i o n

€or

seques t r a t ion o rde r .

REASONS FdR JUDGMENT

This

i s

an appl ica t ion by

Mrs.

Maria

Chr i s t lna P i epe r

for	annulment of her bankruptcy, pr imari ly on the ground that

t he s eques t r a t ion o rde r ough t no t

t o have been

made.

The

applicant

divorced

her

husband.

was ordered t o pay her

costs,

assessed

and

agreed

a t

$750,

t o h e r o r h e r s o l i c i t o r .

H e

then

d i d pay

$700

to t h e s o l i c i t o r

who

was

a c t i n g f o r h e r

when

t h e

d e c r e e n i s i

was

made.

second

so l ic i tor , a

former

par

tner

t h e f irst ,

la te r recovered

defaul t

judgment against

Mrs.

Pieper

for $703.78

i n r e s p e c t of

t h e same costs.

t h a t judgment

founded

t h e c r e d i t o r ' s p e t l t i o n o n w h l c h t h e a p p l i c a n t

was

made

bankrupt.

H e

s a i d

i n

e v i d e n c e b e f o r e

me,

"It is

s i t u a t i o n t h a t

I d o n o t appl icat ion for annulment .

l i k e ,

bu t

the

s i tua t ion" ;

and

opposes

her

Mrs. speak Eng l i sh ,

Pieper 1s a

Spanish lady

who

came

t o A u s t r a l l a ,

unab le

t o

i n

1960 .

Today h e r command of English

is competent t r u s t h e r s e l f

but

not

excel lent .

Not

unna tu ra l ly she

does

n o t

t o deal unaided with

legal document

("I d i d n o t

know

a c t u a l words

what

it means")

and

t akes t he s ens ib l e cou r se

handlng

t o a

s o l i c i t o r f o r

advice

and

necessary ac t ion .

1963 she

married

John

Pieper.

The

marr iage

d id

no t

prosper,

and

she

sought

legal

advice.

H e r

first

s o l i c l t o r was

Mr. L. Chi ldren ' s Cour t i n 1970.

Feeney, who conducted a matter

f o r h e r i n t h e

abou t

Ju ly

1 9 7 1 M r .

Feeney

was

jo ined i n pa r tne r sh ip , unde r t he

name

Bond

Bond,

Mr.

P. B. Cummins.

(La te r

t he re

was a

t h i r d

p a r t n e r ,

Mr.

Clare, who

d ied some

t m e ago and

who played no

par t i n t h i s

s t o r y . )

Mr.

Feeney

introduced

Mrs. P i e p e r

t o

M r .

Cummins.

1 4 December 1972 Bond & Bond on Mrs.

P i e p e r ' s

b e h a l f f i l e d i n t h e F a m i l y

Law

Divis ion

t h e

Supreme

Court of

-2-

New

South

Wales

p e t l t l o n

for d i s s o l u t i o n o f h e r

marriage.

From a f i l e of papers produced

subpoena

Mr.

Feeney and

admitted in evidence on behalf

t h e a p p l l c a n t w i t h o u t o b ~ e c t l o n

It a p p e a r s t h a t t h e p e t i t i o n

was

signed by Mr.

Cummins

and

certlf icate r e l a t i n g

t o r e c o n c i l i a t l o n

was

given

hlm,

t h e

addres s fo r does not properly understand the concept of Par tnership

s e rv i ce

be ing

shown as Bond & Bond.

Mrs. Pieper

when

asked whether she

knew

what

p a r t n e r was,

s h e r e p l i e d

"Yes,

work

toge the r " ; bu t

s a t i s f i e d t h a t s h e

knew

t h a t t h e

name

Bond

had

some

connect ion wlth her proceedings

for divorce.

She pa id t he

firm $ 2 0 on 7 December

1 9 7 2 and was

given one

t h e

firm's

rece ip ts .

There

no doubt

the

evidence

that

both M r .

Feeney

and

Mr.

Cummins

advised her and ac ted for her

i n t he p roceed ings

for

her divorce, though she regarded

Mr.

Feeney

h e r s o l i c i t o r a n d

M r .

Cummins

a s

someone

who

worked

wi th

and

for M r .

Feeney

and,

when M r .

Feeney was absent,

took his

place.

I a m 31 March 1973 she was a c l i e n t of Bond & Bond and became indebted

t h e o p i n i o n t h a t f o r

a l l work

done on her behalf up

t o

for t h a t the d ivorce p roceedings

work

t o t h e p a r t n e r s h i p , a n d t h a t t h e c o n d u c t l n g o f

w a s

p a r t n e r s h i p t r a n s a c t i o n .

' ,

On 30 March 1973 Messrs. Feeney, Cummins and Clare

e n t e r e d i n t o

deed of

d i s s o l u t i o n of

pa r tne r sh ip .

The

deed

p rov ided t ha t

t he

pa r tne r sh ip o f

Bond

should be dissolved

as a t 31 March 1973.

Clause

2 read as follows:

" A l l

t h e r i g h t

t i t l e and

i n t e r e s t o f

LAWRENCE

BERNARD

FEENEY

and MAURICE

BRIOT

CLARE

i n t h e p a r t n e r s h i p

t o t h e f o l l o w i n g , t h e

name

Bond

Bond,

the goodwill

of Bond & Bond, t h e Lease of

Bond & Bond,

t h e f l l e s

and registers of

Bond & Bond,

t h e f u r n l t u r e

Bond

& Bond, d e b t s of Bond & Bond and t h e work and (sic) progress

t h e l i b r a r y

Bond

Bond,

t he ou t s t and ing

i n Bond & Bond,

excepting one

chalr

one

book-case,

two

p ic tures and one t ab le

i s

hereby asslgned

t o

Cummins" .

It was

a g r e e d t h a t

from

1 Apr i l

1973 Mr.

C m i n s s h o u l d c a r r y

nn +h- ~ v - " c - * - ~

-c ' - 3 r '

. ,

- 2-3 - 2 -

-~ -,

-3-

a lso provlded

t h a t Mr.

Feeney

should

remove

t h e f l les r e l a t l n g t o

cer ta in scheduled

matters

(whlch

d i d n o t i n c l u d e

b i r s .

P i e p e r ’ s

matter),

complete those

matters,

and on completion account

“ t h e p a r t n e r s

of On 1 3 ~ u l y

Bond

Bond” 1973 Mr.

f o r t h e p r o f i t c o s t s .

Cummins wrote t o Mrs.

P iepe r

“Be

your d ivorce“ ask ing for

$50

on account

t h e c o s t s o f

Bond

t o d a t e .

August

the respondent husband f i led an

answer.

On 10 August a had gone overseas for

r e p l y v7as

f i l e d ,

s i g n e d

by M r .

Cummins.

Mr. Feeney

w h i l e a f t e r t h e d i s s o l u t i o n

t h e

pa r tne r sh ip ; bu t

had returned

by about August,

when he

r e c e i v e d i n s t r u c t i o n s	-	of	which	he	t o l d M r .	Cummins - from
-.

Mrs.

Pieper about t ry iog On 30 August Bond & Bond wrote t o Mrs.

t o

s e t t l e

the d ivo rce .

Pieper saylng

t h a t

va lua t ion o f he r p rope r ty

would

have

t o be

o b t a i n e d f o r

the hearin; evidence had been given in the Metropolitan Children’s Court

(which

was

due

1 2 September)

and

asking whether

hearlng

September

1970.

These

matters

had

doubt

been

overlooked

i n t h e c o n f e r e n c e

whlch

Mr.

Cummins

had had wlth

Mrs.

Pieper on

27 August.

On 6 September M r . Cummins telephoned Mrs. Pieper .

She

t o l d him she was

g o i n g t o

ge t Mr.

Feeney t o ac t for her

because,

he says, “She did

not

l i k e m e

i n t h e

sense

was

t o o cold

about

t h e matter”.

(Mrs.

P i e p e r s a y s t h a t

W. Feeney

had

telephoned

her

ear l ier t o s a y t h a t h e r

case was

comipg

on and

t h a t he would

f i n i s h

it for he r . )

M r .

Cummins

expostulated,

saying

amongst

other

th ings tha t he had a r ranged

conference with counsel

for

September,

and

asked

her

t o telephone him

9 meantime

September

as 6 September, ‘

t o h e r

i n t e n t i o n s .

She

d i d

n o t

so, and

i n

t h e

unbeknown t o Mrs.

Pieper , Mr.

Feeney f i l e d a notice of

change

sol ic i tor	and	s t a t e d t h a t h e ,	“of	Meagher	D e Coek	sol ic l tors“ ,
-4-

was now t h e r e c e i v e d t h a t n o t i c e

s o l i c i t o r

a c t j r n g

for Mrs.

Pieper .

Mr.

C u m m m s

September

and on

10 September Bond

Bond wrote t o Meagher D e Coek t e l l i n g them the state of

p r e p a r a t i o n f o r t h e

case,

s a y m g t h a t

Bond

exerc ised

l i e n

on t h e i r costs", and t h a t Bond & Bond would

f i l e

"because

your p rev ious conduct in respec t o f

send

t h e i r a c c o u n t t o

M r s .

P i epe r sho r t ly .

12 September

deed of se t t lement

was

e n t e r e d i n t o

between t h e husband

and

wife.

Mrs.

P i e p e r ' s

s i g n a t u r e

was

witnessed

M r .

Feeney.

t h e same day a

d e c r e e n i s i

for

d i s s o l u t i o n	of	the	marr iage	vas made.	The cour t	o rde red In t e r
a l i a

"5.

That

the

costs o f t h e wife assessed

and

agreed

a t t h e

sum

of seven hundred and

f i f t y d o l l a r s

($750.00) be paid by the husband

t o

t h e

wlfe

t o t h e s o l i c i t o r

for

t h e w i f e

o r be fo re

31s t December

1 9 7 4 "

On 12

September

Bond & Bond wrote t o Nrs. Pieper

enclosing an

account

f o r costs

and disbursements which

showed

t h a t t h e t o t a l

amount

s a i d t o be

due

was,

a f t e r al lowing for $ 2 0

a l ready

pa id ,

$369.14.

The

p a r t i c u l a r s

began

with

costs

a r ranging

conference and tak ing ins t ruc t ions

a t

tha t con fe rence

on 4 September 1 9 7 4 and a conference

December

1972 and ended with

at tendance

a t c o u r t on

1 2

with

counsel .

18 September

Meagher

D e Coek wrote

t o Bond

Bond

s a y i n g t h a t t h e

l e t te r of

September had been referred

t o them and

t h a t Mrs.

Pieper

" i n s t r u c t s u s t h a t

she

r e q u i r e s you

t o t a x h e r

b i l l " .

' :

l	On	23	September	1 9 7 4	John P ieper wrote to	M r .	Feeney
i

follows :

"Further t o our te lephone conversat ion

even date

enc losed p l ease f i nd

cheque

for

$700

i n f u l l

s e t t l e m e n t

on account submit ted In respect

divorce

and

t r ans fe r of Unit

4 / 1 1

Manion

Avenue,

Rosebay".

The

t e l ephone conve r sa t ion r e fe r r ed t o

was

one between

Mr.

Pieper

and M r .

Feeney,

during which they agreed that

i f

Mr.

Pieper

made

-5-

an immediate amount

cash i n f u l l s a t i s f a c t l o n o f h i s

payment

$700 M r .

Feeney vould

accept t h a t

wife’s

c o s t s o f t h e d i v o r c e

and

conveyancing

costs

t o b e i n c u r r e d i n t h e t r a n s f e r o f

Mr.

P i e p e r ’ s i n t e r e s t i n t h e f a m l l y u n i t ,

which had been provlded

f o r i n t h e d e e d

settlement,

the deed having been approved

t h e Supreme Court.

Mr. Pieper

had

got i n

t o u c h w i t h

Mr.

Feeney

i n

an endeavour

t o

comply

w i t h t h e c o u r t ’ s o r d e r a n d i n t h e

b e l i e f

t ha t Mr.

Feeney,

whom

he had seen

i n c o u r t on

12 September,

was

Mrs.

P i e p e r ’ s

s o l i c l t o r .

I t

i s

not

suggested

t h a t M r .

Feeney

d i d n o t

receive

t h e $700.

M r .

Cummins

says

tha t

h imsel f

has

received

no On 26 September Bond & Bond wrote t o Meagher De Coek.

p a r t o f t h a t

amount.

I I

Mr.

Cummins had

learned,

from Messrs. Nhlte Murray & Caret?,

I ,

Mr.

Pieper’s s o l i c i t o r s , of

t h e payment of

$700 t o M r .

Feeney.

The l e t t e r Pieper on 1 2 September

r e f e r r e d t o t h e a c c o u n t f o r

$389.14

rendered

t o Mrs.

( i n f ac t it 17as

an account

for

$369.14)

and,

obviously by subtract ing that

amount

from

$750,

a r r i v e d a t

the

assumpt

ion

tha t

Mr. Feeney

Intended

“to

make

(sic) $360.86

f o r t h e

work

done

you

s i n c e

6 t h

September

1974“.

It then

mentioned Mrs.

Pieper’s expres sed i n t en t ion

t o return t o Spain t o

l ive,

and

s a i d t h a t

i f

s h e d i d

it would

d i f f i c u l t t o f i n d

he r ,

s e rve

he r ,

and r ecove r

money

from he r .

It then said:

“As

you have co l lec ted the

moneys

a l r eady In r e spec t

o f t h e

work

performed by

t h i s firm we

would l i k e t o

know whether you

are prepared t o pay from

t h e amounts

r e t a i n e d

you

o f ou r cos t s o f s ay

$300.00,

are

conf iden t that

t a x a t i o n o u r c o s t s

will

exceed

t h e sum

$389.14.

a l s o w i s h t o

know whether

you

will hold the ra ther than have those

sum of

$389.14

in your

t r u s t

account

moneys

p a l d t o

Mrs.

Pleper

t h a t we

c a n e n s u r e t h a t

will

get ou r costs. ”

It was during the cross-examination

t o t h i s

l e t t e r

;hat the following questions and answers

Mr.

Cummins

be fo re me

r e l a t e d :

“Q.

You,

i n fac t , were prepared a t one

s tage

t o accept

sum

cons iderably less

than that which

you

subsequently sought

t o recover from Mrs.

Pieper?

-G-

That is correct.

And	I n fac t , a t one s t a g e I suggest yo'u were

prepared

t o s p l i t what

Nr.

Feeney had recovered

o r less down

the middle?

That is correct, so we would not

here today".

Nothing further happened (except

that

on 4 November

Bond

Bond wrote

to Neagher D e Coek compla in ing tha t the

le t ter

of 26 u n t i l 31 January 1975.

September had not been answered and makinq

var ious

t h r e a t s )

t h a t d a t e

Bond & Bond wrote t o Mrs.

Pieper as follows :-

"Pursuant t o s e c t i o n 1 2 of

t h e Conveyancing Act

1919

a s amended

and

o t h e r hcts,

you

are hereby no t i f led

t h a t t h e p a r t n e r s h i p

Lawrence

Bernard

Feeney,

P a u l

Bernard Cununins

and Maurice Briot

Clare t r ad ing as

Bond & Bond was dissolved from t h e 1st April 1973.

The

par tnersh ip ass igned

a l l i t s r igh t s and

interest

t o Paul

Bernard

Cummins t r ad ing a s

Bond

& Bond.

You

are

he reby no t i f l ed t ha t your deb t

t h i s

flrm

as shown the du ra t ion

the a t tached account incur red dur ing

t he o ld f i rm o f

Bond

and

t h e

new

f l rm of

Bond

is due and payable.

look forward t o payment

t he s a id accoun t

a t

*	your ear l ies t convenience" .

Mr.

Cummms

ident i f ied " the a t tached account"

idence

before

m e :

it is pa r t

Exh ib i t

It was

da ted 3 0 January

1975

and

covers work

done

i n connection with

Mrs.

P i e p e r ' s d i v o r c e s u i t

' ,-

from

unspec i f i ed da t e i n

December

1 9 7 2

e a r l i e r t h a n

December

up to and

including

9 September 1974 .

It s t o p s

t h e r e

and

does

not

inc lude ,

d id the account da ted

1 2 September

1 9 7 4 ,

items

up to and documents cover the

m c l u d m g 1 2 September 1 9 7 4 .

Otherwise,

the

two

same work,

though the earlier one gives

p a r t i c u l a r s

i n

some cases d i f f e r e n t dates.

The charges made

by t h e two documents may be analysed

as follows:

- 7-

1 2 Sept . 7 4

30 Jan. 75

Dxbursements

39 - 1 4

42.82

Costs

"exceeding

but

say"

350.00

c o s t s	336.14
Percentages added	283.82

To ta l

389 . l 4

662 .78

Amount paid t o d a t e Amount

20.00

due

$369 . l 4

$642.78

I t was

probably about th l s

time

(though her

best

r e c o l l e c t i o n

i s t h a t it was

i n or

about December

1 9 7 4 )

t h a t Mrs.

Pieper took the account she had received

from

Bond

t o

off icer of the

Family

Law Divis ion of t h e Supreme Court.

s a i d It

appeared t o be too

large i n view

t h e amount a l ready

p a i d by Mr. between Bond & Bond and Mr. Feeney's firm. She accordingly

Pieper , and advised her

t o seek

t o have

adjus ted

took

it t o Mr. everything".

Feeney,

who

t o l d h e r " n o t

t o worry , tha t he

would

f l x

3 March 1975 Bond & Bond w r o t e t o Mrs.

P ieper

demandmg payment

$642.78

withln seven days and threatening

proceedings.

On 9 June

1975 Mr. Cummins wrote

again.

This

l e t te r

r e f e r r e d

to previous

demands

and went

" A s you

are aware,

t h e d e b t

relates t o work

done

and moneys t o September

pa id du r ing t he pe r iod

from

December

1 9 7 2

1 9 7 4 ,

when

you

apparent ly wi thdrew th i s

firm's

i n s t r u c t l o n s

and presulnably you

i n s t r u c t e d

Mr.

Feeney t o ac t on your behalf

i n t h e

proceedings

against

your

then

husband.

AS you are

also ,aware, the l ega l

prac t ice and bus iness

known

as Bond c a r r i e d on by

Bond

and has been s lnce

1st Apri l 1973

M r .

Cummins

only .

P r l o r t o t h a t

d a t e t h e

bus iness

had been carrled on

Messrs.

L. B. Feeney, M. B. Clare and P. B. Cummins, who by

agreement

made

30th

March

1973 absolu te ly ass igned

t o M r .

Cummins, a l l o f

t h e l r

r e s p e c t i v e

r i g h t

t i t l e

a n d i n t e r e s t I n t h e s a i d b u s i n e s s , i n c l u d i n g

a l l

d e b t s d u e t o

the

f i rm and such r lgh t ,

t i t l e

and

i n t e r e s t as

they

may

have had

I n or

i n r e s p e c t t o t h e

s a i d worl:

done and

moneys

paid and such debt then

owing by you t o t h e f i r m .

You have

previously

been

g iven no t ice o f tha t ass lgnment , and

you

are

hereby

g iven fu r the r no t i ce	of	such ass ignment , pursuant to
-8-

s e c t i o n 1 2 o f t h e

Conveyancing

A c t 1 9 1 9

(as amended)

and you

are

r e q u i r e d t o p a y t h e d e b t t o

M r .

Cummins.

our conten t ion such debt and the only person

tha t t h e sum of

i s

the only person

I t is e n t i t l e d t o payment of

$642.78

inc luding

who

can

give

you

v a l i d receipt

f o r i t s payment."

It t h e n s a i d t h a t unpaid, action would

" the debt due

you

t o Mr.

Cummins" remamed

commenced

wi thour fu r the r no t i ce .

Mrs.

Pieper d id no th ing about tha t

le t ter ,

f o r

two

reasons :

she

re l ied

M r .

Feeney ' s

a s su rance

t ha t

"he

would

f i x

everything", and she

was

u r g e n t l y a r r a n g i n g t o

v i s i t

her mother,

who

vas

s e r ious ly

ill, l n Spam.

Before

she

lef t

f o r

S p a l n ,

she

got

touch with

M r .

Feeney

bu t go t no de f in i t e i n fo rma t ion

from him

though

did ask whether she had paid

Bond

anything and, on being

t o l d

she had paid

them

$50,

soundly advlsed

h e r t o

pay

them

more.

(She

maintains

that

she

has

paid

them

$50,

bu t o the r ev idence

her having paid

than

$ 2 0 i s

lacking.)

She arranged with

her

former

husband

t h a t d u r i n g h e r

absence he would attend

t o any

matters

t h a t arose

through h i s

own

s o l i c i t o r s ,

White,

Murray

Carew.

Af t e r Mrs.

P iepe r r e tu rned

from

Spain a

summons

for

the a l l eged deb t

was served on her .

the adv ice

her

former

husband she ms t ruc ted h i s so l i c i to r ,

Mr.

Murray

White,

Murray

Carew,

t o ac t on

h e r b e h a l f .

When

subsequent

documents

such

bankruptcy not ice

were

served on her she

gave

them

M r .

Murray,

b e l i e v i n g t h a t h e

was

a t t e n d i n g t o t h e m a t t e r

and

t h a t

she

herself

need do nothing.

There

i s

evidence

as t o how It

came a b o u t t h a t t h e n e x t e v e n t d i sag reeab ly su rp r i sed

was

t h a t s h e

w a s

accordingly

about

September

1 9 7 7 t o r e c e i v e

; ;

from

t h e Off ic la l Receiver

in fo rming he r t ha t

sequestrat ion

order

had

been

made

aga ins t

her .

Mr.

Cummins, it 1s

t r u e , s a i d i n h i s a f f i d a v i t o f

October

1977

t h a t on 9 November 197r

he wrote d i rec t

t o Mrs.

P i e p e r t e l l i n g h e r h e

vas

going

t o s lgn

-9-

l e t t e r i t s e l f was

not

produced,

and Mr.

Cummins on 2 2 Decenber

1976 signed i n which he s ta ted,

a p p l l c a t i o n f o r t h e i s s u e

ban1:rupt'cy

n o t i c e

t h e

accompanying

c e r t i f i c a t e

judgment

showed,

t h a t judgmenE had been obtamed

hlm

I n t h e

Dis t r ic t

Court on 15

October

1976.

It was

d e f a u l t

judgment

for

$ 6 4 2 . 7 6

t h e p l a i n t i f f ' s

claim

and $61.00 costs,

making

t o t a l

$703.78.

The

course of the proceedings in bankruptcy

was

a s

follows: a bankruptcy

notice

dated

December

1 9 7 6

r equ i r ing

j I

the payment of

$715.35

( i .e. $703.76

p lus $11.57

i n t e r e s t ) was

duly served

on Mrs.

Pieper on 21 January 1977;

a c r e d l t o r ' s

p e t i t i o n by Nr.

Cummins

r e tu rnab le on 9 August was

duly presented

, I

on 2 1 March, c o n s i s t m g of

a l l e g i n g a

debt of

$715.35

and

act

banlcruptcy

f a i l u r e t o comply

o r b e f o r e

February

w i t h

t h e

bankruptcy no t ice ; the pe t i t ion

was

duly served

Mrs.

Pieper

on 5 Apri l ; on 9 August Mrs.

Pleper did

n o t appear

and was not

r ep resen ted , bu t t he pe t i t i on ing c r ed i to r

was

unable

t o

prove

service

t h e p e t i t i o n

and

ad journed the fur ther hear ing

6 September;

and

t h a t d a t e , t h e r e b e i n g ' a g a i n

appearance

f o r Mrs.

Pieper,

though she had been duly served with

order

adjournment,

and

Rule

having been complied with,

Frank1

J.,who

had before

him

only

t h e ev idence t he e f f ec t o f

which

have

summarized

i n t h i s paragraph,

made

seques t r a t ion o rde r .

Mr.

Cummins has

taken proceedings agalnst

M r .

Feeney

i n r e s p e c t

o t h e r matters,

but

n o t i n r e s p e c t

any

p a r t of

t h e $700.

H e was

advised by

counse l

t o

sue Mrs.

P iepe r

i n s t ead ,

and

began the proceedings which led

to he r bankrup tcy .

I n h l s a f f i d a v i t o f

October

1 9 7 7 Mr.

Cummins

s t a t e d

h i s claim thus:

- 10-

"I s a y t h a t

a m e n t l t l e d t o

noneys pursuant

t o t h e

d.eed

o f d i s s o l u t i o n o f t h e

- .

. p,artnership _.

. and

t h a t t h e

deb t

has been valid.ly assigned

t o me

and

t t h e f i r m of

...

Feeney has no legal interest whatsoever in

t h e costs t h e s o l e p r a c t i t i o n e r " .

and disbursements of the appl icant due to

Bond

€i

Bond,

s o l i c i t o r s , o f

which

I a m

I n h i s

le t ter

31 January quoted above he wrote

t o

Mrs. Pieper account incur red dur ing the dura t ion of the o ld

" y o u r d e b t t o t h i s

show0

the a t t ached

Bond

Eond and the

new

f l r m of

Bond

& Bond".

The at tached account

shows

t h a t the

costs

charged for

work

done "during the durat ion

of t h e o l d

f i r m of Bond 6i Bond",

1.e.

before 1 Apri l

1973,

amounted

to $144.63

or ,

i f t h e

a p p r o p r i a t e

758

is added,

$253.10.

Agam,

i n t h e

l e t t e r of

June 1975,

from which also

have quoted above

(and i n which d l s so lu t ion o f pa r tne r sh ip

the p rov i s lons

c l a u s e

of the deed

are	m i s - s t a t e d ) , h e r e f e r r e d t o " t h e

sum of appear t o mean t h e d e b t

$642.78

including such debt" and the words "such debt"

owmg by Mrs.

Pieper t o Bond & Bond a t

t h e d a t e

o'f

the deed

d i s s o l u t i o n .

In ev idence ,

M r .

Cummins

s a i d t h a t h e

became

e n t i t l e d

t o t h e d e b t

owed

t o t h e "old f i r m " of

Bond

€i

Bond under c lause

of the deed debts" of Bond & Bond and the "work and (scil.

d isso lu t ion .

Clause

ass igns

the

"outs

tanding

-	i n ) p r o g r e s s "

of Bond & Bond.

According t o the

account

for $642.78

a t t ached

t o t h e

le t ter

31 January

1975,

I4 r s .

P i epe r ' s ou t s t and ing deb t

f o r costs

a t t h e d a t e

d i s s o l u t i o n was

$253.10

and

t h e

balance

($389.68)

was Pa r tne r sh ip

a t t r i b u t a b l e t o work

i n p r o g r e s s

o r ,

i n t h e

words of S. 38 o f

t he

A c t

(N.S.W.)

1 8 9 2 ,

t r a n s a c t i o n

begun

b u t u n f i n i s h e d a t t h a t d a t e .

September

1974 Mr.

Pieper had paid

Mr.

Peeney

$700 in t he c i r cums tances

have described. c l e a r l y made

That

payment

" t h e c o s t s

o f

t h e w i f e "

was

Mr.

Pieper , in pursuance

t h e o r d e r

t h e

Supreme Court,

behalf

Mrs.

Pieper .

N o n o t i c e

t h e

-11-

the assignment effected

c l ause 2

the deed

d i s s o l u t l o n

had then e v i d e n c e t h a t t h e

been

given

him

t o h e r .

M r .

Cumnins

admi t t ed

i n

same

c o s t s were

covered

t h e $700 as were

covered by the

$642.78,

though

the former sum may also have

covered

conveyancing

costs

ar is ing

a f te r t h e decree

n i s i .

The

payment

t o Mr.

Feeney discharged

Mrs.

Pieper from t h e d e b t t o

the par tnersh ip : King v. Smith

indley

Par tnersh ip ,

edn

173 ,

251;

(1829),

4 C a r .

& P.

108; 1 7 2 E.R.

6 2 9 .

If it be

a rgued t ha t

only d i scharged her f rom the debt o f

$253.10,

leav lng

the balance of

$389.68

a s a

debt s t l l l owing

t o t h e

"new"

f i r m ,

t hen t he

l a t t e r debt would

n o t e n t i t l e

Mr.

Cummlns

t o p r e s e n t a

c r e d i t o r ' s p e t i t j o n :

Bankruptcy

A c t

1 9 6 6 ,

s.44(1) (a)

I n my

opinion

seques t ra t ion o rder ought no t

t o have

been

made

and

would

not have been

made

had

the l earned judge

who

made

been aware of the actual

s ta te of

a f fa i r s

they

appear

from

the

evidence

which

has

been

put

before

m e :

I n

Dunn,

( 1 9 4 9 )

Ch.

6 4 0 ,

646.

should add that on the

date

o f t h e s e q u e s t r a t i o n

o rde r K r s .

Pieper owed

debt secured

the matr imonial

home,

an unsecured alleged debt to M r . Cummins.

debt

$100,

and no other debts apart

from

the

There is evidence t h a t

t h e u n s e c u r e d

debt has been pald and that payments

are

t o d a t e

t h e

mortgage

account,

which

i n t h e

mortgagee's

opinion has been

m a i n t a i n e d s a t i s f a c t o r i l y .

Her

former

husband

has

wri

ten

h e r p r e s e n t s o l i c i t o r s t h a t ,

i f

t he a l l eged deb t

rea l ly

payable

t o Bond & Bond,

he will

pay it.

The Off ic ia l Receiver's r e p o r t

I .

con ta ins no th ing adverse

t o Mrs.

Pieper .

I n

opinion thls bankruptcy should be annul led

and

' I

t h e r e

no reason

why

i n my

d l s c r e t l o n

s h o u l d d e c l l n e t o

annul it.

o rde r t ha t t he bankrup tcy be annu l l ed ,

and

t h a t t h e

-12-

respondent Paul Bernard

Cummins

pay

the

appl icant ' s t axed cos ts

and

i n c i d e n t a l t o t h e a p p l i c a t i o n

and

her taxed

costs

( i f any)

and

i n c i d e n t a l t o t h e p e t i t i o n f o r

seques t r a t ion o rde r .

, I

. l

1	%	,	a
I .

I N THE FEDERAL COURT OF AUSTRALIA )

GENERAL D IVIS IC~N

)

'No. NSW 5 5 3 of 1977

' l

, ,

, I

' I

APPLICATION FOR

ANNULMENT

RE	- MARIA CHRISTINA PIEPER

THE BANKRUPT

Applicant

PAUL BERNARD CUMMINS

Respondent

I ,

JUDGE MAKING ORDER:	Riley J.
DATE OF ORDER:	25 November 1977
WHERE MADE:	Sydney

ORDERS

1. That the bankruptcy be annul led.

That the respondent pay the appl icant ' s t axed

costs

and

i n c i d e n t a l

t o

t h e a p p l i c a t i o n f o r

annulment

and

her t axed

costs

( i f any )

and

i n c i d e n t a l t o

t h e p e t i t i o n

for

seques t r a t ion o rde r .

REASONS FOR JUDGMENT

This

is an appl ica t ion

Mrs.

Maria Chris t ina Pieper

' i	for annulment of her bankruptcy, primarily	on	t h e	ground	t h a t
I

the sequestrat applicant

ion order

ought

not

have been

made.

The

divorced her husband.

H e

was

o rde red t o pay he r cos t s ,

, i

assessed

and

agreed

a t $750,

t o h e r o r h e r s o l i c i t o r .

H e

then

d i d pay

$700

t o t h e s o l i c i t o r

who

w a s

a c t i n g f o r h e r

when

t h e

d e c r e e n i s i

was

made.

s e c o n d s o l i c i t o r ,

former par tner

t h e first, later recovered a d e f a u l t judgment aga ins t Mrs.

Pieper

f o r $703.78 founded t he c r ed i to r ' s pe t i t i on

i n r e s p e c t

the

same cos ts .

On t h a t judgment

on which

t h e a p p l i c a n t

was

made

bankrupt.

H e s a i d i n evidence

before

m e ,

"It is

s i t u a t i o n t h a t

I do not appl icat ion for annulment .

l i k e ,

but

the s i tua t ion" ;

and

opposes

her

Mrs.

Pieper i s a Spanish lady

who

came

t o A u s t r a l i a ,

unab le

t o

'speak

E n g l i s h , excel lent .

i n

1960.

Today he r command of

English

competent

but

not

Not

unnatura l ly

does not

t r u s t

he r se l f t o dea l una ided w i th

l e g a l

document

("I d i d n o t

know

a c t u a l words

what

means") and takes the sensible course

of handlng

t o a

s o l i c i t o r f o r a d v i c e

and necessary action.

Ia 1963

she

married

John

Pieper.

The

marr iage

did

not

prosper,

and

she

sought

legal

advice.

H e r

first

s o l i c i t o r was

Mr.

Feeney, who

conducted a matter f o r h e r i n t h e

Children 's

Court

1970.

about

July

1 9 7 1 M r .

Feeney

was

jo ined in par tnersh ip , under the

name

Bond

Bond,

Mr. P. B. Cummins. Clare, who d ied some time ago and

(La te r

t he re

was

t h i r d

p a r t n e r ,

Mr.

who played no p a r t i n t h i s

s t o r y . )

M r .

Feeney

introduced

Mrs.

P i e p e r

t o

M r .

Cummins.

14 December 1972 Bond & Bond on Mrs.

P i e p e r ' s

beha l f f i l ed i n t he Fami ly

Lav7

Divikion of the

Supreme

Court

O f

-2-

New South Wales

a pe t i t i on

fo r

d i s so lu t ion

o f

he r

mar r i age .

From a admitted in evidence on behalf of

f i le o f papers p roduced

subpoena

by appl icant wi thout ob jec t ion

Mr.

Feeney and

a p p e a r s t h a t t h e p e t i t i o n

was

signed

M r .

Cummins

and

c e r t i f i c a t e r e l a t i n g t o r e c o n c i l i a t i o n

was

given by him,

t h e

address for does not properly understand the concept of par tnership

se rv ice

be ing

shown a s Bond & Bond.

Mrs.

Pieper

when

asked whether she

knew

what

par tner was , she rep l ied

" Y e s ,

work	toge the r " ; bu t	I	am	s a t i s f i e d t h a t s h e	knew	t h a t t h e	name
Bond	&

Bond She pa id the firm $ 2 0 on

had

some

connect ion with her proceedings for divorce.

7 December

1 9 7 2 and was

given one of

t h e f i r m ' s r e c e i p t s .

T h e r e

doubt

the

evidence

that

both

M r .

Feeney and

M r .

Cummins

advised her

and

a c t e d f o r h e r

i n

the proceedings for her divosce, though she regarded

M r .

Feeney

a s h e r s o l i c i t o r

and Mr.

Cummins

someone who

worked with and

f o r M r .

Feeney

and,

when

M r .

Feeney

was

absent , took h i s p lace .

I a m of 31 March 1973 she

tHe

o p i n i o n t h a t f o r a l l

work

done on

her beha l f

t o

was a c l i e n t o f

Bond & Bond and became indebted

f o r t h a t

work

t o t h e p a r t n e r s h i p ,

and

tha t the conduct ing of

the divorce proceedings

was

pa r tne r sh ip t r ansac t ion .

On 30 March 1973 Messrs. Feeney, Cummins and C l a r e

en te red i n to

deed of

dissolut

ion of

par tnership.

The

deed

p rov ided t ha t

the

par tnersh ip o f

Bond 2 read as follows:

Bond

should be dissolved

a t -31

March " A l l the

1973. r i g h t t i t l e and

Clause

i n t e r e s t o f

LAWRENCE

BERNARJ3

FEENEY

and

MAURICE

BRIOT

CLILRE

i n t h e p a r t n e r s h i p

t o t h e f o l l o w i n g , t h e

name

Bond

Bond,

the goodwil l

of Bond & Bond, t h e Lease of Bond & Bond,

t h e f i l e s

and

r e g i s t e r s o f

Bond

Bond,

t h e f u r n i t u r e o f

Bond

& Bond, debts of

t h e l i b r a r y o f

Bond

Bond,

t h e outs tanding

Bond

and

t h e work

and

(s ic) progress

i n Bond

Bond,

excepting one chair ,

one book-case,

two

p ic tures and one t ab le

hereby ass igned to

Cummins

' I .

It was

a g r e e d t h a t a s

from

1 April 1973

Mr.

Cummins

should carry

t h e

p r a c t i c e

o f

Bond & Bond,

unde r

t ha t name, alone.

It was

- 3-

also

provided

: Mr. Feeney

should

remove

t h e files r e l a t i n g

t o

I	c e r t a i n	schedul-.?i	matters	(which	did	not	include	Mrs.	P iepe r ' s
I

ma t te r ) , comple te those mat te rs ,

and on completion account to

" the pa r tne r s

Bond

Bond"

f o r t h e p r o f i t c o s t s .

13 Ju ly 1973

Mr.

Cununins w r o t e t o

Mrs.

Pieper

"Re

your divorce" asking for

$50

on account of the costs of

Bond

t o d a t e .

August

the respondent husband filed an answer.

On 10 Augus t a r e p l y was had gone overseas for

f i l e d , s i g n e d

by M r .

Cummins.

Mr.

Feeney

a	w h i l e a f t e r t h e d i s s o l u t i o n o f t h e

pa r tne r sh ip ; bu t he

had

re turned

by about August,

when

r ece ived i n s t ruc t ions

of which he told

M r .

Cummins

from

Mrs.

P iepe r abou t t ry ing t o

s e t t l e

the d ivo rce .

On 30

August

Bond & Bond wro te t o

Mrs.

Pieper saying

t h a t

va lua t ion of her p roper ty

would have

t o asking

be ob ta ined for

the hear ing

(which

was

due

1 2 September)

and

whether

evidence

h&d

been given in the Metropol i tan Chi ldren 's

C o u r t

hearing in overlooked in the conference which

September

1970.

These

matters

had

doubt

been

M r .

Cummins

had had with

Mrs.

Pieper on 27 August.

On 6 September M r . Cummins telephoned Mrs. Pieper .

She

t o l d

him

she

was

g o i n g t o g e t

M r .

Feeney

t o

ac t fo r he r because ,

says,

"She d i d n o t l i k e

m e

i n the s ense

I was

too cold about

the mat te r" .

(Mrs.

P i e p e r s a y s t h a t

M r .

Feeney

had

telephoned

her

e a r l i e r t o s a y t h a t h e r

case was

comipg

and

t h a t h e

would

f m i s h

it f o r things that he had arranged

h e r . )

M r .

Cummins

expostulated,

saying

amongst

other

conference with counsel for

September,

and asked her

to t e lephone

him

September as t o he r

i n t en t ions .

She d i d

n o t

do so, and i n t h e meantime on 6 September,

unbeknown t o Mrs.

Pieper , Mr.

Feeney f i l e d a n o t i c e of

change

s o l i c i t o r

and

s t a t e d t h a t h e ,

"of

Meagher

Coek

s o l i c i t o r s " ,

;

-4-

was now

t h e

s o l i c i t o r

a c t i n g

f o r

Mrs.

Pieper.

M r .

Cummins

r e c e i v e d t h a t n o t i c e

September

and

10 September Bond &

Bond w r o t e t o p r e p a r a t i o n f o r t h e c a s e , s a y i n g t h a t

Meagher

D e Coek

t e l l i n g them

t h e s t a t e

Bond

exerc ised

l i e n

t h e i r f i l e " b e c a u s e

your previous conduct in respect of

c o s t s " ,

and t h a t Bond

& Bond would

send

t h e i r a c c o u n t t o

Mrs.

Pieper shor t ly .

1 2 September a

deed of

se t t l emen t was

e n t e r e d i n t o

between

t h e husband

and

wife.

Mrs.

P iepe r ' s

s igna tu re

was

witnessed by

Mr.

Feeney.

t h e same day a d e c r e e n i s i f o r

d i sso lu t ion of	the marr iage	was	made.	The	c o u r t o r d e r e d i n t e r
a l ia

"5 .

That

the

cos

o f

the

assessed

and

agreed

a t t h e

sum

of seven hundred and

f i f t y d o l l a r s

($750.00) be paid

t h e

husband

t o t h e

wife

o r t o t h e s o l i c i t o r f o r t h e w i f e

o r be fo re

31st

December

1 9 7 4 "

1 2 September Bond .S

Bond w r o t e t o

Mrs.

Pieper

enclosing an account for costs and disbursements which

showed

t h a t t h e t o t a l

amount

s a i d t o b e

due

was,

after

a l lowing for

$ 2 0

a l ready

paid,

$369.14.

The

p a r t i c u l a r s

began

with

costs

arranging

conference and tak ing ins t ruc t lons

a t

tha t conference

December September 1 9 7 4 and a conference

1972 and ended with an attendance

a t

c o u r t

1 2

with

counsel.

18 September

Meagher

D e Coek

w r o t e t o

Bond

s a y i n g t h a t t h e

l e t te r of

1 2 September

had been

r e f e r r e d t o

them and

t h a t Mrs.

Pieper

" i n s t r u c t s u s t h a t s h e r e q u i r e s

you

t o t a x h e r b i l l " .

On 23

September

1974 John

Pieper

w r o t e t o

M r .

Feeney

as fo l lows :

"Further to our te lephone conversat ion

even date

enc losed p lease f ind

cheque

f o r $700 i n f u l l

s e t t l emen t

on account submitted in respect

divorce

and

t r ans fe r o f Un i t

4 / 1 1

Manion

Avenue,

Rosebay".

The t e

! lephone conversat ion referred to

was

one between

M r .

Pieper

and

M r .

Feeney, during which they agreed that

if M r .

Pieper

made

-5-

an immediate

cash payment of $700 M r . Feeney

would

a c c e p t t h a t

amount

i n f u l l s a t i s f a c t i o n o f h i s w i f e ' s c o s t s o f t h e d i v o r c e

and conveyancing cos ts to be incur red in the t ransfer

M r .

P i epe r ' s

i n t e re s t

i n t h e f a m i l y u n i t ,

which had been provided

I '

f o r i n t h e

deed

settlement,

the deed having been approved by

t h e Supreme Court.

Mr.

Pieper

had

got

touch

with

M r .

Feeney

i n an b e l i e f t h a t

endeavour

t o

comply

w i t h t h e c o u r t ' s o r d e r a n d i n t h e

M r .

Feeney,

whom

he had seen in court

12 September,

was

Mrs.

P i e p e r ' s

s o l i c i t o r .

It is not

sugges

ted

tha t

M r .

Feeney

d i d n o t

receive

t h e $700.

M r .

Cummins

says

tha t

h imsel f

has

received

p a r t o f t h a t

amount.

26 September Bond & Bond w r o t e t o Meagher De

Coek.

M r .

Cummins had learned,

from Messrs.

White

Murray

Carew,

M r .

P i e p e r ' s s o l i c i t o r s , o f t h e

payment

$700

t o M r .

Feeney.

The

l e t te r

r e f e r r e d

the account for

$389.14

r ende red t o

Mrs.

Pieper on

1 2 September

( i n f a c t

it w a s an

account

for

$369.14)

and, obviobsly by subtracting that

amount

from

$750,

a r r i v e d a t

the

assumpt

ion

tha t

Mr. Feeney

intended September

"to

make

(sic) $360.86

f o r t h e

work done by you since

6th

1974" .

then

mentioned

Mrs.

P iepe r ' s exp res sed i n t en t ion t o r e tu rn t o Spa in t o

l ive ,

and

s a i d t h a t i f s h e d i d

it would

b e d i f f i c u l t

t o f i n d

h e r ,

serve h e r ,

and

recover money from

her.

It then sa id :

"AS

you

have co l lec ted the

moneys

a l r e a d y i n r e s p e c t

balance

($389.68)

was Par tnersh ip

a t t r i b u t a b l e t o

work

l n p r o g r e s s o r , i n t h e

words

S. 38 of

the

A c t

(N.S.W.)

1892, a

t r a n s a c t i o n

begun

b u t u n f i n i s h e d a t t h a t d a t e .

2 3

September

1974 Mr.

Pieper had pa id M r .

Feeney

$700

in the c i rcumstances

have

described.

That

payment Pieper , in pursuance o f the o rder o f the

"the

costs

the

wife"

was

c l e a r l y made

Mr.

Supreme Court, on behalf

Mrs. Pieper .

No no t i ce

o f

t he

-11-

I . -

l '

t h e

assignment effected

clause

of the deed of d i sso lu t ion

then evidence tha t

been

given the same c o s t s were

t o h i m o r t o

her.

M r .

Cummins

admitted

i n

I !

had

covered by

t h e $700 a s were

I	covered by t h e $642.78,	though	the former	sum	may	a l so have
I I

covered

conveyancing

cos

a r i s ing a f te r

the

decree

n i s i .

The

payment

t o M r .

Feeney

discharged

Mrs.

Pieper from t h e

d e b t

t o

the

par

tnership:

Lindley

Par

tnership,

13th

edn,

173,

251;

King v.

Smith

( 1 8 2 9 ) , 4 Car.

& P.

108; 172 E.R.

629.

I f it be

a rgued tha t

only discharged her from the debt of $253.10, leaving

the balance of

$389.68

a s a

debt still owing

t o t h e

"new"

f i rm,

then t he

l a t t e r

debt

would

n o t e n t i t l e

M r .

Cummins

t o p r e s e n t

c r e d i t o r ' s

p e t i t i o n :

Bankruptcy

A c t

1 9 6 6 ,

s . 4 4 ( 1 ) ( a ) .

I n

opinion

seques t r a t ion o rde r ough t no t t o

have

been

made

and

would

not have been

made

had the learned judge

who

made

been aware o f t he ac tua l s t a t e o f a f f a i r s

they

appear

from the evldence which has

been

put

before

m e :

I n

Dunn,

(1949) Ch.

6 4 0 ,

646.

should add that

the da t e o f t he s eques t r a t ion

order Mrs.

Pieper owed a debt secured

on the matrimonial

home,

an unsecured debt of

$100,

and

o the r deb t s apa r t f rom the

I #

!	a l l e g e d d e b t	t o	Mr. Cummins.	There i s evidence	that	the	unsecured
1

debt has been paid and that payments

are

t o d a t e

t h e

mortgage

account,

which

i n

the

mortgagee's opinion has been

ma in ta ined s a t i s f ac to r i ly .

Her

former

husband

has

writ

ten

4	h e r p r e s e n t s o l i c i t o r s t h a t , i f t h e a l l e g e d d e b t	is	rea l ly payable
' l

t o Bond & Bond, he will pay it.

The Official Receiver's r e p o r t

conta ins no th ing adverse to

Mrs.

Pieper .

I n

opinion this bankruptcy should be annul led

and

t h e r e

i s no

reason

why

i n my

d i s c r e t i o n I

shou ld dec l ine t o

annul it.

I	order tha t the bankruptcy be annul led , and tha t the

-12-

. . .

' respondent

Paul

Bernard

Cummins

pay

the

applicant's

taxed

costs

and inc identa l

t o

the appl icat ion"

and

h e r

taxed cos ts ( i f any)

a n d i n c i d e n t a l t o t h e p e t i t i o n f o r

s eques t r a t ion o rde r .

IN THE FEDERAi COURT OF AUSTRALIA

I *

GENERAL DIVISIGN

)

* No. NSW 553 of 1977

APPLICATION FOR ANNULMENT

RE - blARIA CHRISTINA PIEPER	I
THE BANKRUPT

Applicant

PAUL BERNARD CUMMINS

Respondent

JUDGE MAKING ORDER:

Ri ley

DATE OF ORDER:	25 November 1977
WHERE MADE:	Sydney

ORDERS

That the bankruptcy be annulled.

That the respondent pay the appl icant ' s taxed

costs

of and and her taxed

i n c i d e n t a l

t o

the app l i ca t ion fo r annu lmen t

costs

( i f

any) o f and inc identa l

t h e p e t i t i o n f o r

seques t r a t ion o rde r .

REASONS FOR JUDGMENT

This

is an appl ica t ion

Mrs.

Maria Chris t ina Pieper

for annulment

her bankruptcy, pr imarl ly

t h e ground

t h a t

the seques t ra t ion o rder

ought

no t

have been

made.

The

applicant

divorced her husband.

H e

was

o r d e r e d t o p a y h e r c o s t s ,

assessed

and

agreed

a t

$750,

t o h e r o r h e r s o l i c i t o r .

H e

then

d i d pay

$700 t o t h e s o l i c l t o r

who

was

a c t i n g f o r h e r

when

t h e

d e c r e e n i s i

was

made.

s econd so l i c i to r ,

former

par

tner

t h e

first, l a t e r r ecove red

d e f a u l t

judgment

aga ins t M r s .

P ieper

f o r $703.78

i n r e s p e c t

t h e same

cos ts .

t h a t judgment

founded

t h e c r e d i t o r ' s p e t i t i o n

on which

t h e a p p l i c a n t

was

made

bankrupt.

H e s a id

i n

ev idence

be fo re

me,

"It is

s i t u a t i o n t h a t

I do no t l i k e , bu t it is the

s i tuat ion";

and

opposes

her

app l i ca t ion

for

annulment.

Mrs.

Pieper i s a Spanish lady

who

came

t o A u s t r a l i a ,

unable

'speak

E n g l i s h , excel lent .

i n

1960.

Today he r command of

English

competent

but

not

Not

unnatura l ly

she

does

not

t r u s t

he r se l f t o dea l una ided w i th

l e g a l

document

("I d i d n o t

know

a c t u a l words

what

means") and takes the sensible course

of handing

t o a

s o l i c i t o r f o r a d v i c e

and

necessary act ion.

I1 1963

she

married

John Pieper.

The marr iage

did

not

prosper,

and

she

sought

legal

advice.

Her

f i r s t s o l i c i t o r

was

Mr.

Feeney,

who 1970.

conducted

ma t t e r fo r he r

i n t h e

Children 's

Court

about

July

1 9 7 1 M r .

Feeney was

joined

i n par tnersh ip , under the

name

Bond

Bond,

M r .

Cummins.

(La te r

t he re

was

a t h i r d

p a r t n e r ,

M r .

Clare ,

who

d ied

some

time

ago and

who

p layed no pa r t i n t h i s

s t o r y . )

Mr.

Feeney On 1 4 December 1972 Bond & Bond on Mrs. Piepe r ' s

introduced

Mrs.

P i e p e r

t o

M r .

Cummins.

beha l f f i l ed

i n the Family

Law

Division of the

Supreme

Court

-2-

New

South

Wales

p e t i t i o n f o r d i s s o l u t i o n o f h e r m a r r i a g e .

From a admitted in evidence

f i le o f papers p roduced

subpoena

M r .

Feeney and

behalf of

th'e

app l i can t w i thou t ob jec t ion

a p p e a r s t h a t t h e p e t i t i o n

was

signed

M r .

Cununins

and

c e r t i f i c a t e r e l a t i n g t o r e c o n c i l i a t i o n

was

given by him, the

address

for service being shown as Bond & Bond.

Mrs. Pieper

does not properly understand the concept

pa r tne r sh ip

when

asked whether she

knew

what

par tner was , she rep l ied

"Yes,

work

toge the r " ; bu t

s a t i s f i e d t h a t s h e

knew

t h a t t h e

name

Bond

had

some

connect ion with her proceedings for divorce.

She pa id t he

firm $20 on

7 December 1972 and was

given one of

t h e firm's

receipts .

There

is no doubt

the

evidence

that

both Mr. Feeney

and

M r .

Cummins

advised her and acted for her

the proceedings for her divoxce, though she regarded

Feeney

as h e r s o l i c i t o r

and M r .

Cummins

a s someone who

worked

with and

f o r Mr.

Feeney

and,

when

M r .

Feeney

was

absent , took h i s p lace .

th'e

o p i n i o n t h a t f o r a l l

work

done

her beha l f

t o

31 March 1973 she

was a c l i e n t o f

Bond & Bond and became indebted

f o r t h a t

work

t o t h e p a r t n e r s h i p ,

and

tha t t he conduc t ing o f

the divorce proceedings

was

pa r tne r sh ip t r ansac t ion .

On 30 March 1973 Messrs. Feeney, Cummins and Clare

en te red i n to

deed of

dissolut

ion of

par tnership.

The

deed

p rov ided t ha t t he pa r tne r sh ip o f

Bond

should be dissolved

as at-31 March 1973.

Clause

read

fol lows:

" A l l

t h e r i g h t

t i t l e and

i n t e r e s t of

LAI?RENCE

BERNARD

FEENEY

and

MAURICE

BRIOT

CLARE

i n t h e p a r t n e r s h i p

t o t h e f o l l o w i n g , t h e

name

Bond

Bond,

the goodwil l

of Bond & Bond,

t h e Lease of Bond & Bond,

t h e f i l e s

and r e g i s t e r s o f deb t s of Bond & Bond and t h e work and (sic) progress

Bond

Bond,

t h e f u r n i t u r e o f

Bond

& Bond, i n Bond

t h e l i b r a r y o f

Bond

Bond,

the ou ts tanding

Bond,

excepting one chair,

one

book-case,

two

p ic tures and one t ab le

hereby ass igned to

Cummins " .

was

ag reed t ha t a s

from

1 April 1973

M r .

Cummins

should carry

t h e

p r a c t i c e

of Bond & Bond,

unde r

t ha t

name, alone.

It was

- 3-

I , *

also

provided

I M r .

Feeney

should

remove

t h e

f i les

r e l a t l n g

t o

c e r t a i n scheduI;d

matters

(which d id

no t

i nc lude

Mrs.

P iepe r ' s

matter), complete

those

mat ters ,

and

completion

account

"the par tners of

Bond

Bond"

f o r t h e p r o f i t c o s t s .

13 July 1973

M r . $50 on account

Cummins w r o t e t o

Mrs.

Pieper

"Re

your

divorce"

asking

for

the

costs

Bond

t o d a t e .

August

the respondent husband filed an answer.

10 August a r ep ly was

f i l e d , s i g n e d

by M r .

Cummins.

Mr.

Feeney

had gone overseas for

wh i l e a f t e r t he d i s so lu t ion o f t he

par tnersh ip ; bu t he

had

re turned

by about August,

when

r ece ived i n s t ruc t ions

of which he told

M r .

Cummins

from

M r s .

P i epe r abou t t ry ing t o

se t t le

the d ivorce .

On 30

August

Bond

w r o t e t o

Mrs.

Pieper saying

t h a t a the hearing (which

va lua t ion of her p roper ty

would have

be ob ta ined for

was

due

1 2 September)

and asking whether

evidence hsd been given

in the Met ropol i tan Chi ldren ' s Cour t

hearing

September

1970.

These

matters

had

doubt

been

overlooked

in the conference which

M r .

Cummins

had had with

Mrs.

Pieper on 27 August.

On 6 September M r . Cummins telephoned Mrs. Pieper .

She

t o l d him

she was

g o i n g t o g e t

M r .

Feeney

t o a c t f o r

her

because,

he says ,

"She

d i d n o t l i k e

m e

i n t h e s e n s e

was

too cold about

the mat te r" .

( M r s .

P i e p e r s a y s t h a t

Mr.

Feeney

had

telephoned

her

e a r l i e r t o s a y t h a t h e r c a s e

was

comipg on and

t h a t h e

would

f i n i s h

it f o r things that he had arranged

h e r . )

M r .

Cummins

expostulated,

saying

amongst

other

conference with counsel for

September,

and asked her

to t e lephone

him

September as to h e r

in t en t ions .

She d i d n o t

do so, and i n t h e

meantime on

6 September,

unbeknown t o Mrs.

Pieper , M r .

Feeney

f i l e d a notice of

change

s o l i c i t o r

and

s t a t e d t h a t h e ,

"of

Meagher

D e Coek

s o l i c i t o r s " ,

-4-

was now r e c e i v e d t h a t n o t i c e

t h e s o l i c i t o r

a c t i n g f o r

Mrs.

Pieper.

M r .

Cummins

September

and

on 10 September Bond &

Bond w r o t e t o p r e p a r a t i o n f o r t h e

Meagher

D e

Coek

t e l l i n g

them

t h e s t a t e o f

case,

say ing t ha t

Bond

exerc ised

l i e n

on	the i r f i l e "because o f your p rev ious conduct in respec t o f

c o s t s " ,

and

t h a t Bond

Bond

would send

t h e i r a c c o u n t t o

M r s .

Pieper

shor t ly .

1 2 September

deed of set t lement

was

e n t e r e d i n t o

between the

husband

and

wife.

Mrs.

P iepe r ' s

s igna tu re

w a s

witnessed

Mr.

Feeney.

t h e same day a d e c r e e n i s i f o r

d i sso lu t ion of	the marr iage	was	made.	The	cour t	o rde red i n t e r
a l i a

"5.

That

the a t t h e

costs

the

wife

assessed

and

agreed

sum

of seven hundred and f i f ty do l la rs

($750.00) be paid

t h e

husband

t o t h e w i f e

o r t o t h e s o l i c i t o r f o r t h e w i f e

or before

31s t December

1974"

1 2 September Bond

& Bond w r o t e t o

Mrs.

Pieper

enclosing an account for costs and disbursements which

showed

t h a t t h e t o t a l

amount

s a i d t o b e

due

was,

a f t e r a l l o w i n g f o r

$20

a l ready

paid,

$369.14.

The

p a r t i c u l a r s began

with

costs

arranging

conference and taking instruct ions

a t

tha t conference

December September 1974 and a conference

1 9 7 2

and ended with an attendance

a t c o u r t

1 2

with

counsel.

September

Meagher

D e Coek

w r o t e t o

Bond

s a y i n g t h a t t h e

let ter of

1 2 September had been

r e f e r r e d t o

them and

t h a t Mrs.

P ieper

I .

" i n s t r u c t s u s t h a t s h e r e q u i r e s

you

t o t a x h e r b i l l " .

23 September

1974

John P ieper wrote to

M r .

Feeney

as fo l lows :

"Further

our

lephone conversat

ion of

even date

enc losed p lease f ind

cheque for

$700 i n f u l l

s e t t l emen t

account submit ted in respect of divorce

and

t r ans fe r o f Un i t

4 ) l l

Manion

Avenue,

Rosebay".

The

te lephone conversa t ion re fer red to

was

one between

M r .

Pieper

and M r .

Feeney,

during which they agreed that

i f

M r .

P ieper

made

-5-

an immediate amount

cash i n f u l l s a t i s f a c t i o n o f h i s

payment

$700 M r .

Feeney

would

a c c e p t t h a t

wife's

cos t s o f t he d ivo rce

and

conveyanc ing cos t s t o be i ncu r red i n t he t r ans fe r o f

M r .

P i e p e r ' s

i n t e r e s t

i n

the

family

unit,

which

had

been

provided

for in t h e Supreme

the deed of

set

lement

the

deed having been approved

Court.

M r .

P ieper

had

got

touch

with

M r .

Feeney

in an endeavour t o

comply

wi th t he cour t ' s o rde r

and

i n

t h e

b e l i e f t h a t

Mr.

Feeney,

whom

he had seen in cour t

1 2 September,

was

Mrs.

P i e p e r ' s

s o l i c i t o r .

not

sugges

ted

tha t

M r .

Feeney

d i d n o t

receive

t h e

$100.

M r .

Cummins

says

tha t

he h imsel f

has

received no p a r t of

t h a t amount.

26 September Bond

& Bond w r o t e t o Meagher D e Coek.

Mr. Cummins had learned, from Messrs. White

Murray

Carew,

Mr. P i e p e r ' s s o l i c i t o r s , o f t h e T h e - l e t t e r r e f e r r e d t o t h e a c c o u n t f o r

payment

$700 t o M r .

Feeney.

$389.14

r ende red t o

Mrs.

Pieper on

1 2 September

( i n f a c t it was

an account for

$369.14)

and,

obvio.usly

s u b t r a c t i n g t h a t

amount

from

$750,

a r r i v e d a t

the

assumpt

ion

tha t

Mr. Feeney

intended

"to

make

(sic) $360.86

f o r t h e

work

done

you

s ince 6th September

1974" .

then

mentioned

Mrs.

P iepe r ' s exp res sed i n t en t ion t o r e tu rn

t o

Spain to

l ive ,

and

s a i d t h a t i f s h e d i d

so money from her .

would be

d i f f i c u l t t o f i n d

h e r ,

serve h e r ,

and

recover

It then

sa id :

"AS

you

have co l l ec t ed t he

moneys

a l r eady i n r e spec t

of the

work

performed by

t h i s f i r m

would l i k e t o

know

whether

you

a r e p r e p a r e d t o

pay from

t h e amounts

r e t a i n e d

you

of our costs of say $300.00, as

a r e c o n f i d e n t t h a t

t axa t ion ou r cos t s

will

exceed

t h e sum of

$389.14.

a l s o w i s h t o

know

whether you

will hold ra ther than have those

the

sum

$389.14

i n y o u r t r u s t a c c o u n t

moneys

p a i d t o

M r s .

P ieper

t h a t

can ensure tha t

will

g e t o u r c o s t s . "

It was during the cross-examination of

t o t h i s

l e t t e r

that the fol lowing quest ions and answers

M r .

Cummins

before

r e l a t e d :

"Q.

You,

i n fac t ,

were

prepared

a t one

s t a g e t o a c c e p t

sum

considerably

less

t h a n t h a t

which you

subsequently sought to recover from

Mrs.

Pieper?

-6-

. h a t

c o r r e c t .

And

i n fact , a t one s t a g e I suggest you w e r e

p r e p a r e d t o s p l i t

what

M r .

'Feeney had recovered

more o r less down

the middle?

That i s c o r r e c t ,

so we

would not

here

today".

Nothing further happened (except that

November

Bond

wro te t o

Meagher

Coek

compla in ing t ha t t he

l e t t e r

of 26 September

had

not

been

answered

and

making

various

threats)

unti l 31 P i e p e r a s f o ~ l o w s :-

January

1975.

t h a t d a t e

Bond

w r o t e t o

Mrs.

"Pursuan t t o s ec t ion

1 2 o f t he

Conveyancing

Act

1919

as amended t h a t t h e p a r t n e r s h i p o f

and

o the r A c t s ,

you

are hereby no t i f ied

Lawrence

Bernard Feeney,

Paul

Bernard

Cummins

and

Maurice Briot Clare t rading as

Bond

& Bond was dissolved f rom the

1st April 1973.

The

p a r t n e r s h i p a s s i g n e d a l l

i t s

r i g h t s

and

i n t e r e s t

t o Paul Bernard Cummins

t r a d i n g a s

Bond

Bond.

You are the du ra t ion o f t he o ld

h e r e b y n o t i f i e d t h a t y o u r d e b t t o t h i s f i r m

a s shown new f i r m of Bond & Bond is due and payable.

the a t tached account incur red dur ing

firm

Bond

and

t h e

I *

look forward to

payment

t he s a id accoun t

a t

convenience" .

ear l ies t

your

Mr.

Cummins

ident i f ied " the a t tached account" in ev idence before

me:

it is p a r t of Exhibi t D.

It was da ted 30 January

1975

and

covers

work

done

in connect ion with

N r s .

P i e p e r ' s d i v o r c e s u i t

from

an unspec i f ied da te in

December

1972

earlier

than

1 2 December

up t o and

including

September

1 9 7 4 .

It s t o p s

t h e r e

and

does

not inc lude ,

d id the account da ted

1 2

September

1 9 7 4 ,

items

up t o and

including

1 2 September 1974.

Otherwise,

the

two

documents

cover

t h e

same

work, though the earlier one gives

p a r t i c u l a r s

and

i n some

cases

d i f f e r e n t

d a t e s .

The

charges

made

by t h e two documents may be analysed

as follows:

,	-	.	._
i

1 2 Sept. 74

30 Jan. 75

Disbursements

39 . l 4

42.82

Costs

"exceeding

but

say"

350. 00

c o s t s

336.14

Percentages

added

283.82

Tota l

389 . l 4

662.78

Amount

p a i d t o d a t e

20 .00

20 . DO

Amount due

$642.78

$369.14

It was

probably about th i s

time

( though her best

r e c o l l e c t i o n

t h a t it was

i n o r a b o u t

December

1 9 7 4 )

t h a t Mrs.

Pieper took the account she

had

received from

Bond

t o an

of f icer o f

the Faml ly

Law

Divis ion of

the

Supreme

Court.

H e

s a i d

a p p e a r e d t o b e t o o l a r g e i n

view

of the

amount

a l ready

p a i d by

M r .

P ieper , and advised her to

seek

t o have

adjus ted

between Bond & Bond and Mr. Feeney's firm.

She accordingly

took

it t o M r . everything".

Feeney,

who

to ld he r "no t t o wor ry

, t h a t h e

would

f i x

3 March 1975 Bond & Bond w r o t e t o

Mrs. Pieper

demanding payment

$642.78

wi th in seven days and threatening

proceedings. On 9 June

1975 Mr. Cummins wrote

again.

This

le t ter

r e f e r r e d t o p r e v i o u s

demands

and went

"As you t o September

are aware , the debt

relates

t o work

done

and moneys f i r m ' s i n s t r u c t i o n s

pa id dur ing the per iod

from

December

1972

1 9 7 4 ,

when

you and presumably you instructed

apparent ly withdrew this

M r .

Feeney t o a c t

on your behalf

the

proceedings

against

your

then

husband.

A s

you

are

a l so (avrare , the l ega l p rac t ice and bus iness

known

a s Bond &.

Bond is and has

been

smce 1st April

1973

c a r r i e d on by M r .

Cummins o n l y .

P r i o r

t o

t h a t

da te the bus iness had been car r ied

Messrs.

L. B. Feeney, M. B. Clare and P . B. Cummins, who by

agreement made

30th March

1973 absolutely assigned

to M r .

Cummins,

a l l o f t h e i r r e s p e c t i v e

r i g h t

t i t l e

and

i n t e r e s t i n t h e s a i d b u s i n e s s , i n c l u d i n g

a l l d e b t s

due

t o t h e f i r m a n d s u c h r i g h t ,

t i t l e

and

i n t e r e s t a s t h e y

may

have

had

i n o r i n r e s p e c t t o t h e

s a i d

work

done and

moneys

paid and such debt then

owing by given not ice of that ass ignment , and

you

t o t h e f i r m .

You

have

previously

been

you	are hereby

given fur

ther

not

ice

such ass

ignment

pursuant

-8-

s e c t i o n

1 2 of

the

Conveyancing

A c t 1919

( a s amended)

and you e n t i t l e d t o

a r e r e q u i r e d t o

pay

t h e d e b t t o

M r .

Cummins.

i s our con ten t ion t ha t

t h e

only person

payment

o f t h e

sum

of $642.78 including

such debt and the only person

who

can give

you

v a l i d r e c e i p t f o r

its

payment."

I t t h e n s a i d t h a t

" the debt due

you

t o M r .

Cummins"

remained

unpaid, act ion

would

commenced

wi thour fur ther no t ice .

M r s .

P ieper d id no th ing about tha t

let ter,

f o r

two

reasons:

she

re l ied

M r .

Feeney 's

assurance

that

"he

would

f i x

everything", and she

was

u r g e n t l y a r r a n g i n g t o v i s i t h e r m o t h e r ,

who was got in touch wi th

s e r i o u s l y ill, in

Spa in .

Be fo re

she

l e f t

f o r

Spa in ,

she

Mr.

Feeney

b u t g o t

de f in i t e i n fo rma t ion

from him anything and, on being told she had paid

though he did ask whether she had paid

Bond

them

$50,

soundly advised

h e r t o

pay them no

more.

(She

ma in ta ins

t ha t

she

has

pa id

them

$50,

but other evidence of her having paid

than

$20

lacking.)

She

arranged

with

her

former

husband

that

during

her

absence he.would s o l i c i t o r s , I a i t e , Murray

tend

any

matters

t h a t

a r o s e

t h r o u g h

h i s

own

Carew.

Af te r

Mrs.

Pieper returned from Spain

summons

f o r

t he a l l eged deb t

was

served

her .

the advice of

her

former

husband she i n s t ruc t ed h i s so l i c i to r ,

M r .

Murray

White,

Murray

& Carew,

t o a c t

on he r

beha l f .

when

subsequent

documents

such

a s a

bankruptcy not ice

were

served on

her she gave

them

t o

M r .

Murray,

b e l i e v i n g t h a t h e

was

a t t e n d i n g t o t h e

matter

and

t h a t

she

herself

need do nothing.

There

i s

ev idence a s t o

how

came

abou t t ha t t he nex t even t

was

t h a t s h e

was

accordingly

d isagreeably surpr i sed

about

14 September

1977 t o r e c e i v e

telegram from the

Official

Receiver informing her that

sequestrat ion

order

had

been

made

aga ins t

he r .

M r .

Cummins,

i s

t r u e ,

s a i d i n h i s a f f i d a v i t o f

October

1977

t h a t on

November

1 9 7 c .

he wro te d i r ec t t o

Mrs.

P iepe r t e l l i ng he r he

was

go ing t o s ign

judgment

if t h e money

was

no t pa id w i th in

seven

days ; bu t t he

-9-

le t ter

i t s e l f

. not

produced,

and M r . Cummins on 22 December

1976 signed

an Clppl icat ion for the

issue of

a bankruptcy not ice

i n which

s t a t e d ,

t h e accompanying

c e r t i f i c a t e o f

judgment

showed,

t h a t

judgment had been obtained

him

i n t h e

District

Court

1 5 October 1976.

It was

a d e f a u l t judgment f o r $642.78

the p l a in t i f f ' s c l a im and

$61.00

c o s t s ,

making

t o t a l o f

$703.78.

The

course of the proceedings

i n bankruptcy was

follows:

a bankruptcy

not

ice

dated

December

1976 r equ i r ing

t h e payment

$715.35

- (i.e.

$703.78

p lus $11.57

i n t e r e s t ) was

duly served

on Mrs.

Pieper on

2 1 January 1 9 7 7 ;

a c r e d i t o r ' s

p e t i t i o n by Mr.

Cummins

r e tu rnab le on 9 August was duly presented

on 2 1 March, c o n s i s t i n g o f f a i l u r e t o

a l l e g i n g a

debt of

$715.35

and

act

of bankruptcy

comply

o r b e f o r e

February with the

bankrup tcy no t i ce ; t he pe t i t i on

was

duly served

Mrs.

Pieper

on 5 Apri l ; r e p r e s e n t e t l , b u t t h e p e t i t i o n i n g c r e d i t o r

August Mrs.

Pieper did not appear and

was

not

w a s

unable to p rove

service

o f t h e p e t i t i o n

and

ad journed t he fu r the r hea r ing t o

8 September;

and

tha t da t e , t he re be ing aga in

appearance

f o r Mrs.

Pieper,

though

she

had

been

duly

served

with

order

adjournment,

and Rule

having been complied with,

Franki

J.,who

had before

him

on ly t he ev idence t he e f f ec t

which

have

summarized

in t h i s pa rag raph ,

made

seques t ra t ion o rder .

Mr. Curmnins has

taken

proceedings

against

M r .

Feeney

i n

r e spec t

o t h e r m a t t e r s , b u t n o t

i n

respec t o f any par t o f

t h e $700.

H e was

advised by

counse l

t o

sue

Mrs.

P iepe r

i n s t ead ,

and

began the proceedings which led to her bankruptcy.

I n h i s a f f i d a v i t o f

October

1977 M r .

Cummins

s t a t e d

h i s claim thus:

-10- .

"I say t h a t I

a m e n t i t l e d t o moneys

pursuant

t o t h e

deed of

d i s s o l u t i o n o f t h e

... par tne r sh lp

...

and

t h a t

t h e

debt

has

been

v a l i d l y a s s i g n e d t o

m e

and

t h a t

... Feeney

has

l e g a l i n t e r e s t w h a t s o e v e r i n

t h e c o s t s

and

d isbursements o f the appl icant due to

the f i rm of

Bond

Bond,

s o l i c i t o r s , o f

which

t h e s o l e p r a c t i t i o n e r " .

I n h i s

letter

of 31 January quoted above he wrote

Mrs.

Piepe r o f "your deb t t o t h i s f i rm a s

shown

the a t t ached

account incur red dur ing the dura t ion of the o ld

firm

Bond

and the

new

f i rm of

Bond

& Bond".

The at tached account

shows

t h a t t h e c o s t s c h a r g e d

for

work

done

"dur ing the dura t ion

of the o ld f i rm of

Bond a p p r o p r i a t e

Bond",

i.e.

before

1 April

1973,

amounted '

t o $144.63

o r ,

i f

t h e

75% is

added,

$253.10.

Again,

I 1

i n t h e

l e t t e r of

June

1975 ,

from which

a l s o I

have quoted above

I .

(and

i n which

the p rov i s ions o f c l ause

of the deed of

d i s so lu t ion

pa r tne r sh ip a r e mi s - s t a t ed ) , he r e f e r r ed t o

" t h e

sum

of $642.78 including such debt" and the words "such debt"

appea r t o

mean

the deb t

owing by

Mrs.

P i e p e r t o

Bond

a t

the da te o f the deed

d i s so lu t ion .

evidence,

M r .

Cummins

s a i d

t h a t

h e

became

e n t i t l e d

t o t h e d e b t

owed

t o t h e " o l d

f i r m "

Bond

under clause

of the debts" of Bond & Bond and t h e "work and (scil.

deed

dissolut

ion.

Clause

ass igns

the

"outs

tanding

-	in ) p rogress"

Bond

Bond.

According

t o t h e a c c o u n t f o r

$642.78

a t tached

t o t h e f o r c o s t s a s	l e t te r of a t t h e d a t e o f d i s s o l u t i o n	31	January	1 9 7 5 ,	Mrs.	Pieper ' s	ou ts tanding	debt	!
I

was

$253.10 and

t h e

balance

($389.68)

was Par tnersh ip

a t t r i b u t a b l e t o

work

in p rog res s

or,

i n t h e

words of S. 38 of

the

A c t

( N . S . N . )

1892,

t r a n s a c t i o n

begun

but

unf in ished

a t t h a t d a t e .

September

1974 Mr.

Pieper had paid

M r .

Feeney

$700 in the c i rcumstances

have described. c l e a r l y made

That

payment

" the

cos ts

o f

the

wi fe"

was

Mr.

Pieper , in pursuance

the o rde r o f t he

Supreme Court, on behalf

Mrs.

Pieper .

n o t i c e o f

t h e

the ass ignment effected

c lause

of the

deed

o f d i s so lu t ion

had then ev idence t ha t t he

been

given

t o h i m o r t o her:

M r .

Cummins

admlt ted

same

c o s t s were

covered by

t h e $700 a s were

covered by

t h e

$642.78 ,

though the former

sum may

also have

cove

red

conveyanc

ing

cos

a r i s ing a f t e r

t he

dec ree

n i s i .

The

payment

t o Mr.

Feeney discharged

Mrs.

Pieper

from t h e d e b t t o

the

par

tnership:

Lindley

on 4 Car. & P. 108; 1 7 2 E.R. 629.

Par

tnership,

13th

edn,

173, If it be

251;

King v.

Smith

(1829),

a rgued tha t

only discharged her f rom the debt of

$253.10,

leav ing

the balance of

.$389.68

debt still owing

t o t h e

"new"

f i rm,

t h e n t h e l a t t e r d e b t

would

n o t e n t i t l e

M r .

Cummins

t o p r e s e n t

c r ed i to r ' s pe t i t i on : Bankrup tcy

A c t

1 9 6 6 ,

s . 4 4

(1)

( a ) .

opinion

seques t ra t ion o rder ought no t to have

been

made

and

would

not have been

made

had the learned judge

who

made

been

aware

o f t he

actual

state o f a f f a i r s a s t h e y

appear

from

the

evidence

which

has

been

put

before

m e :

I n re Dunn,

(1949) Ch.

6 4 0 ,

646 .

should add that

t h e d a t e o f t h e s e q u e s t r a t i o n

o rde r Mrs. Pieper owed a debt

secured

on the

matrimonial

home,

an unsecured a l l e g e d d e b t

debt

$100,

and

o the r deb t s apa r t

from

t h e

t o

Mr. Cummins.

There i s ev idence

tha t

the

unsecured

debt has been paid

and

t h a t payments

are

t o d a t e

t h e

mortgage

account,

which

the mortgagee

opinion has

been

ma in ta ined

s a t i s f ac to r i ly .

H e r

former

husband

has

writ

ten

h e r p r e s e n t s o l i c i t o r s t h a t , i f t h e a l l e g e d d e b t

i s

rea l ly payable

t o Bond & Bond, he will

pay it.

The O f f i c i a l

R e c e i v e r ' s

r e p o r t

conta ins no th ing adverse to

Mrs.

Pieper.

opinion this bankruptcy should be annul led and

t h e r e	i s no reason	why	i n my	d i s c r e t i o n I	shou ld dec l ine t o
annul	it.

I	order tha t the bankruptcy be annul led , and tha t the

' respondent Pat. aernard Cummlns pay the

app l i can t ' s

t axed

cos t s

' l

, l

I I

and

inc identa l

the

app l i ca t ion

and

her

t axed

cos ts

( i f

any)

I ,

and

i n c i d e n t a l t o t h e p e t i t i o n f o r

seques t r a t ion o rde r .

; I

I I

I I

l .

l ,

' ,

[1977] FCA 84

25 Nov 1977