Re: Ayoub, George and Ex Parte: Vitol Asia Pty Ltd

[1993] FCA 1065

/DJ;- 0

JUDGMENT No. ........ J ,..

IN THE FEDERAL COURT OF AUSTRALIA	1
GENERAL DIVISION	1
) No. NP 4348 of 1992
BANKRUPTCY DISTRICT OF THE	1
1
GEORGE AYOUB

Debtor

EX PARTE:  VITOL ASIA PTY LTD

Petitioning Creditor

22 June 1992 ,

REASONS FOR JUDGMENT

LOCKHART J.

This is a petition by a creditor, Vitol Asia Pty Ltd, for the sequestration of the estate of the debtor, George Ayoub. The debt due by the debtor to the petitioning creditor is in the sum of approximately $277,000, which is a judgment debt entered in the Supreme Court of New South Wales on 27 March 1992 by consent. There is no dispute as to the existence of the debt. The debtor seeks today to have the petition adjourned until a date after 5 October 1993 because, on that date, the Court is to hear an application by the debtor in another matter in which he seeks a declaration that the resolutions passed by creditors at a meeting held on 23 December 1993 pursuant to Part 10 of the Bankruptcy Act 1966 are void and of no effect, together with certain other relief.

-%	'
It would appear that another creditor of the debtor, BP Australia Limited, has presented another petition to the Court, number 577 of 1993, in which it seeks sequestration of the estate
of the debtor.
BP is a judgment creditor in the sum of something in excess of $6 million. That judgment was entered by the Supreme Court on 7 June 1993. Though not the subject of an appeal to the Court of Appeal, there is evidence that satisfies me that it is proposed in the near future to file an appeal against that judgment. The outcome of that appeal is, of course, not known.
I have no knowledge as to the prospects of success of that appeal but what I do have before me is that BP has the benefit of a judgment entered by a judge of the Supreme Court, so the money is presently due. The debtor has argued that if he should succeed in his application before this Court on 5 October next, then it will probably have the effect, so it is argued, that the resolutions of the creditors on 23 December 1992 will be void and of no effect and he says it will then leave the way clear for the debtor to place before the creditors at a fresh meeting, under Part 10 of the Act or otherwise under the Bankruptcy Act itself,
a proposal whereby a member of the debtor's family will place in the hands of a trustee for creditors some $100,000 which will be
available to creditors, after of course deducting the costs and expenses of any administration of any such informal arrangement or compromise.
The evidence before me of the debtor's financial position shows that he is indebted to creditors in the sum of at least $6 million, and has assets that are at best $2800 in cash. It is of course a huge deficiency. A petitioning creditor is prima facie entitled to have his case heard and a sequestration order made if he makes good his case. This petitioning creditor is, as I have said, owed some $277,000 on an undisputed debt. The matter has been in the list on a number of occasions before registrars and has been adjourned. There is no evidence before me of creditorsf attitudes as to whether they support or oppose the petition. At best it seems to me, if the petition is adjourned, and making the further assumption that the debtor should win his proceedings on 5 October, it simply means the creditors will be faced with the choice in the future of taking their share of $100,000 to pay out debts of something like $6 million.
This particular petitioning creditor, who is the largest creditor after BP, wishes to have no part in that arrangement, an attitude which was evidenced also by it at the meeting of 23 December when it voted in favour of a proposal that the debtor
should present his own petition for sequestration, and it is that failure to comply with that resolution which as I understand it
is the foundation of BP'S petition. In all the circumstances I
am satisfied that no case whatever has been made out to adjourn
this petition and that it should proceed. I refuse to adjourn the petition.
It has emerged that the debtor had paid earlier this year to the petitioning creditor some $40,000 of the debt due to it. That of course will have the effect, notwithstanding the accumulation of interest in the meantime, of reducing the debt of the petitioning creditor from the figure which I mentioned to something a little below it. That factor however does not in any way influence or affect the reasons which I have already given for refusing the adjournment. Indeed, it is arguable that it would give rise in any event to a preferential payment in due course.
I am satisfied that the debtor committed the act of bankruptcy alleged in the petition. I am satisfied with the proof of the other matters of which S. 52 of the Act requires proof.
I make a sequestration order against the estate of the debtor. I order that costs including any reserved costs be taxed and paid according to the Act and direct that a draft of the order be delivered to the registrar within seven days in
accordance with the rules. I certify that this and the

preceding three (3) pages are a

true copy of the r as 6 d for	judgment P6rein of thJHdxfo kable
Mr. Justlce ~ockhitft?( ;! 7
Dated: 22 June 1993

Solicitors for the Debtor	:	R E Izzard & Associates
Solicitors for the
Petitioning Creditor	Lane & Lane
Date of Hearing	.	22 June 1993
Date of Judgment	.	22 June 1993