Re Bachmann, C. v Ex parte Doran, E

[1987] FCA 496

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CATCHWORDS

Bankruptcy - creditors petition - debtor able but unwilling to pay

debts - whether sequestration ought to be made - costs.

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Bankruptcy Act 1966 ss.40(l)(d)(i), 52(2)

Re: CLENENS BACHMANN EX parte: ETHEL DORAN

No. P. 360 of 1987

Sweeney J.

Sydney

3 JUIY, 1987

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IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION	No. P. 368 of 1987
BANKRUPTCY DISTRICT OF THE STATE

OF NEW SOUTH WALES AND THE

AUSTRALIAN CAPITAL TERRITORY !

RE : CLEMENS BACHMANN

EX PARTE: ETHEL DORAN I

THE COURT: Sweeney J.

PLACE : Sydney

DATE : 3 July, 1987

MINUTES OF ORDER

THE COURT ORDERS THAT:

1.	The petition be dismissed.	I.'
2.	Debtor to pay petitioning creditor's costs of and incidental to petition up to 17 June 1987 when the debtor's affidavit

was served on the petitioning creditor and that he

petitioning creditor pay the	debtor's costs of and incidental
to the petition thereafter.

Note: Settlement and entry of orders is dealt with

in Order 36 of the Federal Court Rules.

IN THE FEDERAL	COURT OF AUSTRALIA	)
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DIVISION	GENERAL	1
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BANKRUPTCY DISTRICT OF THE STATE	)
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OF NEW SOUTH WALES AND	THE	1
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AUSTRALIAN CAPITAL TERRITORY ) .

RE : CLEMENS B A C H W N

EX PARTE: ETHEL DORAN

THE COURT: Sweeney J.

PLACE : Sydney

: 3 July, 1987

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EX TEliIPORE JUDGMENT

This is a creditor's petition by Ethel Doran, the creditor,

against Clemens Bachmann, the debtor, in which the creditor

alleged that the debtor was just and truly indebted to her in the

sum of $16,839.65, being the amount due under the final judgments

recovered in the District Court at Sydney on the 31st day of May

1982, together with interest thereon at 10 per cent per annum on

reducing balances from time to time and costs taxed pursuant to

such judgment, the consideration for such debt being wages,

overtime and holiday pay due to the creditor for work done for the

debtor.

The act of bankruptcy alleged in the petition was that the

debtor within six months before the presentation of the petition

committed the following act of bankruptcy, namely that on 5

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Itembe r 1986 execution having been issu ed against him under

process of the District Court of New South wales certain of his

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property, namely yellow Falcon station sedan number MDM-407, was

held by the sheriff for 21 days.

The act of bankruptcy alleged is said to be within the berms

of section 40(1) (d) (i) of the Bankruptcy Act 1966 which I shall

call the Act, which reads as follows:

"A debtor commits an act of bankruptcy

in each of the following cases -

...

...

(d) if -

(i) execution has been issued aginst him under process of a court and any of

his property has, in consequence,

either been sold by the sheriff or

held by the sheriff for 21 days".

By affidavit sworn on 20 February 1987 the creditor

purported to verify the petition by deposing that the statements

set out in paragraphs 1, 2 and 3 of the petition were within her

own knowledge true.

A further affidavit was relied upon in support of the

petition, that of Paul Le Gay Brereton, her solicitor, also sworn

on 20 February 1987, which purports to set out the history of the

steps taken in execution of the judgment. This affidavit is open

t o the criticism that appropriate verification of an act of

bankruptcy such as is alleged in this case should be provided by

the person with first-hand knowledge of the facts such as the

sheriff or one of his officers.

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By notice of intention to oppose the petition, dated 30 April

1987, the debtor claimed to be "solvent and able to pay his debts

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as and when they fall	due", obviously seeklng to bring himself	F
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within the judgment in Re Sarina ex parte Wollondilly Shire ! ,

Council, (1980) 43 FLR 163 and before the Full Court 48 FLR 372.

In that case the debtor was shown to be able but unwilling to-pay

his debts and it was held that he was entitled to the benefit of

section 52(2) of the Act which provides that if the court is

satisfied by the debtor that he is able to pay his debts it may

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dismiss the petition. The notice of opposition did not raise any

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other ground.

The debtor relied upon his own affidavit sworn on 10 May 1987

in the first part of which he set out the fact that he refused to

pay the balance of the debts which he owed to the creditor and

gave his reasons for this attitude which it is unnecessary to

reproduce. Paragraphs 16 and 18 of his affidavit, which dealt

with his ability to pay, stated as follows -

"16. I state that for the above reasons, I

refuse to pay the debts to the creditor.

I am in a position to pay such debts and

set out my assets and liability below:-

a.	Half share in house at	15 Georges River
Road, Croydon, $40,000.00.

b. Laundromat business and freehold of a

property at 153 Rawson Street, Auburn,

$80,000.00.

c. Laundromat businesses at Stanmore,

Ashfield and Auburn, $80,000.00.

d. Motor vehicle, $3,000.00.

18. I advise the Court that I am solvent and am able to pay my ordinary debts in the

ordinary course of my business but refuse

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to pay the creditors debt for the above

reasons".

The debtor was cross-examined on these paragraphs but in my

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opin he has d ion ischarged the onus which r ests up ton him and the

petition should be dismissed.

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He has sufficient assets to enable him to obtain funds quite

quickly on the security of his properties. The discretion

conferred upon the court by section 52(2) of the Act should in my l .2

opinion be exercised by dismissing the petition and I do so.

On the question of costs, in Sarina's case at first instance

the debtor was ordered by pay the petitioner's costs up to and

including the proceedings before the Court on 28 April 1980 when it first appeared that the debtor was able to pay his debts, see 4 5 FLR 167. The debtor appealed against the order for costs made against him and the Full Court dismissed that appeal.

Consistently with the authority of Sarina I order that the

debtor pay the petitioning creditor's costs of and incidental to the petition up to 17 June 1987 when the debtor's affidavit was

served on the petitioning creditor and that the petitioning

creditor pay the debtor's costs of and incidental to the petition

thereafter.	I.
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I certify that this and the	I
preceding three ( 3 ) pages are a

true copy of the Judgment

herein of the Honourable	Hr.
Justice Sweeney

Dated: 3 July, 1987

Associate

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P. 368 of 1987
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Counsel for the petitioning creditor: Mr P. Brereton

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Solicitors for the petitioning

creditor: Duncan Baron & CO . I

Counsel for the debtor:	Mr S. Torrington
Solicitors f o r the debtor:	Sally Nash & CO

Date of hearing: 3 July, 1987

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