Re Bird, Alex Neville (as Trustee of the estate of Yiangos Arcadiou, a bankrupt) Ex parte Tasmanian Board Mills Ltd (trading as Country and Western)

[1980] FCA 8

Bankruptcy Act 1'356 s.122 - paycc h a v l n g fails5 t o

p r o v e t h a t it h a s a pay<? I n t h r o l d l n a r y c,frurSe of

bus l r . e s s , paynex t hav lng been r e c e ~ v c d 85 a r c z u l t

of s t a t e m e n t madc by paycc a t 2 x e t l n g of c c r t a l n

of t h e b a n k r u p t ' s c r e d l t o r s 21.6 a s a r e s u l t of t h e

l s s u e a n d service of a wr1 L, p a y m n t declare6 void

a g a i n s t t h e t r u s t e e of t h e e s t a t e of t h e m n k r u p t

as a p r e f e r e n c e .

SliECNEY J.

19 DECEFBER 1 3 7 9

IN TlIE FEDERAL CCURT OF AUS'??:\Lii>

-

GENERAL DIVISION L No. 6 8 of 1517

EX PARTE: TASI4ANII.N EOARD MILLS LTD.

trading ;IS Councry and Wcsttrn.

JUDGE X A K I N G ORDER : SWEENEiI J .

WHERE :V:DE:	MELBOURNE
DATE OF ORDER:	19 DECEMBEP 1979

Tnz covm DECLARE THAT:

.

The p a y m n t of $ 1 5 , 0 0 0 maclc by t h e b a n k r u p t t o the

r e s p o n d e n t o n 28 Sep tember , 1 9 7 6 and the paymc,l t of

$ 5 , 0 0 0 made by t h c b a n k r u p t t o t h e r e s p o n d e n t on

9 Oc tobe r 1 9 7 6 are v o l d a s a g a l n s t t h c a p p l l c a r ~ t as

t r u s t e e of t h e p r o p c r t y of chc! b a n k n i p t a n d orders

t h a t t h 2 L e s p o n d c n t pay t o t h e applicant t h e sa;? of

$ 2 0 , 0 0 0 . I t 1 s f u r t h e r o r c k r c d t h a t t n c r c spo>x l?n t

p a y t h e a p p l l c a n t ' s costs o€ a n d l n c l d e n t a l t c t h e

a p p l l c a t l o n , l r ! c l u d l n g r e s c r v e d costs , such cost:

t o h e t a x e d if n o t a g r e e d . L l t c r t y 2 S rescr17ct-l t o

e l t h e r p a r t y t o a p p l y .

, ' .

No. 6 8 of 1 9 7 7

Applicant

Respondent

REASCiiS F O R J LiDG."INT

. . . .2/

L .

T h e r e s - Jonden t base< i t s notlccA of intention CO

oppose t h e a s p l i c a t l o n on the c j rounds :

" ( a ) t h a t t h e paym2:lts r e f e r r e d t o I n

t h e a p p l l c a t l o n dlcl no t h a v ? t h e

e f f ec t of glvln; . the Fcspondent a

p r e f e r e n c e priority o r a d v a n t a g e

over c r e d i t o r s o f t h e B a n k r u p t .

( b ) t h a t h e s a i d p 2 : m e n t s a r e n o t

deemed t o h a v e l r e l a t l o n b x k t o

t h e 2 0 t h d a y of September , 1 9 7 6

as a l l e c j e d i n t h e s a l d n p p l l c a t l o n

or a t a l l .

( c ) t h a t a t t h e tlne t h a t t h e sal2

payments were r:a<r t h e E x k r u p t was

n o t l n s o l v e n t . "

A t t h e h e a r i n g , o n the a p p l i c a t i o n of Mr H . H . Cdxie ,

of c o u n s e l f o r t h e r e s p o n d e n t , l e a v e w a s g l v e n t o t h e r e s > a x d c n t

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

t h a t t h e r e s p o n d c n t 1s and a t a l l

times mdterlal was a paycc 111 good

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

, a n d i n t h e 0 r d l : l d r y c ~ u r r e cf

b u s i n e s s w l t h l n t h e 7 . e a n i n g of

sec .12 .2(2) an:! ( 4 ) and nccordlngly

l i e s o u t s i d e th? a n b i t of s ~ b - s e c . ( 2 )

'I

of t h a t s e c t i o n .

I t was common ground L e t w e n t h e p a r t i e s t h a t t h e

b a n k r u p t made payments t o t h e r e s p o n d e n t of $ 1 5 , 0 9 0 ox

28 September a n 2 of $5,000 on '3 Octohe r 1 9 7 5 in r e s p e c t o f

a d e b t of $25,000 w i n c t , h e owed t o t h e r e s p o n d e n t .

The rcs;>ondent by l t s n o t l c e 05 I n t e n t i o n to nppoce

the a p p l i c a t i o n p u t I n l s sue thc c ; U e s t i G n whe the r these p a : / , ~ , ~ r t 5

h a d t h e e f f e c t of g1v1.1:g t h e rct,;pondent 2 :>refcrenc:r? p r l c r l t y or

a d v a n t a g e o v e r t h e o t h e r c r e d l x o r s of = h 1 3 aa.nlrrupt. T h c

e v i d e n c e of the ap :3 l lcant , which I a c c e p t , plainly e s t a b l l c h e 5

t h a t e a c h o f t h e p a y m e n t s h a d t h l s e f f e c t .

The r e s p o n d e n t a l s o c o n t e n d e d t h a t ar. t h time 05

cach o f t he payn ' cn t s t he ba .nk r l+ t w?s n o t u n z b l c t o pay h; S

debts as t h e y bccamc! c?ue f r o n 111s cr:rn mcney, wrthln thc rcc:r! lnq

Of s.122 of t h e B x k r u p t c y A c t 1366.

The meaning t o b? g r v e n t o tnesc words has been laid

down i n H y m n Concrete P t y . L t 2 . v G a r r l t t y ( 1 9 7 7 ) 1 3 A . L . R . 3 2 1 .

A t pp 327-8 Zacobs J . said:

. . . / 4

1.

Barwlck C . J . and Glbbs J . c o n c u r r e d I n t h e ]ui!wer.t

of JacoSs J.

The t e s t so approv-:? 111 t h e Eynnx C c n c r r t e P t y . L t d .

c a s e 1 s es?ressecl 111 thc! worcis of G l - ~ f f l t h C . J . ( 1 9 0 7 4 CLR

a t p 1 5 2 8 ) :

5

The t es t a s fo rm- la t ed by I s a a c s J . ( a t p 1 5 4 3 )

was:

. . .6/

6 .

7 .

I c.ould cstlmatc that 111th ?,royer su?pIy

of lakour a n J m a t e r l a l I t would have

t a k e n o n e t o t!,o rro!lt i ls t o conq ' l e t e so!ne

of t h e h o u s e s and trio t o three .nonths t o

con2 lc t e t he r e1aa in l r . y ones.

6 . TYAI' - I havc had a cjrcat dea l O F e x p e r i e n c e

111 v a l u l n q : - e a 1 e s t z t c an< ,:lso b u l l d ~ n g

works i n Froqress. 111 addition t o havlnn;

t h e qualifications of b e l n g a trEstee i n

b a n k r u p t c y a n d official liquidator and a

c h a r t e r s d a c c s u n t z n t , I hcivc gair .ed a

g rea t dea l of e x > c r l c n c e a s t o rea l e s t a t e

v a l u e s , b u i i d l n c j works la p r o g r e s s and

mor tgage l L a b l l i t l . - s by r e a s o n of hav lng

b e e n f o r a pried of t w e a t y y e a r s assoclztee

w l t h the building i n d u s t r y ( l n c l u c h i i g

p e r s o n a l l y h a v l n g p e r f o r m e d work a s a

b u l i d c r ) a n d a lso by redson of hav ing been

for a period of two or t h r c c y e a r s a board

mexbcr	of	t h e H o u s i n g a u l l d c r s R e g l s t r y
Board.

7. TI3AT from t h e i n f o r m o t l o n 2 r o v l G c d t o me by

t h e b a n k r u p t a n d f r o ~ c t h 2 enr;ulr;es t h a t I

h a v e p e r s o n a l l y maze a n d Fro3 thf e x a a l n a t l o c

of t h e books 2nd r e c o r d s of t h e b a n k r u p t I

h a v e p r e p a r e d a S t a t c w n t of Assets an:!

L l c b l l i t l e s of t h e b a n k r u p t a5 a t t h e 1 5 t h

Septenlber , 1976. >!CV FrodJcecl znri sho..n ;o

me a t t h e tlme of s w c a r l n q t h l s ~y P. t f l .davl t

and narked with t h e 1 c t ~ c r " A " 1s tr.e 5 2 1 L

S t a t e K e n t o f A s s e t s n:ld L l a b l l l t : e s . "

$1 ,G29,476

-	LCSS
- Advances secured by mortgage:-

- All iance Acccptance Corp . L tX. $ 1 2 5 , 3 9 5

- B e i > c < l c l a l F i n a n T e C o . Ltd. 268, 0 C G

- C o f u r e P t y . L t d . 105 ,500

- G u a r d > a x I n v e s t r , s n t s P t y . Ltd. 460,ltE _- 959,593

$ 69,812

on Stock Hand $ 40,oocl

Amounts due o n C o n t r a c t of S a l e 2 9 , 0 0 0 - h9,000_

$ 1 3 6 . 5 1 2

8 1

.

8.

LIABILITIES	-
A . N . Z .	Bank $ 43,000

- Less :.:Jrtszge security $ 2 > , c 3 0

$ 18,000

T r a d e C r c c h t o r s 251,964

O t h e r C r e d i t o r s : -

- Land Tas $ 6,274

- Income Tax 1 5 , 5 5 3

- I n t e r e s t Accrusd 11 ,500

33 ,327

3 0 3 , 2 3 1

$ 164 ,479

CONTINGE?;? ASSETS

E q u l t y i n l a n d p u r c h a s e d u n d e r d c o n t r a c t

o f sale. 50 ,000 -

$ 112 ,479"

__

The applicant's acc0ur . t of t h e s t a t e of t h e

b a n k r u p t ' s a f f a l r s cor.tlr.ucZ as follows:

. . . g /

9 .

, . .10/

10.

i m e r i c n P l a s t e r

53 h'heatshecs Road, Glenrof	6 , C i G . G O
N. Nlcopoulos,

5 3 May S t r e e t , ;;arLh Altona

. . .11/

..

. . .12/

. . .13/

r ..

13.

. . .14/

.. 14.

15.

16.

t h a t t h e r e s p o n d e n t p a y t!:n a p p l ; c a i , t ' s c o s t s of a n d l n c l d s n t ? ?

t o	t h e a p p l l c a t i o n ,	l n c l u d l n g	rcserved	costs,	s u c h c o s t s	t o h
L

t a x e d li n o t agreed.	Liberty 1 s rcscrvcd t o cltl.er p c r t y L~
apply .

4