Re Capel, Elwyn John

[1998] FCA 372

FEDERAL COURT OF AUSTRALIA

BANKRUPTCY - Sequestration - ability to pay debts - whether alleged ability to borrow against other causes of action makes debtor solvent - whether sufficient validity in claims - whether real claims with any likelihood of success- debtor refusing to so borrow in any event

BANKRUPTCY - Sequestration - Whether other sufficient cause to dismiss petition within meaning of s52 (2) (b) - whether claim against the creditor of sufficient validity to justify dismissal or adjournment of petition

Bankruptcy Act 1966 (Cth) s 52(1) & (2)
Trojan v Corporation of Hindmarsh (1987) 16 FCR 37 (Applied)
Re Stubberfield;  Ex parte Paradise Grove Pty Ltd (1995) 134 ALR 169 (Applied)
Re James;  Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No 2) (1994) 51 FCR 14(Applied)
Re Schmidt;  Ex parte Anglewood Pty Ltd (1968) 13 FLR 111 (Applied)
Re Sarina;  Ex parte Council of the Shire of Wollondilly (1980) 43 FLR 163 (Considered)
Re Kostezky;  Ex parte Milder Elfman Szmerling Krycer Pty Ltd (1996) 67 FCR 101(Applied)
Sandell v Porter (1966) 115 CLR 666 (Applied)
Cain v Whyte (1933) 48 CLR 639 (Applied)

RE ELWYN JOHN CAPEL (Debtor):  Ex parte CARAM FINANCE AUSTRALIA LIMITED (FORMERLY CALLED MARAC FINANCE AUSTRALIA LIMITED) ACN 000 098 402 (Creditor)
QG 7299 of 1997

FINN J
BRISBANE
9 APRIL 1998

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 7299  of   1997

RE:	ELWYN JOHN CAPEL DEBTOR
EX PARTE:	CARAM FINANCE AUSTRALIA LIMITED (FORMERLY CALLED MARAC FINANCE AUSTRALIA LIMITED) ACN 000 098 402 CREDITOR
JUDGE:		FINN J
DATE OF ORDER:		9 APRIL 1998
WHERE MADE:		BRISBANE

THE COURT ORDERS THAT:

1.        The estate of the debtor be sequestrated.

2.The Petitioning Creditor’s costs, including any reserved costs be taxed and paid in accordance with the Bankruptcy Act 1966.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 7299 of 1997

RE:	ELWYN JOHN CAPEL DEBTOR
EX PARTE:	CARAM FINANCE AUSTRALIA LIMITED (FORMERLY CALLED MARAC FINANCE AUSTRALIA LIMITED) ACN 000 098 402 CREDITOR

JUDGE:	FINN J
DATE:	9 APRIL 1998
PLACE:	BRISBANE

REASONS FOR JUDGMENT

The path of resistance taken by the judgment debtor, Elwyn John Capel, to the petition of Caram Finance Australia Ltd (“Caram”) for a sequestration order, can at best be described as surprising. Mr Capel has conceded that the requirements of s 52(1) of the Bankruptcy Act, 1966 (Cth) (“the Act”) are satisfied.  He nonetheless contends that I should dismiss the petition under s 52(2) of the Act because “he ... is able to pay his ... debts” and/or because “for other sufficient cause a sequestration order ought not to be made”.  I should add that Mr Capel has conducted his own defence of this proceeding.

For the sake of completeness I should also add that I gave leave to Ms Heather Langston, a creditor of Mr Capel who shares accommodation and is in a relationship…