Re Dart, S.R. v Ex parte Boulton, A.J.

CATCHWORDS

Bankruptcy - objection to sequestration order being made on creditor's petition - debtor's petition presented - appointment of trustee - difference in relation back period between debtor's and creditor's petitions.

Bankruptcy Rules r.12(3)(ba)

Re: Sydney Ronald Dart Ex parte Andrew John Boulton, Keith Ronald Kern, David Fraser Montgomery, Peter Logan and John Damien Andrews (Trading as Boulton Cleary & Kern)

No. QP2371 of 1994

Re Sydney Ronald Dart Ex parte Sydney Ronald Dart

No. QP 201 of 1995

Cooper J., Brisbane, 10 April, 1995

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION

BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND

No. QP 2371 of 1994

RE: SYDNEY RONALD DART
Debtor

EX PARTE: ANDREW JOHN BOULTON, KEITH RONALD KERN,
DAVID FRASER MONTGOMERY, PETER LOGAN AND
JOHN DAMIEN ANDREWS (Trading as Boulton

Cleary & Kern)
Petitioning Creditor

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION

BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND

No. QP 201 of 1995

RE: SYDNEY RONALD DART
Debtor

EX PARTE: SYDNEY RONALD DART

JUDGE MAKING ORDER:Cooper J.
WHERE MADE: Brisbane
DATE OF ORDER: 10 April, 1995

MINUTES OF ORDER

THE COURT ORDERS THAT In QP 2371 of 1994 :-

1. A sequestration order be made against the estate of SYDNEY RONALD DART.

2. Ross Andrew Duus be appointed trustee of the estate of Sydney Ronald Dart.

3. The petitioning creditor be paid its costs of and incidental to the petition, in accordance with the provisions of the Bankruptcy Act.

THE COURT DIRECTS THAT In QP 201 of 1995 :-

The District Registrar reject the debtor's petition.

Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION

BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND

No. QP 2371 of 1994

RE: SYDNEY RONALD DART

Debtor

EX PARTE: ANDREW JOHN BOULTON, KEITH RONALD KERN,
DAVID FRASER MONTGOMERY, PETER LOGAN AND
JOHN DAMIEN ANDREWS (Trading as Boulton

Cleary & Kern)

Petitioning Creditor

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION

BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND

No. QP 201 of 1995

RE: SYDNEY RONALD DART

Debtor

EX PARTE: SYDNEY RONALD DART

CORAM:                    Cooper J.
PLACE:   Brisbane
DATE:             10 April, 1995

REASONS FOR JUDGMENT

The court has before it a creditor's petition presented by Messrs. Boulton Cleary and Kern on 7 November, 1994. The debtor, Sydney Ronald Dart, presented to the court a debtor's petition on 4 April, 1995. The matter recently came before the Registrar in Bankruptcy at Townsville, where Mr. Dart appeared and opposed the making of a sequestration order on the petition of the petitioning creditor. Mr. Dart sought that his debtor's petition be accepted.

The Registrar referred the matter to a judge of the court, and when called today, Mr. Dart did not appear. Mr. Dart has written a letter of 7 April, 1995 to the Court admitted into evidence as Exhibit 1, in which he says that he is unable to attend personally before the court in Brisbane due to lack of funds. In paragraph 5 of his letter he outlines the grounds upon which he objects to the sequestration order being made on the creditor's petition.

The first ground is that he has already presented his own debtor's petition, but for reasons I will come to shortly, that of itself is insufficient. The second ground is that rule 12(3)(ba) of the Bankruptcy Rules has not been complied with. However, the trustee's consent has now been filed, so there is no basis to refuse to make a sequestration order on the creditor's petition on this ground.

The question of the cost of the administration of the bankruptcy by a private trustee has been raised in paragraphs 6 and 7 of his letter. Mr. Dart says, in effect, that the appointment of a Brisbane based trustee would increase the cost of the administration and thereby deprive creditors of a higher dividend in relation to the sequestration of his estate, and further that he does not have the funds to attend upon the trustee at Brisbane as part of the winding up of his affairs.

I was advised from the bar table and accept that the proposed private trustee, Mr. Duus, in fact has a Townsville office, and that in those circumstances it is unlikely that it would be necessary for Mr. Dart to attend in Brisbane. I was further advised that there will be no additional costs incurred in the administration of the estate
caused by the appointment of Mr. Duus as trustee. There is therefore nothing in the objections taken by Mr. Dart which would persuade me against making an order on the creditor's petition. In fact there is a substantial reason why such an order should be made. I am satisfied that there is a sufficient gap in the relation back period between that which would operate in respect of a sequestration order made on the earlier creditor's petition and the later debtor's petition to justify the court in making a sequestration order on the creditors petition. Although there is no material to suggest that there has been any dealing with property during that period, to proceed on the debtor's petition would effectively deny to the creditors five or six months of the relation back period.

THE COURT ORDERS THAT:

In QP 2371 of 1994 :-

1.   A sequestration order be made against the estate of SYDNEY RONALD DART.
2.   Ross Andrew Duus be appointed trustee of the estate of Sydney Ronald Dart.
3.   The petitioning creditor be paid its costs of and incidental to the petition, in accordance with the provisions of the Bankruptcy Act.

THE COURT DIRECTS THAT:

In QP 201 of 1995 :-

The District Registrar reject the debtor's petition.

I certify that this and the preceding two (2) pages are a true copy of the reasons for judgment herein of his Honour Justice Cooper.

Date: 12 April, 1995

Associate

Counsel for the

Petitioning Creditor: Mr. T. Quinn

Solicitors for the

Petitioning Creditor: Cleary & Hoare

Debtor: No appearance by Debtor

Date of Hearing:   10 April, 1995
Place of Hearing:   Brisbane
Date of Judgment:   10 April, 1995

The case of Re Dart, S.R. v Ex parte Boulton, A.J. involves a dispute regarding a sequestration order against the estate of Sydney Ronald Dart. The creditor, represented by Boulton Cleary & Kern, filed a petition on 7 November 1994. In opposition, the debtor, Sydney Ronald Dart, submitted his own petition on 4 April 1995, seeking to have the creditor's petition dismissed. The matter was heard by Cooper J. in the Federal Court of Australia's General Division, Bankruptcy District of the State of Queensland.

The court had to determine whether to proceed with the sequestration order based on the creditor's petition or to accept the debtor's petition, which was filed later. The key issues included the validity of the debtor's objection based on the difference in relation back periods between the two petitions and whether the debtor's inability to appear due to lack of funds warranted any special consideration. The court also considered the implications of appointing a trustee and the associated costs.

Cooper J. found that the debtor's objections did not outweigh the need for a sequestration order based on the creditor's petition. The court noted that there was a sufficient gap in the relation back periods that justified making the sequestration order on the creditor's petition. The debtor's inability to attend due to lack of funds did not alter the court's decision. Furthermore, the court was satisfied that the appointment of a trustee would not incur additional costs, and the debtor's concerns about the location of the trustee's office were alleviated by the fact that the trustee had an office in Townsville.

In conclusion, the court ordered that a sequestration order be made against Sydney Ronald Dart's estate based on the creditor's petition and appointed Ross Andrew Duus as the trustee. The court also directed that the debtor's petition be rejected. The petitioning creditor was awarded costs in accordance with the Bankruptcy Act.

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