Re de la Vega, A.J. Summary

JUDGMENT NO. .......,........ .. W., 3S0 /Q2

IN THE FEDERAL COURT OF AUSTRALIA 1 No. QB 473 of 1992
GENERAL DIVISION 1
BANKRUPTCY DISTRICT OF 1
THE STATE OF OUEENSLAND 1

RE: ALEJANDRO JOSE DE LA VEGA and
LYNETTE MARGARET DE LA VEGA
EX PARTE: ALEJANDRO JOSE DE LA VEGA and
LYNETTE MARGARET DE LA VEGA
Applicants

EDDIE THOMPSON'S CARPETS PTY. LTD.

Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER: Drummond
DATE OF ORDER: 9 April,
WHERE MADE: Brisbane
THE COURT ORDERS THAT:

1. The sequestration order made on 25 February, 1992 is rescinded.

NOTE : Settlement and entry of orders is dealt with in Rule

124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA 1 No. QB 473 of 1992
GENERAT, DTVTSTON 1
BANKRUPTCY DISTRICT OF 1
THE STATE OF OUEENSLAND 1

RE : ALEJANDRO JOSE DE LA W G A and
LYNETTE MARGARET DE LA VEGA
EX PARTE: ALEJANDRO JOSE DE LA VEGA and
LYNETTE IWRGARET DE LA VEGA
Applicants

EDDIE THOMPSON'S CARPETS PTY. LTD.

Respondent

LRAM: Drummond J

PLACE: Brisbane

U: 9 April, 1992

EX TEMTORE REASONS FOR JUDGMENT

When this matter came before me on Tuesday, 7 April,
1992, the application for rescission of the sequestration

order was made by Mr. Crowley on behalf of the applicant

Bankruptcv Act 1966 or to any authorities. I was informed, debtors. No reference was made to any provisions of the

however, by Mr. Crowley that the sequestration order should not have been made because the debt upon which the petition was based had been paid prior to the sequestration order being made. That statement appeared to me to be inconsistent with some of the documentary material exhibited to the affidavit of
Mr. Roth upon which the application was founded.

I therefore adjourned the matter to today to enable
proper instructions to be taken and, if necessary, any
additional material to be put before me.

When the matter came on before me this morning, the solicitor for the creditor appeared and in effect indicated he had no objection to the order sought being made. However, he disputed the proposition that the sequestration order should not have been made because the debt had been paid prior to the order being pronounced, which proposition had been previously advanced by Mr. Crowley. Mr. Crowley confirmed that his statement made on Monday as to when the debt was paid was incorrect.

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Mr. Crowley applied accordingly for the order to be made in accordance with the application, in reliance upon S. 154 of the Bankruptcv Act. Neither sub-clause (a) nor (b) of

S. 154 is applicable in the circumstances that obtain here i
where the sequestration order, as is now conceded, was

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properly made, has not been taken out with the result. that the L .
administration has not yet in fact commenced.

I accordingly stood the matter over to 30 April, 1992 to enable the application to again be brought back before

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me, if it was the desire of the applicants to further attempt i~
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to persuade me to make the order. I
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I was not referred to S. 37 of the Bankru~tcv Act,

which I have looked at in the meantime. Having done that, and solely in order to save the applicants the unnecessary expense of a third application to the Court, I relisted the matter for this afternoon for the purpose of indicating I would be

. prepared to grant the relief sought.

The following exchange took place after the order was made.

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H I S HONOUR: M r . Crowley, I take it you read the !
papers?

MR. CROWLEY: Yes, your Honour.

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H I S HONOUR: You would have seen over the last 12 I

months a litany of complaints about lawyers; about how they

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are lazy; about how they are incompetent and how they charge : - ,
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too much for the work they do. l !

MR. CROJJLEY: Yes, your Honour, I have seen it
H I S HONOUR: I cannot understand how against that

background of intense criticism of the profession I was confronted with thls application or rather with the way this application was presented to me by you. An application has now come before me three times. I am not sure if I have power to direct that you do not charge any fee for your involvement in the proceedings so far as appearing in court is concerned,

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but I am requiring from you an undertaking that if you intend

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to charge a fee for your services that you will draw to the

attention of your Sydney principals the comments I have made L

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in pronouncing this order. I

. MR. CROWLEY: Yes, your Honour.

HIS HONOUR: Do I have that undertaking?
HR. CROWLEY:

Indeed, your Honour, I give that . ~
undertaking.
HIS HONOUR: Thank you, 1-lr. Crowley; that is all.

I certify that this and the preceding

three pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Drummond.

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Associate: -

Date: V 9 April, 1992

In the Federal Court of Australia, the case of Re de la Vega involved Alejandro Jose de la Vega and Lynette Margaret de la Vega, who sought the rescission of a sequestration order against them. The order had been made by Eddie Thompson's Carpets Pty. Ltd., which claimed that the de la Vegas owed it a debt. The applicants argued that the sequestration order should be rescinded, and the court was tasked with determining whether the order was validly made and if there were grounds for its rescission. The legal issues centered on whether the debt had been paid before the sequestration order was made and whether the order was properly issued under the relevant provisions of the Bankruptcy Act 1966.

The court examined the evidence presented and found that the initial statement by counsel for the applicants, Mr. Crowley, was incorrect. He had claimed that the debt was paid before the sequestration order was made, but this was contradicted by documentary evidence. The solicitor for the creditor did not contest the rescission but disputed the claim that the sequestration order was improperly made. Drummond J noted that the order was validly made and had not yet led to any administration of the bankruptcy estate. Despite this, the court decided to rescind the order to avoid unnecessary expenses for the applicants. The judge also expressed concern about the way the application was presented, referencing recent criticisms of lawyers and questioning the competence of Mr. Crowley’s presentation.

Drummond J ordered the sequestration order rescinded and required Mr. Crowley to inform his principals of the judge's comments. This decision was made to ensure that the applicants would not incur further unnecessary costs associated with additional applications to the court. The final orders reflected the court's decision to rescind the sequestration order, which had been made on 25 February 1992.

Re de la Vega, A.J.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE FEDERAL COURT OF AUSTRALIA	1	No. QB 473 of 1992
GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF	1
THE STATE OF OUEENSLAND	1

JUDGE MAKING ORDER:	Drummond
DATE OF ORDER:	9 April,
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

IN THE FEDERAL COURT OF AUSTRALIA	1	No. QB 473 of 1992
GENERAT, DTVTSTON	1
BANKRUPTCY DISTRICT OF	1
THE STATE OF OUEENSLAND	1

Bankruptcv Act 1966 or to any authorities. I was informed,	debtors. No reference was made to any provisions of the
however, by Mr. Crowley that the sequestration order should not have been made because the debt upon which the petition was based had been paid prior to the sequestration order being made. That statement appeared to me to be inconsistent with some of the documentary material exhibited to the affidavit of
Mr. Roth upon which the application was founded.
I therefore adjourned the matter to today to enable proper instructions to be taken and, if necessary, any additional material to be put before me.
When the matter came on before me this morning, the solicitor for the creditor appeared and in effect indicated he had no objection to the order sought being made. However, he disputed the proposition that the sequestration order should not have been made because the debt had been paid prior to the order being pronounced, which proposition had been previously advanced by Mr. Crowley. Mr. Crowley confirmed that his statement made on Monday as to when the debt was paid was incorrect.

properly made, has not been taken out with the result. that the	L .
administration has not yet in fact commenced.
I accordingly stood the matter over to 30 April, 1992 to enable the application to again be brought back before	!
I
1
!
me, if it was the desire of the applicants to further attempt	i~
i
to persuade me to make the order.	I
f
!

are lazy; about how they are incompetent and how they charge	:	- ,
I
I
too much for the work they do.	l !
MR. CROJJLEY:	Yes, your Honour, I have seen it
H I S HONOUR:	I cannot understand how against that

three pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Drummond.	I -
Associate:	-