Re Dempsey, R.D. Ex parte Motor Trade Finances Ltd

[1992] FCA 611

JUDGMENT No. ......,........ ... b \ \ /W- b........ .-

IN THE FEDERAL COURT OF AUSTRALIA	)
BANKRUPTCY DISTRICT OF THE	) NO. QP 762 of 1992
1
STATE OF OUEENSLAND	1
B E T W E E N :

RE: ROBERT DAVID DEMPSEY

EX PARTE: MOTOR TRADE FINANCES LIMITED

JUDGE:	Heerey J
DATE:	11 ~ugust  1992 2 6 AUG 1992
PLACE :	Brisbane  AUSTRALIA

EX TEMPORE REASONS FOR JUDGMENT

I propose to make a sequestration order in this case. The bankruptcy notice was served on 11 January 1992. It was based on a judgment in the High Court of New Zealand on 12 June 1989 for $NZ91,146.84 plus interest of $N216,779.84 and costs $NZ525. That judgment was registered in the Supreme Court of Queensland pursuant to leave granted on 3 September 1991.

The New Zealand judgment arose out of the guarantee by the debtor of the liabilities of Dempsey Holdings Limited, a company controlled by him, under an agreement dated 11 April 1984. By that agreement the petitioning creditor agreed to provide finance for the purchase of motor cars by customers of Dempsey Holdings Limited. The agreement included a guarantee by Mr Dempsey of all liabilities of Dempsey Holdings Limited.

agreement was a claim that the exhibit had been somehow
The main issue taken by the debtor in relation to that

fraudulently altered. He said that the only guarantee that he signed in favour of the petitioning creditor was the guarantee in respect of the purchase of one motor vehicle, a Jaguar motor car, by Dempsey Holdings Limited.

I am satisfied from his evidence that the signature which appears in the agreement under the guarantee clause was signed by him and I reject his evidence to the effect that the agreement that is before the Court was different to the agreement which he signed. There is internal evidence in the document itself which makes it clear that the document was in the same form as it was when he signed it. In particular, I note that the document consists of two folded pages, one inserted inside the other, so that pages 1, 2, 7 and 8 are folded from the one sheet and pages 3, 4, 5 and 6 from another sheet. The text of the document shows that it followed naturally on from the bottom of page 2 to the top of page 3, and from the bottom of page 6 to the top of page 7, those two latter pages being the pages on which the signatures and

sealing by companies appear. The text of the agreement makes	it seem quite impossible that that part of the document which
was signed by the debtor could have somehow attached to some different sort of agreement relating to one motor car only.
I note also that immediately after the bankruptcy notice was served, a firm of solicitors in Surfers Paradise wrote on behalf of the debtor to the petitioning creditor's solicitors saying, amongst other things:

"Our client has instructed us to request that proceedings against our client be stayed on the basis that our client is not in a position to pay the debt nor does he possess the assets which may be liquidated and provide any surplus funds for the benefit of your client. It would appear to be .fruitless in continuing the recovery action your client has undertaken.

Our client is prepared to provide you with full details of his assets and liabilities and overall financial position.

We await your advices."

Shortly afterwards, the petitioning creditor's solicitors wrote rejecting that offer and indicating that bankruptcy proceedings would continue.

I agree with the submission of counsel fpr the petitioning creditor that this letter amounts to an admission of indebtedness by the debtor. In final submissions, the debtor claimed that the letter was sent contrary to his instructions and that as soon as he received the response from the petitioning creditor's solicitors, he wrote to them and to the petitioning creditor disputing the debt. No such letter was

me, and the debtor was unable to provide a copy of it. I am	produced by the solicitors for the petitioning creditor before	not satisfied that any such letter was in fact ever sent.
I think that I should add that the case that the debtor puts seems unlikely in the extreme. The company which he controlled traded for some four years and sold approximately $3,000,000 worth of motor cars through finance obtained from the petitioning creditor and, on his version, that was all done without any general agreement between his company and the petitioning creditor as to the provision of finance.
The debtor also made some point about the failure of the petitioning creditor to provide a copy of the dealer agreement to him as required by the New Zealand legislation, but as far as I can see from the Credit Contracts Act 1981 of New Zealand, there was no such obligation. In any event, s.44 of the Act makes it clear that any contravention of the Act does not make the contract illegal or, except as expressly provided in the Act, make the contract unenforceable.
I order that a sequestration order be made against the estate of the debtor, Robert David Dempsey, and that the petitioning creditor's costs of and incidental to the petition in this matter be taxed and paid in accordance with the Bankruvtcv Act 1966.

I certify that this and the

preceding (3) three pages are a true copy of the

reasons for judgment of his

Honour M.r Justice Heerey

The debtor appeared on his own behalf

Counsel for the petitioning

creditor :	M r F G Forde
solicitors for the petitioning
creditor :	Feez Ruthning
Date of hearing:	11 August 1992