Re Doneley, John Justin Ex Parte Australian Guarantee Corp Ltd

IN THE FEDERAL COURT OF AUSTRALIA     )
GENERAL DIVISION  )
   No. QN 506 of 1996
BANKRUPTCY DISTRICT OF THE             )
STATE OF QUEENSLAND  )

RE:JOHN JUSTIN DONELEY

EX PARTE:AUSTRALIAN GUARANTEE CORPORATION LIMITED
ACN 000 015 485

MINUTES OF ORDER

JUDGE MAKING ORDER: Spender J

DATE OF ORDER: 15 July 1996

WHERE MADE: Brisbane

THE COURT ORDERS THAT:

The application is dismissed.

The debtor is to pay the costs of this application, including any reserved costs.

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

IN THE FEDERAL COURT OF AUSTRALIA     )
GENERAL DIVISION  )
   No. QN 506 of 1996
BANKRUPTCY DISTRICT OF THE             )
STATE OF QUEENSLAND  )

RE:JOHN JUSTIN DONELEY

EX PARTE:AUSTRALIAN GUARANTEE CORPORATION LIMITED
ACN 000 015 485

CORAM:    Spender J
DATE:     15 July 1996
PLACE:    Brisbane

REASONS FOR JUDGMENT

This is an application filed on 11 June 1996 seeking an order that the bankruptcy notice which is bankruptcy notice No 506 of 1996 be set aside on the grounds set out in the affidavit of John Justin Doneley sworn 7 June 1996 and the affidavit of Barry Edward Atkins sworn 7 June 1996. It appears that that bankruptcy notice was served on Mr Doneley on 14 May 1996 on his property at Beadie, St George. On 11 June 1996, the application I have just referred to was filed, as were the affidavits of Mr Doneley and Mr Atkins.

When the application was called on for hearing today, there was no appearance by Mr Doneley or by Mr Atkins on his behalf, and I am told from the bar table that Mr Atkins had indicated that he would not be appearing on Mr Doneley's behalf today. Notwithstanding that non-appearance and an earlier non-appearance, I have looked at the affidavit of Mr Doneley to see whether it is an affidavit of the kind

referred to in s 41(7) of the Bankruptcy Act 1966 ('the Act'). A careful reading of all the material filed on behalf of Mr Doneley satisfies me that Mr Doneley is not asserting a cross-claim of the kind referred to in s 41(7) and, therefore, I should indicate that I am not satisfied that the debtor has not filed an affidavit to the effect that he has a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g) of the Act.

It seems to me that the material there refers to details, matters particularly concerning the National Australia Bank and prospective litigation in that regard, as well as asserting that there is a possibility of the claim of AGC being able to be met with funds that are dependent on a number of matters referred to in Mr Doneley's affidavit. Those considerations are not relevant to the present application. In those circumstances the application filed on 11 June 1996 is dismissed and the court indicates that it is not satisfied that the affidavit filed by Mr Doneley on 11 June 1996 is an affidavit of the kind referred to in s 41(7) of the Act.

The debtor is to pay the costs, including reserved costs of this application.
I certify that this and the preceding page are a true copy of the reasons for judgment herein of the Honourable Justice Spender.

Associate
Date: 15 July 1996

No appearance for the debtor.

Solicitors for the

petitioning creditor: Clayton Utz

Date of Hearing: 15 July 1996

In the Federal Court of Australia, General Division, Justice Spender dismissed an application seeking to set aside a bankruptcy notice. The applicant, John Justin Doneley, had applied to set aside the bankruptcy notice No 506 of 1996 issued by Australian Guarantee Corporation Limited, which was served on Mr Doneley on 14 May 1996. The application was supported by affidavits sworn by Mr Doneley and his solicitor, Barry Edward Atkins, on 7 June 1996. The application was filed on 11 June 1996 and listed for hearing on 15 July 1996. Neither Mr Doneley nor Mr Atkins appeared on the day of the hearing.

The primary issue before the court was whether Mr Doneley's affidavit amounted to the kind of affidavit referred to in s 41(7) of the Bankruptcy Act 1966. Section 41(7) permits the court to set aside a bankruptcy notice if the debtor has filed an affidavit stating that they have a counterclaim, set-off or cross demand that could satisfy the debt. Justice Spender examined the affidavits and accompanying materials and found that the debtor's affidavit did not constitute an affidavit of the kind referred to in s 41(7). The affidavit contained matters unrelated to the present application, such as prospective litigation with the National Australia Bank and the possibility of meeting the debt from other funds. In dismissing the application, the court held that the debtor had not filed an affidavit of the required kind and ordered that the debtor pay the costs of the application.

Justice Spender concluded that the application was dismissed and that the debtor's affidavit did not constitute an affidavit of the kind referred to in s 41(7). The debtor was ordered to pay the costs of the application, including any reserved costs.

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Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established