Re Fitzgerald; ex parte Fitzgerald

[1988] FCA 39

Re: MARK ANDREW FITZGERALD
Ex parte: THE BANKRUPT
Nos. E454 & 455 of 1983
Bankruptcy
99 ALR 189

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Pincus J.(1)

CATCHWORDS

Bankruptcy - two bankruptcies - second beyond Court's power - whether should be annulled - whether second (annulled) bankruptcy prevents automatic discharge - conflicting decisions.

Bankruptcy Act 1966, ss.149, 150, 154

HEARING

BRISBANE

#DATE 23:2:1988

Counsel for the debtor: Mr P.R. Dutney

Solicitors for the debtor: Messrs M.J. Kitchen & Co.

Counsel for the creditor: Mr P.E. Nolan

Solicitors for the creditor: Messrs W.T. Purcell, Chadwick & Skelly

ORDER

Orders that the second bankruptcy founded upon the sequestration order made on 3 October 1983 be annulled under s.154(1) of the Bankruptcy Act 1966;

Declares that by virtue of s.149(1) of the Bankruptcy Act 1966 the applicant is discharged from the bankruptcy consequent upon the acceptance of his debtor's petition on 3 October 1983; and

Orders that there be no order as to costs.

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

JUDGE1

I have before me applications for annulment of bankruptcy or alternatively discharge from bankruptcy.

1. On 26 October 1982, there was presented against the applicant a petition for sequestration by a creditor, and a sequestration order was made on it by an order of 3 October 1983. However, on the same date the applicant had presented his own petition and it was accepted before the sequestration order was made.

2. By reason of acceptance of the debtor's petition, the debtor became bankrupt (s.55(3) of the Bankruptcy Act 1966), but that circumstance was not drawn to the attention of the judge who made the sequestration order.

3. Mr. Dutney, for the applicant, argued that the second bankruptcy should be annulled under s.154(1) on the ground that the sequestration order "ought not to have been made". He relied upon the decision of the High Court in Clyne v. Deputy Commissioner of Taxation (1984) 55 ALR 143. The reasoning adopted by their Honours in that case applies here; the debt on which the creditor's petition was founded was one provable in the bankruptcy which began when the debtor's petition was accepted. For the same reasons as the Court there gave, this Court:
   
   

"... had no power to make the order that it did while the bankruptcy which resulted from the

acceptance of the debtor's petition continued."

1. In those circumstances, it is clear that the order "ought not to have been made" and no sufficient reason appears for declining to exercise the power to annul the bankruptcy; in particular, it is not shown that the filing of the debtor's petition constituted an abuse of process.

2. The next step in Mr. Dutney's argument, delivered in anticipation of an order annulling the sequestration order on the ground that there was no power to make it, was that the annulment had such retrospective effect as to make s.149(3)(b)…