Re Harris, Winifred Anne Madelaine Ex parte Niemann, Ernest Harding

Bankruptcy Act

1 9 6 6 - ss.41(7)

m d 40(1) (g),

“ h f f : d a v i t

t o C o u n t e r c l a i x ,

Se::-Off

Cross

.nand” a l l e g i n s ;I

F-lr t ia l set-off or

cross-demand

?.c; l inst

Kt12

p e t 1 t i c l l l n g c r e d i t o r ,

h e l d

n o t

a n a f f l d a v l t

tne

!<:Er1

contempla ted

by	t h e s e c t i o n s : o r d c r c f s e q u e s t r a t l o n	marle
on	c z c d l t o r ’ s p e t i t i o n .

IN THE FEDEL-,L COLXT or XJST~XAIJA

GENE.W,L DIVISION

_ _ .	BANXRUPTCY DISTRICT @F THE
S‘YAi’i: 01‘ V1CTOA<i:1

T h e p e t i t i o n l n q c r e d i t o r

i s s u e d

p c t i t l o n

r e tu rnab le on

2 3 C c t o b e r

1 9 7 9 I n v,hlch

it G:ZS

z1:egcS:

. .

. 2 /

- 2 -

4 .

The

i!-btor,

wlthln

s i x c.ockhs

b e f o r e

t h e p r e s e n t a t i o n

t h l s petition,

commi t t ed

the

fo l iowing

a c t

bankrup tcy nams ly

tha t

shc

f o l l e d on

b e f o r e

t h e

1 7 t h c i ~ y

0:'

Septcmlxr ,

1 9 7 9 ,

c l t h e r t o ccxnply

w3:h

r e q u l r c c e n t s

o i a

bar.kru;lLcy

n o t l c e

s e r v e d on

h c r on

the

; ' l~-s t

day of

S e p t e m m r ,

1 9 7 9 ,

o r

t o

s z t l s r ' y

the

Cour t

t h a t s h e hdd

c o u n t c r c l z ~ n ,

s e t - o f f

or cross demand e<::I";l t o or

e x c e d l n g t h e

sum s:,cclllcG

I n

pa rag raph	( a ) of	the	bankr-ptcy
no t ice . 'I

?ne

e v i d e n c e ,

including

a n a f f :

d.vl+.

t h e Cebtur,

e s z a b l l s h e d c h a t

t h e b a n k r u p t c y

nz t lce

x e f e r r e d t o I n t h e

p e t i t i o n

WRS

s e r v e d o n

t h e d e b t o r

1 Scp tcnbe r ,

1 3 7 9 .

. .

. 3 /

- 3 -

. 4 /

- 4 -

9 .

or about t h e 1st d a y o f

DecepLer,

1977, I and a Mr. Locwcnsteln of

Counsel

b e h a l f

the

sa l< E r n c s t

H a r l i n g Nlemann

agrccd

t o com?romlse

t h c

sald

a p p l i c a t i o n

ttlc

fo l lo* . l r .g

terms :

( a )

T h a t t h e

s a l d

E r n c s t Har?lng

Nlemann would adrnlt mc trJ ::rove

a s

c r e d l t o r i n a d c l i t l o n t o t n e

d e b t a d m i t t e d a n d

pa:d

$2,50C

follows:-

(i)

as a n

u n s e c u r e d

c r e 2 i t o x

fo r t h e sun of

$11,042;

(ii) as

p r e f c r c n t l a l

c r c d l t n r

for t h e SUE of $1,175.

( b )

T h a t

h e

s a l d

E r n e c t

Hzr?:nq

Mlenann

and

m y s e l f

wou?C

conse : !~ t

t z

a n o r d e r

i n t h e

ti-rms

set

o u t

l n

pa rag raph

(a) hcrco:.

10. On t h e 1st day of Deccrl>er, 1977, r!:c

Honourable

bir.

J J s t l c z i I z r ~ l s

( I n

Chani:;.rs)

w l t h

thc

c o n s e n t

m y s G l €

anc? I l r .

L o c w n s t e l n on L,enalf o f >!r.

:Ilcrrxm,

orcierc2 i n r e s p e c t o f

the Sal6::ce

oi t h e

P l a l n E l f f ' s

c l a m ~ c l e c t c d

by t h e L:fe?:sxt

o v e r and ahove t he sum cf $2,5CG ai71 t bc2

and pz ld

the DcrcndarC,

an2

t i l e uef?r.-:

LZ:,

Ercest liarclxF; LIifi?l:;n

Se 2lrGcter:

k a zt-7: t

m y s e l f

t o ? r o v e

a s a

c r e d l - ~ ~ r

t h t . cs;-.:,my

as	f c l l o v s : -

( a )

as a n ~r.securcc!

cresl tor Tor

sum of

$ 1 1 , 0 4 2 ;

( b )

p r e f e r c n t l a l

crerl l tcr

f o r

t h 2

sum of $1,175.

11.

6et;'eec t h e

d a t e

o f

t h e s a i d @:?e:-

znd

o r

abou t .June

1978, E r n e s t Hardlc;

I;lcmLmr?

d i s t r l h u t e d a n d d ~ s p o . = c d

t k . 2

2-sm+ts

t h e p r o p e r t y o f

the

co rn~x~ .~y

i t s

c r e d z t n r s .

I n o r

ahou t

Sep tenbc r

1 9 7 8 ,

t h e

sa16

company

was

d i s s o l v e d .

1 2 .

I n

pu rpor t ed

paymen t

s a l d

e n t l t l e x z n t

t h e

sald

E r n e s t

l lardlr~7 Nlc:mr.n

p a l 2

l n

a d d i t l o n t o t h e sun of

52,500 alreatiiy pa ld

t o me

t h e sum of $1,766.90

o111y and h a s

f a l l e d and/or

neglec te t i

and/or

re fused

t o

pay

m e the b a l a n c e of

$2,500

t o w h l c h

entitled.

. , .5/

. .6/

. .

- 6 -

1 6 .

n o t l c c

a p p c z l

h i t s

beer:

lodged

myself

and

A??t.nl Books have r.ow

b e e n

s e t t l e d .

verily

b c l i s v e

t h a t

t h l s m a t t e r

wlll

heard

cn t h e

1st Oc tobe r ,

1 9 7 9 ,

a g a l n s t

t h e orc?er

of h i s Honour Nr. Justice >.~1-,5.

1 7 .

I ver i ly

bc l ie . ;c

t -ha t

h3vc

p a r t l a l

s e t -o f f and	c o u n t c r c l a 1 r n z y n x s t	t!Is
s a l d C r n c s t	Hardinr; P.lcmonn. "

a n

a p p l i c a t l o , )

d a t e d

2 6

September

1 9 7 9

t h e

d e b t o r

s o u g h t

t h e

f o l l w d i n g o r d e r s :

B o t h m a t t e r s

weze

r c - l l s t c d

r:3vemler

w!len

Beaumont

o f c o u n s e l a p p c a r c d f o r

t h e

p e t i t i o n x g c r e d i t o r

and b l r Walker,

s o l l c i t o r , nnnoLnccd

t h a t he had

been

a c t l n 5

f o r

t h e

d e b t o s ,

who v a s p r ? s e n t .

>!r

:.:alker

s t z t c r l

t h z t

t h E

A u s t r a l i a n L e g a l A i d O f f i c f

hac1

n o t x i l e d

him

t h a t l e g a l a i d

would no l o n g e r be made

available,

tb.at

h e h::d

ad \ r l sed

the

d e b t o r

t h a t he

had

ceased

t o a c t to r

h e r and t h a t s h e

agreed

t h a t c h i s was

so.

. 7 /

- 7 -

. .

.8/

- 8 -

t h e f a c t t h a t

it d i d n o t contain

a n y a l l e q a t l o n

ca .>n te r - c l a i rn ,

s e t -o f f

or c r o s s dcmanci equal t o cr excecdln>J

t h e a m o u n t p a y a b l e u n d e r

t h e

f i n a l o r ? e r , b u t o n l y

r e E e r r e d

t o a

c l a l - .

f o r

le , ;ser

amount .

:,:lss

I l a r r i s co.1cec!ed

t h l s

f a c t and Chc Court,

apply,.>g

t h e

t e s t

l a l d

do:ln

C b e r t l v

The Unlon

T r*~s te?

Coymny of ~ u s t l - a l ~ ~

L t d .

(1360) 10: C . L . ~

-__

----

346 a t p .

350,

uphc'd

B c a u n o n t ' s

s . h n i s s l o n .

Th2

C o u r t

t h e n h o a r d

t h e E c b t c r ' s a p 2 l I c a t l o c f o r

e n l a r g e c e n t o f

t i m e f o r c o m p l l a n c e w i t h

t h e

b a n k r l q t c y n o t l c e

slid dlsn135?3. ~t 01

t h e s round t n a t lt W ~ S

cot m 2 2 unt ; l

a f t s r t ' r e c x n i r a t l o z o f t h a t

t m c ,

ar.d

accordi::G:y

c o u l 2 n o t

a f f e c t t h e c m r x s s i o n

t h e a c t

bnnkrup tcy

a l l eged

( s e e

R e Grazs;

e x F?r t e C a s t l i n g

(1931) 3

A.B.C.

13i).

I n

a n a f f i d a v i t

s w o r n o n

t h e

same

d a y ,

t h e d e b t a r

depose?.

a s f o l l o w s :

...

- 9 -

2 .

The

ev ldence

I s!lall p-ocluce 50 the

C o x t i n s u p p o r t

c o u n t e r

c l z l x ~ ,

s e t o f f o r cross dem.n.l w l l l L e as

f o l l o w s :

( a )

$2,50C

b a l a n c e cf wayes as pcr

comprcr::s~

r c a c k d on 1st

Decemb2r

1 9 7 7 .

( b )	$ 2 5 0 costs orZc;.,L-c!	by h s k e r
Uar':er 22/11,'7i;

(c)

5280 c o s t s

o r d e r e d

by Master

Bre t t

17/19/78

I t

t r x ' s p l r e d

t h a t

t he ckS to r hzd L iken

; ~ r c i ~ . ~ ~ S i : ~ ; s

I n

t h e S u p r a n e C o u r t s e e k i z g

t o

h a w t n z c o n s s n t

orcier

J u s t i c f H a r r l s r e c t i f l e d

t c make

clcar

t h l t t h c r c i 1 3 f

g r a n t e d

t o h e r

i n

t h a t o r d e r

was

15 ? d k t l o : .

t o h f r

clc7-z

a g a i n s t

t k e p e t l t l o n l n g

c r e S i t o r

f o r

$ 2 , 5 0 0 .

lbir J~sticc

I:l;.g

r e f u s c d t o make the order r'riich shc. sou9l-t and hc? appca'-

t o

t h e

Full

Cour t

t h e

Supreroe

Court

a g a L n s t t h a t r e f u s a l

ilas

d i s m s s e d w i t h

cos ts ,

a f t e r

h c a r l n g e x t e n d l n g o v e r

t h r e e

days

i n w h i z h

b o t h

p a r t l c s

v e r e

l e g a l l y

r e p r e s e n t e d .

?!;e

c3StS

- l d -

a w e r d e d a g a l n s t

t h e d e b t o r

hac?

n o t b e e a t a x e d t o t h a t d a t e .

The d e b t o r c a l l e d

Locwenstein as a witness

an?.

q u e s t i o n e d	! l i n about	the compccrnlsc made	!x:xee:1	!Il:em	on
1 December	1 5 7 7 .

. . .11/

- 11 -

I n t h e

l l g h t o f

t h e h l s t o r y

t h e c a s e ,

a n d

t h e

f a c t s w h i c h h a v e	t e e n o u t l l z c d a b o v e ,	t h e	a p p l i c a t l o n	was
r e f u s e d .

I n h i s a f f i d a v i t

8 >:ay

1'379 he

st+tcJ t h a t c.ft:T

r e t u r n i n g t o t h e

Su;lreme

C c s r t ,

h z v l n y

n e g o t i a t c d

sctL.l e x n t

the

a;rpeal

the

d e b t o r ,

I n whlci:

she

was

c l e s c r l l x d a s " t h e

f i r s t named

A p p l i c a n t " :

. . .12/

- 1 2 -

[1980] FCA 7

19 Dec 1980