Re Leczynski, Bogdan Ex Parte Hont, Helen Elene

[1997] FCA 347

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIA DISTRICT REGISTRY )
  )
GENERAL DIVISION                 )    No SP 302 of 1995
  )
BANKRUPTCY DISTRICT OF THE       )
  )
STATE OF SOUTH AUSTRALIA             )

Re:      BOGDAN LECZYNSKI

Debtor

Ex Parte: HELEN ELENE HONT

Substituted
  Petitioning Creditor

REASONS FOR DECISION

CORAM:    Mansfield J
PLACE:    Adelaide
DATE:     5 May 1997

On 17 April 1997 the Registrar made a sequestration order against the estate of Mr Bogdan Leczynski ("Mr Leczynski") on the application of Helen Hont who was the substituted petitioning creditor.  That order was made in respect of an application originally instituted on 28 November 1995, following an act of bankruptcy committed on 20 November 1995 constituted by the failure to comply with a bankruptcy notice.  The matter is of considerable age.

When the sequestration order was made, the Registrar also made an order staying for two weeks the operation of that order under s52(3) of the Bankruptcy Act 1966 ("the Act").  I now have before me an application for a further stay of that order, as the matter came on again before the Registrar this morning, and no further stay was then granted.

In the meantime, Mr Leczynski, by application of 1 May 1997, has applied for a review of the sequestration order made against him.  That application has been listed for mention first on 26 May 1997.  I am not sure whether that application, or indeed today's application, has been served on Peter Ivan Macks ("Mr Macks"), who by the sequestration order, was made trustee of the estate of Mr Leczynski.

I have considered the material put before me by Mr Leczynski, including his affidavit sworn today, and the affidavit comprising part of the application for review of the Registrar's decision accompanying that application made on 1 May 1997.

I decline to grant the application for a stay made before me.

The application was made under s52(3) of the Act only. As appears from that section, the power to grant a stay is for a period of up to twenty one days, following the sequestration order being made. That period has almost expired. I am not satisfied that the grant of a stay for the further few days would, in any event, be of significance, having regard to the
grounds upon which the stay was sought.  Those grounds are that during the course of the administration, and perhaps before the hearing of the application for review, the trustee may dispose of assets of Mr Leczynski on terms which are unfavourable, having regard to their real value, and secondly that in the meantime he may be precluded from further certain conducting proceedings in the Supreme Court as a director of certain companies.  Those companies, no doubt, have other directors.  If he is not able to act as a director, and it is necessary to appoint further directors, the shareholders of these companies can no doubt appoint further directors to conduct the affairs of those companies.

I have not had the opportunity to hear full submissions on the prospects of Mr Leczynski succeeding in his application for review, but I note that the judgment upon which the bankruptcy notice was based, and in turn in that sense the application for a sequestration order was proceeded with, has been sustained, despite several applications to set it aside, and that most recently an application to the Full Court of the Supreme Court for leave to appeal from a decision refusing the setting aside of that judgment has also been refused.  Accordingly, the present position is that the judgment is in place.

I note that Mr Leczynski, in the period of fourteen days of the stay allowed by the Registrar, has not paid the amount of the debt, nor has he procured the funds in a form which secures that payment by tendering them, either to the creditor or by paying that amount into Court, or otherwise making arrangements to ensure that that amount is paid.

I am not satisfied that in the particular circumstances, and having regard to those factors, there is an irremedial harm to be suffered by Mr Leczynski if the stay is refused, and his application to set aside the bankruptcy, the sequestration order, is proceeded with and is successful in due course.

Accordingly, I decline the application for a stay which is made before me today.  On the application for review, I should indicate that I have not presently heard anything which justifies it being brought on sooner than 26 May 1997.  If, however, in the course of the administration of his estate by Mr Macks, Mr Leczynski becomes concerned that Mr Macks may dispose of, or be about to dispose of some assets of his in the estate at a value which he considers to be a massive under value of those assets, he may apply to the Court to have that application brought forward.  He may then make an application for a stay under O52 r17 of the Federal Court Rules.

From my knowledge of the way these matters are proceeded with, and the obligations of the trustee, it may well be that Mr Macks, in getting in the assets of the estate of Mr Leczynski, will not be in a position to dispose of those assets, or at least having got in those assets, may not be in a position to have fully explored their realisation at the best available value in the period of time before the matter next comes before the Court. 
He is a person who I am confident is conscious of his responsibilities in that regard.

If, however, Mr Leczynski does come to the concern that the trustee may dispose of the assets in a way which makes them irrecoverable, and at a value which he regards as totally unrealistically low, he does have liberty to apply, which I now give him, to have the matter brought before the Court prior to 26 May 1997, when the matter will otherwise come before the Court for directions.

I certify that this and the preceding        pages are a true copy of the Reasons for Decision of the Honourable Justice Mansfield.

Associate:

Date:

Debtor appearing in person

Counsel for the
     Substituted Petitioning Creditor  :    Mr J W Willsmore

Solicitors for the
     Substituted Petitioning Creditor  :    Womersley & Co

Hearing Date  :    5 May 1997