Re Macchia, M.S. Ex Parte Macchia, M.S

[1991] FCA 940

IN THE FEDERAL COURT
OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT
OF THE STATE OF

WESTERN AUSTRALIA

RE: MAR10 SILVERO MACCHIA

EX PARTE: MAR10 SILVERO MACCHIA

CORAM: LEE J.
DATE : 16 SEPTEMBER 1991

PLACE: PERTH

EX TEMPORE REASONS FOR JUDGMENT

Being a recent amendment to the Bankru~tcv Act 1966

("the Act") there are not many occasions on which para.55(3)(a) has been considered. Obviously its purpose is to ensure that no disadvantage will flow from the operation of para.55(4A)(b) of the Act which states, inter alia, that a debtor who presents a petition becomes a bankrupt by force of the section by virtue of presentation of the petition. In the

past such a commencement of bankruptcy has had the effect of	overriding the prospect of any sequestration order being made
upon a creditor's petition on foot at the time of the presentation of a petition by a debtor. The amendment is a recognition by the legislature that in some cases creditors may be disadvantaged if the Act is to operate in that way.
Sub-section 55(3)(a) has been introduced to provide the Court with a supervening discretion in the form of a
requirement that the Registrar not accept a debtor's petition
in such circumstances but refer it to the Court for its
considgration and direction. The discretion to be exercised
by the Court is at large. There is no indication in the Act
.
as to what matters the Court should take into account before advising the Registrar whether the petition of the debtor is to be accepted or rejected.
Principal amongst the considerations, however, will be whether acceptance of the petition would be an abuse of other process provided by the Act. But to say that is probably to say no more that it is a matter of looking at all the considerations raised by the particular facts or surrounding circumstances of the particular case. Not every case will have the same result. The Act is concerned with public interest as well as the interests of creditors and there is also an underlying element that the Act is to provide
management of their affairs. bankrupts with the benefit of some instruction in the proper If in any case it appears that on balance there is better reason to have a sequestration order made on a creditor's petition than allow the debtor to present a petition, that is the course the Court should follow both in the public interest and in the interest of creditors. In the present case a creditor's petition was presented in May 1991 in relation to, and relying upon, an act of bankruptcy that occurred in early April 1991.
Pursuant to S. 115 of the Act the period of relation 'back would extend to November 1990 within which the earliest act of bankruptcy would be deemed the commencement date of the bankruptcy if a sequestration order were made on that petition. With regard to a debtor's petition, under the same section of the Act the relation back period is six months prior to the presentation of the petition which in this case is in early September and the deemed commencement of the bankruptcy would be from the earliest act of bankruptcy within that period.
The potential difference in commencement dates of the bankruptcy is approximately four months which although not major is not insignificant. In the administration of many bankrupt estates such a period may be quite significant. I do not think that sub-s.55(3A) places any onus on a petitioning
creditor to show that there will be a particular advantage to be gained. It is enough that the potentiality of advantage be obvious on the face of the matter. In some cases it may be that competing interests are so finely balanced and nothing to be gained by the making of a sequestration order that there will be no reason to direct the Registrar not to accept the debtor's petition.
But in the present matter I am satisfied that a sequestration order should be made on the creditor's petition
and for that reason there should be a direction to the
.
Registrar not to accept the debtor's petition. I may say that had it been otherwise and had it been necessary for me to give consideration to the minute of consent filed by the parties, I would not have been of the view that there could have been an order made in the terms of c1.3 of that minute directing that the trustee of the estate, established by the acceptance of the debtor's petition, be one Nilant.
I agree with the reasoning and conclusion of Fisher J. in pe Aaostino: Ex Darte Jackson (1983) 78 F.L.R. 142 that s.156A contemplates the filing of a notice of consent by a trustee in the particular proceeding in which a sequestration order is made under 8.45 or in which a bankruptcy is created
by 8.55. The consent to act as trustee was filed in relation to the creditor's petition presented under 8.44 of the Act.
No consent to act as trustee if the debtor becomes bankrupt by virtue of presentation of a petition has been filed.
In the absence of an appropriate instrument of consent s.58 of the Act would apply and the property of the bankrupt would vest in the Official Trustee.
.' The Court was informed that a person jointly indebted with the debtor has already become bankrupt and the -nominated trustee appointed as trustee of that bankrupt's estate. It will be necessary to give consideration to the
consolidation of the two estates - the estate to be made by
the sequestration order in this matter and the estate created
by the earlier acceptance of the joint debtor's petition -
there being no petition relating to the joint debts of the debtors. The appropriate course would be to make an order under s.53 of the Act consolidating the administration of the two separate estates in respect of those joint debts.
It is unnecessary to say anything about the conduct of the Pt.X proceedings other than to refer to the comments made by French J. in pe Edwards (1987) 14 F.C.R. 113 which
about them. Such proceedings do not interfere with the recognize that Pt.X proceedings have some lack of resolution
Court's power to make a sequestration order but there is a discretion in the Court to further adjourn a petition for bankruptcy where Pt.X proceedings are on foot. There is no request for such an adjournment in this case.
For the foregoing reasons I will direct the Registrar not to accept the debtor's petition in this matter and, subject to the filing today of the appropriate affidavits of search and continuing debt, I will make a sequestration order a n the creditor's petition with the usual order that costs of the petition be paid from the estate. It is 'unnecessary to make any order in respect of the trustee of the estate. A consent to act as trustee has been filed and by force of para.l56A(3)(a) that trustee becomes the trustee of the estate of the bankrupt. I will make a further order pursuant to s.53 of the Act that the estates of this debtor, and of Lucio Macchia, who became a bankrupt on 4 September 1991, be consolidated in order that their joint debts may be dealt with in the administration of the several bankruptcies.

I certify that the preceding

six (6) pages are a true copy of the

Reasons for Judgment of his Honour Mr Justice Lee.

Associate:

Counsel for the Petitioning Creditor:	Mr S.G. Bennett
Solicitors for the Petitioning Creditor: Robinson Cox	1
Counsel for the Debtor:	Mr M.A. Atkinson 1

Solicitors for the Debtor: Marks Healy Sands

Date of Hearing: 16 September 1991

Date of Judgment: 16 September 1991