Re Mazzullo, N. Ex Parte de Cicco Industries Pty Ltd

[1992] FCA 540

JUDGMENT No, - - & c

CATCHWORDS

BANKRUPTCY - creditor's petition - authority given to trustee pursuant to section 188 - application to adjourn petition to enable meeting of creditors to be called - principles applicable - adjournment refused.

Bankruptcy Act, S. 188

Field v Commercial Bankinq Company of Sydney 37 FLR 341

RE: NUNZIO MAZZULLO;

EX PARTE: DE CICCO INDUSTRIES PTY LIMITED

04 AUC F"'

No. VP 440 of 1992

Olney J
Melbourne

15 July 1992

RECEI

IN THE FEDERAL COURT OF AUSTRALIA	1
BANKRUPTCY DISTRICT OF THE	)
STATE OF VICTORIA	)
GENERAL DIVISION	) No. VP 440 of 1992

Re :  NUNZIO MAZZULLO

A Debtor

EX Parte:  DE CICCO INDUSTRIES PTY LIMITED

Petitioning Creditor

Coram:	Olney J
Place :	Melbourne
Date:	15 July 1992

EX TEMPORE JUDGMENT

The background to the matter presently before the Court is that a creditors petition was presented on 28 April 1992, and served on the debtor on 5 May 1992. The act of bankruptcy upon which the petitioner relies is non-compliance with a bankruptcy notice that had been issued on 7 February 1992 and served on 13 February

Court obtained on 17 July 1990 and at the time the petition was	1992. The judgment debt in question is a judgment of the County
presented a net amount of $72,697.09 was owing.
The petition was returnable before the Court on 2 July 1992 when it came before Deputy Registrar Agnew. At that time no notice
of any opposition to the petition had been filed, but the debtor was represented and sought an indefinite adjournment to enable him to call a meeting of creditors pursuant to an authority under
section 188 of the Bankruptcy Act given to a trustee on the previous day, 1 July 1992. The proposal was to call a meeting of creditors on 23 July 1992. The Deputy Registrar refused the adjournment sought, but granted an adjournment to 15 July 1992 and gave leave for the filing of affidavits.
Upon the adjourned hearing a further application has been made on behalf of the debtor to adjourn the hearing of the petition to a date beyond the date of the proposed meeting of creditors. It is difficult to understand what circumstances have changed since 2 July when a similar application was refused. Perhaps the difference is that it is now only a short time until the proposed meeting, and there is some material before the Court which was not before the Deputy Registrar. Be that as it may, the material now before the Court in the form of the affidavit of the debtor, does not suggest that anything has occurred in the period since 2 July that would justify the Court reaching a different conclusion. However, I propose to deal with the present application on the basis that it is a fresh application for an
principles applicable to this type of application. adjournment, and it should be dealt with on the appropriate
It is common cause between the parties that the decision of the Federal Court in Field v Commercial Banking Company of Sydney 37 FLR 341, sets out the general considerations that are applicable in this context. It should be said, of course, that Sweeney J at the time of giving his reasons in Field, indicated that he was not attempting to draw up an exhaustive catalogue of the circumstances to which the Court should have regard in considering such an application. But it is fair to say that the
7 matters to which he made reference do appear to cover the
field, as it were, and one would expect that such an experienced bankruptcy judge as his Honour, would have been alert to most, if not all of the possible matters that ought to exercise the Court's mind. The argument today has been directed to the particular matters set out in the judgment in W, and it is not suggested that any other consideration ought to be taken into account.
I do not propose to go through the various matters seriatim,
rather, I will make a few comments which I thlnk will indicate the general approach that I adopt. The judgment was obtained in July of 1990. Some payments were made in reduction of the judgment debt but no payments have been made since April of 1991. The bankruptcy notice was served on 13 February 1992 and the petition served on 5 May 1992. The debtor said when cross-
any arrangement about the debt at that time. He said also that examined, that when he received the bankruptcy notice, he gave it to his solicitors, but he did not ask them to try to come to
when he was served with the petition, he gave it to his solicitors, but did not ask the solicitors to put forward any proposal to pay his debts. It does appear however that at some stage he made contact with Mr Brook a trustee, and the probability is that this was at the end of April. It is common cause that the intention to sign an authority to appoint a trustee was first conveyed to the petitioning creditor's solicitors by the debtor's solicitor on 30 June, two days before the petition was due to be heard, and one day before the authority was in fact signed.
The judgment creditor strenuously opposes the adjournment, and does so amongst other reasons, because it is said that to delay further may prejudice the capacity to apply the provisions of the Act in respect of past transactions.
The debtor's general financial position is that he is presently hopelessly insolvent. Indeed, the proposal that he intends to advance for the consideration of his creditors, involving the payment of a gross sum of $27,000 over a period of three years, is one which according to the trustee is likely to yield something like 3 cents in the dollar and is not one which, in the ordinary course of events, one would contemplate as being a particularly attractive proposal, given the extended period over which it is suggested that the money be paid. Further, the
debtor has a record of having, on a previous occasion, attempted
to pay off the debt by instalments, but then having ceased
without explanation.
The petitioning creditor's judgment is a substantial one, but it is not one which would enable that creditor to carry the day at a meeting of creditors. Nevertheless, I accept that it is a debt of significant proportions. There is no direct evidence from other creditors before the Court. There is, however, some evidence which has been adduced on behalf of the creditor, which suggests that a majority in value of the creditors would not approve the proposal presently advanced. But be that as it may, it must be remembered that the onus of showing cause for the exercise of the Court's indulgence lies upon the debtor. The debtor has put forward nothing that would persuade the Court that there is any likelihood that the proposal will be supported, and even apart from the evidence in the creditor's affidavit, which I admitted against the debtor's objection, the debtor simply has not addressed that issue. It is something that he could have done and may well have done. But it is not something which has been put before the Court to show that there is any body of creditor opinion that is likely to support his proposal.
The question of whether or not the interests of the creditors would be better served by an administration under Part X of the
Bankruptcy A c t , is not one upon which a definitive answer can be
given. It does appear from what evidence there is before the Court that there is not much to choose between bankruptcy and the proposed composition, although having had the opportunity of
conclusion is open that an immediate payment of a relatively reading the trustee's report in the Part X proceedings, the
small sum under bankruptcy may well be at least as advantageous and possibly more so than the payment of a slightly greater sum over a three year period.
Having regard to all of these matters, which in one way or another touch upon the various headings enumerated in Field, I have come to the conclusion that the debtor has not discharged the onus that rests upon him to convince the Court that it is appropriate that the hearing of this petition should be adjourned to permit the meeting of creditors to proceed as planned, and accordingly the application for adjournment will be rejected.

I certify that this and the preceding 5 pages is a true copy of the Ex Tempore Judgment of the Honourable Mr. Justice Olney

Associate: h Q-

-

Dated :  tg . wt. 1992-

Counsel and solicitors for the

judqment debtor:	Mr T. Irlicht instructed by Alan Walker & Associates
Counsel and solicitors for the
petitioninq creditor:	Mr I. Percy instructed by Messrs Phillips Fox
Date of Hearing:	15 July 1992
Place:	Melbourne
Date of Judqment:	15 July 1992