Re Mustafa, Kani Ex Parte Galbally & O'Bryan

[1996] FCA 3

IN THE FEDERAL COURT OF AUSTRALIA )

BANKRUPTCY DISTRICT IN THE       )        VB 2250 of 1995

STATE OF VICTORIA                )

RE:KANI MUSTAFA

(Debtor)

EX PARTE:GALBALLY & O'BRYAN (a firm)

(Petitioning Creditor)

CORAM:    RYAN J

PLACE:    MELBOURNE

DATE:     11 JANUARY 1996

REASONS FOR JUDGMENT

Ryan J:   On 9 August 1995 the debtor who appeared in person sought a further adjournment of the creditor's petition to allow him to obtain the proceeds of a loan from an entity called "Aussie Home Loans" which would enable him to discharge his liabilities to the petitioning creditor and two banks which appeared as supporting creditors.  Those, he said, represented all his current liabilities as he had reached an accommodation with the Australian Taxation Office which was his only other substantial creditor.  After hearing submissions from Mr O'Bryan on behalf of the petitioning creditor, which were adopted by Mr Dickson and Mr Netto for the supporting creditors, I acceded to the request for the adjournment saying:

"Well, in the circumstances, Mr Mustafa, I am disposed to exercise the Court's discretion by granting you a further adjournment, but I am only disposed to do so on your undertaking.  I am proposing to adjourn the matter to 6 September before myself - that is one month from today.  I am only disposed to do that on your undertaking that if by that date you have not made arrangements acceptable to each of the petitioning creditor and the supporting creditors to discharge your liabilities to those creditors, that you will not further oppose the making of a sequestration order.  Are you prepared to give that undertaking?  You understand that the effect of it will be to give you a month to raise the money from whatever source you think appropriate, but that if you fail in that endeavour a sequestration order will be made without further delay."

After further discussion the period of the adjournment was extended to 13 September 1995 upon the debtor undertaking that, if by that date he should not have made arrangements acceptable to each of the petitioning creditors and the supporting creditors, he would not further oppose the making of a sequestration order.

On the adjourned hearing on 13 September 1995 it was indicated on behalf of the petitioning creditor and each of the supporting creditors that no arrangements acceptable to any of them had been made by the debtor for the discharge of his respective liabilities to those creditors.

The debtor complained that he had only been told three minutes before the resumption of the hearing that a proposal which he had made to the creditors was regarded as unacceptable.  However, he later disclosed that his proposal had not been communicated until 12 September.  In the circumstances, I declined to grant a further adjournment.  In accordance with his undertaking the debtor was precluded from opposing the sequestration order which I then proceeded to make.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment of His Honour Justice Ryan.

Associate:

Date:

Counsel for the debtor           :    -

Solicitors for the debtor        :    -

Counsel for petitioning creditor  :    -

Solicitors for petitioning       :    Messrs Galbally &

creditorO'Bryan

Counsel for supporting creditor   :    -

(Commonwealth Bank)

Solicitors for supporting creditor    :    Australian Government

(Commonwealth Bank)                  Solicitor

Counsel for supporting creditor   :    -

(Citibank)

Solicitors for supporting creditor    :    Henty Jepson & Kelly

Date of Hearing                  :    9 August 1995 and

13 September 1995

Date of Judgment                 :    11 January 1996