Re Raymond; Ex parte Raymond - [1992] FCA 495

Re: GEOFFREY RAYMOND
Ex Parte: THE ABOVENAMED (Applicant)
No. Q B2845 of 1991
FED No. 495
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND
Spender J.(1)

CATCHWORDS

Bankruptcy - application for annulment of sequestration order - meaning of words "ought not to have been made" - no debt founding creditor's petition - judgment debt set aside after making of sequestration order - standing-by by bankrupt - costs.

Bankruptcy Act 1966 s. 154

Re Scott (1975) 6 ALR 558

Re Deriu (1970) 16 FLR 420

Re Griffiths; Ex parte Huntley Vol. III NSW Bktcy Cas (1890-99) 6

HEARING

BRISBANE

#DATE 30:6:1992

Counsel for the applicant: Mr S.R. Blaxland
instructed by : Barbeler and Cooke

Counsel for the petitioning creditor: Mr F.G. Forde
instructed by: Crowley and Greenhalgh

ORDER

The Court orders that:

1. The bankruptcy of Geoffrey Raymond be annulled.

2. Geoffrey Raymond pay to the petitioning creditor the costs of and incidental to the petition and to the application for annulment, to be taxed if not agreed.

3. Geoffrey Raymond pay the trustee's costs in respect of his proper fees of administering the estate of Geoffrey Raymond to the date of this order.
Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

JUDGE1

This is an application for the annulment of a sequestration order made against the estate of Geoffrey Raymond on 3 December 1991. The application for annulment poses a question as to the proper construction of the words "ought not to have been made" contained in s. 154(1) of the Bankruptcy Act 1966. Section 154(1) relevantly provides:

" Where the Court is satisfied:

(a) that a sequestration order ought not to have been made or, in the case of a debtor's petition, that the petition ought not to have been presented or ought not to have been accepted by the Registrar; ...

the Court may make an order annulling the bankruptcy. "

On 11 May 1990, judgment was entered in the Magistrates Court at Brisbane against Mr Raymond in respect of a plaint and summons issued on behalf of Morre Anna Henderson. The total amount of the judgment, including costs, was $12,426.49. The gravamen of Mrs Henderson's claim was for $11,250.00, being the balance of the purchase price said to be owing by Mr Raymond to the plaintiff pursuant to an agreement in writing dated 18 December 1989. The agreement related to the sale of a dwelling house located at 49 Station Road, Indooroopilly, with all fittings and fixtures for removal for the sum of $12,500.00. It was alleged that Mr Raymond had paid a deposit to the plaintiff of $1,250.00 on or about 18 December pursuant to the terms of that contract.
Judgment was obtained in default of entry of appearance and defence. Pursuant to the judgment, Bankruptcy Notice No. 195 of 1991 was issued. No attempt was made by Mr Raymond to set aside that bankruptcy notice, nor did he…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1992] FCA 495
Decision Date: 30 JUNE 1992

CaseChat Overview and Summary

The case of Re Raymond; Ex parte Raymond involves an application by Geoffrey Raymond for the annulment of a sequestration order made against him. The dispute centres on the interpretation of the phrase "ought not to have been made" in the context of bankruptcy proceedings, particularly when a judgment debt on which a creditor's petition was founded is subsequently set aside. The matter was heard in the Federal Circuit Court of Australia.

The primary legal issue the Court had to resolve was whether the sequestration order should be annulled due to the absence of a valid debt at the time of the order's making. The Court had to consider the effect of the judgment debt being set aside post-sequestration and whether this fact alone justified the annulment of the sequestration order. Additionally, the Court examined the bankrupt's standing to apply for annulment and the appropriate costs order in the context of the annulment and the original petition.

In its reasoning, the Court found that the absence of a valid debt at the time of the sequestration order's making meant the order "ought not to have been made". The setting aside of the judgment debt after the sequestration order was a significant factor in this conclusion. The Court determined that the petitioner had standing to apply for annulment, and it was appropriate to annul the sequestration order under the circumstances. The Court also considered the costs associated with both the original petition and the annulment application, directing that Geoffrey Raymond bear these costs.

The final orders of the Court annulled Geoffrey Raymond's bankruptcy and required him to pay costs to the petitioning creditor and the trustee. The specific costs related to the petition, the annulment application, and the trustee's fees were to be taxed if not agreed upon by the parties.

Orders

Orders of the court

The Court orders that:

1. The bankruptcy of Geoffrey Raymond be annulled.

2. Geoffrey Raymond pay to the petitioning creditor the costs of and incidental to the petition and to the application for annulment, to be taxed if not agreed.

3. Geoffrey Raymond pay the trustee's costs in respect of his proper fees of administering the estate of Geoffrey Raymond to the date of this order.

Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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