Re Rozenes; Ex parte Burd

The case of *Re Rozenes; Ex parte Burd* concerned an application by a creditor, Mr. Burd, for the sequestration of the estate of Mr. Rozenes. The dispute arose from an alleged debt owed by Mr. Rozenes to Mr. Burd, which Mr. Rozenes claimed was not a provable debt in bankruptcy. The matter came before Dawson J of the High Court of Australia.

The central legal issue before the Court was whether the debt claimed by Mr. Burd was a "provable debt" within the meaning of the *Bankruptcy Act 1966* (Cth). Specifically, the Court had to determine if the debt, arising from a judgment for costs in a defamation action, was a debt that could be proved in bankruptcy, notwithstanding that the quantum of the costs had not yet been assessed at the time of the bankruptcy notice.

Dawson J reasoned that the *Bankruptcy Act* defines a provable debt broadly to include all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the commencement of bankruptcy. His Honour held that a judgment for costs, even if unassessed, constituted a liability at the commencement of bankruptcy. The fact that the amount was not yet quantified did not prevent it from being a provable debt, as the Act provided mechanisms for its assessment. Therefore, the debt was provable, and the bankruptcy notice was valid.

The application for sequestration was accordingly dismissed.