Re Steggall, N.G. Ex parte Advance Bank Australia Limited

[1992] FCA 141

BANKRUPTCY ACT 1966

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF THE	1
STATE OF VICTORIA	No. VP 92 of 1992

Re : NEIL GRAHAM STEGGALL

Judgment Debtor

EX Parte:  ADVANCE BANK AUSTRALIA
LIMITED
(A.C.N. 002 953 335)

Judgment Creditor

And :

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF THE	1
STATE OF VICTORIA	No. VP 93 of 1992

Re : VICTORIA LOUISE STEGGALL

Judgment Debtor

Ex Parte:  ADVANCE BANK AUSTRALIA
LIMITED
(A.C.N. 002 953 335)

Judgment,.Creditor

Victoria Louise Steggall (VP 93 of 1992) be expedited.
Coram:	Olney J
Place:	Melbourne

Date : 5 March 1992 FEDERAL COURT Or

AUSTRALIA

PRINCIPAL

EX TEMPORE JUDGMENT REGISTRY

Presently before the Court are 2 applications by the judgment creditor seeking orders that the hearing of bankruptcy petitions against Neil Graham Steggall (VP 92 of 1992) and

The creditor obtained judgment against both debtors in the County Court at Melbourne on 4 October 1991. Bankruptcy notices were served on Mr. Steggall and Mrs. Steggall on 6 and 18 November 1991 respectively. There being no response to the bankruptcy notices, the creditor issued bankruptcy petitions which were served on 6 February 1992, and were returnable on 28 February 1992. On 24 February, the debtors signed an authority under section 188 of the Bankruptcy Act.

When the petitions came before a Deputy Registrar on 28 February 1992 an application by counsel representing the debtors for the adjournment of the petitions was refused. The basis upon which the adjournment was sought was that a meeting under Part X of the Act was to be held, and that a proposal involving the payment of $25,000 in settlement of the debtors' liabilities was to be put to such meeting. No date had been fixed for the meeting.

The Deputy Registrar, having refused the adjournment, counsel

the Act, requiring that the petitions be referred to a judge	for the debtors invoked the provisions of subsection 31A(9) of
for hearing. The Deputy Registrar had no discretion in the matter, and referred the petitions to the next judge's bankruptcy list, which happened to be 18 March 1992. But for some other matters which have nothing to do with the case, the next bankruptcy list would have been yesterday, but no judge had been listed to sit in bankruptcy on the regular sitting days on 4th or 11th of this month.
The creditor, at an early stage following the hearing on 28 February 1992, sought an early hearing of the petitions and formal applications were filed on 3 March 1992 seeking orders that the hearing of the petitions be expedited.
The debtors ask that the original order of the Deputy Registrar stand. Although it was put in terms of requesting an adjournment of these applications, in effect the debtors want the hearing of the petition not to be expedited but rather to proceed on 18 March 1992 because, in the intervening period, arrangements have been made for a meeting of creditors to be held on 17 March 1992.
It will be noted that when the Deputy Registrar made the order on 28 February 1992 he reserved liberty to apply in respect of the date, and the present applications are an exercise of that leave.
Those matters aside, the real issue that has to be resolved at
Field v. The Commercial Bankinq Company of Sydney, 22 ALR 403. this stage is similar to the issue which arose in the case of
In that case the Full Court of the Federal Court helpfully set out what it said were some of the relevant circumstances which the Court could usefully refer to in circumstances similar to this case. I do not propose to canvass all of those matters. Counsel for the creditor has done so, and for the most part, I accept her analysis.
In the affidavit material put before me, there is no explanation of why the section 188 authority was not executed until 24 February 1992, given that the creditor obtained judgment on 4 October 1991, and the first bankruptcy notice was served on 6 November 1991. In my view, the absence of any explanation for the delay is unhelpful to the debtors and the proximity of the date of the signing of the authority to the return date of the petitions is such as to suggest, on the face of it at least, that there was an attempt to delay the hearing of the petitions.
Having had the opportunity of reading all the affidavit evidence now adduced, including the report of the controlling trustee, I am of the view that there is no cogent evidence to support the proposition that the proposal for composition would be in the best interests of the creditors. There is nothing in either the trustee's report or the affidavits as to the source from which the money which is to be used as the basis for the composition would be derived. In those circumstances, there can be no real confidence that the composition, even if approved as required, would succeed.
Another factor that is unhelpful to the debtors is that they have changed their ground since the matter was before the Deputy Registrar 6 days ago. At that time the proposal was for a composition involving the payment of $25,000. Between 28 February and the date of the trustee's report (2 March 1992), the proposal has gone from $25,000 to $100,000 with no

explanation either as to why it was changed or as to where the
funds will be derived from.

The complexity of the affalrs of the debtors appears to justify the investigation of a trustee. It seems to me that the state of debtors' affairs, as presented in the affidavit evidence, is such that it is completely beyond the power of any decision maker, on the material presented, to reach a conclusion that the proposed composition would or could be for the benefit of the creditors generally. But a more practical problem is that it is quite clear that once contingent creditors are eliminated and given the known attitude of one major creditor, the ANZ Bank, the proposed composition has no chance of receiving the required majority. That conclusion is an inevitable conclusion based upon the material before me and so long as the ANZ Bank's judgment stands, the conclusion cannot in my view be gainsaid. It is said that the debtors dispute the liability to the ANZ Bank, but they have not manifested their dispute by any overt action that suggests

that the dispute is a real one.

Having regard to all of these factors there is no reason to depart from the conclusion reached by the Deputy Registrar on 28 February 1992 that the application for adjournment should be refused. There are compelling reasons for the petitions to be dealt with expeditiously and pursuant to the leave reserved to the creditor, I propose to vary the order of the Deputy Registrar and order that the petitions be heard

forthwith.

I have perused the evidence produced in support of the two petitions for bankruptcy. I am satisfied that the requirements of the Act have been complied with. As a matter of record the act of bankruptcy upon which the petition against Mr Steggall is based occurred on 20 November 1991; and in respect of Mrs Steggall on 2 December 1991.

In the absence of any reason why I should not do so, I order that the estates of both debtors be sequestrated. I appoint Graham John Clark to be the trustee in each case. I order that the costs of the petitioning creditor, including the costs reserved on 28 February 1992 and the costs of and incidental to the applications filed on 3 March 1992 be taxed and paid out of the respective estates in accordance with the

, statute.

I certify that this and the preceding 5 pages is a true copy

of the Ex Tempore Judgment of

the Honourable Mr. Justice Olney

Heard:	5 March 1992
Place:	Melbourne
Judqment :	5 March 1992
Counsel for the creditor:	Mrs. G. Grigoriou
Solicitors for the creditor:	Darvall McCutcheon
Counsel for the debtors:	Mr. K. Baker
Solicitors for the debtors:	Scanlan Carroll