Re T.J. Farley Ex Parte Hargoss P/L - [1992] FCA 573

Re: T.J. FARLEY
EX PARTE: HARGOSS PTY LTD
No. V B1840 of 1992
FED No. 573
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA
Olney J.(1)

CATCHWORDS

Bankruptcy - exercise of delegated power by registrar - review of order made by registrar - effect of amendment of s. 37 - whether Court may review sequestration order made by registrar.

Bankruptcy - matters required to be proved on making of sequestration order - proof that debt relied upon by petitioning creditor still owing - default judgment pre-dating act of bankruptcy set aside after petition issued and judgment given for creditor on re-hearing - creditor relying on subsequent judgment - whether creditor proved debt on which it relied was still owing.

Bankruptcy Act, ss. 31A, 52(1) and 37

Family Law Act 1975

Harris v. Caladine 172 CLR 84

McNamara v. Longford (1931) 45 CLR 267

HEARING

MELBOURNE

#DATE 10:8:1992

Counsel and solicitors for
the debtor: Ms J. Davies instructed

by Dunemann Sutherland Pty

Counsel and solicitors for the
substituted petitioning creditor: Ms E. Williamson instructed

by Brady, Kinnane and Towers

Mr T. Clarke appeared for the Official Trustee in Bankruptcy.

ORDER

The Court orders that:

1. The order for the sequestration of the estate of the debtor made

by Deputy Registrar Morris on 25 June 1992 be affirmed;

2. The debtor's application filed 15 July 1992 be dismissed;

3. The costs of the substituted petitioning creditor of and

incidental to the application be taxed and paid in accordance with the statute as part of the costs of the petition.

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

JUDGE1

This is an application pursuant to subsection 31A(6) of the Bankruptcy Act to review the exercise of power by a deputy registrar whereby a sequestration order was made against the estate of the debtor on 25 June 1992.

Two discrete, and so far as I am aware, novel questions of law call for determination. The first goes to the question of whether the review function of the Court under subsection 31A(6) still applies in respect of a sequestration order made in the exercise of power delegated to a registrar. The second involves the construction of paragraph 52(1)(c) of the Act.
The following brief chronology will help to set the context in which the application has been made.

13 September 1991 - The debtor committed an act of bankruptcy when he failed to respond to a bankruptcy notice issued on behalf of the petitioning creditor. 24 September 1991 - Creditor's petition presented. 15 January 1992 - Petition served.

11 February 1992 - Upon the return of the petition, the petitioning creditor withdrew, there being a dispute as to the debt relied upon. 19 March 1992 - IOOF Building Society (IOOF) substituted as petitioning creditor. (In support of its application to be substituted as petitioning creditor IOOF relied upon a final judgment recovered in the Magistrates' Court of Victoria…

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 573
Decision Date: 10 AUGUST 1992

CaseChat Overview and Summary

In the case of Re T.J. Farley Ex Parte Hargoss P/L, the dispute involved the validity of a sequestration order issued by the Deputy Registrar Morris on 25 June 1992. Hargoss P/L sought to challenge this order, questioning the extent of the registrar's powers and the implications of the amendments to section 37 of the relevant legislation. The case was heard in the Australian court, which was tasked with determining the scope of review over orders made by the registrar in bankruptcy proceedings.

The central legal issue before the court was whether it had the authority to review a sequestration order issued by the registrar, particularly in light of the amendments to section 37 of the Bankruptcy Act. The court had to consider the extent of the powers delegated to the registrar and whether the amendments limited the Court's ability to review such orders. Additionally, the court needed to ascertain whether the order made by the Deputy Registrar Morris adhered to the statutory requirements and procedural fairness.

Upon review, the court affirmed the sequestration order made by Deputy Registrar Morris, dismissing Hargoss P/L's application. The court concluded that the registrar's power to issue such orders was valid and that the amendments to section 37 did not restrict the Court's ability to review these orders. The decision emphasized that the order in question was issued in accordance with the law, and the procedural fairness was upheld. The court further directed that the costs of the substituted petitioning creditor and the incidental costs of the application be taxed and paid as part of the petition costs.

The final orders of the court affirmed the sequestration order, dismissed the debtor's application, and outlined the costs to be paid by the petitioner. This decision underscores the importance of adhering to statutory procedures and the limited scope of judicial review over decisions made by the registrar in bankruptcy matters.

Orders

Orders of the court

The Court orders that:

1. The order for the sequestration of the estate of the debtor made

by Deputy Registrar Morris on 25 June 1992 be affirmed;

2. The debtor's application filed 15 July 1992 be dismissed;

3. The costs of the substituted petitioning creditor of and

incidental to the application be taxed and paid in accordance with the statute as part of the costs of the petition.

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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