Re Todd, K.

[1991] FCA 349

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JUDGMENT NO. 3.e / ........ ....... I. I !

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION 1 !

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BANKRUPTCY DISTRICT OF THE	)	No. QB 1687 of 1990
STATE OF OUEENSLAND	1

RE :  K. TODD (A MALE1

EX PARTE: BAKER BROS. FAMILY PTY. LTD.

KENNETH RAY TODD

(Applicant)

MINUTES OF ORDER

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PINCUS J.

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JUDGE MAKING ORDER:

DATE OF ORDER:	9 MAY 1991
WHERE MADE:	BRISBANE

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THE COURT ORDERS THAT:

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1.    The application be dismissed.

2.

The costs of the respondent creditor and trustee be	i
given that priority which the costs mentioned in	(I.

s.lOg(l)(a) of the Bankru~tcv Act 1966 have.

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

IN THE FEDERAL COURT OF AUSTRALIA	1
GENERAL DIVISION	1
BAlJKRUPTCY DISTRICT OF THE	1 No. QB 1687 of 1990
STATE OF QUEENSLAND	)

RE:	K. TODD (A MALE1
EX PARTE:	BAKER BROS. FAMILY PTY. LTD. KENNETH RAY TODD

(Applicant)

CORAM: PINCUS J.

PLACE: BRISBANE

m: 9 MAY 1991

EX TEMPORE REASONS FOR JUDGMENT

This is an application that a sequestration order made in November 1990 be annulled on the grounds that the order ought not to have been made. The application was based upon s.154 of the Bankru~tcv Act 1966, the terms of which include the expression used in the application, that is, "ought not to have been made".

The section has been construed as meaning what it appears on its face to mean, namely that the Court has a discretion to annul the bankruptcy, but it is not obliged to do so. The basis of the application for annulment is evidence that an amended petition, on which the sequestration order was made, was never served upon the applicant.

The evidence as to that seems to me to be fairly
clear. The applicant is a blind man. He is obviously blind,

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in the sense that he is eyeless, and even a casual observation of him would make it clear that his position in that respect is not normal.

The affidavit which was relied on to establish service, so far from convincing one that service occurred, almost has the opposite effect. Although a description of the person served is given, the description does not include the obvious blindness, but it includes reference to showing a document to the person served, and placing a notice "at the defendants feet, face up where it could be seen by the defendant".

Very sensibly, counsel for the creditor did not seek to press the affidavit as showing anything which could assist his side. It is perhaps peripheral, but it seems to me very unfortunate that those who were responsible for achieving the service of this document, and I refer not only of course to Mr. Lewis, but to those who engaged him, did not take better care. It is a matter for concern that a person with such a

little consideration, that it appears no-one even bothered to	serious disability as the applicant has is treated with so
tell the process server that the target of his endeavours was a blind man.
However that may be, I am quite satisfied that the amended petition was not served on the applicant, and the matter comes therefore to a question of the exercise of discretion. It was argued on behalf of the creditor that I should find that the petition itself, which was, as I mentioned, later amended, was served upon the applicant. Not having had that matter carefully analysed, but having looked at the affidavits again, it seems to me that I should make that finding.
It is true, as Mr. Baker for the applicant pointed out, that the affidavit of the person who claims to have served the original petition, Mr. Gill, is less than satisfactory. Mr. Baker pointed out that according to the affidavit, Mr. Gill asked the applicant whether he was the person referred to in the proceedings; of course, he could hardly say so unless he could read them.
Nevertheless, there does not seem to be any special reason to doubt the accuracy of what Mr. Gill says. The applicant has made an affidavit dealing with the matter, in which he simply says that he does not recall being served with the petition; that is in reference to Mr. Gill's affidavit.
That conclusion is of some little importance, because, although I am satisfied that the applicant had no notice of the date of the hearing of the amended petition, I find that he was served with the original petition, which was in no very significant respect different from the amended petition.

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The facts, then, appear to be that through what seems to me to be reprehensible carelessness, the amended petition was not served upon the applicant, although the original petition had been. The consequence is, as Mr. Baker says, that the applicant had no notice of the date of the hearing.

Ordinarily one would, without much hesitation, annul the bankruptcy in those circumstances, but special considerations are said to operate here. It is unnecessary to go into much detail about them, because in essence what is set out in the material which is relied on by Mr. Martin for the creditor, and Mr. Redmond for the trustee, is not disputed. The pattern which emerges is of the incurring of debts in a number of names - that is apart from the applicant's name - leading to what, on the face of it, seems to be an obvious insolvency.

The applicant does not dispute this picture, and

indeed he admits that he has received quite a lot of legal

process. The affidavit of Mr. Freriks suggests that fairly	recently a number of proceedings have been served: warrants
of execution have been returned unexecuted and matters of that sort.
The point which has troubled me is to balance the interests of the commercial community, which are of course important, against the interests of the applicant, who has his xight not to be affected by proceedings of which he has no notice. One of the factors in favour of the applicant, as it seems to me, is that if the sequestration order is not annulled, that may be taken as some evidence that the Court is careless of the rights of disabled people and that it approves of the way in which this applicant was treated. That would, however, be quite a wrong construction. The Court is by no means careless of the rights of disabled people, and those who are working in the area of litigation should obviously be much more solicitous of those rights than appears to have been the case here.
I have had some difficulty in determining what is the proper course, but have come to the conclusion that the application should fail. It is true, as Mr. Martin submitted, that the applicant does not, as it appears to me, seriously contest the debt. He does not suggest that had he been aware of the date he would have come along to contest it.
A number of other proceedings against him have resulted in unsatisfied judgments. And most importantly, I have no confidence that if the applicant is released from
bankruptcy he will not do again what he seems to have done fairly recently, and that is run up debts which he simply cannot pay.
Therefore, with some regret, I feel obliged to dismiss the application and I do so. The costs of the

resistance to the application by the creditor, and by the trustee, should I think in the circumstances, be given that priority which the costs mentioned in s.l09(1)(a) of the Bankruptcv Act have. That will be also ordered.

That is, the orders will be:  application dismissed;

the costs of the respondent creditor and trustee are to have the priority which the costs mentioned in s.109(1) (a) of the Act have.

I certify that this and the five preceding pages are a true copy of the reasons for judgment herein of his Honour l&. Justice Pincus.	-	~
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Associate

Date 4 Mny