Re Vanderwall, W.J - [1991] FCA 181

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAI. DIVISION 1
EMKRUPTCY DISTRICT OF THE ) No NP 640 of 1991
STATE OF NEW SOUTH WALES )

Re: W.J. AND S.V. VANDERWALL

Debtors

Einfeld J Svdney 26 March 1991

The debtors have presented a petition under section 56 in respect of a business partnership involving themselves and M r and possibly Mrs McWilliam of Putney. Pursuant to section 56(6) the Registrar did not accept the petition but referred it to the Court and caused a notice in accordance with the rules to be given to Mr McWilliam. He had not joined in presenting the petition. This much is required by section 56(6)(b).

bound to reject the petition if I ordered him to do so.

By section 56(7) the Court on reference of a petition in this way may direct that the Registrar accept or reject the petition or may with the consent of any one or more of the petitioning partners amend the petition by deleting the name of the partner who did not give consent and to accept the petition as so amended. It is therefore for me to determine whether the Registrar should be directed to accept or reject the petition. By subsection (7)(a) the Registrar would be

There has been placed before me today a deed by which Mr McWilliam together with his wife have compromised then part of any debts owed by the partnership to a man named Dennis Herbert Lindsay. He was the proprietor of enterprises known

as Fitzroy Displays and Fitzroy Electroplating wh~ch carr~ed

on business at the Revesby address from which the debtors and
Mr McWilliam were also operating their business together.

The debtors advised the Court that following upon the compromise by Mr and Mrs McWilliam of their debts with Mr Lindsay, Mr Lindsay is now suing the debtors for the balance of the debts now said to be owing. The debtors obviously seek bankruptcy as a method of defence to this action.

I can see no issue of the principle arising under section 56 that would prevent that method of defence being adopted according to law. Obviously debtors' petitions will often be used for such a purpose and it is clear from the provisions of subsections ( 6 ) and (7) that the purpose of referring the

matter to the Court is to ensure that the interests of other partners who did not join in presenting the petition are
adequately protected or catered for.

In the current case the other partner or partners have dealt with their own part in the debts involved and do not need the Court to protect their interests. Part of the settlement Ln which they were involved was contained in terms of settlement called Short Minutes of Order entered in the Commercial

Division of the New South Wales Supreme Court in matter number 50498 of 1990 in which both the McWilliams and the Vanderwalls were defendants.

For those reasons it seems to me appropriate that pursuant to…

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.

Continue reading Re Vanderwall, W.J

Details

AGLC: Re Vanderwall, W.J [1991] FCA 181
Case: [1991] FCA 181
Decision Date: 26 Mar 1991

CaseChat Overview and Summary

The case Re Vanderwall, W.J. involved the debtors, W.J. and S.V. Vanderwall, seeking bankruptcy as a defense against a lawsuit by Dennis Herbert Lindsay for debts owed by their business partnership with Mr. and Mrs. McWilliam. The partnership had been operating from an address in Revesby. Lindsay, who owned Fitzroy Displays and Fitzroy Electroplating, was suing the debtors for the balance of debts after Mr. and Mrs. McWilliam compromised their part of the debts with Lindsay. The debtors presented a petition under section 56, which the Registrar did not accept but referred to the Court. The Court was required to decide whether the Registrar should be directed to accept or reject the petition. Section 56(7) of the Act allows the Court to amend the petition if any partner who did not join in presenting it consents, or to direct the Registrar to accept or reject it. The Court found that the other partners had already settled their part of the debts and did not need the Court's protection. Therefore, the Court directed the Registrar to accept the petition.

In the case of Re: Robert Lachlan McKechnie, the debtor, Robert Lachlan McKechnie, was served with a bankruptcy notice by the judgment creditor, Reginald Whitworth Weir, based on an order made in the Supreme Court of the Northern Territory. McKechnie filed an affidavit claiming to have a counterclaim, set-off, or cross demand as required by section 41(7) of the Bankruptcy Act 1966. The Registrar found that the affidavit did not comply with the requirements of the Act and was invalid. McKechnie sought a review of the Registrar's decision, which was set aside by Foster J, who remitted the matter to the Registrar to fix a date for a hearing. The Court was required to determine whether McKechnie had satisfied the Court that he had a counterclaim, set-off, or cross demand that equaled or exceeded the amount referred to in the bankruptcy notice. The Court found that McKechnie had not made out a prima facie case that he had such a claim, and therefore, the Court was not satisfied that McKechnie had a counterclaim, set-off, or cross demand of the kind referred to in paragraph 40(1)(g) of the Act. The Court ordered that McKechnie pay the judgment creditor's costs.

Orders