A Jankrupc
Aspl rcant
and
J o u n l a s ( " t h e A p p l i c a n t " ) wno clarms to be a c r - d i t o r o f
Wr l l i am 3as i l Vass l s , a bankrugt . The a p p l r e a t i o n 1s d a t t d
1 4 Decemne: 1988 and seeks an order tha: t h e Applrcant have
l t a v e t o c o m e n c e l e S a l groceedrngs a g a i n s t :'C= s a n k x s z
| pursuan t | t o | he | p rov r s lgns | o f | Saragraph | 53(3)(5) of | t n t |
| aankruptcv | Act | 1 9 6 6 . | That | paragraph | provides: |
" 5 8 ( 3 ) Zxcept as provaded by t h r s A c t , a f t e r a deb to r
has become a bankrupt , 1: IS not competent f o r
The f a c t s g l v l n g r i s e t o t h e = r e d - : c l a - m e d b y t a e
. \ pp l~can t a r e : a the r obscu re bu t l t appea r s t na t :he Aspl lcant gave moneys to the bankrup t , who was a s o i l c l t o r ,
f 3 r the pur2ose of investment t o enable the Appl lcanz to
r e c e i v e t h e I n t e r e s t p a z d on the rnvestments, and l n due
cou:se t a Se r epa ld t he cap l t a l amoun t . ? a r t o f t he money
was ia f a c t :spai;, buc an amount o f some 5 3 0 , 0 0 0 has no t
c
| . | ' | . | X | Seen | repaid. | The | bankrupt | has | ceased | t3 | p r a c t i c e | a s | a |
-
s o l L c i t o r . 3:s practising c e r t r f l c a r e h a s n o t b e e n renewed-
and he has become a bankrugt .
The creda:or i s making a c la .9 agarns t the
SoLlc i tors Guaranter Tund o f t he L a w I n s t - t u t e of Victorza
and presumably t h a t m a t t e r has ground t 3 a h a l t and Chece is
some doubt as to whether the…
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Details
- AGLC
- Re Vassis, B.W. [1989] FCA 130
- Case
- [1989] FCA 130
- Decision Date
CaseChat Overview and Summary
The applicant, a creditor of the bankrupt William Basil Vassilis, sought leave to commence legal proceedings against Vassilis under section 53(3)(5) of the Bankruptcy Act 1966. The applicant had loaned money to Vassilis with the expectation of receiving interest and repayment of the principal amount. Although part of the money was repaid, an amount of $30,000 remained unpaid. Vassilis, who was a solicitor, had ceased practising and became bankrupt. The applicant also sought to make a claim against the Solicitors' Guarantee Fund of the Law Institute of Victoria, but there was doubt as to whether that fund was the appropriate one from which to seek payment. Additionally, the applicant aimed to make a claim against Vassilis under the professional indemnity insurance provisions of the Legal Profession Practice Act 1958, but there was uncertainty as to whether that insurance was liable for the claim.
The court considered whether there was a basis for exercising the discretion under section 53(3)(5) of the Act in favor of the applicant. The court noted that under section 117 of the Act, where a bankrupt was insured against liability to third parties, and a liability against which he was insured had been incurred, the right to indemnity under the policy vests in the trustee. The court found that there were significant difficulties and challenges in pursuing a successful claim, including whether the policy would cover the facts of this case to provide indemnity. The court also found that there was no valid reason provided as to why leave should be granted under section 53 of the Act. The court suggested that the applicant should lodge his proof of debt, consult with the trustee, and determine what action should be taken thereafter. The application was refused.
The court's decision hinged on the absence of a proof of debt lodged by the creditor and the lack of action by the trustee in bankruptcy pursuing the debt claimed by the creditor. The court also noted that the applicant could make an application again under section 58 of the Act at a later stage. However, at this stage, there were insufficient grounds for making the order sought. The applicant's application was ultimately refused, and no leave was granted to commence legal proceedings against the bankrupt.
The court considered whether there was a basis for exercising the discretion under section 53(3)(5) of the Act in favor of the applicant. The court noted that under section 117 of the Act, where a bankrupt was insured against liability to third parties, and a liability against which he was insured had been incurred, the right to indemnity under the policy vests in the trustee. The court found that there were significant difficulties and challenges in pursuing a successful claim, including whether the policy would cover the facts of this case to provide indemnity. The court also found that there was no valid reason provided as to why leave should be granted under section 53 of the Act. The court suggested that the applicant should lodge his proof of debt, consult with the trustee, and determine what action should be taken thereafter. The application was refused.
The court's decision hinged on the absence of a proof of debt lodged by the creditor and the lack of action by the trustee in bankruptcy pursuing the debt claimed by the creditor. The court also noted that the applicant could make an application again under section 58 of the Act at a later stage. However, at this stage, there were insufficient grounds for making the order sought. The applicant's application was ultimately refused, and no leave was granted to commence legal proceedings against the bankrupt.
Orders
Orders of the court
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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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