Re: Versace

[1995] FCA 1154

JUDGMENT No. ........ ........ .. ll5+ 45 t ,..,...,.

IN THE FEDERAL COURT OF AUSTRALIA

BANKRUPTCY DISTRICT OF

THE STATE OF VICTORIA

Re : NICOLETTA VERSACE

Judgment Debtor

Ex parte: COMMONWEALTH BANK OF AUSTRALIA

Judgment Creditor

No VP 637 of 1995

Re : JOSEPH VERSACE

Judgment Debtor

Ex parte: COMMONWEALTH BANK OF AUSTRALIA

Judgment Creditor

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I	Coram: Olney J
I	Place : Melbourne
Date : 13 December 1995 0 7 MAR 1996

FEDERAL COURT OF

REASONS FOR JUDGMENT AUSTRALIA PRINOIPAL WEOlSTRY

I propose to deal initially with the formal matters.

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Leave is granted to amend each peti'tion to allege an act of bankruptcy occurring on 19 April 1995. The error is one which is a mere irregularity and can in no way give rise to any injustice or detriment.

I accept the production of a copy of the power of attorney as

evidence of the authority of the person who signed the

petitions to do so.

The failure of the witness to the petitions to insert his address and occupation as apparently required by form 5 is a

mere irregularity which can give rise to no injustice and the

petition is not invalid by reason of that omission.

So far as paragraph 3 of each petition is concerned, the provisions of s 4 4 ( 4 ) require that where a petitioning creditor is a secured creditor he shall set out in the petition particulars of his security. In each petition the petitioner has recited, by reference to the nature of the security, namely an equitable mortgage, and the date or dates (dates plural in the case of Mr Versace and singular in the

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case of Mrs Versace) of those documents and in my view in the circumstances of the case, that is a sufficient description to satisfy the provisions of s 4 4 ( 4 ) . The petitioner has sought leave to amend each petition in the event that I am of the view that the statutory requirements have not been met but because of the view I have reached it is unnecessary to amend in the way he has suggested. However, had I been of the view that amendment was called for, I would have granted the amendment he sought.

In my opinion neither petition is in any way invalidated by

reason of any alleged or possible non-compliance with S 4 4 ( 4 ) .

The petitioner has, in each case, established the commission of an act of bankruptcy and the service of a valid petition on the debtor. There is evidence, in each case, of the continuation of the debt and the other formalities which are required to support a sequestration order.

The debtors seek to have the Court exercise its undoubted discretion to go behind the judgments on which the respective petitions are founded. The material before the Court shows that judgments were obtained on 22 February 1995 against each of the debtors, that on 22 September 1995 after the bankruptcy petitions had been issued following the service of bankruptcy notices, and about five or six weeks after the first return of the petitions, an application was made to set aside the

judgments. That matter was dealt with initially on 17 November 1995 when, in the case of Mrs Versace, her application was dismissed and in the case of Mr Versace, the application was partially successful. An appeal was then taken from the decision of the Master and on 8 December 1995 Beach J dismissed the appeals of the debtors and allowed an appeal by the creditor against the partial setting aside ordered by the Master on 17 November 1995. The effect of Beach J's order was that the judgments of 22 February 1995 were confirmed. The debtors have filed affidavits alleging various matters against the petitioner involving dishonesty and other oppressive conduct, which they say may entitle them to a judgment in excess of the amount of the debt in each case. It is on this basis that the Court is being invited to exercise its discretion not to make sequestration orders.

So far as going behind the judgment is concerned, there is no basis at all to suggest that either judgment is not supported by a real debt. So far as the asserted cause of action against the petitioner is concerned, my view is that this is a

matter which could have been pursued earlier and one which is lacking in any detail, other than a considerable degree of emotion in the affidavits that have been filed. Apparently, the decision not to take proceedings against the petitioner was a tactical step decided upon on legal advice and in all the circumstances of the case I do not think that any material has been put forward which justifies the Court exercising its discretion to refuse to make a sequestration order in either of these matters.

I note that Paul Anthony Pattison has consented to act as

trustee in each case in the event that the respective debtor becomes a bankrupt. I propose therefore to make orders in each case for sequestration of the estate of the debtor, appointing Paul Anthony Pattison as trustee and ordering that the petitioning creditor's costs of each petition, including any reserved costs, be taxed and paid in accordance with the

Bankruptcy A c t .

I certify that this and the preceding 3 pages are a true copy of the Reasons for Judgment of the Honourable Justice Olnev

Dated: 13 &.-\q%

Heard :	13 December 1995
Place :	Melbourne

Judgment: 13 December 1995

Mr M. McNamara (instructed by Herbert Geer & Rundle) appeared

for the petitioner.

Mr M. Kearney appeared for the debtors.