Re Wallace, Tony Desmond Ex Parte Downie, Phillip Graeme
[1997] FCA 588
•24 Jun 1997
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
No QG 7252 of 1997
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND
RE:TONY DESMOND WALLACE
EX PARTE:PHILLIP GRAEME DOWNIE, Official Liquidator of Maenex Pty Ltd (In Liquidation) (ACN 052 264 178)
TONY DESMOND WALLACE
Applicant
AND:PHILLIP GRAEME DOWNIE, Official Liquidator of Maenex Pty Ltd )In Liquidation) (ACN 052 264 178)
CORAM: Spender J
PLACE: Brisbane
DATE: 24 June 1997
MINUTES OF ORDER
THE COURT ORDERS THAT:
The bankruptcy of Tony Desmond Wallace be annulled;
The court accepts the undertaking offered by Mr Rosen on behalf of Mr Wallace to pay the reasonable costs of Paul Desmond Sweeney, the trustee, pursuant to the sequestration order made by the court on 6 March 1997, those costs to be taxed if not agreed;
The applicant pay the costs of the trustee of this application, to be taxed if not agreed.
THE COURT GRANTS liberty to apply.
Note:Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
No. QG 7252 of 1997
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND
RE:TONY DESMOND WALLACE
EX PARTE:PHILLIP GRAEME DOWNIE, Official Liquidator of Maenex Pty Ltd (In Liquidation) (ACN 052 264 178)
TONY DESMOND WALLACE
Applicant
AND:PHILLIP GRAEME DOWNIE, Official Liquidator of Maenex Pty Ltd )In Liquidation) (ACN 052 264 178)
CORAM: Spender J
PLACE: Brisbane
DATE: 24 June 1997
REASONS FOR JUDGMENT
This is an application filed on 1 May 1997 by Tony Desmond Wallace seeking the annulment of a sequestration order that was made on 6 March 1997. The application is brought pursuant to s 153B of the Bankruptcy Act 1966 (‘the Act’) which provides:
“ If the Court is satisfied that a sequestration order ought not to have been made or, in the case of a debtor’s petition, that the petition ought not to have been presented or ought not to have been accepted by the Official Receiver, the Court may make an order annulling the bankruptcy.”
. Notwithstanding the fact that he did not appear to resist the making of the order, Mr Wallace claims that the sequestration order ought not to have been made on the basis that he was then, and is now solvent.
Subsection (2) of section 52 of the Act relevantly provides:
“ If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:
(a)that he or she is able to pay his or her debts; or
(b)that for other sufficient cause a sequestration order ought not to be made;
it may dismiss the petition.”
This section recognises that the court, even in the case where solvency is established, still has a discretion to dismiss the petition. In the present case, however, there are no circumstances to suggest that, had the true facts been made known to the court, it would not have exercised the discretion which s 52(2) of the Act confers. The fact that the debtor stood by and permitted the bankruptcy proceedings to go to the extent that they did can be met by making appropriate orders as to costs.
In this particular case, in respect of a judgment debt of the order of $3600.00, the trustee deposes to the fact that his costs are at least that amount. I find some difficulty in relation to the costs which the trustee says he has incurred in respect of this very small estate and the minimal inquiries that have been made. Those concerns can be met again by making appropriate orders as to the taxation of costs.
In all the circumstances, notwithstanding what appears to be errors in the statement of affairs, I am satisfied that the debtor was and is solvent and that, had the true facts been known to the court at the time of the making of the sequestration order on 6 March 1997, the court would not have made the sequestration order.
The orders that I make are as follows:
The bankruptcy of Tony Desmond Wallace is annulled;
The court accepts the undertaking offered by Mr Rosen on behalf of Mr Wallace to pay the reasonable costs of Paul Desmond Sweeney, the trustee, pursuant to the sequestration order made by the court on 6 March 1997, those costs, to be taxed if not agreed.
The applicant pay the costs of the trustee of this application, to be taxed if not agreed.
Having regard to the orders concerning the costs of the administration and the costs of this application, I grant liberty to apply.
I certify that this and the preceding two (2) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.
Associate
Date: 24 June 1997
Solicitor for the applicant : Mr W Rosen of Rosen
Solicitor for the respondent : Mr P Kar of Dunhill Madden Butler
Date of hearing : 24 June 1997
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