Re Wilkie, Sophie v Ex parte Bewsher Consulting Pty Ltd (formerly Zatika Pty Limited t/as Bewsher Consulting)

[1996] FCA 789

CATCHWORDS

BANKRUPTCY - Sequestration order sought - No point of principle.

Bankruptcy Act 1966; s 52

Re James and Anor: Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No. 2) (1994) 51 FCR 14

No. NP 306 of 1996

Re:  Sophie Wilkie; Ex parte Bewsher Consulting Pty Limited (formerly Zatika Pty Limited t/as Bewsher Consulting)

MOORE J
SYDNEY
5 SEPTEMBER 1996

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )       No. NP 306 of 1996
  )
GENERAL DIVISION                 )

RE:  SOPHIE WILKIE

Judgment Debtor

EX PARTE:  BEWSHER CONSULTING PTY LIMITED
  (formerly Zatika Pty Limited
  t/as Bewsher Consulting)

Judgment Creditor

JUDGE:    Moore J

PLACE:    Sydney

DATE:     5 September 1996

ORDER OF THE COURT

THE COURT ORDERS THAT:

1. The Estate of Sophie Wilkie be sequestrated.

1. The petitioning creditors costs including any reserved costs be taxed and paid in accordance with the Bankruptcy Act 1966.

NOTE:     Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )       No. NP 306 of 1996
  )
GENERAL DIVISION                 )

RE:  SOPHIE WILKIE

Judgment Debtor

EX PARTE:  BEWSHER CONSULTING PTY LIMITED
  (formerly Zatika Pty Limited
  t/as Bewsher Consulting)

Judgment Creditor

JUDGE:    Moore J

PLACE:    Sydney

DATE:     5 September 1996

REASONS FOR JUDGMENT

This judgment deals with whether an order should be made under s52 of the Bankruptcy Act 1966 ("the Act") sequestrating the estate of Sophie Wilkie ("the debtor"). The petitioning creditor is Bewsher Consulting Pty Limited formerly named Zatika Pty Limited trading as Bewsher Consulting.

On 21 June 1996 an order was made substituting Bewsher Consulting Pty Limited as the petitioning creditor in proceedings which had been commenced by Jamisontown Investments Pty Limited.  The act of bankruptcy founding the creditor's petition of Jamisontown Investments Pty Limited was the failure of the debtor to comply with a bankruptcy notice served on 11 August 1995 founded on a judgment debt
Jamisontown Investments Pty Limited had obtained judgment against the debtor on 27 October 1994 in the District Court of New South Wales in the sum of $17,445.66 including interest.  The time for compliance with the notice was extended on two occasions and ultimately it had to be complied with by 26 September 1995.  The act of bankruptcy identified in the petition was thus the failure of the debtor on or before 27 September 1995 to comply with the requirements of the notice and satisfy the judgment.

In circumstances where there has been the substitution of a creditor for the original petitioning creditor it is necessary that the debt to the substituted creditor existed at the time of the act of bankruptcy: see McNamara v Langford (1931) 45 CLR 267 at 271 namely at the last moment on 26 September 1995: see Re Prowe; Ex parte Dalgety Farmers Ltd (1985) 5 FCR 233. I am satisfied that at the time of the act of bankruptcy the debtor was indebted to Bewsher Consulting Pty Limited, that debt having resulted from judgment obtained against the debtor in the sum of $25,715.79 in the Local Court of New South Wales on 1 May 1995. The debt must also exist at the time the sequestration order is made: see s52(1)(c) of the Act and Hyams v Elder Smith Golsbrough Mort Limited (1976) 133 CLR 637 at 639. Having regard to an affidavit of Stephen Meitz sworn 26 August 1996, I am satisfied it does. I am also satisfied as to the other matters stated in the petition and that the petition was served on 20 March 1996.

The debtor sought to have the petition dismissed on the ground that there existed a claim brought by her in the District Court alleging professional negligence on the part of Bewsher Consulting Pty Limited. This claim had not yet been determined and, if successful, would result in a judgment in excess of $200,000. At the hearing of the petition submissions were made as to whether the claim in the District Court proceedings commenced by the debtor could have been set up in the action resulting in the judgment in the Local Court in favour of Bewsher Consulting Pty Limited. While that matter is of relevance in considering whether a bankruptcy notice should be set aside, the issue I must presently consider is whether there exists sufficient cause for a sequestration order not to be made: see s52(2)(b) of the Act which was considered by Olney J in Re James and Anor: ex Parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No. 2) (1994) 51 FCR 14.

The evidence of the debtor concerning the merits of that claim was, at best, scant.  The statement of claim is in evidence.  The debtor says she was advised by her legal advisors that she had a claim against Bewsher Consulting Pty Ltd, who had advised her on engineering matters, for professional negligence.  However, there is no evidence establishing facts which might lead to a conclusion that the debtor has a claim against the substituted petitioning creditor which is likely to succeed: see Re James at 22.  It
has not been demonstrated that there is a basis upon which I should dismiss the petition.

Accordingly I propose to make an order sequestrating the estate of the debtor.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.

Associate:  ........ ........ ......
Dated:    5 September 1996

APPEARANCES

Counsel for the Judgment Debtor:          Mr D Miller

Solicitor for the Judgment Debtor:             Brendan Piggott Solicitors

Counsel for the Judgment Creditor:             Mr M Rollinson

Solicitor for the Judgment Creditor:      Phillips Fox

Date of Hearing:  27 August 1996

Date of Judgment:  5 September 1996