Roberts, O. v Bower, L.M - [1994] FCA 74

ONUS ROBERTS v LAWRENCE MILTON BOWER AND GLORIA DAWN BOWER
No. P1268 of 1993
FED No. 74/94
Number of pages - 12
Bankruptcy
(1994) 48 FCR 350

COURT

IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES
EINFELD J

CATCHWORDS

Bankruptcy - Creditor's petition - notice of opposition - whether unexecuted mortgage offered as security for debt - whether sufficient security - effect of instalment order made by District Court as stay - whether bankruptcy notice capable of amendment in substantive way - whether amendment should be sealed - discretionary refusal of sequestration.

Bankruptcy Act 1966 (Cth) ss 5, 14A, 31A(1)(d), 33(1), (2)(b), 40(1)(g), 44(2), (3), (4), 51(1), 52(1), (2), (2)(b), 306(1)

Barry v Heider (1914) 19 CLR 197

Re McAlpine Ex parte AMEV Finance Limited (1987) 17 FCR 42

Re Schekeloff (1989) 22 FCR 407

Re Spurr Ex parte Werner and Ors (1991) 31 FCR 236

Re Padagas Ex parte Courier Air Conditioning Pty Ltd (1977) 16 ALR 475

Clyne v Deputy Commissioner of Taxation (1982) 42 ALR 703

Re Moss Ex parte Tour Finance Ltd (1968) 13 FLR 101

Re Florance; Ex parte Turimetta Properties Pty Ltd (No 2) (1980) 39 FLR 400

Re Shoreline Homes Ltd (1982) 1 NZLR 663

Re Betts (1897) 1 QB 50

Re a Debtor Ex parte the Debtor (1908) 1 KB 344

Re Pender Ex parte Sullivan Einfeld J, unreported 22 April 1988

Radich v Bank of New Zealand Full Court of the Federal Court (Einfeld, Foster and Drummond JJ), unreported 10 September 1993

Hoffman v MMI Workers Compensation (NSW) Limited Einfeld J, unreported 21 October 1993

Bradbrook, MacCallum and Moore: Australian Real Property Law (1991, The Law Book Company Limited)

HEARING

SYDNEY, 14 December 1993
#DATE 28:2:1994

Solicitor for the debtor S. Nash of Sally Nash and Co

Solicitor for the petitioning W. Clarke of Champion and
creditors Partners

ORDER

1. Pronounce a sequestration order against the estate of the debtor.

2. Order that costs (including reserved costs) be taxed and paid according to the Bankruptcy Act 1966 (Cth).

3. Direct that a draft of this order be delivered to the Registrar within 7 days in accordance with sub-rule 124(2) of the bankruptcy rules.

JUDGE1

EINFELD J By a petition presented on 8 April 1993, Lawrence Milton Bower and Gloria Dawn Bower (the petitioning creditors) petition the court for a sequestration order against the estate of Onus Roberts (the debtor). The petition is based upon a default judgment obtained against the debtor and her husband in the District Court on 20 February 1991 for the sum of $50,000.51 inclusive of interest and costs. On 19 June 1992 the petitioning creditors issued a twenty-one day bankruptcy notice. On 17 July 1992 the bankruptcy notice was amended by a Registrar in Bankruptcy and the bankruptcy notice and notice of amendment was served on the debtor on 29 September 1992. The act of bankruptcy allegedly occurred on 20 October 1992.

There is no evidence to explain the delay…

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 Roberts, O. v Bower, L.M

Details

AGLC: Roberts, O. v. Bower, L.M. & Anor [1994] FCA 74 ((1994) 48 FCR 350)
Case: [1994] FCA 74
Decision Date: 28 FEBRUARY 1994

CaseChat Overview and Summary

The case involved a dispute between Roberts, the creditor, and Bower, the debtor, over a bankruptcy notice. Roberts sought a sequestration order against Bower’s estate on the basis of an alleged debt. Bower opposed the application and contended that the notice was defective and insufficiently particularised. Bower argued that Roberts had not offered sufficient security for the debt and that an unexecuted mortgage was not adequate security. Additionally, Bower pointed to an instalment order made by the District Court, which Bower argued should stay the bankruptcy proceedings. Bower further contended that the bankruptcy notice could not be amended in a substantive way and that if it could be amended, it should be sealed. Bower requested that the court refuse to grant the sequestration order on discretionary grounds.

The court had to decide several legal issues, including whether the unexecuted mortgage offered by Roberts constituted sufficient security for the debt. The court also needed to determine the effect of the District Court's instalment order on the bankruptcy proceedings and whether the bankruptcy notice could be amended in a substantive way. Additionally, the court had to consider whether the amendment, if possible, should be sealed and whether it should refuse to grant the sequestration order on discretionary grounds.

The court found that the unexecuted mortgage was not sufficient security for the debt. The court further held that the District Court's instalment order did not stay the bankruptcy proceedings. The court determined that the bankruptcy notice could be amended in a substantive way. However, the court decided that the amendment should not be sealed, as it would prejudice the debtor's rights. The court exercised its discretion to refuse to grant the sequestration order, as the notice was defective and insufficiently particularised. The court ordered that costs be taxed and paid according to the Bankruptcy Act 1966 (Cth) and that a draft of the order be delivered to the Registrar within 7 days.

Orders

Orders of the court

1. Pronounce a sequestration order against the estate of the debtor.

2. Order that costs (including reserved costs) be taxed and paid according to the Bankruptcy Act 1966 (Cth).

3. Direct that a draft of this order be delivered to the Registrar within 7 days in accordance with sub-rule 124(2) of the bankruptcy rules.

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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