Smart v Esanda Finance Corp Ltd

[2000] FCA 235

FEDERAL COURT OF AUSTRALIA

Smart v Esanda Finance Corp Ltd [2000] FCA 235

BANKRUPTCY – Creditor’s petition – sequestration order – whether debtor had counterclaim, set‑off or cross demand equal to, or greater than, the judgment debt which could not have been set up in the proceeding in which the judgment was obtained – whether there was sufficient cause why a sequestration order should not be made.

Bankruptcy Act 1966 (Cth): s 40(1)(g), s 52(2)(b)

Re Ling; Ex parte Ling v Commonwealth of Australia (1995) 58 FCR 129 considered

ANTHONY IVAN SMART v ESANDA FINANCE CORPORATION LIMITED
V 478 of 1999

LEE, GOLDBERG & KENNY JJ
8 MARCH 2000
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 478 of 1999

ON APPEAL FROM A SINGLE JUDGE OF THE
FEDERAL COURT OF AUSTRALIA

BETWEEN:	ANTHONY IVAN SMART Appellant
AND:	ESANDA FINANCE CORPORATION LIMITED Respondent
JUDGES:	LEE, GOLDBERG & KENNY JJ
DATE OF ORDER:	8 MARCH 2000
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The appellant pay the respondent’s costs of and incidental to the appeal including reserved costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 478 of 1999

ON APPEAL FROM A SINGLE JUDGE OF THE
FEDERAL COURT OF AUSTRALIA

BETWEEN:	ANTHONY IVAN SMART Appellant
AND:	ESANDA FINANCE CORPORATION LIMITED Respondent

JUDGES:	LEE, GOLDBERG & KENNY JJ
DATE:	8 MARCH 2000
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

THE COURT:

1. The appellant appeals from an order of Merkel J on 30 July 1999 made on a petition filed by the respondent that the estate of the appellant be sequestrated and the respondent’s costs, including reserved costs, be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth) (“the Act”). The appellant appeared in person before Merkel J and prepared and filed his own notice of appeal. On the hearing of the appeal counsel appeared for the appellant pursuant to the pro bono scheme established under O 80 of the Federal Court Rules.  Counsel did not seek to rely on the grounds set out in the notice of appeal but rather relied on the following grounds:

   “(1)His Honour erred in finding that [the appellant’s] ‘cross demand’ could not have been set up in the action being the action commenced by [the appellant] on 15 February 1996

   (2)On all the material available, His Honour, pursuant to section 52(2)(b) of the Bankruptcy Act should have dismissed the petition because ‘for some other sufficient cause a sequestration order … should not be made’.”

2. The primary judge was satisfied that the appellant had committed the act of bankruptcy alleged in the petition, namely, a failure to comply with a bankruptcy notice which had been served upon him.  The bankruptcy notice was based upon a judgment obtained by the respondent against the appellant in the County Court at Melbourne on 3 December 1998 in the sum of $12,779.45 which…