Trepic, M. v Arrowcrest Group Pty Ltd - [1990] FCA 583

Re: MIRKO TREPIC
Ex Parte: ARROWCREST GROUP PTY. LTD.
No. P219 of 1990
FED No. 583
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY BANKRUPTCY DISTRICT OF THE STATE OF SOUTH AUSTRALIA
GENERAL DIVISION
O'Loughlin J.(1)

CATCHWORDS

Bankruptcy - Notice of opposition to the making of a sequestration order on the grounds of abuse of process and "futility" - debtor failed to meet the onus of establishing either ground - application dismissed.

HEARING

ADELAIDE

#DATE 19:10:1990

Counsel for the Creditor: Mr. T. Bryant

Solicitors for the Creditor: Messrs Sanderson and Co.

Counsel for the Debtor: Mr. I. Robertson

Solicitors for the Debtor: Messrs Piper Alderman

ORDER

The application be dismissed.

The creditor's petition for sequestration be listed for hearing before a Registrar of this Court on Monday 29 October 1990.

Note: Settlement and entry of order is dealt with in Bankruptcy Rule 124.

JUDGE1

On 9 August 1990, Arrowcrest Group Pty. Ltd. filed a petition in this Court seeking a sequestration order against the estate of Mr. Mirko Trepic. The debtor has opposed the making of any such order, alleging that the petition is an abuse of the process of the court and that "the making of a sequestration order would be futile".

The facts that are relevant to these proceedings are within a short compass and, in the main, are not disputed. As an employee of the petitioning creditor, the debtor suffered a work-related injury. He successfully claimed compensation pursuant to the Workers Compensation Act, 1971 (S.A.) but only after protracted litigation, in the course of which he incurred an order to pay certain of the petitioning creditor's costs. In addition, the debtor is currently prosecuting a common law claim against his former employer in the South Australian Supreme Court. That matter was removed from the trial list on the application of the debtor but on terms that he pay all costs thrown away. The two sets of costs have been taxed and allowed at $9,220.15 and $4,828.48 a total of $14,048.63.
It is common ground that the debtor has not paid any part of these debts nor has he attempted to claim that he has a counter-claim, set-off or cross-demand equal to or exceeding either of the separate sums hereinbefore specified. The acts of bankruptcy relied on are the failures to comply with separate bankruptcy notices that were issued as a consequence of the orders for the payment of the two sets of costs.
The debtor claimed that the injury that he suffered to his left elbow (commonly known as "tennis elbow") combined with a subsequent neurotic or psychological overlay to render him totally incapacitated. Whatever may be the ultimate findings in the Supreme Court it is a fact that the debtor is now, and has for sometime been, in receipt of an invalid pension. It is his claim that he has no assets constituting property that would be divisible amongst his creditors and no likelihood of benefiting from any after-acquired property. It is…

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 Trepic, M. v Arrowcrest Group Pty Ltd

Details

AGLC: Trepic, M. v Arrowcrest Group Pty Ltd [1990] FCA 583
Case: [1990] FCA 583
Decision Date: 19 OCTOBER 1990

CaseChat Overview and Summary

Trepic, M. v Arrowcrest Group Pty Ltd concerned a bankruptcy application by Arrowcrest Group Pty Ltd against Michael Trepic. Arrowcrest sought a sequestration order against Trepic on the grounds of his inability to pay debts. Trepic opposed the application on the basis of abuse of process and futility. The matter was heard in the Federal Court of Australia.

The court was required to determine whether Trepic had established the grounds of abuse of process or futility to oppose the sequestration order. Abuse of process involves a creditor using the bankruptcy process for an improper purpose, whereas futility pertains to the impracticality or pointlessness of the sequestration order. Trepic needed to demonstrate that either of these grounds existed for his opposition to be valid.

In its decision, the court found that Trepic did not meet the onus of proving either abuse of process or futility. The court held that the opposition was not substantiated by evidence and that the creditor's application for sequestration was not improperly motivated. Consequently, the court dismissed Trepic's opposition and ordered that Arrowcrest's petition for sequestration be listed for hearing before a Registrar of the Court on 29 October 1990. The court's reasoning focused on the lack of merit in Trepic's arguments, leading to the dismissal of his application and the progression of Arrowcrest's petition.

Orders

Orders of the court

The application be dismissed.

The creditor's petition for sequestration be listed for hearing before a Registrar of this Court on Monday 29 October 1990.

Note: Settlement and entry of order is dealt with in Bankruptcy Rule 124.

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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