Turner, M. v The Official Trustee in Bankruptcy (as Trustee of the Bankrupt of Joseph Anthony Talia)

[1993] FCA 304

JUDGMENT No. ........ ........ ..I 304- 149'3 ,,,,,,,,,.,,

IN THE FEDERAL COURT OF AUSTRALIA	) )
VICTORIA DISTRICT REGISTRY	) NO VB 616 of 1993
)
BANKRUPTCY DIVISION	)
BETWEEN :

MICHM3L TURNER

Judgment Debtor

and

THE OFFICE TRUSTEE IN BANKRUPTCY

/AS TRUSTEE OF THE BANKRUPT ESTATE OF

JOSEPH ANTHONY TALIAI

Judgment Creditor

Judae : Heerey J

Place: Melbourne

Date

-- 2 8 April 1993

Please substitute the following date for the judgment date previosly cited in the above matter:

Paae 1:	2 8 April 1993
Please subst~tute	the following date for the date of hearing

previosly cited in the above matter:

Associate:

Paae 4:  2 8 April 1993

Please substitute the following name for the counsel for the first supporting creditor previosly cited in the above matter:

Paqe 4:  Miss Story

I certify that this page is a true copy of the corrigendum to the Judcrment of his Honour Mr Justice iieere

Q / I q l 3

JUDGMENT No. ........ ........ .. ........ ... ,

IN THE FEDERAL COURT OF AUSTRALIA	) )
VICTORIA DISTRICT REGISTRY	) )
BANKRUPTCY DIVISION	)
BETWEEN:

MICHAEL TURNER

Judgment Debtor

and

THE OFFICE TRUSTEE IN EANKRUPTCY

(AS TRUSTEE OF THE EANKRUPT ESTATE OF

JOSEPH ANTHONY TALIAl

Judgment Creditor

Judae :  Heerey J

Place: Melbourne

Date :  4 May 1993

\

EX TEMPORE REASONS FOR JUDGMENT

\ -.

This is an application to review the sequestration order made	-- /"
by Mr Deputy Registrar Morris on 16 March 1993. The central issue is whether an authority under s.188 of the Bankruptcy Act 1966 having been signed on 15 March, the hearing of the	petition should be adjourned to enable the debtor's
proposition to be put to a meeting of creditors.
The history of the matter is a sad one. It is obvious that the debtor was under considerable financial pressure. His efforts to reach an accommodation with his creditors centred on his disposal of a very valuable property at Browns Road, Werribee . As at 7 December 1992, when an affidavit of solvency was sworn, he had reasonable grounds for putting a value of $1.3 million on the property, and indeed, there was a contract of sale signed a few days later for $1.4 million; a deposit of $25,000 paid and settlement due 19 March 1993.

Had that sale been completed, the position would have been totally different. It is not suggested that the contract was anything other than a genuine arms length transaction. Nevertheless, the purchaser defaulted and it appears the property is now worth much less.

The debtor's proposal as outlined in his latest affidavit sworn 29 March 1993, is to put to creditors a composition under Part X which would involve contributions from "the bulk of my wife's share of the sale of the Werribee Bingo Centre and such reasonable sum as can be negotiated between myself and creditors from the income of my medical practice over the next three years". It is also said that his medical practice company Sinnott Medical Accounting Services Pty Limited, to

Administration and that all this would be for the benefit of	which he owes $419,106, will not prove in a Part X	creditors.
There is also some evidence that the debtor has some significant problems of a psychiatric nature. They might be relevant insofar as it was necessary to consider the contribution that he would be able to make from his earnings as a medical practitioner. However, it seems to me that in the practical setting of this case the foremost consideration

is whether there is a realistic prospect of any composition
being accepted by a meeting called under Part X.

If that is clearly not the case, then it is doing nobody, including the debtor, a service to put off the fearful day.

The evidence discloses unsecured creditors (including the secured creditor Merlin, who it seems will not receive anything under its second mortgage) totalling $950,000. Those creditors who oppose any composition and do so, of course, in the light of the material provided by the debtor, are the petitioning creditor $52,000, the Bank of New Zealand $34,000 and Merlin $200,000; total $286,000.

Those figures are in a sense generous to the debtor because they do not include accrued interest. Even so, they disclose a figure of 30.1 per cent of unsecured creditors opposed to any composition which is clearly in excess of the 25 per cent

creditors voted in favour. I think, therefore, in those	needed to defeat any composition, even assuming all other	circumstances, I must refuse the application.
I will order the petitioning creditors costs of the application be taxed and paid out of the estate of the debtor.
I will order that the costs of the two supporting creditors; that is Merlin and the Bank of New Zealand, be taxed and paid out of the estate of the debtor.

I certify that this and the

preceding three (3) pages are a true copy of the Reasons for Judament of his Honour M r

~uscice Heerey

Associate:

Counsel for the applicant:  Mr R Cameron

Solicitor for the applicant: Hannebery Boyle & Partners

Counsel for the respondent:  MS E Williamson

Solicitor for the respondent: Australian Government Solicitor

Counsel for the first

supporting creditor:	Miss Stony
Solicitor for the first
supporting creditor:	Robert Green & CO
Counsel for the second
supporting creditor:	Mr P Jansen
Solicitor for the second
supporting creditor:	Lander & Rogers

Date of hearing:  4 May 1993