Ward v Zozi

Ward, a creditor, sought to set aside a Personal Insolvency Agreement (PIA) entered into by Zozi, the debtor, and to proceed with sequestration of Zozi’s estate. The dispute involved the validity of the PIA and the correct date for the act of bankruptcy, which was central to the creditor's petition for sequestration. The Federal Court was tasked with deciding these matters.

The court had to determine whether the PIA was valid and should be set aside and, if so, the appropriate date for the act of bankruptcy that should be used in the creditor’s petition. The creditor argued that the PIA was invalid due to Zozi's failure to disclose all of his liabilities. The court needed to examine Zozi’s conduct and the terms of the PIA to decide if the agreement should be upheld or annulled. Additionally, the court had to establish the correct date for the act of bankruptcy, as this was crucial for the creditor’s petition.

The court found that Zozi had indeed failed to disclose all of his liabilities in the PIA, which rendered the agreement invalid. The act of bankruptcy was determined to have occurred on 11 March 2011, a date earlier than previously asserted in the creditor’s petition. The court set aside the PIA and granted leave to amend the creditor’s petition to reflect the correct date of the act of bankruptcy. The court subsequently issued a sequestration order against Zozi’s estate. The court ordered that the creditor’s costs be paid from Zozi’s estate and directed that a copy of the orders be sent to the Official Receiver in Sydney within two working days.

The court’s decision resulted in the annulment of the PIA, the amendment of the creditor's petition to reflect the accurate date of the act of bankruptcy, and the sequestration of Zozi’s estate. The creditor’s costs were to be paid from Zozi’s estate, and a copy of the orders was to be promptly provided to the Official Receiver.