West, R.E. v Hardeman & Rolls Packaging Pty Ltd

[1994] FCA 606

JUDGMENT No. A,,,,,-. 606 9+

TBEDERILI. COURT OF A U S m I A	)
1

V I C M R I A DISTRICT	REGISTRY	1	No. VP 527 of 1994
1 1
B E T W E E N :

ROBERT EDWARD WEST and PRANCES PATRICIA WEST

Judgment Debtor

- and -

EARDEWAN h MUS PACKAGING PTY LIMITED

Petitioning Creditor

dmfz:	Heerey J
lxcm:	17 August 1994

E&z: Melbourne

- 6 SEP 1994
FEOERAL COURT OF

-0NS FOR JUDGMENT

PRINCIPAL
-. ,

I am satisfied a sequestration order should be made in this case. There were two grounds urged against the making of a sequestration order. First was sald that the court should go behind the judgment which founded the petition; that is, the judgment in the Magistrates' Court at Melbourne on 2 March

1993 for $11,496.95 plus interest of $1634 and costs of $1886.

It appears that the debtor appeared at the hearing of the matter in the Magistrates' Court. He had already filed a notice of defence, which asserted that the debt claimed was the debt of Bob West Flexible Packaging Pty Limited and not the debtor personally. The debtor appears in person before the magistrate and gave evidence but that evidence was not	representative of the creditor with whom he dealt, a Mr Gary	accepted. It also would appear from his own version that the
Hardeman, was not called to give evidence. Apparently the magistrate indicated to counsel for the creditor that he was not persuaded by the debtor's evidence.
All that the material advanced before this Court amounts to is that the debtor raised a defence which was not accepted in the Magistrates' Court. No appeal or order to review was taken from that decision. The fact that a particular witness was not called, does not seem to take the matter any further, particularly where, as one might infer, the witness in question was one who was inherently likely to give evidence contrary to that of the debtor. There is no basis for going behind the judgment of the Magistrates' Court.
The second ground was based on section 5 2 ( 2 ) (b) which confers a wide discretion on the Court to dismiss a petition "for other sufficient cause a sequestration order ought not to be made". It is said that a cross-claim is on foot against the
the Supreme Court of Victoria pursuant to leave granted on 3 creditor. This takes the form of third party proceedings in
May 1994 by Beach J.
The debtor is a defendant to proceedings brought by DuPont Australia Limited, initially commenced in New South Wales on
18 May 1992 and transferred to the Supreme Court of Victoria
on 15 October 1993. There is a total lack of detail as to the nature of these proceedings. All the debtor deposes to is that he believes he has "a good prima facie case against the
judgment creditor which is in excess of the amount claimed by the judgment creditor".
There has not even been tendered a copy of the third party notice. Consistently with the evidence that is before the Court, the third party notice could be merely one seeking indemnity against the DuPont claim; in other words, if the DuPont claim failed against the debtor no question would arise of any claim against the creditor. I am not saying, of course, that that is in fact the case, but it merely illustrates the quite unsatisfactory position in which this Court is left.
I should mention also that in an application to extend the
time for compliance with the bankruptcy notice, Jenkinson J on
2 May 1994 made a declaration that "the Court is not satisfied
that the debtors have such a counter-claim set off or cross- demand as is referred to in paragraph 40 (1) of the Bankruptcy
Act 1966". I do not think that is conclusive against the exercise of the general discretion conferred at a later stage
of the proceedings under s.52(2)(b). Nevertheless, it seems to be another reason tending against the exercise of any discretion in favour of the debtors.
There being no dispute as to the formal requirements of the Bankruptcy Act there will be a sequestration order made against the estate of the debtors. The petitioning creditor's costs of and incidental to the petition in this
matter, including reserved costs, are to be taxed and paid in accordance with the Bankruptcy Act 1966. The date of conmission of the act of bankruptcy is 30 December 1993.

I certify that this and

the preceding three (3) pages are a true copy of the reasons for judgment of his Honour Mr Justice Heerey.

Counsel for the judgment debtors B Guzzo

Solicitor for the judgment debtors: Alderuccio & Associates

Counsel for the petitioning	C H Sparke
creditor:
Solicitor for the petitioning	Russell Kennedy
creditor:
Date of hearing:	17 August 1994

JUDGES' CHAMBERS
FEDERAL COURT OF AUSTRALIA
450 LITTLE BOURKE STREET

MELBOURNE 3000

1 September 1994

Sonia Cornale
Federal Court of Australia

Principal Registry

Law Courts Building

Queens Square

SYDNEY NSW 2000

k:

Dear Sonia,

R E West h Anor v Hardeman h Rolls Packaaina Ptv Ltd

No. VP 527 of 1994

X # e er ns '

No. G69 of 1994

I enclose a copy of the judgments delivered by his Honour Mr

Justice Heerey in the above matters on 17 August 2 September.
A diskette record of the judgment is also enclosed.

These judgments are not for general distribution.

David Brennan

Associate to Heerey J