Westpac Banking Corporation v Carver

[2003] FCA 22

FEDERAL COURT OF AUSTRALIA

Valassis, in the matter of Valassis v Bernard [2003] FCA 22

BANKRUPTCY – application for annulment of sequestration order – debtor died prior to hearing of creditor’s petition – debtor gravely ill prior to death – estate was solvent at time of death – estate able to pay debt – no opposition to application by petitioning creditor or trustee in bankruptcy – sequestration order annulled

IN THE MATTER OF THE LATE DENNIS VALASSIS

ESTATE OF THE LATE DENNIS VALASSIS v ERIC BERNARD
N7361 of 2002

MADGWICK J
20 JANUARY 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N7361 of 2002

IN THE MATTER OF THE LATE DENNIS VALASSIS

BETWEEN:	ESTATE OF THE LATE DENNIS VALASSIS APPLICANT
AND:	ERIC BERNARD RESPONDENT
JUDGE:	MADGWICK J
DATE OF ORDER:	20 JANUARY 2003
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The bankruptcy of the late Dennis Valassis be annulled.

2.The Trustee's remuneration and costs totalling $2,219.05 to be paid out of the estate by the solicitor acting on behalf of the estate.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N7361 of 2002

IN THE MATTER OF THE LATE DENNIS VALASSIS

BETWEEN:	ESTATE OF THE LATE DENNIS VALASSIS APPLICANT
AND:	ERIC BERNARD RESPONDENT

JUDGE:	MADGWICK J
DATE:	20 JANUARY 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(revised from transcript)

HIS HONOUR:

1. In this matter the applicant is the legally authorised representative of the late Dennis Valassis whom it is convenient to call the debtor and the application is to annul a sequestration order made on 18 November 2002 against the debtor.

2. The debtor committed an alleged act of bankruptcy on 22 August 2002 and on 4 September 2002 a creditor’s petition was issued claiming $40,363.11.  On 28 October 2002 the debtor died and a hearing of an application for a sequestration order on the petition occurred on 5 November 2002 without the petitioning creditor or the Court being aware that the debtor had died.  The sequestration order was made on 18 November 2002.

3. No order was sought or made under s 245 of the Bankrutpcy Act 1966 (Cth) (“the Bankruptcy Act”) which contemplates that, where a person against whom a creditor’s petition has been presented dies after the service of the petition but before the making of the sequestration order (or dismissal of the petition), an order may be made “on that petition for the administration of his or her estate under this Part”. 

4. Under s 153B of the Bankruptcy Act the Court may make an order annulling the bankruptcy if the Court is satisfied “that a sequestration order ought not to have been made”. 

5. In addition to the foregoing which might be enough, in my view, to warrant annulling of the sequestration order, it appears that the debtor was gravely ill during the last months of his life and, despite being clearly solvent with a substantial surplus of assets over the said liability (exceeding a million dollars), he had chosen not to or was unable to obtain representation for the hearing of the creditor’s petition.  The estate is able to realise assets within a relatively short time to pay the judgment debt.  The application for annulment is not opposed by either the petitioning creditor or the trustee in bankruptcy.

6. Accordingly, I order that the bankruptcy of the late Dennis Valassis be annulled.  The Trustee's remuneration and costs totalling $2,219.05 are to be paid out of the estate from funds held by the solicitor acting on behalf of the estate.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

Associate:

Dated:            22 January 2003

Solicitor for the Applicant:	Mr G Vardas, Gunn Hamilton & Blay
Date of Hearing:	20 January 2003
Date of Judgment:	20 January 2003