FEDERAL CIRCUIT COURT OF AUSTRALIA
| WESTPAC BANKING CORPORATION v PARAS & ANOR | [2020] FCCA 1156 |
| Catchwords: BANKRUPTCY – Creditor proceeding with petition in 2017 – proceeding leading to deed of settlement – debtors not complying with deed of settlement – whether deed amounted to an accord executory or accord and satisfaction – whether creditor entitled to proceed to petition on basis of judgment debt allegedly compromised by deed of settlement – whether creditor precluded by its allegedly unconscionable conduct from proceeding to bankrupt debtors – debtors’ criticisms not made out – sequestration orders made. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.52, 245. |
| Cases cited: Cain v Whyte (1933) 48 CLR 639 DCT v Hadidi (1994) 123 ALR 48 Harman v Secretary of State for Home Department [1983] 1 AC 280 McDermott v Black (1940) 63 CLR 161 Re A Debtor (1909) 16 Manson 205 Re Feast (1887) 4 Morr 37 Re HB (1904) 1 KB 94 Re Lomax ex parte City Bank (1892) 3BC (NSW) 66 Re Vogel; ex parte East Anglo Eastern Contract Company (1913) 10 LT 325 |
| Applicant: | WESTPAC BANKING CORPORATION |
| First Respondent: | JOHN PARAS |
| Second Respondent: | STEPHEN MATTHEW APPERLY |
| File Number: | MLG 2563 of 2019 |
| Judgment of: | Judge Burchardt |
| Hearing date: | 17 April 2020 |
| Date of Last Submission: | 17 April 2020 |
| Delivered at: | Melbourne |
| Delivered on: | 22 May 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Brown |
| Solicitors for the Applicant: | DLA Piper |
| Counsel for the Respondents: | Mr McEwen |
| Solicitors for the Respondents: | Patrick & Associates |
ORDERS
The parties are directed to confer and forward Minute of Orders to give effect to these Reasons for Judgment within 14 days.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 2563 of 2019
| WESTPAC BANKING CORPORATION |
Applicant
And
| JOHN PARAS |
First Respondent
| STEPHEN MATTHEW APPERLY |
Second Respondent
REASONS FOR JUDGMENT
In this proceeding the applicant bank seeks sequestration orders. In respect of the first respondent, who tragically died during the currency of the proceeding, an order is sought against his estate pursuant to section 245 of the Bankruptcy Act 1966 (Cth) (“the Act”). In respect of Mr Apperly a sequestration order is also sought. The applicants submit, and this is not controversial, that the formal matters in section 52(1) are satisfied, and that the respondents have not put forward any evidence of solvency.
This is not, however, where the controversy ends, rather it is where it starts. The respondents (counsel appeared on behalf of both the estate of Mr Paras and Mr Apperly) submit that there are two bases upon which the respondents resist the making of sequestration orders. Although not articulated in terms, they seem to fall as a matter of analysis within section 52(2) of the Act and to amount to “other sufficient cause a sequestration order not be made”.
Although the matter has been expressed in a somewhat scattergun way from time to time by the respondents, they appear to me to advance two central matters which are:
(a)The judgment debt upon which the bankruptcy notice…
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- Case
- [2020] FCCA 1156
- Decision Date
CaseChat Overview and Summary
The court was required to determine whether the deed of settlement constituted an accord executory or an accord and satisfaction, and consequently, whether the creditor was entitled to pursue the bankruptcy petition based on a judgment debt allegedly compromised by the deed. Further, the court had to consider whether the creditor's conduct was so unconscionable as to preclude it from proceeding with the bankruptcy petition.
Judge Burchardt found that the debtors' criticisms of the creditor's conduct were not made out. The court determined that the deed of settlement did not prevent the creditor from proceeding with the bankruptcy petition. The legal principles applied focused on the nature of accord and satisfaction and the circumstances under which a creditor might be precluded from pursuing bankruptcy proceedings due to unconscionable conduct.
Ultimately, sequestration orders were made against the debtors.
Orders
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Evidence
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