Westpac Banking Corporation v Paras

Westpac Banking Corporation (the creditor) sought to proceed with a bankruptcy petition against the debtors in 2017, following a prior proceeding that had led to a deed of settlement. The debtors had failed to comply with the terms of this deed. The matter came before Judge Burchardt.

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.