Wilcox v Cottrell

[2001] FCA 1357

FEDERAL COURT OF AUSTRALIA

Wilcox v Cottrell [2001] FCA 1357

BANKRUPTCY – earlier sequestration order made by Registrar for non-compliance with bankruptcy notice based on court judgment – application of bankrupt to set aside sequestration order on ground of abuse of process referrable to champertous agreement – application dismissed at first instance by primary judge – bankrupt appealed to Full Court – Full Court rejected stated grounds of appeal but remitted to primary judge for review and hearing de novo proceedings for bankruptcy earlier purportedly determined by Registrar – finding of act of bankruptcy by reason of failure to comply with act of bankruptcy committed within six months before presentation of petition – only defect in documentation formal and no substantial injustice occasioned thereby – debtor had belatedly moved beforehand to set aside court judgment upon which bankruptcy notice based – absence of evidence of likelihood of debtor being able to set aside court judgment – absence of sufficient cause for sequestration order not to be made.

Bankruptcy Act 1966 (Cth) ss 52(1), 52(4)
Federal Court Rules O 77 r 19

Australia and New Zealand Banking Group Ltd v Prestia [2001] FCA 792 followed
Cottrell v Wilcox [2001] FCA 866 referred to
Daly v Watson (1994) 50 FCR 544 followed
Martin v Commonwealth Bank of Australia [2001] FCA 87 referred to

JOHN ALFRED WILCOX v DAVID MERVYN COTTRELL

N 7880 OF 2000

CONTI J
21 SEPTEMBER 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 7880 OF 2000

BETWEEN:	JOHN ALFRED WILCOX APPLICANT
AND:	DAVID MERVYN COTTRELL RESPONDENT
JUDGE:	CONTI J
DATE OF ORDER:	21 SEPTEMBER 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.A sequestration order be made against the estate of the Respondent.

2.The Respondent to pay the costs of the Applicant of the proceedings.

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	N 7880 OF 2000

BETWEEN:	JOHN ALFRED WILCOX APPLICANT
AND:	DAVID MERVYN COTTRELL RESPONDENT

JUDGE:	CONTI J
DATE:	21 SEPTEMBER 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 29 November 2000, Registrar Tesoriero made a sequestration order against the estate of the Respondent (“Mr Cottrell”) pursuant to the petition of the Applicant (“Mr Wilcox”) filed on 18 October 2000. The act of bankruptcy which founded the order was non-compliance with a bankruptcy notice requiring the payment of $36,679.42, being the amount of the judgment obtained by Mr Wilcox against Mr Cottrell on 17 August 1999 in the Wagga Wagga Local Court for moneys lent together with interest.

2. Mr Cottrell had not sought to establish in opposition to the petition the existence of a counterclaim or cross claim, and he did not apply to set aside the bankruptcy notice prior to the making of the sequestration order. After the sequestration order was made, Mr Cottrell provided a statement of financial affairs on 19 December 2000 which disclosed as his only assets a…