Wilcox v Cottrell

[2000] FCA 1656

Wilcox v Cottrell [2000] FCA 1656
Bankruptcy

Wilcox v Cottrell [2000] FCA 1656

BANKRUPTCY – motion by bankrupt debtor to set aside sequestration order upon basis of improper purpose of petitioning creditor in obtaining such order – improper purpose said to be constituted by making of cost sharing agreement between petitioning creditor and defendants to legal proceedings being brought by bankrupt debtor – no improper purpose involved since debt of bankrupt to petitioning creditor undisputed and no counter-demand or counter-claim established.

Bankruptcy Act 1966 (Cth) ss 52(3) and 60(3)

Rozenbes v Kronhill (1956) 95 CLR 407 applied.

JOHN ALFRED WILCOX v DAVID MERVYN COTTRELL

N 7880 of 2000

CONTI J

SYDNEY

22 DECEMBER 2000

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:	22 DECEMBER 2000
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.       The application of the Respondent to set aside the sequestration order be dismissed.

2.       No order be made as to costs.

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:	22 DECEMBER 2000
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1       On 29 November 2000 the Respondent David Mervyn Cottrell (“Mr Cottrell”) was made bankrupt on the petition of an unsecured creditor John Alfred Wilcox (“Mr Wilcox”). The basis of the sequestration order in bankruptcy was non-compliance with a bankruptcy notice related to a Wagga Wagga Local Court judgment for moneys lent by Mr Wilcox to Mr Cottrell and interest accrued thereon in the sum of $36,679.42, which judgment had been entered on 17 August 1999 and remained unsatisfied. The petition in bankruptcy brought by Mr Wilcox was supported by Goddard Elliott claiming as an unsecured creditor for legal services in the sum of $21,636. No counter demand or counter claim was ever sought to be established by Mr Cottrell in this Court, nor was any application ever made to this Court to set aside the preceding bankruptcy notice prior to the sequestration order being made.

2       A statement of financial position has been filed by Mr Cottrell in this Court on 19 December 2000, which disclosed that he had no assets other than two causes of action in proceedings instituted by him in a County Court in Victoria, together with a savings bank account in credit in the sum of merely $8.00. Such statement also disclosed as the sole source of Mr Cottrell’s income a fortnightly disability support pension of $399.20. Mr Cottrell has informed me that such causes of action involved claims for interests in assets comprising real and personal property held by Marie Urjadkco, Anthony Ben Boer and two companies Sanders Way Pty Limited and Sertram Pty Limited. The hearing of the proceedings had already occupied…