Xiang v Ward

In *Xiang v Ward*, the applicant creditor sought to have the respondent debtor declared bankrupt by way of a creditor's petition. The respondent debtor subsequently filed a debtor's petition before the creditor's petition was listed for a final hearing. The respondent sought to rely on solvency as an objection to the making of a sequestration order.

The primary legal issue before the court was whether to make a sequestration order given the debtor's petition had been filed after the creditor's petition. A secondary issue concerned the costs of the proceedings, with both parties seeking orders in their favour.

Judge Nicholls reasoned that the filing of a debtor's petition under section 54 of the *Bankruptcy Act 1966* (Cth) automatically stayed any proceedings by a creditor for the sequestration of the debtor's estate. Consequently, the creditor's petition could not proceed. The court noted that the event in the costs application was the dismissal of the creditor's petition. Accordingly, the applicant creditor's application for costs was allowed, and the respondent debtor's application for costs was refused.