CATCHWORDS Bankruptcy - Sequestration Order - Creditor's Petition accompanied by consent to act as trustee - Debtor's Petition - Whether Official Trustee or registered trustee appointed by force of law. BANKRUPTCY ACT 1966 ss.55(3), 55(4A), 260(1) (c) (i), 156A(3) RE: SALVATORE AGOSTINO EX PARTE: JOHN HENDERSON JACKSON as trustee of the property of Salvatore Agostino A bankrupt Applicant Fisher J. Adelaide 5 September 1983. iN THE FEUERAL COURT OF AUSTRALIA ) SQUTH AUSTRALIA TISTRICT REGISTRY ' GENERAL D1VIS CON No. 138 of 1983 BANKRUPTCY DISTRICT OF THE STATE ov) SOUT] AUSTRALIA ke ISALVATORE AGOSTING 4& Bankeupt Ex Tarte tJOHN HENDERSON JACKSON as trustee oy the property of Salvatore agastino 3 bankrupt Applicant ORDER Pry by H ur or i) a] z JUUGE HAKING ORDER ATE ac & September 1983 WHEPED MALE : Adelaide THE COURT ORVERS THAT 1. Yne Officiel Trustee in Hankruptey ss the sole trustee of the estate of Salvatore Agoetira,. 3. The question of costs 15 reserved. TN JHE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY ) ) } ) GENERAL »IVIS LON ) No.138 of 14983 ) BANKRUPTCY TISTRICT OF THE STATE GE) ) ) SOUTH GUSTRALIG Re -SALVATORE AGOSTING A Lenkrupt E.. Parte :F0ltt HENDERSON JACKSON se trustee of the property of Salvatore Agostina a bankrupt Applicant 19 September 1907 REASONS FOR JUDGMENT FISHER J.: Gn 3 September 1983 I made on the applicstion of Jonn Henderson Jackson (fthe regzsleread trustee") an order declaring that the Offacrial Trustes air Bankruptcy 36 the trustees of the ettale oar Sulvatore fAgosbina ("tne bankrupt'), I alsa cConsequentially declsred that the registered trustee 1s mot the trustee of the estate of the bankrupt. AL the time I intimated that an due caurse I would publish my ceasons, which IT now do. é- Nae The registered trustee sought directions from this Court as to whether he or the Official Trustee im Kankruptcy ("the Official Trustee') is the trustee of the estate of the bankrupt. The question arises in the following carcunstances, ' On 8 February 1983 the registered trustee gave to a jJyudgnent creditor Charles Parsons (S.A.) Fty. Ltd., a consent to act as trustee of the estates of such of three debtors, one of whom was the bankrupt, as might become bankrupt. This consent was given in accordance with form 30BR of the Schedule to the Rules under the Bankruptcy Act 1966 ("the Act") as follows: "THE BANKRUPTCY ACT 1966 CONSENT TO ACT AS TRUSTEE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL LIVISION No.112 of 1983 ) ) ) ) BANKRUPTCY DISTRICT OF THE STATE, OF) ) SOUTH AUSTRALIA ) ret VINCENT FAZZARL and SARA FAZZARS and MR.S.AGOST INO Creditor ex parte CHARLES PARSONS (S.A.) PITY. LTB. febtors I, JOHN HENDERSON JACKSON of 173 Warefield Street, Adelaide in the State of South Australia Chartered Accountant being a registered trustee within the neaning of section 5 of the Bankruptcy Act 1966, hereby consent to act as the trustee of the joint and separate estate of such of the debtors VINCENT FAZZARI, SARA FAZZARI and MR. S&S. AGOSTING as may become bankrupts or, af only one of them becomes a bankrupt, as trustee of the estate of that debtor. DATED this 8th day of February, 1983. Signed in my presences— (signed) E.R. Garvey Signature of witness Manager Occupation of witness (signed) 9 Don Terrace John H. Jackson Morphettville S.A. 5043 Registered Trustee . Address of Watmess ° This consent was failed with the Registrar on 9 February 1983 BS provided by s.156A(1) of the Act and rule 12(3)¢ba) thereunder at the time when the judgment creditor presented a petition being matter No. 112 of 1983 against the three debtors. It appears that neither the ereditor's petition nor the consent of the registered trustee was served on the bankrupt. ' On 24 February 1983 the bankrupt presented to the Registrar ai debtor's petition being matter No. 138 of 1983 pursuant to the provisions of 5.55 of the Act. At the same tine he swore an affidavit verifying his statement of affairs as follows: rey doa LO pe wat 5am Pr a ire -fF . Po wat "AFEIMAVIT VERIFYING STATEMENT, OF AFPALRS Bankruptey Act Bankruptcy District of the } State of South Australia } No. of 19 Re: A Agostino I, Salvatore Agostino (also known as Sam Agostino) of 8 Golfers Avenue, Seaton. MAKE GATH, ANL SAY; (1) That the Statement of Affairs annexed to this , affidavit and consisting of Sheets numbered 1 toa 7 inclusive contains, to tne best of my knowledge and belief, 8s true and complete statement of my affairs as al the 24th day of February 1983. (2) That in view of the statement of affairs abovementioned J felieve that the value of the property of wine which by virtue of Section 116 of the Act would be divisible among my creditors 1f my patation be accepted, is less than $10,000, (3) I Fnow the facts deposed herein of my own Frowledge. SWORN by the deponent the 24th day of February 1983 at Adelaide. (Signed) S.Agostinoa Before me, .Gade Commissioner for Declarations" The statement of affairs annexed to this affidavit purported to disclose liabilities totalling $15,139.36 and mo assets. In velirance no doubt upon paragraph (2) of the affidavit the Registrar accepted the petition and as a result s.55(3) of the Act took effect. It 1s in the following terms: "S3¢3) Subject to sub-section (4A>, where it appears to the Registrar that a petition presented to him under thas section 28 1m accordance wath the prescribed form and that the statement of l affairs accompanying the petitzon 21s also ain accordance with the preseribed form or the Court directs, under sub-section (4), the Registrar to accept the petition (3) the petition shall be accepted by the Registrar, who shall endorse at accordingly; and (hk) thereupon, by force of this sub-section, the debtor becomes a bankrupt by virtue of the presentation of the petition." Section S5(4A) provides: 55¢4A) The Registrar shall not, under sub-section (3), accept a petition presented to him under this sectiion, being a petition other than a petition im relation to which a direction under sub-section (4) 1s an force, and the Court shall not, under sub-sectzron (4), direct tite Registrar to accept such a petition, unless- (a) a registered trustee has, under sub-section 15GA(1)}, consented to act as the trustee of the estate of the debtor; or - + (b) af paragraph ¢a) does mot apply- (1) at appears to the Registrar, or to the Court, as the case may be, that the value . of the property of the debtor that would be divisible amongst his creditors by ' virtue of section 116 21f the petition were to be accepted (but not including any property acquired by or devolving on . him after the acceptance of the petition that would be 50 divisible) 1s less than $10,000, or, 1f another amount 25 for the time being prescrabed for the purposes of this sub-paragraph, that other amounts; oar €11) the debtor satisfies the Kegistrar, or the Court, as the case may be, that he ro wor has, an ali the circumstances of the case, taken all reasonable steps to obtain from registered trustees a consent under sub-section 156A(1) 1m respect of his estate but has been unable to obtain any such consent.*® Subsequently the Kegistrar issued, at the request, I informed, §.260(1)¢ was of the applicant the following certificate pursuant to e)¢i) of the Act. "CERTIFICATE OF TRUSTEESHIP BANKRUPTCY ACT 1966 BANKRUPTCY DISTRICT OF THE STATE OF SOUTH AUSTRALIA NO: 138 of 1983 RE: SALVATORE AGOSTINO a Bankrupt This 15 toa certify that JOHN HENDERSON JACKSON of 173 Wakefield Street, Adelaide ain the State of 4] | oe South Australia, as by force of sub-section 156A (3) of the Eankruptey Act 1966, the Trustee of the estate of SALVATORE AGOSTINO who became bankrupt on the 24th day of February, 1983. DATED this 22nd day of April 1983. (Signedd}R. O'Connor REGISTRAR" . at ae afte OE = one i f | : 4 rage ts Te tod Bc ed *. 'Ss see The applicant thereupon entered wpon the administration of the estate of the bankrupt. However in consequence of the hearing in this Court of an application im the matter of Frederick Close the applicant applied on 17 August 1983 for directions concerning his ' position. The difficulties which arise in this matter are ~N primarily 2m consequence of the relevant provisions of s.156A(3) of the Act which are as follows: "156A(3). Where —- (a) at the time when a debtor becomes 3a bankrupt, a registered trustee has, under sub-section {1)>, consented to act as the trustee of the estate of the dektor amd the consent has mot been revoled, the registered trustee becomes, at that time, by force of this sub-section, the trustee of the estate of the bankrupt, and (od aa" I considered these provisions in my reasons delivered on 19 August 1983 im the matter of Frederick, Close trading as F.B. Close Transport Ex parte John Raymond , Abbott in determining whether all registered trustees who have given their consent become by virtue thereof trustees of the estate of the bankrupt. Nuch of what I said has application to the circumstances of thas matter. In particular I decided for many reasons which have equal relevance here that the trustee who gave his consent in the proceedings aim which the sequestration order was made was the sole trustee. I acknowledged that this was not because the particular statutory provisions cleariy required this conclusion, ° though there were indications to this effect, but because of the y tel considerable practical difficulties were 1t otherwise. These practical difficulties will arise equally here, if all trustees, whether in this State or elsewhere and whether in petitions which are current or have lapsed, and who have given consents. become by force of s.156A(3) <tirustees of the estate. The difficulties for them are compounded when the debtor lodges his own petition and mo order is made 1m open court. There 1s however an addaitiomal difficulty which will fall on the Registrar. He is forbidden, and ain fact has na jurisdiction, to accept the debtor's petition unless either a registered trustee has consented or he us satisfied 'Unat the debtor's divisible property 158 less than $10,000 or the debtor has been wnable to obtain the services of a registered trustee. It was contended that s.55(4A) should be read, as imposing on the ' Registrar an obligstion to satisfy himself that there is not anywhere in his Registry or elsewhere a consent of a registered trustee, Only if he so satisfies himself, it was submitted, can he consider the sise of the divisible estate or whether reasonable steps have been taken by the: debtor to obtain the relevant consent. In my opinion this would ampose on the Registrar an almost impossible burden, and a burden such as the unsuccessful contrary argument an Re Frederick Close would impose on the °° trustee who consented im the proceedings in which the ~- bee 9, sequestration order was made. lt 1s my opinion that the Registrar is entitled to accept the petition if any one of the three circumstances 1S present. He 15 entitled, as he did an this matter, having satisfied himself that the value of the divisible property 15 less than $10,000, to accept the petition. if he 15. mot so satisfied, the debtor 15 required to take steps to obtain the consent of a registered trustee. If he does obtain this consent, §.959(¢44) eantatles the Registrar to accept. Alternalively if the debtor, having takem reasonable steps, fails to obtain a2 consent, the Registrar 12s «likewise empowered to accept the petition. It 35 only if 4 consent 18 obtained and filed in the proceedings when the petition 16 accepted that the consenting trustee ain those proceedings becomes by force of S.156A(3) trustee of the estate. In the other circunpstances the Official Trustee 15 trustee of the estate. This as the position here and therefore I made on 3 September 1983 the order declaring that the Official Trustee is the trustee of the estate of the bankrupt. ! certify that this and the % preceding - pages are a true copy of the Reasons for . Judgment of Mr. Justice Fisher. Pot ££ Cea neha pe, 99.53 arya any