IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISLON BANKRUPTCY DISTRICT OF THE STATE No. P1241 of 1983 OF NEW SOUTH WALES AND THE NN ye AUSTRALIAN CAPITAL TERRITORY Re: VICTOR SUTITERLAND-CROPPER Ex parte: NATIONAL ACCEPTANCE CORPORATION PTY. LIMITED ORDER JUDGE MAKING ORDER: Neaves J. DATE OF ORDER: 22 December 1983 WHERE MADE: Sydney THE COURT ORDERS THAT: Brian Raymond Silvia, the trustee under the deed of assignment in pursuance of Part X of the Bankruptcy Act 1966 made the 5th day of September 1983 between Herbert Victor Cropper and the said Brian Raymond Silvia, pay to National Acceptance Corporation Pty. Limited out of the estate of the said Herbert Victor Cropper the taxed costs of National Acceptance Cor-- poration Pty. Limited of the petition herein pre- sented on 12 September 1983 including the costs of the proceedings on 5 and 12 December 1983 and this day. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION ) ) ) ) BANKRUPTCY DISTRICT OF THE STATE ) No. P1241 of 1983 ) OF NEW SOUTH WALES AND THE ) ) ) AUSTRALIAN CAPITAL TERRITORY Re: VICTOR SUTHERLAND~CROPPER Ex parte: NATIONAL ACCEPTANCE CORPORATION PTY. LIMITED REASONS FOR JUDGMENT CORAM: Neaves J. DATE: 22 December 1983 This is an application by National Acceptance Corporation Pty. Limited ("the judgment creditor") for an order providing for its costs of a creditor's petition presented against Victor Sutherland-Cropper ("the judgment debtor"). On 31 May 1983 a bankruptcy notice was issued on the application of the judgment creditor addressed to Jonathan Sutherland-Cropper and the judgment debtor based upon a judgment for $11,687.80 recovered in the District Court of New South Wales on l2 April 1983. That notice was served on the judgment debtor on 27 June 1983. An act of bankruptcy was committed on 18 July 1983 by reason of the judgment debtor's failure, in terms of paragraph 40(1)(g) of the Bankruptcy Act 1966 ("the Act"), to comply with the requirements of the notice or satisfy the Court that he had a counter-~claim, set-off or cross-demand equal to or exceeding the amount of the judgment debt. A creditor's petition against the judgment debtor based on that act of bankruptcy was executed under the seal of the judgment creditor on 6 September 1983 and presented to the Court on 12 September 1983. The petition was served personally on the judgment debtor on 22 November 1983. It came before the Court on 5 December 1983 when, on the application of the judgment creditor, it was dismissed on the ground that the judgment debtor had, prior to the presentation of the petition, assigned his estate for the benefit of his creditors. An application made by the judgment creditor for an order for the payment of its costs was adjourned to 12 December 1983. That is the application that is now before me. On 3 August 1983 one Herbert Victor Cropper signed an authority pursuant to sub-section 188(1) of the Act authorising a registered trustee, Brian Raymond Silvia, to call a meeting of his creditors and to take over the control of his property. On the same day Mr. Silvia consented to exercise the powers conferred on him by that authority. A copy of the authority with the consent endorsed thereon was filed in the office of the Registrar in Bankruptcy on 8 August 1983. A meeting of creditors was held on 30 August 1983. The creditors who attended that meeting, by special resolution, resolved that Herbert Victor Cropper execute a deed of assignment under Part X of the Act. The creditors also resolved that Mr. Silvia ("the trustee") be appointed trustee of the deed. A certificate that those resolutions had been passed was signed by the chairman of the meeting on 1 September 1983. It was subsequently filed in the office of the Registrar in Bankruptcy but not until 19 Sept- ember 1983. Minutes of the meeting were prepared. The Chairman of the meeting signed them on 2 September 1983 and a copy was filed in the office of the Registrar in Bankruptcy on 19 September 1983. A deed of assignment expressed to be in pursuance of Part X of the Act was executed by Herbert Victor Cropper and the trustee on 5 September 1983. A copy of the deed and a copy of the debtor's statement of affairs were filed in the office of the Registrar in Bankruptcy on 19 September 1983. I am satisfied that the Herbert Victor Cropper party to the deed of assignment is identical with Victor Sutherland-Cropper referred to in the judgment, the bankruptcy notice and the creditor's petition to which I have referred. : There is evidence before me, which I accept, ; that neither the judgment creditor nor its solicitors were aware until 30 November 1983 of the holding of the meeting of creditors or of the execution of the deed of assignment. , The judgment debtor did not disclose to the trustee either in his statement of affairs or otherwise that he was indebted to the judgment creditor and this explazns, no doubt, why no notice was given to the judgment creditor of the holding of the meeting of creditors on 30 August 1983. It may be noted that an affidavit was sworn on 13 September 1983 on behalf of the judgment creditor stating that the deponent had on that day searched the proceedings filed with the Registrar in Bankruptcy under the bankruptcy notice issued on the application of the judgment creditor against Jonathan Sutherland-Cropper and the judgment debtor and bearing date 31 May 1983. That search failed to disclose the authority under sub-section 188(1) of the Act which had been signed by the judgment debtor on 3 August 1983 and filed in the office of the Registrar 1n Bankruptcy on 8 August 1983. Perhaps the different name under which the authority was given contributed to this failure. The judgment creditor seeks an order that the trustee pay the costs of the petition out of the estate of the judgment debtor which has become vested in him pursuant to the deed of assignment under Part X of the Act. The trustee was informed that the judgment creditor proposed to seek such an order but he did not appear and was not represented when the matter came before the Court on 12 December 1983. The judgment debtor also took no part in the proceedings. Section 32 of the Act provides - "The Court may, in any proceeding before it, including a proceeding dismissed for want of jurisdiction, make such orders as to costs as it thinks fit." That provision confers a very wide discretion on the Court. It is clearly wide enough to empower the Court to make an order for costs binding on the trustee if the circumstances are such as to justify such an order: see Re Mitchell; Ex parte S.A. Tractor Co. Ltd. (1967) 9 F.L.R. 286. I am satisfied that the judgment creditor, having received no notice of the events leading to the execution of the deed of assignment, was fully justified in presenting the creditor's petition on 12 September 1983. The action of the judgment debtor in Failing to include the name of the judgment creditor amongst those to whom he was indebted has not been explained. Nor has his failure to inform the judgment creditor of the execution of the deed when served personally with the creditor's petition on 22 November 1983. In the circumstances I am of opinion that an order for costs as sought should be made. I, therefore, order that Brian Raymond Silvia, the trustee under the deed of assignment, pay to the judgment creditor out of the estate of the judgment debtor the taxed costs of the judgment creditor of the petition presented on 12 September 1983 including the costs of the proceedings on 5 and 12 December 1983 and this day. I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Neaves. DATED: 22 December 1983 [2 'Oe Associate