Re Giuca, G. & Anor v. Ex parte Giuca, G. [1986] FCA 64

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CATCHWORDS Bankruptcy - annulment - unsecured debts being debts that have been proved in the bankruptcy having been paid in full - person claiming to be a secured creditor failing to prove debt - claim

disputed - separate proceedings pending in relation to disputed debt - whether order of annulment should be granted.

Bankruptcy Act, 1966 - s.154(1)(b)

John v. Mendoza £19391 1 K.B. 141 More v. More £1962] Ch. 424 Re Southwell; Ex parte Southwell (1978) 23 A.L.R. 253

RE: GIOVANNI GIUCA AND CARMELA GIUCA EX PARTE: THE BANKRUPTS

No. 263 of 1984

Jenkinson J. 17 March, 1986 Melbourne

IN THE FEDERAL COURT OF AUSTRALIA

) GENERAL DIVISION ) NO. 263 of 1984 BANKRUPTCY DISTRICT OF THE STATE OF ) VICTORIA RE: GIGVANNI GIUCA AND

CARMELA GIUCA Bankrupts

EX PARTE: THE BANKRUPTS

Applicants

CORAM: Jenkinson J. PLACE: Melbourne DATE: 17 March, 1986

REASONS FOR JUDGMENT

Applications for orders annulling the bankruptcies of Giovanni and Carmela Giuca, a sequestration order against the

estate of each of whom was made by this court on 10 April 1984.

The ground of each application is that specified in 5.154(1)(b) of the Bankruptcy Act 1966 - "that -he unsecured debts of the bankrupt, being debts that have been proved in the bankruptcy, have been paid in full". The evidence establishes the ground. On the hearing of the application a person who claims to be a secured creditor of the bankrupts, Sergio Casonato, appeared by Mr. Nash of counsel. No proof of debt has been lodged in either bankruptcy by Mr. Casonato. His claim to be a secured creditor is disputed by the bankrupts and an action in which he 1s

Plaintiff and the bankrupts are defendants is pending in the

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Supreme Court of Victoria, wherein the mortgage which Mr. Casonato claims to secure payment of the debt is impugned by the bankrupts as vo1d or voidable. If in the result it is established that Mr. Casonato does not hold security for payment of the debt, Mr. Nash submits that there 1s doubt whether, after an order annulling the bankruptcies has been made, an action for recovery of the debt could be maintained. The principal source of the doubt which Mr. Nash sought to raise is the reasoning of du Parecg, L.d. (sitting as a judge of the King's Bench Division) in John v. Mendoza [£1939] 1 K.B. 141. Mendoza, being a bankrupt by whom a debt provable in the bankruptcy was owed to John, persuaded John to declare falsely to the Official Receiver that no debt to him existed. The bankruptcy having been thereafter annulled on the ground that the debts of the bankrupt had been paid in full, John's action to recover the debt failed, inthe judgment of du Parcq, L.d., because the order of annulment constituted an estoppel by record, binding on John as a creditor who had with knowledge of the bankruptcy abstained from proof of his debt in the bankruptcy and had thereby placed himself in the position of a party to the bankruptcy proceedings, the ultimate order in which negatived the existence of any debt by reciting the payment of the debts of the