CATCHWORDS BANKRUPTCY - security provisions - non-compliance by trustee - whether registration should be suspended - whether non-complying trustee should have new trusteeship. Bankruptcy Act, 1966 ss.155(5A), 155(5C), 156A(3)(a), 160 Re: John Lingard Ex parte: Queensland Cement Distributors QLD P 731 of 1986 PINCUS J. BRISBANE 1 SEPTEMBER 1986 IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) QLD P 731 of 1986 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: JOHN LINGARD EX PARTE: QUEENSLAND CEMENT DISTRIBUTORS MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 1 SEPTEMBER 1986 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. I find the act of bankruptcy alleged in the petition. 2. I am satisfied of proof of the other matters in which the act requires proof. 3. I note that Mr. I. Worrell, registered trustee, has consented to act as trustee of the estate of the debtor. 4. I make a sequestration order against the estate of the debtor and order that the costs of the petitioning creditor of and incidental to the petition be taxed and paid in accordance with the Act. 5. I declare that the said I. Worrell is, by force of $.156A(3)(a) of the Act, made the trustee of the estate of the debtor notwithstanding the non-compliance by the said I. Worrell with s.155(5A) of the Act. 6. I order that the application of the registrar against Mr. Worrell under s.155(5C) be adjourned until Monday, 15 September 1986 at 10,15 a.m. NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION ~ ~ QLD P 731 of 1986 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: JOHN LINGARD EX PARTE: QUEENSLAND CEMENT! DISTRIBUTORS PINCUS J. 1 SEPTEMBER 1986 EX TEMPORE REASONS FOR JUDGMENT There are two matters before me. One 1s a petition for a sequestration order, no. 731 of 1986, against John Lingard. The Registrar has also brought before me a viva voce application under s.155(5C) of the Bankruptcy Act. The latter application is founded upon evidence that the trustee (who has consented to act in the matter of John Lingard, the consent having been filed on 8 July 1986) has not complied yet with the provisions of s.155(5A) inserted by Act No. 21 of 1985. There have apparently been numerous instances of such non-compliance by other trustees. It is suggested that the appropriate course is to suspend the registration of the trustee, Mr. Worrell, for sufficient time to allow him to fulfil his obligations under s.155(5A). The failure of Mr. Worrell to comply with these provisions does not seem to be accompanied by any good excuse. be The circumstances, however, seem to me such that [f should give him more time to doso, in the sense that, without formally extending the time mentioned in s.155(5A), I propose to adjourn the Registrar's application until Monday, 15 September 1986, at 10.15 a.m. Mr. Whitman, who has appeared for the trustee, Mr. Worrell, has pointed out that compliance with the relevant provision is at this stage not a matter which is wholly within Mr. Worrell's control. It depends upon securing the ready co-operation of the State stamp duties authorities and also the co-operation of the surety, Suncorp. Nevertheless, it appears to me that, if the matter is not attended to by 15 September 1986, prima facie it will be necessary to suspend Mr. Worrell's registration. Of course, 1t is clear that there has been ample time to comply with s.155(5A) already. The other matter which has given me pause is whether, in view of Mr. Worrell's non-compliance with s.155(5A), he should be allowed to become the trustee of the estate of Mr. Lingard. It is submitted on behalf of Mr. Worrell by Mr. Whitman that I have no discretion in the matter and that, if a sequestration order is made, then Mr. Worrell must become the trustee because he has consented and his consent has not been revoked. That appears to be correct, nor does it seem possible to make an order, consistently with s.155(5C), suspending the trusteeship only as regards the estate of Mr. Lingard. Since the circumstances are not the fault of the petitioning creditor, it appears that there is no practical choice other than to make a sequestration order the result of which will be that Mr. Worreli will become the trustee. Mr. Allen has drawn attention to s.160 which would have the effect of making the Official Trustee the trustee of this estate during any period of suspension under s.155(5C). T am concerned about the complications which are likely to ensue, as it seems to me, in respect of the estates presently being administered by Mr. Worrell if there 1s an interregnum and I am anxious to avoid that result. However, it does not seem likely that that result can be avoided if matters are not put in order fairly soon, 1.e. by Monday, 15 September. Therefore the orders which I shall make are: in the creditor's petition no. 731 of 1986 against John Lingard, I find the act of bankruptcy alleged in the petition; Iam satisfied of proof of the other matters of which the Act requires proof; I note that Mr. I. Worrell, registered trustee, has consented to act as trustee of the estate of the debtor; I make a sequestration order against the estate of the debtor and order that the costs of the petitioning creditor of and incidental to the petition be taxed and paid in accordance with the Act. Also, in the same matter, I make a declaration that the said I. Worrell is by force of s.156A(3)(a) made the trustee of the estate of Mr. Lingard, notwithstanding his non-compliance with s.155(5A) of the Act. As to the application of the Registrar against Mr. Worrell under s.155(5C), I order that that application be adjourned until Monday, 15 September 1986 at 10.15 a.m. { certify that this and the preceding pages sre a true ccpy of the reascns for