.? SQ NOT FOR DISTRIBUTION IN THE FEDERAL CoUuRT oF AUSTRALIA EXERCISING FRDERAL JURISDICTION o pad Cr ™ GJ ry tu CG cary ray hae tu oh IN BANKRUETC 2 BANKRUETC2 DISTRICT GF THE STATE OF VICTGRIA Re : JAMES GOTSIGS Judgment Debtor Ex parte : GWEIGER NOMINEES ETT. LIMITED Fetirtiocning Creditor foe \ ried COURT: NORTHROP J. DATE: 21 OCTOBER 1386 FLACK: MELBOURNE EX TEMFORE REASUNS FOR JUDGNENT There are two matters for consideration before the Court. The debtor is seeking an adjournment of che hearing of the petition and the peritioning creditor is seeking leave to amend the petition by substituting paragraphs < and 4 to what appears currently in the petition. These two matters are, to some axtent, inter-mixed. I propose to deal first with the application for the leave to amend. The matter originally came on for hearing before me yesterday when the debtor appeared in gerson. He has certain aifficulty with the English language; 25 rather excitable; has a tendency not co answer yuesctions and goes off on frolics of his own in justification of matters which are not oe 4, Pa I. I. | L I I. t h |. L ' ! re, ve being sought at the time. Having regard to the difficulties I encountered yesterday in trvinag to understand what the matter was all about, and although an application was made to amend the petition yesterday, I was not in a position ta consider that, s0 I adjourned che matter cto today and strongly advised the debtor cto have legal representation or representation of some kind here today. At present, paragraphs 2 and 4 of the petition are almost méaningleéss and paragraph 4 Tails to comply with Che requirements of Form 5 of the Bankruptcy Rules which require the petition to set out the nature and date or dates of the act or acts of bankruptcy relied upon. The petition as presently framed does not do so at all. It merely makes reference to the serving of a bankruptcy notice on 23 June 15386. It does not say whether the notice was a 14 day notice, a 21 day notice or any other period. Looking at the petition, it is completely impossible to work gut when the act of bankruptcy was committed. ffotice of proposed amendments has been given to the solicitors for the debtor who 15 represented today by counsel and in all the circumstances I think Lt 1s appropriate to give leave to amend the petition in the form sought and to dispense with further verification and service of the petition as amended. But, because of the nature of the amendments which are far more than merely a clerical amendment, the Court should refuse to award to the petitioning creditor costs which were reserved yesterday. ' t Bo Narre memes me ey pert op mm renee -f we epee ae ae 1% aa] us I curn to consider the yuesbtion of the adjournmenc. The debtor apparently carries on a manufacturing business of Manufacturing sportwear under the name Jim-Jam. In July of last year he entered into a deed of arrangement with his creditors but that deed was terminated this year when the current petitioning creditor obtained a judgment against the debtor in the sum of approximately $24,000. Applying a presumption of compliance with the requirements of the Bankruptcy Act, one draws the inference that that debt was incurred after the deed oF arrangemenc was entered into. The jiudament Jebt upon which che petition is founded was made on 21 April 1986, the bankruptcy notice was served on 23 June 1386 and the act of bankruptcy occurred on 7 July 13986. The debtor gave evidence on oath in support of the application for the adjournment and his evidence is to the effect that he owes about $160,000; he has stock on hand of about $120,000 and 15 owed about $75,000 by other debtors. He desires to keep on manufacturing to try and trade out of that debt position and if need be to seek a Part X& arrangement in the very near future. It was urged upon me by counsel for the petitioning creditor that in reality the debtor was insolvent. The past history disclosed the ract that 10 was most unlikely that the debtor could trade out of his current Fanancial position and that the Court should continue with the hearing of the petition which, 1f proved, should' support the making of a sequestration order, among other things to protect the sublac qenérally and seople who are likely to deal with -Ehe debtor, and also to prevent che debtor from dissipating his assets. They are strong araduments but, in my opinion, this is a case where there should be some adjournment for a relatively short period, the reason being that this 15 a case where the judgment was early this year, the act of bankruptcy was in July of thi2s vear and vesterday was the first return date of the hearing of the petition. I have already made some comments about my assessment of the debtor. One has certain doubts about his abilities as a businessman to conduct his business adequately to trade out of his current Financial position. I[t is true that at the moment he is facing charges in connection with Cheques which were dishonoured. Those cheques are related to the judament obtained by the petitioning creditor against the debtor. UOespite all those factors, im the exercise of mr discretion, I consider that the debtor should be given some short time to enable the matter to stabilise to some extent so that when the matter comes on for hearing again before this Court, the Court will be in a position to have a better understanding of the whole matter, and if need be, to proceed with the hearing of the petition which now is ina proper form. i : i l, [ Le | The he December 13986 at creditor are res aring of the petition is adjourned to 8 10.00 a.m. The costs of the erved. | Be & tue of Ream note ie ae at Bisain ef ee al | Honour: rr onoyrabte, Mix, panos iQ Sertays . hy " | Dasae tifa ib C Por Loccle | Poy a ts at qour (4) petitioning x eye ee