fe "JUDGMENT No. FLOP none ' . t CATCHWORDS .- Bankruptcy - creditors petition —- debtor able but unwilling to pay debts - whether sequestration ought to be made - costs. Bankruptcy Act 1966 ss.40(1)(d)(i), 52(2) Re: CLEMENS BACHMANN Ex parte: ETHEL DORAN No. P. 368 of 1987 Sweeney J. Sydney 3 July, 1987 FEDERAL coy : AUSTRALIA. oF PA ~~ ——e {i ne no rere eng . - ed ee ee ee bo ——- "= 7 -— iad Seite A ences nme IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY No. P. 368 of 1987 RE: CLEMENS BACHMANN EX PARTE: ETHEL DORAN THE COURT: Sweeney J. PLACE Sydney DATE 3 July, 1987 MINUTES OF ORDER THE COURT ORDERS THAT: The petition be dismissed. Debtor to pay petitioning creditor's costs of and incidental to petition up to 17 June 1987 when the debtor's affidavit was served on the petitioning creditor and that the petitioning creditor pay the debtor's costs of and incidental . to the petition thereafter. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. ~— one Oe eee meme me aan ve van toys aot es IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION No.* P. 368 of 1987 BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY RE: CLEMENS BACHMANN EX PARTE: ETHEL DORAN THE COURT: Sweeney J. PLACE : Sydney DATE : 3 July, 1987 7 EX TEMPORE JUDGMENT This is a creditor's petition by Ethel Doran, the creditor, against Clemens Bachmann, the debtor, in which the creditor alleged that the debtor was just and truly indebted to her in the sum of $16,839.65, being the amount due under the final judgments recovered in the District Court at Sydney on the 31st day of May 1982, together with interest thereon at 10 per cent per annum on reducing balances from time to time and costs taxed pursuant to such judgment, the consideration for such debt being wages, overtime and holiday pay due to the creditor for work done for the debtor. The act of bankruptcy alleged in the petition was that the debtor within six months before the presentation of the petition committed the following act of bankruptcy, namely that on 5 no sre ee Sow ve woe ml A ON I I LAER [wu September 1986 execution having been issued against him under process of the District Court of New South Wales certain of his ~ property, namely yellow Falcon station sedan number MDMN-407, was held by the sheriff for 21 days. The act of bankruptcy alleged is said to be within the terms of section 40(1)(d)(i) of the Bankruptcy Act 1966 which I shall call the Act, which reads as follows: "A debtor commits an act of bankruptcy in each of the following cases - (d) if ~ {i) execution has been issued aginst him under process of a court and any of his property has, in consequence, either been sold by the sheriff or held by the sheriff for 21 days". By affidavit sworn on 20 February 1987 the creditor purported to verify the petition by deposing that the statements set out in paragraphs 1, 2 and 3 of the petition were within her own knowledge true. A further affidavit was relied upon in support of the petition, that of Paul Le Gay Brereton, her solicitor, also sworn on 20 February 1987, which purports to set out the history of the steps taken in execution of the judgment. This affidavit is open to the criticism that appropriate verification of an act of bankruptcy such as is alleged in this case should be provided by the person with first-hand knowledge of the facts such as the sheriff or one of his officers. ee nee ee ee H 7 ° ~ mov opriee as oe rr en re we erp toy 5 ee Ae net em een Me te enn toe en, By notice of intention to oppose the petition, dated 30 April 1987, the debtor claimed to be "solvent and able to pay his debts ~ as and when they fall due", obviously seeking to bring himself within the judgment in Re Sarina ex parte Wollondilly Shire Council, (1980) 43 FLR 163 and before the Full Court 48 FLR 372. In that case the debtor was shown to be able but unwilling to-pay his debts and it was held that he was entitled to the benefit of section 52(2) of the Act which provides that if the court is satisfied by the debtor that he is able to pay his debts it may dismiss the petition. The notice of opposition did not raise any other ground. The debtor relied upon his own affidavit sworn on 10 May 1987 in the first part of which he set out the fact that he refused to pay the balance of the debts which he owed to the creditor and gave his reasons for this attitude which it is unnecessary to reproduce. Paragraphs 16 and 18 of his affidavit, which dealt with his ability to pay, stated as follows - "16. I state that for the above reasons, I refuse to pay the debts to the creditor. I am in a position to pay such debts and set out my assets and liability below:- a. Half share in house at 15 Georges River Road, Croydon, $40,000.00. b. Laundromat business and freehold of a property at 153 Rawson Street, Auburn, $80,000.00. c. Laundromat businesses at Stanmore, Ashfield and Auburn, $80,000.00. d. Motor vehicle, $3,000.00. 18. I advise the Court that I am solvent and am able to pay my ordinary debts in the ordinary course of my business but refuse to pay the creditors debt for the above reasons". The debtor was cross-examined on these paragraphs but in my mre Roce ee ay - mart teen yt ree mae nnn ene te rier poo oe oo sat cee ee ne woe seqress ate ae ee Qo Oe nr een TE [oo opinion he has discharged the onus which rests upon him and the petition should be dismissed. He has sufficient assets to enable him to obtain funds quite quickly on the security of his properties. The discretion conferred upon the court by section 52(2) of the Act should in my opinion be exercised by dismissing the petition and I do so. On the question of costs, in Sarina's case at first instance the debtor was ordered by pay the petitioner's costs up to and including the proceedings before the Court on 28 April 1980 when it first appeared that the debtor was able to pay his debts, see 45 FLR 167. The debtor appealed against the order for costs made against him and the Full Court dismissed that appeal. Consistently with the authority of Sarina I order that the debtor pay the petitioning creditor's costs of and incidental to the petition up to 17 June 1987 when the debtor's affidavit was served on the petitioning creditor and that the petitioning creditor pay the debtor's costs of and incidental to the petition thereafter. I certify that this and the preceding three (3) pages are a true copy of the Judgment herein of the Honourable Mr. Justice Sweeney Dated: 3 July, 1987 Associate ee — lu P. 368 of 1987 *~ Counsel for the petitioning creditor: Mr P. Brereton Solicitors for the petitioning creditor: Counsel for the debtor: Solicitors for the debtor: Date of hearing: 3 July, Duncan Baron & Co Mr S. Torrington Sally Nash & Co aye oe ee | a Le RR I mae pene ~. yen fe ote rs na see a ne se ee we