Cooley, T.L. v Westpac Banking Corporation [1995] FCA 282

IN THE FEDERAL COURT OF AUSTRALIA BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA GENERAL DIVISION No VP 134 of 1994 Re: TERRENCE LAMBERT COOLEY Debtor Ex parte: WESTPAC BANKING CORPORATION Creditor

Coram: Olney J Place: Melbourne Date: 3 May 1995 MINUTE OF ORDERS THE COURT ORDERS THAT: 1. A sequestration order be made against the estate of the debtor Terrence Lambert Cooley. 2. The petitioning creditor's costs of and incidental to the petition including any reserved costs be taxed and paid in accordance with statute. THE COURT NOTES: Date of Commission of act of Bankruptcy - 18 November 1993 Trustee: Paul Anthony Pattison

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA GENERAL DIVISION No VP 134 of 1994 Re: TERRENCE LAMBERT COOLEY Debtor Ex parte: WESTPAC BANKING CORPORATION Creditor

Coram: Olney J Place: Melbourne Date: 3 May 1995 REASONS FOR JUDGMENT The petitioning creditor seeks a sequestration order against the estate of the debtor. The petition was presented on 11 February 1994 and was served on 26 March 1994. For various reasons which are not presently relevant the hearing of the petition was adjourned on a number of occasions. It was finally heard by me on 24 April 1995 when I reserved my decision. On 8 July 1994 Paul Anthony Pattison a registered trustee in bankruptcy within the meaning of s 5 of the Bankruptcy Act (the Act) consented to act as the trustee of the estate of the debtor in the event that he becomes a bankrupt. On 10 February 1995 an order was made pursuant to s 52(5) of the Act that the period at the expiration of which the petition will lapse be a period of 24 months commencing on the date of presentation of the petition. In the petition the petitioning creditor claimed to be a creditor of the debtor in respect of a debt of $957,625.64 pursuant to a guarantee dated 29 January 1991 given by the debtors to the petitioner. The petition asserts that the debtor committed the following acts of bankruptcy: (a) On 18 November 1993 he signed an authority under s 188 of the Act (s 40(1)(i)). (b) On 3 December 1993 a meeting of his creditors was called pursuant to such authority (s 40(1)(j)). (c) On 21 December 1993, having been required by a special resolution of a meeting of his creditors so called to present a debtor's petition within 7 days, he failed without sufficient cause to present such petition within the time specified in the resolution (s 40(1)(b)). On 27 July 1994 the debtor filed a notice of intention to appear at the hearing of the petition and to oppose the same on the ground that the petitioning creditor is not a creditor of the debtor or alternatively, the debtor has a counterclaim, set-off or cross-demand equal to or exceeding the balance of the debt owed by the debtor to the petitioning creditor. Upon the hearing of the petition the debtor did not pursue the alternative ground of objection and did not call any evidence. Nor did his counsel seek to cross-examine the deponents of the several affidavits relied upon in support of the petition. In the circumstances it is unnecessary to canvass the rather complex series of loans, mortgages and guarantees entered into by the debtor and several companies with which he was at the relevant time associated. It is sufficient to say that the guarantee upon which the petitioning creditor relied was executed by the debtor on 29 January 1991. It is what is commonly called an "all moneys" guarantee in respect of the liability to the petitioning creditor of a company then known as Cooley-Jones & Co Pty Ltd which later changed its name to Flo-Bin (Australia) Pty Ltd. Under the guarantee the debtor guaranteed to the petitioning creditor the payment when demanded in writing from the debtor of the moneys secured by the guarantee. The only live question on the hearing of the petition was whether the petitioning creditor had proved that a demand had been made under the guarantee so as to render the debtor liable to pay the petitioning creditor the moneys thereby secured. The evidence relating to the demand was contained in a single paragraph of the affidavit of Edward John Cumper (Cumper) sworn on 11 January 1995 and a copy document exhibited thereto. In his affidavit Cumper deposed to being a Senior Manager, Recoveries in the full time employ of the petitioning creditor and as such to have access to the books and records of the petitioning creditor. After setting out in considerable detail particulars of the various security documents executed in favour of the petitioning creditor by the debtor and his companies (including the guarantee referred to above which he described as the Cooley guarantee) Cumper said (at paragraph 20): 20. My solicitors, Minter Ellison, advise me and I verily believe that they served a demand dated 22 September 1993 on Mr Cooley under the Cooley Guarantee on or about 22 September 1993. Now produced and shown to me and marked with the letters "EJC-10" is a copy of the demand. The following is a copy of the document marked EJC-10: