Re Zaffino, Domenico v Fork Truck Hire & Transport Pty Ltd [1996] FCA 57

IN THE FEDERAL COURT OF AUSTRALIA BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA No VB 2074 of 1995 RE: DOMENICO ZAFFINO A Bankrupt BETWEEN: DOMENICO ZAFFINO Applicant -and- FORK TRUCK HIRE & TRANSPORT PTY LTD Respondent Coram: Olney J Place: Melbourne Date: 16 February 1996 REASONS FOR JUDGMENT This is an application by a bankrupt pursuant to s 153B of the Bankruptcy Act for the annulment of the bankruptcy. The Court may annul a bankruptcy if it is satisfied that the sequestration order ought not to have been made. In the present case it is said that the sequestration order ought not to have been made because there was in truth no real debt behind the judgment relied upon by the petitioning creditor. Where in truth there is no debt, an annulment order order is appropriate (See McCollum; ex parte The Bankrupt (1987) 71 ALR 626; Re Deriu (1970) 16 FLR 420; Re Raymond, ex parte Raymond (1992) 36 FCR 424). On 19 January 1995 Fork Truck Hire & Transport Pty Ltd (the respondent) caused a bankruptcy notice to be issued against Domenico Zaffino (the bankrupt) in respect of a judgment debt and interest totalling $6,557.57. The bankruptcy notice required the bankrupt to respond to its demand within 14 days of its service on the bankrupt. Service was effected on 23 March 1995. The bankrupt did not respond to the notice nor did he make any application for an extension of time to comply or to have the notice set aside. The bankrupt accordingly committed an act of bankruptcy on 6 April 1995. The respondent presented a bankruptcy petition against the bankrupt on 5 May 1995 relying on the act of bankruptcy committed on 6 April 1995. The petition was served on 5 July 1995. It was returnable on 28 August 1995. The bankrupt did not appear on the return date and a sequestration order was made on that day. On 15 September 1995 the bankrupt filed an application seeking the annulment of the bankruptcy. The matter came on for hearing on 14 December 1995. The bankrupt (who had previously been represented by a solicitor) appeared in person. After hearing argument I adjourned the application until 7 February 1996 and gave the parties leave to file and serve further affidavit material. The hearing was resumed on 7 February 1996. The petitioning creditor filed further affidavit material but the bankrupt did not take the opportunity to do so. Following further argument I reserved my decision. The bankrupt disputes that any debt is owing by him to the respondent and evidence contained in affidavits sworn by himself on 13 September 1995 and by his father Franco Zaffino sworn on 21 November 1995 is to that effect. The respondent relies on affidavits of Jeffrey Lewis Duneman (its solicitor) sworn 24 October 1995 and of Tony Hagg (a director of the respondent) sworn 31 January 1996. In his affidavit in support of the application the bankrupt says as follows concerning the question of whether a debt is owing by him to the respondent: 5. Some time in September of 1991 my father, Franco Zaffino ordered a Fork Lift Truck to be used in his detergent manufacturing business. The contract of hire was between Fork Truck Hire and Transport Pty Ltd and L.C.P. Pty Ltd (A.C.N. 004 955 131) herein referred to as "L.C.P. Pty Ltd". Annexed hereto and marked 'DAZ 1' is Fork Lift Truck Hire Contract No 5867 in the name of L.C.P. Pty Ltd. Although a notation next to L.C.P. Pty Ltd states "(T/A Melchem Int.)", in fact Melchem International was never a trading name of L.C.P. Pty Ltd. I accepted delivery of the Fork Lift Truck, on behalf of my father's company, L.C.P. Pty Ltd and my signature appears on the contract of hire. 6. It was never my intention to be personally bound to the contract of hire of the Fork Lift Truck. The Fork Lift Truck Hire was arranged by my father, Franco Zaffino, and it was on his instructions that the hire contract was made out to L.C.P. Pty Ltd. 7. Subsequent to the hire, a number of invoices were made out to L.C.P. Pty Ltd and in fact, the hiring fees were paid by my father, through his company, L.C.P. Pty Ltd. Annexed hereto and marked 'DAZ 2' are a number of invoices clearly made out to L.C.P. Pty Ltd. A statement dated August 1992 is also made out to L.C.P. Pty Ltd. 8. It was never my intention to be personally liable for the payment of my father's hire of the Fork Lift Truck, as the Petitioning Creditor well knew. 9. I am informed by my father and verily believe that the petitioning creditor sent monthly statements of account to my father's company, L.C.P. Pty Ltd and payments were made by my father from his company's cheque accounts.