Re Abdulnour, Solie Ex Parte Abdulnour, Solie v CBFC Leasing Pty Ltd & Anor [1996] FCA 640

CATCHWORDS BANKRUPTCY - application for annulment of bankruptcy under s153B of the Bankruptcy Act 1966 - whether the Court is satisfied that the sequestration order ought not to have been made. Bankruptcy Act 1966 ss153B, 178. RE SOLIE ABDULNOUR; EX PARTE SOLIE ABDULNOUR v CBFC LEASING PTY LIMITED & ANOR

VB No 1622 of 1993 Olney J Melbourne 17 July 1996

IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA No VB 1622 of 1993

RE: SOLIE ABDULNOUR BETWEEN: SOLIE ABDULNOUR Applicant -and- CBFC LEASING PTY LIMITED First Respondent OFFICIAL TRUSTEE IN BANKRUPTCY Second Respondent

Coram: Olney J Place: Melbourne Date: 17 July 1996

REASONS FOR JUDGMENT On 13 May 1996 the applicant filed an application seeking an order pursuant to s 153B of the Bankruptcy Act 1996 annulling the bankruptcy which occurred on the making of a sequestration order against her estate on 21 June 1993. In the circumstances of this case, the Court may make an order annulling a bankruptcy if it is satisfied that the sequestration order ought not to have been made. The background to the bankruptcy is that the applicant was made bankrupt on the petition of CBFC Leasing Pty Limited (the first respondent) a company which is acknowledged to be a wholly owned subsidiary of the Commonwealth Bank of Australia. The debt on which the sequestration order was based was a judgment of the County Court at Melbourne obtained on 11 August 1992 in a total sum of $45,101.71. The judgment debt arose out of a guarantee which the applicant had signed on 10 July 1990 when a company of which she was a director and secretary leased a Ford motor car from the first respondent. The applicant became liable under the guarantee when the lessee defaulted under the lease. The applicant was discharged from bankruptcy by operation of s 149 of the Bankruptcy Act on 14 July 1996. Insofar as it can be ascertained from the papers, the basis on which the annulment is sought is set out in paragraph 14 of the affidavit of the applicant sworn on 13 May 1996. I propose to refer to the provisions of that paragraph in which the applicant deposed as follows: I believe that the sequestration order ought not have been made on the following basis: (a) CBFC's sole purpose was to obtain a sequestration in respect of me and not to minimise their loss by first selling the vehicle before seeking recovery of any amount outstanding against myself as guarantor. (b) The vehicle was always made available for inspection and return to CBFC. No formal demand for the return of the vehicle was ever made by CBFC except for the issuance of a search warrant on 1 September 1994, some 14 months after the making of a sequestration order in respect to me and over two years after CBFC obtained judgment against me for amounts owing under the lease. Then there is another sub-paragraph (b): CBFC did not genuinely attempt to request the return of the vehicle to recover possession of the vehicle. CBFC should have engaged the assistance of the police to recover the vehicle at any time up to the making of the sequestration order against my estate in order to sell the vehicle and mitigate its loss if any. No attempt was made to obtain a court order for the delivery up of the vehicle.