Re Wood, Richard H v Ex parte Deputy Commissioner of Taxation [1996] FCA 776

IN THE FEDERAL COURT OF AUSTRALIA ) ) BANKRUPTCY DISTRICT OF THE STATE OF ) NP 715 of 1996 ) NB 2443 of 1996 NEW SOUTH WALES ) ) GENERAL DIVISION ) RE: RICHARD H. WOOD Applicant EX PARTE: DEPUTY COMMISSIONER OF TAXATION Respondent Coram:Davies J Place: Sydney Date: 20 August 1996 REASONS FOR JUDGMENT In this matter, the question before the Court is whether the Court should accept or reject a debtor's petition. The power to decide this matter is conferred upon the Court by s.55(3A) of the Bankruptcy Act 1966 (Cth). The matters put by counsel for the petitioning creditor in support of the rejection of the debtor's petition are that the creditor's petition was filed first and that the periods of relation back referrable to the debtor's petition and to the creditor's petition are not identical. No matter has been specifically pointed out by counsel that might result from this difference, nevertheless it might turn out, as facts unfold, that there would be some advantage to the creditors by having the creditor's petition proceed. The third matter relied upon by counsel for the petitioning creditor is that the trustee who is nominated by the debtor is not acceptable to either to the petitioning creditor or the two other major creditors who support the petitioning creditor. The matters put on behalf of the debtor are that the trustee nominated by the debtor carries on a practice at Cootamundra, at the firm of Nicholls & Co., Chartered Accountants. That firm is therefore situated closer to the debtor and to the local creditors than is the trustee nominated by the petitioning creditor, who is located in Sydney. Moreover, counsel for the debtor referred to the fact that the debtor's nominated trustee has already done some work in relation to the debtor's affairs. No objection is raised to the trustee nominated on behalf of the creditor save that he is situated in Sydney. It is not ordinarily the practice of the Court to concern itself in the matter of the appointment of a trustee. The practice of the Court is to leave the choice of the trustee to the petitioning creditor unless there is some matter raised which shows a ground upon which the Court would find it would be improper or inappropriate for that person to be appointed as a trustee. It has not been suggested that there is any reason that the trustee nominated by the petitioning creditor, Mr M.W. Prentice, should not be trustee other than that he is located in Sydney whilst the debtor has carried on his practice in Cootamundra. That seems to me not to be a sufficient reason not to appoint him as trustee. Moreover, as the trustee nominated by the debtor is opposed by the petitioning creditors and the two other major creditors, it would be unlikely that the Court would think it proper that he should be appointed. This is a matter that ought to be left to the petitioning creditor unless it is shown that there is some good reason why the Court should interfere. No such reason has been shown on the present case. Accordingly, having regard to the fact that the petitioning creditor's petition was lodged first, that there could be some advantage to the creditors from proceeding with that petition and that the creditor's trustee has nothing said against him whilst there are views against the debtor's trustee, I think that the debtor's petition should be rejected. I am satisfied with the proof of the act of bankruptcy and of the other matters which the Bankruptcy Act requires to be proved. There will be a sequestration order against the estate of the debtor, Mr Richard H. Wood. I certify that this and the 2 preceding pages are a true copy of the reasons for judgment herein of the Honourable Justice Davies. Associate: Date: 20 August 1996 Counsel for the debtor: M. Ryckmans (sol.) Solicitors for the debtor: P.A. Somerset & Co. Counsel for the petitioning creditor: M.R. Aldridge Solicitor for the petitioning creditor: Australian Government Solicitor Date of hearing: 20 August 1996 Date of judgment: 20 August 1996