Re Menere, Paul Henry v Donnelly, Max Christopher & Anor [1996] FCA 796

CATCHWORDS BANKRUPTCY - Application to annul sequestration order - Bankruptcy Act 1966 (Cth) s 153B - broad discretion - Bankruptcy Notice will result in available act of Bankruptcy notwithstanding judgment on which it is based is set aside - setting aside judgment conditional - conditions not fulfilled - no reasonably arguable defence. Bankruptcy Act 1966 (Cth) s 153B Corporations Law, s 183 Re Vella; Ex parte Seymour (1983) 67 FLR 287, cited Re Hayes; Ex parte Thomas Borthwick & Sons (Australasia) Ltd (1970) 18 FLR 216, cited Re Handby; Ex parte Flemington Central Spares Pty Limited (1967) 10 FLR 378, cited Clyne v Deputy Commissioner of Taxation (NSW) (No 3) (1983) 48 ALR 545, cited Re Raymond; Ex parte Raymond (1992) 36 FCR 424, cited Re Deriu (1970) 16 FLR 420, considered Cook Hills Investments Pty Ltd v Rodriguez (No 2) (unreported, 10 December 1986), cited RE: PAUL HENRY MENERE MAX CHRISTOPHER DONNELLY and THE AUSTRALIAN POSTAL CORPORATION No NB 1574 of 1996 Tamberlin J Sydney 5 September 1996

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) No NB 1574 of 1996 BANKRUPTCY DISTRICT OF THE ) STATE OF NEW SOUTH WALES RE: PAUL HENRY MENERE Applicant MAX CHRISTOPHER DONNELLY First Respondent THE AUSTRALIAN POSTAL CORPORATION Second Respondent CORAM: TAMBERLIN J PLACE: SYDNEY DATED: 5 SEPTEMBER 1996 MINUTE OF ORDERS THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the costs of the second respondent. NOTE: Settlement and entry of orders is dealt with in accordance with Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA) GENERAL DIVISION ) No NB 1574 of 1996 BANKRUPTCY DISTRICT OF THE ) STATE OF NEW SOUTH WALES RE: PAUL HENRY MENERE Applicant MAX CHRISTOPHER DONNELLY First Respondent THE AUSTRALIAN POSTAL CORPORATION Second Respondent CORAM: TAMBERLIN J PLACE: SYDNEY DATED: 5 SEPTEMBER 1996 REASONS FOR JUDGMENT Before me is an application for annulment of a sequestration order made on 3 June 1996 in respect of the applicant, Paul Henry Menere. The application is resisted by the respondents. The relevant provision of the Bankruptcy Act 1966 (Cth) ("the Act") is s153B which reads: "If the Court is satisfied that a sequestration order ought not to have been made ... the Court may make an order annulling the bankruptcy." The basis on which the application is made is that prior to the making of the sequestration order the judgment of the Local Court on which the Bankruptcy Notice was founded, was set aside by consent. The only evidence as to the basis on which the judgment was set aside is a rather cryptic handwritten note on the Civil Claims Cover Sheet in respect of the callover on 15 March 1996. That note reads: "Rasmussen J.C. (8.6) Durston J.B. Opposed LATER - B\C ASAJ Granted Subject D. 7 days D paying P. Costs $456 in 28 days from 15/3" The sequence of relevant events is that on 5 September 1994, the second respondent, Australian Postal Corporation, issued a Liquidated Statement of Claim against the applicant for a total amount of $7,546.63 including interest, fees and costs. No defence was filed and on 5 May 1995 default judgment was entered against the applicant in the Local Court. On 6 October 1995 a fourteen day bankruptcy notice was issued and it was served on 7 December 1995. On 21 December 1995 the act of bankruptcy was committed, being non-compliance with the bankruptcy notice, and on 25 January 1996 the Creditors' Petition was issued. On 15 March 1996 there was a hearing of an application to set aside the default judgment at the Downing Centre Local Court. The default judgment was set aside in the terms with the notation set out above.