FEDERAL COURT OF AUSTRALIA Ahamud v GIO Workers Compensation (NSW) Limited [2004] FCA 817 BANKRUPTCY – recent sequestration order – prompt satisfaction and accommodation of creditors – annulment not opposed by trustee in bankruptcy – in the unique circumstances order for annulment granted instead of putting applicant to cost and delay of discharge of bankruptcy Bankruptcy Act 1966 (Cth) s 153B Hardaker v Phair trading as Proctor Phair & Associates [2002] FCA 1176 MASAHUD AHAMUD v GIO WORKERS COMPENSATION (NSW) LIMITED N 813 OF 2004 CONTI J 22 JUNE 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 813 OF 2004 BETWEEN: MASAHUD AHAMUD APPLICANT AND: GIO WORKERS COMPENSATION (NSW) LIMITED RESPONDENT JUDGE: CONTI J DATE OF ORDER: 22 JUNE 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The order for bankruptcy of the applicant made on 25 March 2004 be annulled. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 813 OF 2004 BETWEEN: MASAHUD AHAMUD APPLICANT AND: GIO WORKERS COMPENSATION (NSW) LIMITED RESPONDENT JUDGE: CONTI J DATE: 22 JUNE 2004 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 14 May 2004, the applicant (Mr Ahamud) made application for the annulment of his bankruptcy pursuant to s 153B of the Bankruptcy Act 1966 (Cth). A sequestration order had been made against his estate on 25 March 2004, upon the application of GIO Workers Compensation (NSW) Limited. The present application was not opposed by his Trustee Mr S D Pascoe. The applicant and the Trustee were each legally represented. 2 The application for annulment was supported by an affidavit of the applicant, to which was annexed a bundle of material concerning his affairs. 3 The applicant is a builder by trade, who conducted his building work through his family company M A Design & Build Pty Ltd, by whom he was paid a weekly wage of $550.00. 4 The applicant's affidavit, together with additional material tendered, disclosed that at the time the sequestration order was made, his major creditors were GIO Workers Compensation (NSW) Limited ('GIO'), Citibank Pty Ltd, Westpac Banking Corporation Limited and Telstra Limited. Documentary material attached to the affidavit disclosed that all of those creditors have been subsequently paid in full, except for Citibank, which on 29 April 2004 accepted the sum of $5,800 in full satisfaction of its asserted indebtedness, and also Westpac, which on 29 April 2004 accepted the sum of $15,000 in full satisfaction of its indebtedness. In addition it was disclosed to the Court that the applicant was indebted to St George Motor Finance Pty Ltd, to whom $1,924.24 was owing by way of arrears, but that its representative Collection House Limited had made arrangements for payment of the arrears of $1,964.24 in full by 25 June 2004, and thereafter to make normal repayments from 17th day of July 2004. 5 The applicant further testified that his solicitors had asserted that the costs of the Trustee's firm Sims Partners to date amounted to $5,422.45, and that arrangements had been made to effect that payment. As I have indicated already, the Trustee signified through his solicitor Ms Aleck that he did not oppose an annulment of the bankruptcy. That was a practical and sensible course, so it appeared to me in all the circumstances, for Mr Pascoe to have adopted. Otherwise there was a likely prospect that the applicant would probably be unable to exploit his skills as a tradesman for the benefit of his family, and satisfaction of such limited financial obligations still outstanding as he did have would be put in jeopardy to the advantage of no one. 6 The applicant testified that his financial affairs had been 'organised by Vinseshaw Praskesh', an accountant, 'as I was busy on site building and organising contractors etc'. He said that he arrived at the Federal Magistrate's Court too late in the day to oppose a sequestration order being made against him, not being then familiar as to the location of the Court. The applicant attributed his predicament to his former accountant, in the following terms: 'As the accountant did not perform his job properly I did not realise that I was behind in payments nor was I aware of the extent of my indebtedness until it was too late to attend to payment at the stipulated time.' 7 Strictly speaking, the evidence tendered to the Court points more to the need for the applicant to have applied for a discharge, rather than an annulment, of his bankruptcy, with all the cost and delays thereby necessarily to be incurred. However I adopted what I considered to be the more pragmatic course in all the circumstances of acceding to annulment, that being a course not opposed by the trustee in bankruptcy. The applicant is a person of more recent residence in Australia who impressed me as a person who would promptly make good his present predicament, with such further assistance (if at all necessary now in the events which have happened) of the trustee in bankruptcy as might possibly be needed. 8 Hence in all the circumstances I made an order for annulment. As his solicitor submitted, the evidence placed before the Court suggests that not all of the true facts were before the Registrar when the sequestration order was made (see in that regard Hardaker v Phair trading as Proctor Phair & Associates [2002] FCA 1176). I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 29 June 2004 Solicitor for the Applicant: Barwick Boitano Lawyers Solicitor for the Respondent: Sims Partners Date of Hearing: 22 June 2003 Date of Judgment: 22 June 2004