Taylor (liquidator) v Trustee, bankrupt estate of Heading, in the matter of Heading [2020] FCA 1450

Federal Court of Australia

Taylor (liquidator) v Trustee, bankrupt estate of Heading, in the matter of Heading [2020] FCA 1450 File number: SAD 116 of 2020

Judgment of: CHARLESWORTH J

Date of judgment: 9 October 2020

Catchwords: BANKRUPTCY – application under s 58(3) of the Bankruptcy Act 1966 (Cth) for leave to commence and continue a proceeding in respect of a provable debt – claimed contravention by a company director of s 588G of the Corporations Act 2001 (Cth) – where director was declared bankrupt and later discharged from bankruptcy – where applicants seek a declaration of past liability so as to trigger obligations under a policy of insurance that may respond to the claim – where right of indemnity under the policy has vested in the trustee of the bankrupt estate pursuant to s 117 of the Bankrupty Act 1966 (Cth) – whether proposed proceedings joining the discharged bankrupt are competent – whether proposed proceedings are commercially futile – whether leave should be refused in the exercise of the Court's discretion – leave granted on conditions

Legislation: Bankruptcy Act 1966 (Cth) ss 58, 104, 117, 149, 152, 153 Corporations Act 2001 (Cth) ss 588G, 588M Federal Court of Australia Act 1976 (Cth) s 21

Cases cited: A.F.I. Management Pty Ltd v Condon in his Capacity as Trustee of the Bankrupt Estate of Brian Keith Hones [2019] FCA 2012 Allnation Corporation Pty Ltd, in the matter of Maddy v Maddy [2017] FCA 1258 Bailey, in the matter of Australian Recruiting Group Pty Ltd (in liq) v Aningat [2020] FCA 1319 Free v Ma [2020] FCA 226 Geor & Anor v Delaney [2009] QCA 363 Hillig, in the matter of Battaglia [2019] FCA 2191 Hudson v Sigalla (2015) 235 FCR 122 Perrine v Carrello [2017] WASCA 151 Tarea Management (North Shore) Pty Ltd (in liq) v Glass (1991) 28 FCR 93 Taylor v Rudaks (2007) 166 FCR 451 Williamson v Michell (Trustee) [2019] FCA 481; 16 ABC(NS) 472