Case: Sandell v Porter [1966] HCA 28 ; (1966) 115 CLR 666
Outcome: applied
Based on this, the Federal Magistrate concluded that the appellant was insolvent. He applied Sandell v Porter [1966] HCA 28 ; (1966) 115 CLR 666 which he said stated the law as follows: "insolvency is an inability to pay debts as they fall due out of the debtor's own monies. Those monies are not however limited to cash resources immediately available. They extend to monies which the debtor can procure by realisation by sale or otherwise of assets within a relatively short time. The conclusion of insolvency should be clear from a consideration of the debtor's financial position in its entirety and generally ought not to be drawn simply from evidence of a temporary lack of liquidity. It is the debtor's inability utilising such cash resources as they have or can command to meet their debts as they fall due which indicates insolvency. Whether that state of affairs has arrived is a question for the Court and not one to which expert evidence may be given in terms." 25 The appellant argued before the Federal Magistrate that a sequestration order may adversely affect his "proposed studies at University". In fact, there was evidence that the appellant is currently a student at the University of Tasmania. His Honour appears to have inferred that the appellant studies law, although why he should have drawn that inference is not stated. He concluded that "the possible, and in my view unproved, detriment that bankruptcy might have on any legal career would not be enough to persuade me that the petition be set aside". 26 The Federal Magistrate also considered the failure to provide or the very tardy provision of a statement of affairs to the trustee in bankruptcy as a relevant discretionary factor. His Honour exercised his discretion not to dismiss the petition. 27 The appellant argued before the Federal Magistrate that he was served with the creditor's petition within the precincts of the Court. His Honour accepted the evidence of Mr Velos that the petition was served outside the Court. 28 The appellant has appealed the striking out of his Victorian Magistrates Court complaint against the respondents. The Federal Magistrate noted that a Master dismissed the Supreme Court proceeding on 8 September 2006 and that accordingly it was of no assistance to the appellant. 29 Before the Federal Magistrate, the appellant sought to appeal out of time from the decision of O'Dwyer FM not to further extend the time for compliance with the bankruptcy notice. The Federal Magistrate noted that he was not in a position to go behind a decision of another Federal Magistrate. 30 The argument about the validity of the bankruptcy notice appears to concern the calculation of interest during a 14-day period after the taxation of the bill of costs in the Supreme Court proceeding. The Master made an order staying execution of the order for taxation for 14 days. The appellant appears to have claimed that interest did not accrue during this period. The Federal Magistrate disagreed but noted that at any event the creditor's petition claimed an amount that did not include any interest on the amount allowed by the Master. 31 The appellant submitted that the date on the amended creditor's petition caused him confusion. Without explaining why, the Federal Magistrate found that the change in date was not likely to confuse the appellant. 32 The appellant also made submissions about confusion occasioned by the change in description of the legal name of the respondents. The Federal Magistrate referred to the irrelevance of the change in the description and said "I do not think that the partnership as an entity known to law was ever in danger of being misunderstood and I do not believe that the changes made were of any moment."