Case: Re Frank; Ex parte Piliszky (1987) 16 FCR 396
Outcome: considered
The manner in which s 153B is to be applied has been summarised as follows by Carr, Finn and Sundberg JJ in Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315: [20] The Court must first consider whether the sequestration order ought not to have been made. If it so finds, then the Court must consider whether, in the exercise of its discretion, the bankruptcy should be annulled: Re Deriu (1970) 16 FLR 420. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made. That is, the Court is entitled to consider not only the case as disclosed at the time when the sequestration order was made, but also those facts now known then to have existed. The Court excludes those facts which have occurred since the order was made. Later evidence of previously unknown facts may disclose matters which show that the sequestration order ought not to have been made: Re Frank; Ex parte Piliszky (1987) 16 FCR 396 ; Stankiewicz v Plata [2000] FCA 1185 at [19] ; Re Williams (1968) 13 FLR 10 at 23; Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347. These authorities, all of which were cited by the learned primary judge in his judgment, were accepted at first instance as reflecting the relevant law. The section thus contemplates two elements: the Court reaching a state of satisfaction that an order " ought not to have been made " and an exercise of discretion: Rigg v Baker [2006] FCAFC 179 at [59] , [2006] FCAFC 179 ; 155 FCR 531 at 543 per French J. 34 In the present proceeding Ms Samootin did not establish any reason why the sequestration order " ought not to have been made ". And the task to be undertaken pursuant to that provision is not a task of the Court reviewing afresh the facts as at the date of the making of the sequestration order, but rather the very much more confined task of considering whether the person making the order was " bound " not to have made it: cf Re Frank; Ex parte Piliszky (1987) 16 FCR 396 at 403. Fisher J there concluded: In the light of the various contrasting avenues open to a bankrupt to approach the court to have the sequestration order set aside, it is in my opinion necessary to attach significance to the "careful provisions" of s 154 , and in particular the words "ought not to have been made". In my opinion it can be said that a judge "ought" not to have made an order only if he was "bound" not to make the order. In circumstances where it was open to a judge to make an order in the exercise of his discretion, it can only be said he "ought not to have made the order" if none of the circumstances could justify the making of an order. Alternatively it can be established that an order "ought" not to have been made because subsequent evidence discloses that all of the true facts were not before the court when the order was made: Re Cook (1946) 13 ABC 245 at 249. F'lld: Boles v Official Trustee in Bankruptcy [2001] FCA 639 at [16] , [2001] FCA 639 ; 183 ALR 239 at 243 per Emmett J (Katz and Conti JJ agreeing). There is certainly no basis upon which such a state of " satisfaction " could be reached in the present proceeding. Even if it were permissible to simply review the facts as known when the sequestration order was made, nothing has emerged other than to confirm that the order was then properly made; certainly, Ms Samootin has not been able to point to any " evidence of previously unknown facts " as at the date of the making of the order.