Case: Kleinwort Benson Australia Ltd v Crowl [1988] HCA 34 ; (1988) 165 CLR 71
Outcome: cited
the evidence, her Honour was satisfied of all the matters in s 52(1) , and noted that the appellant had not in his evidence or submissions to the court put a case that he was solvent (par 29). Accordingly in her Honour's view the matter turned on the question whether there was other sufficient cause within the meaning of s 52(2) why a sequestration order ought not to be made, and whether her Honour should exercise her discretion to dismiss the petition. In deciding whether to exercise her discretion her Honour considered: &#8226; A potential counter-claim, set-off or cross-demand of the appellant related to the original litigation between the parties, but which her Honour considered continued to suffer from all the deficits identified by Cooper J in Worchild v The Drink Nightclub (Qld) Pty Ltd [2004] FCA 642. &#8226; A potential counter-claim, set-off or cross-demand in the appellant in that he claimed the respondents had committed contempt of court, but which her Honour considered was unlikely to have any prospects of success, and which was not a proper matter to be taken into account when exercising her discretion under s 52(2). &#8226; A potential counter-claim, set-off or cross-demand in the appellant in that he claimed that the judgment of Cooper J had been obtained by fraud or collusion or mistake, but which her Honour considered was not supported by the evidence before her nor by the decision of Cooper J, and which was not a proper matter to be taken into account when exercising her discretion under s 52(2). &#8226; A claim described by her Honour as being essentially that an act of bankruptcy had not been committed by the appellant. Her Honour summarised this claim of the appellant as being that he should have been successful before Cooper J, the order for costs should not have been made, the appellant should not be indebted to pay those costs to the respondents, and, as a result, in not paying the debt the appellant has not committed an act of bankruptcy. Her Honour considered that the appellant had committed an act of bankruptcy, and that this was not a proper matter to be taken into account when exercising her discretion under s 52(2). &#8226; A claim by the appellant that the bill of costs produced for taxation following the decision of Cooper J included items which did not relate to the proceedings under Pt 4A Trade Practices Act 1975 (Cth). In her Honour's view, these matters should have been addressed by the appellant in the taxation process in the Federal Court of Australia, and there was no evidence before her to establish that they were raised nor what the outcome was of it being raised at the taxation. &#8226; A claim by the appellant that there were defects in the petition and/or bankruptcy notice. Her Honour considered this claim in detail, including reviewing Kleinwort Benson Australia Ltd v Crowl [1988] HCA 34 ; (1988) 165 CLR 71 and The Australian Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915 ; (2000) 109 FCR 33, which are the leading authorities in this area. Her Honour summarised this claim as follows: 'In this matter the debtor contends that par 1 of the petition states that the creditors are owed an amount due under the order of the Federal Court and that the bankruptcy notice fails to contain the judgment or certificate of taxation. He says that where in par 2 it says that the creditor does not hold security over the property of the debtor, that this leaves doubt as to whether the one or the other holds security over the property of the debtor. Further he contends that the petition refers to the words 'creditor' and 'creditors' including reference to the agent for the Petitioner which creates a doubt as to who the Petitioner is and whether or not there are two joint petitioners and whether or not the agent holds instructions to act on behalf of both petitioners. He says that par 4 of the Petition fails to state the date of the act of bankruptcy.' (at [69]) Her Honour was satisfied that the creditors' petition was overall compliant and in all respects clear and unequivocal, that the appellant's submissions concerning the reference to 'creditor' and 'creditors' was a spurious argument without merit, and that par 4 was compliant with the formal requirements of the prescribed Form.