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[1986] FCA 521
procedural. Leave to amend the petition granted; costs of the petitioning creditor refused; hearing of the petition adjourned to 8 December 1986 at 10:00 a.m.; costs of the petitioning creditor reserved.
A creditor asked the court to declare a businessman, Mr Gotsios, bankrupt. The creditor also needed to fix errors in its court paperwork, as the original petition did not properly state when the bankruptcy event occurred. The judge allowed the creditor to fix the paperwork but refused to make the debtor pay the creditor's legal costs for this, because the changes were substantial. The debtor asked for more time before the bankruptcy hearing, saying he wanted to try to pay his debts or arrange a settlement with creditors. Despite concerns about the debtor's ability to manage his business, the judge agreed to delay the hearing until December 1986, as the case was still early in the process and the debtor needed time to organise his affairs.
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Ex parte : GWEIGER NOMINEES ETT. LIMITED Fetirtiocning Creditor
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foe \ ried COURT: NORTHROP J. DATE: 21 OCTOBER 1386 FLACK: MELBOURNE
There are two matters for consideration before the Court. The debtor is seeking an adjournment of che hearing of the petition and the peritioning creditor is seeking leave to amend the petition by substituting paragraphs < and 4 to what appears currently in the petition. These two matters are, to some axtent, inter-mixed. I propose to deal first
The matter originally came on for hearing before me yesterday when the debtor appeared in gerson. He has certain aifficulty with the English language; 25 rather excitable; has a tendency not co answer yuesctions and goes off on
frolics of his own in justification of matters which are not
being sought at the time. Having regard to the difficulties I encountered yesterday in trvinag to understand what the matter was all about, and although an application was made to amend the petition yesterday, I was not in a position ta consider that, s0 I adjourned che matter cto today and strongly advised the debtor cto have legal representation or representation of some kind here today.
At present, paragraphs 2 and 4 of the petition are almost méaningleéss and paragraph 4 Tails to comply with Che requirements of Form 5 of the Bankruptcy Rules which require the petition to set out the nature and date or dates of the act or acts of bankruptcy relied upon. The petition as presently framed does not do so at all. It merely makes reference to the serving of a bankruptcy notice on 23 June 15386. It does not say whether the notice was a 14 day notice, a 21 day notice or any other period. Looking at the petition, it is completely impossible to work gut when the
ffotice of proposed amendments has been given to the solicitors for the debtor who 15 represented today by counsel and in all the circumstances I think Lt 1s appropriate to give leave to amend the petition in the form sought and to dispense with further verification and service of the petition as amended. But, because of the nature of the amendments which are far more than merely a clerical
petitioning creditor costs which were reserved yesterday.
I curn to consider the yuesbtion of the adjournmenc. The debtor apparently carries on a manufacturing business of Manufacturing sportwear under the name Jim-Jam. In July of last year he entered into a deed of arrangement with his creditors but that deed was terminated this year when the current petitioning creditor obtained a judgment against the debtor in the sum of approximately $24,000. Applying a presumption of compliance with the requirements of the Bankruptcy Act, one draws the inference that that debt was
incurred after the deed oF arrangemenc was entered into.
The jiudament Jebt upon which che petition is founded was made on 21 April 1986, the bankruptcy notice was served on 23 June 1386 and the act of bankruptcy occurred on 7 July 13986. The debtor gave evidence on oath in support of the application for the adjournment and his evidence is to the effect that he owes about $160,000; he has stock on hand of about $120,000 and 15 owed about $75,000 by other debtors. He desires to keep on manufacturing to try and trade out of that debt position and if need be to seek a Part X&
It was urged upon me by counsel for the petitioning creditor that in reality the debtor was insolvent. The past history disclosed the ract that 10 was most unlikely that the debtor could trade out of his current Fanancial position and that the Court should continue with the hearing of the
petition which, 1f proved, should' support the making of a
sequestration order, among other things to protect the sublac qenérally and seople who are likely to deal with -Ehe debtor, and also to prevent che debtor from dissipating his assets. They are strong araduments but, in my opinion, this is a case where there should be some adjournment for a relatively short period, the reason being that this 15 a case where the judgment was early this year, the act of bankruptcy was in
July of thi2s vear and vesterday was the first return date of
I have already made some comments about my assessment of the debtor. One has certain doubts about his abilities as a businessman to conduct his business adequately to trade out of his current Financial position. I[t is true that at the moment he is facing charges in connection with Cheques which were dishonoured. Those cheques are related to the judament obtained by the petitioning creditor against the debtor. UOespite all those factors, im the exercise of mr discretion, I consider that the debtor should be given some short time to enable the matter to stabilise to some extent so that when the matter comes on for hearing again before this Court, the Court will be in a position to have a better understanding of the whole matter, and if need be, to proceed with the hearing of the petition which now is ina proper
| Honour: rr onoyrabte, Mix, panos iQ Sertays . hy "
Leave to amend the petition granted; costs of the petitioning creditor refused; hearing of the petition adjourned to 8 December 1986 at 10:00 a.m.; costs of the petitioning creditor reserved.