Knudsen & Yates trading as The Hargreaves Practice, in the matter of Sanders v Sanders

Assets 7 Listed assets totalled $870,430. This included Mr Sanders' interest in two properties which he said that he had no interest in selling. There was limited evidence of a mortgage over one property but no evidence as to any other interests or the likelihood of a sale in the immediate future. In any event, Mr Sanders did not ask me to take them into account. In the circumstances, I am not satisfied that they are available to pay Mr Sanders debts.Another listed asset was Mr Sanders' share of $63,400 in his late father's estate. The $63,400 has been paid into the Supreme Court of New South Wales to be used to pay party-party costs awarded in that Court in proceedings brought against Mr Sanders by the executor of that estate and which he is liable to pay. Mr Sanders said that the costs had been assessed as $98,000 indemnity costs of which $92,000 was party-party costs but that the quantum of the costs to be paid was under challenge by him. There was no dispute as to these assets. 8 The remaining listed asset was a loan of $136,430to CountryHeart Australia Ltd ('CountryHeart'), a project in which Mr Sanders is involved and from which he said that he expected to earn income at some time in the future. There was no suggestion that the loan would or could be repaid in the immediate future or at all. 9 I am not satisfied that, on the evidence, any part of the listed assets is realisable for present purposes.

Liabilities 10 Mr Sanders' listed liabilities totalled $551,125. There were three entries in this category. 'Business/Commercial Loans and debts' were $387,405. Mr Sanders' evidence was that this was made up in part of $175,000 owed to his partner in a computer consultancy business, Mr Durr who, he said, does not press for payment, although some payments are made to him for work done and expenses incurred. Mr Sanders also said, however, that these payments are both in reduction of the accrued indebtedness and for ongoing work. There was no explanation of the methodology applied to such payments. Fifty thousand dollars is owed to Ms Coumbis, made up of a $20,000 loan and $30,000 for work done. Some payments of unstated amounts have been made to bring the debt to its present level. No arrangements for repayment have been made and there is no provision in the financial position statement for any such repayments. The third creditor in this category is an American company, which Mr Sanders referred to as Atlantic Software. That debt is about $162,000. Mr Sanders said that there is an ongoing working relationship with that company and that the debt predominantly relates to work done between 1996 and 1998. He says that he is working off the debt by doing work for the company but also said that he is working with Atlantic Software on future projects, so that the debt is like 'venture capital'. There was no evidence other than Mr Sanders' oral evidence, which was somewhat lacking in specificity, about any of those arrangements. 11 Under the heading 'Contingency: solicitor's fees' was the sum of $107,320. The evidence was that this included the $92,000 referred to above and the costs claimed by the applicant creditors and supporting creditor. 12 The costs claimed by the applicant creditors have been independently assessed in accordance with sections 208A and 208J of the Legal Profession Act 1987 (NSW). The assessor considered submissions by Mr Sanders and the applicant creditor, as well as the applicant creditors' file, which included memoranda of advice by counsel briefed to represent Mr Sanders in the Supreme Court proceedings. Those memoranda and correspondence gave some of the history of the relationship between Mr Sanders and the applicant creditors and retained counsel in those proceedings. It is fair to say that Mr Sanders' complaints as to the conduct of the applicant creditors were rejected by the assessor. The substance of those complaints is reflected in the Local Court statement of claim. 13 Mr Sanders listed, as a liability, 'Personal Loans/Credit Cards' in the sum of $56,400. Mr Sanders stated that he was unable immediately to pay the amounts presently owed to the AMP Bank American Express Card ('AMP') and to the Commonwealth Bank of Australia ('CBA') for two credit cards. The evidence was that Mr Sanders will be given a 20% discount off the $10,700 liability to AMP if the discounted debt is paid by November and that he has paid $3000by two instalments each of $1000 and $500 respectively in respect of the $20,023.01 and $7,430.70 debts to the CBA. There is no evidence that the CBA has agreed to payment by instalments; the two debts are presently claimed to be $27,453.71. An application to pay by instalments has been made to the Local Court with respect to a further $33,000 debt to Citibank Mastercard. Mr Sanders had negotiated a settlement with respect to two other credit cards such that, if instalments of $5000 are paid in September, the total liability of $17,020 with respect to those two credit cards will be reduced to $12,320. 14 Even accepting that the discount referred to will apply, the amount presently owed (in the absence of Local Court orders as to instalments) on credit cards would seem to be approximately $78,000. Mr Sanders' entries in the financial statement cannot be reconciled with this evidence.

Monthly income and outgoings 15 There was no dispute with respect to the income amount of $1,334 from rent or of monthly outgoings for mortgage or utility payments. Mr Sanders listed, in this category, credit card instalment payments that have been dealt with above including those to the CBA as to which, as I have noted, there is no evidence of agreement. Certain other payments were not disputed. Mr Sanders listed his total monthly outgoings at $17,321. Of this, $4,800 refered to payments with respect to credit cards that do not accord with the evidence. One of the monthly outgoings recorded by Mr Sanders is $1,000 to A Patrick/Talquin Pty Ltd. That relates to a part of a debt of $5,000 to Mr Patrick that Mr Sanders said that he had 'no contest with', although Mr Sanders has apparently recently applied to set aside the default judgment for all monies claimed. In cross-examination it was established that A Patrick/Talquin Pty Ltd claim a total of $20,000, $15,000 of which is the subject of one or more default judgments against Mr Sanders. There was no reference to the $15,000 in the financial statement, nor to any evidence that Mr Patrick or Talquin Pty Limited have agreed to any payment by instalments. 16 There was evidence of other debts owed to solicitors where there had been agreement to pay by instalments. It does not seem that all of those payments were included in the financial statement. 17 Mr Sanders stated, in the financial statement, that his monthly income is $22,084. In evidence, Mr Sanders said that he has yet to receive $750 of that amount said to be from CountryHeart. The major source of income on which he relied was said to be a commitment by R.W. Basham Pty Ltd ('Basham') to pay a minimum of $20,000 for work to be done by Mr Sanders and his partner Mr Durr. Mr Sanders said that Mr Durr would not seek to be paid any money for his work. There was no evidence from Mr Durr. The payments apparently received from Basham to date, as referred to in the oral evidence, have been received in the last 2 months and have been, on average, less than $20,000. They have been made, not to Mr Sanders personally, but to a company called Fourline Pty Ltd ('Fourline'). There was also a deal of confusion in the evidence as to the financial position of Fourline, the company of which Mr Sanders said he was the sole director and shareholder. Fourline has 'virtually no assets' according to Mr Sanders and has about $2000 - $4000 in the bank which, he said, he does not treat as his own because Mr Durr has an interest. Mr Sanders said that he has about $1000 in cash or in a personal bank account. There was evidence that Fourline pays money to Mr Sanders, Mr Durr and another employee and, presumably, is liable for any salaries, employment benefits and other expenses, to which no reference is made in the financial statement. Reference to Fourline's liabilities are appropriate as Mr Sanders is including at least part of Fourline's income as his own. There was no documentary or other evidence to support Mr Sanders' evidence as to the agreement with Basham, which Mr Sanders said was an oral agreement. There were no bank statements brought to the hearing showing any past receipt of moneys, despite the fact that Mr Sanders had apparently been advised by the Registrar to bring such documents with him. 18 The financial statement of monthly outgoings did not include business expenses, the wages of staff members, motor vehicle operating expenses or the debtor's own personal living expenses. The true sum available from Fourline's computer consultancy business was further overstated, in that the debtor admitted that Mr Durr also shared in the receipts and had received approximately $5,000 in June and another $8,500 in July from monies received from commercial clients of the business.

additional matters 19 Mr Sanders speculates that there will be money from other sources in the future. No specific time frame was identified and the sources seem to relate to projects still in a planning stage. It was not apparent that moneys will be available in the immediate future. Based upon the income and expenditure as outlined in the financial statement, Mr Sanders asserted that he will be able to satisfy what he calls his 'pressing creditors', including the applicant creditors, within 'a reasonable time by instalments'. He maintained that he wishes to pay all of his creditors. 20 Approximately three weeks before the hearing on 9 September 2003 before me, the sheriff came to Mr Sanders' residence, which is also his place of work, with a Writ of Execution to seize assets. The total value of the goods (being one or two computers, a printer, a photocopier, two screens and some furniture) was, according to Mr Sanders, between $2500 and $3000. They were not removed from the premises.

whether the respondent debtor can pay his debts 21 The applicant creditors have made out the elements which prima facie entitle them to the making of a sequestration order. However, s 52(2) of the Act provides that if the Court is satisfied that the debtor is able to pay his debts, or that for other sufficient cause a sequestration order ought not to be made, then the Court may dismiss the petition. 22 The onus of proving that the debtor is able to pay his debts is on Mr Sanders. As noted by Hely J in Australia and New Zealand Banking Group Ltd v Foyster [2000] FCA 400 ('Foyster')at [17] it is not sufficient for the respondent simply to establish that he has assets which exceed his liabilities in value. It must also be established that the assets are available to be realised and capable of ready realisation. 23 Mr Sanders relied upon the principle that bankruptcy is not a proceeding designed for the recovery of debts and that creditors should resort to other remedies. As noted by Hely J in Foyster (at [17]-[19]), that may be the case where, unlike here, a debtor is able to pay his debts but is recalcitrant and the debtor should then demonstrate that the petitioning creditor will be satisfied from the ordinary remedies such as execution and guarantee. Even if a debtor establishes solvency, the Court retains a discretion whether or not to dismiss the petition. 24 As pointed out by the Full Court in Trojan v Corporation of Hindmarsh (1987) 16 FCR 37 ('Trojan') at 48, a sterile demonstration of an ability to achieve payment which was not in reality likely to occur, may still result in a sequestration order. The Full Court noted in Trojan (at 46), that there is a difference between a situation where it is established that a petitioning creditor may pursue remedies of execution and garnishee against a debtor who had demonstrated ample assets and income available for the application of those remedies (see Sarina v Council of the Shire of Wollondilly (1980) 48 FLR 373) and the situation where there is no alternative remedy because the assets are insufficient to meet the debt relied upon in the petition. In the present case, the evidence is that an attempt at execution demonstrated this was not an alternative remedy and that the assets were insufficient. There is no question of guarantee. 25 Mr Sanders cited numerous authorities for the proposition that, if he establishes that he is able to pay his debts, a sequestration order should not be made. The applicant creditors dispute Mr Sanders' assertion that he can do so. Mr Sanders is not in the position of a person who simply declines to pay the debt. He asserted on a number of occasions that, if given time and the opportunity to pay by instalments, he wished to pay and would pay his debts, including the amount owed to the applicant creditors. 26 'Debts' as referred to in s 52(2)(a), by reason of s 5(1) includes liabilities. Katz J in International Alpaca Management Pty Ltd v Ensor [1999] FCA 72 discussed the distinction between 'solvent' as defined in s 5(2) and 'debt'. His Honour (at [8]-[10]) proceeded to deal with s 52(2)(a) on the basis that the debtor should prove an ability to pay his debts as and when they become due and payable. In this context only the reasonably immediate future is looked at (Bank of Australasia v Hall (1907) 4 CLR 1514 ('Hall')). Katz J proceeded on this basis because that was the way the parties in that case approached the matter and also because that was the approach of other Judges of this Court. His Honour also pointed out that the broader considerations so encompassed were of importance in considering the exercise of the discretion in s 52(2) to dismiss the petition. Katz J said (at [31]) that, in determining the debtor's ability to pay any debts becoming payable in the future, it is incumbent upon the debtor to satisfy the Court either that no debts will become payable in the immediate future or that, if they will, he will be able to pay them. 27 This was also the approach taken by Hely J in Foyster (at [19]) who expressed the view that s 52(2)(a) refers to a state of affairs which requires account to be taken of debts which will fall due in the reasonably immediate future pursuant to existing obligations. Mr Diethelm relied on Hall (at 1527) for the proposition that the debts to be considered are not limited to those presently payable but also include those payable in the reasonably immediate future. He submitted that the question is not one of temporary lack of liquidity (Sandell v Porter (1966) 115 CLR 666 at 670-671). In Foyster (at [19]) Hely J concluded that s 52(2)(a) refers to 'a state of affairs which requires account to be taken of debts which will fall due in the reasonably immediate future pursuant to existing obligations: Bank of Australasia v Hall (1907) 4 CLR 1514 at 1527-1528 as well as debts which are presently due and payable'. 28 In the present case, the assets under consideration are those reasonably available to meet the debts which, as Mr Sanders has made clear, do not include the two properties for the purposes of a payment now or in the immediate future. Mr Sanders has not established that his assets and income are sufficient to meet his debts. 29 The Local Court statement of claim is for an amount in excess of the judgment debt that forms the basis of the bankruptcy notice. A legitimate claim of the debtor against the judgment creditor is a significant consideration for the purposes of the exercise of discretion in the making of a sequestration order and the Court may consider whether it is probable that the claim is likely to succeed (Ling v Enrobook Pty Ltd (1997) 74 FCR 19 at 25). Apart from the pleading itself, there is no evidence before me other than the decision of the costs assessor and the file of the applicant creditors that was before the assessor to assist in forming an opinion on the claim. The history of the relationship between the parties as set out in the material before me establishes the difficulty experienced by the applicant creditors as legal advisers to Mr Sanders in obtaining instructions and in having their advice acted upon. Mr Sanders, despite giving extensive evidence, did not adduce evidence in support of his claim. I cannot conclude that the claim is likely to succeed. 30 It was pointed out on behalf of the applicant creditors and the supporting creditor that, on the evidence · there are no assets to be realised · the amount of cash presently available to satisfy the debts is $5,000-$6,000 · there are a number of outstanding judgments against Mr Sanders immediately due and payable which total $70,100 · there are payments due this month for credit card debts which are being paid by instalments of at least $10,700 · there are credit card debts of $27,453.71 to the CBA as to which there is no evidence of an agreement to pay by instalments · execution was attempted but the value of goods proposed to be seized did not meet the debt owed to the applicant creditors or the supporting creditor · the financial statement is not accurate and, on the evidence, a number of debts are not included · there is no supporting evidence of the alleged agreement with Basham to pay $20,000 per month · the evidence is that payments to date from Basham have not reached that monthly amount · there is no supporting evidence for Mr Sanders' statement that none of the parties to whom business debts totalling $387,405 are owed are seeking payment. In any event, those moneys are presently due and payable and there is no evidence that the creditors are in any way disentitled from demanding repayment · if payments due to Fourline are to be taken into consideration, then Fourline's expenses, such as payments in respect of employees and payments to Mr Durr must also be taken into account · there are funds held in the Supreme Court ($63,000) to meet the claim for costs for which Mr Sanders is liable. While Mr Sanders is challenging the amount claimed of $92,000, there is no evidence of the likely quantum of any reduction. In any event, there is in existence a costs order which is due and payable now or in the immediate future which is presently in excess of the amount set aside to pay it · the unchallenged debt due to the supporting creditor is approximately $5,500 and there is insufficient cash presently available to pay that debt alone 31 Mr Sanders submitted that the applicant creditors should not have commenced bankruptcy proceedings but attempted enforcement in the Local Court or by way of execution prior to commencing proceedings. He stated that he did not rely on income or assets other than the income to be received from Basham which, he stated, was a conservative figure. He asked the Court to infer an agreement on the part of the persons who were business creditors not to demand payment. Mr Sanders conceded that the amounts owed to Citibank, the CBA, the solicitors and counsel and Mr Patrick are moneys that are 'pressed' and pointed to his applications to set some aside or pay by instalments. He says that there is an 'excellent chance' that he will be able to pay his present creditors in 60 to 90 days, although there is no evidence of any time frame that would affect his present indebtedness. 32 In summary, the respondent has four judgment debts totalling $70,100 together with at least two credit card debts totalling $27,453.71where no agreement has been reached with the respective creditors. The debtor's evidence is that he has between $5,000 and $6,000 available to him from monies in banks or on credit that could be possibly used to meet those debts. The sum available is insufficient to meet the debts. The evidence does not satisfy me that, even if moneys were to be received by Fourline from Basham as asserted, that Mr Sanders would have sufficient funds to pay his debts in the immediate future. Further, the debtor gave no evidence of any intention to borrow or to liquidate any assets which would enable him to pay the debts. I am not satisfied by Mr Sanders that he is able to pay his debts.

matters arising after the hearing 33 After the hearing, in written submissions, Mr Sanders informed me that the Local Court orders in the proceedings brought by the applicant creditors upon which the bankruptcy notice is based, have been stayed until 15 October 2003, the date of the hearing for the application to pay by instalments. Similarly, the Local Court proceedings brought by Citibank have apparently resulted in judgment and that has been stayed to the same date for a similar application. Two Local Court proceedings commenced by Mr Patrick and Talquin Pty Ltd have been stayed until 21 October 2003, the date of the hearing of Mr Sanders' application to set aside default judgment and file a defence and cross-claim. On the evidence, the total of moneys claimed in those three or four proceedings is $59,626.14. 34 Even if the $44,626.14 owed on the first two claims were removed from the present lump sum liabilities and some instalment payment substituted, I am not satisifed that Mr Sanders could meet those instalments. 35 Mr Sanders now submits that, if he were to be successful in his applications in the Local Court 'there can be little doubt that I will be able to satisfy other claims by pressing creditors in the next two months'. He does not explain how he will meet the instalment payments in addition to his other liabilities nor, indeed, what those payments are. He still only speculates on likely future payments by Basham to Fourline. 36 In his written submissions, Mr Sanders raised a number of matters that were, in effect, an attempt to introduce further evidence. I relisted the matter in order to regularise the evidence and to give the parties the opportunity to deal with this turn of events and to address the question of whether, if a sequestration order were to be made, the Court should grant a stay pursuant to s 52(3) of the Act. 37 On that occasion, Mr Sanders sought leave to file in Court a notice of motion and affidavit sworn on the day. I was informed and it was not disputed that the applicant creditors and the supporting creditor were served with those documents only minutes before the matter was called on. They objected to the filing of each of the documents. 38 The orders sought in the notice of motion were as follows: '1. That the applicant be granted leave to adduce further evidence which corroborates statements made under oath in oral evidence.

2. That the proceedings in the Federal Court be adjourned until the Application to Make Payment by Instalments listed for Hearing on 15 Oct 2003 has been determined by the Local Court. 3. That the applicant be granted leave to make further, brief, oral submissions on the question of the prospects of success in the claim for damages initiated in proceedings in the Local Court. 4. That the applicant be granted leave to make further, brief, oral submissions on the question of abuse of process.' 39 To the extent that the applications to pay by instalments which are yet to be heard, the application to set aside the judgments obtained by Mr Patrick/Talquin Pty Ltd and the further submissions are relevant to the exercise of a discretion to stay a sequestration order, I note that the applicant creditors no longer oppose such a stay. 40 I granted Mr Sanders leave to file the notice of motion in Court and made it returnable before me on the same day. I formed the view that the affidavit was speculative and unhelpful. In substance, it annexed eleven pages of bank statements, apparently in the name of Fourline, the content and details of which were unexplained. Also annexed was correspondence with the Local Court which, like the bank statements, did not add to the evidence adduced on the previous occasion, other than to refer to the amount offered by Mr Sanders in his applications to pay the applicant creditors' and Citibank's judgment debts by instalments. 41 The applicant creditors did not have the opportunity to deal with the affidavit on the day. This matter has been before the Court on numerous occasions and Mr Sanders was advised on a previous occasion, 19 August 2003, that the matter would be dealt with when next before the Court so that he should bring all relevant evidence with him. In the circumstances, an adjournment or leave to reopen is unwarranted and unfairly prejudicial to the applicant and supporting creditors. It is unlikely to be cured by a costs order. The evidence in the affidavit, other than the correspondence with the Local Court, was available to Mr Sanders at the time of the hearing and he did not lead it. With respect to the bank statements, he says that he made a conscious decision not to lead it. I had indicated to the parties on 9 September 2003 that I would receive written submissions and, if required, relist the matter to hear submissions on whether any sequestration order should be stayed. Mr Sanders took advantage of that to include what was further evidence in the written submissions and then to seek to reopen his case. The evidence he so sought to adduce is, on its face, largely inadmissible and speculative. If it were admitted, to examine and explain it would have taken a great deal of time and not added to the overall effect of the evidence already before the Court. It purported to be evidence in relation to the moneys from Basham and the existence of the applications in the Local Court, as to which there had been earlier evidence. 42 Apart from the Local Court documents, all of the evidence sought to be adduced was available to be tendered when the matter was previously heard; Mr Sanders had decided not to bring it to Court. Mr Sanders had been cross-examined. To permit the additional evidence at this stage would cause prejudice to the respondents; when the form of that evidence is taken into account and the fact that proper consideration of its admissibility and cross-examination could not take place on the day for submissions, the prejudice to the applicant and supporting creditors is increased. In the circumstances, the respondent was not given leave to adduce further evidence (see generally Smith v New South Wales Bar Association (1992) 176 CLR 256). Where parties are authorised to provide to the Court supplementary written submissions, it is appropriate for the Court's directions to be strictly complied with; Jackson, in the matter of Conway v Conway [2000] FCA 1530 at [29]. 43 In light of the fact that all parties agreed that the application to pay by instalments does not affect the Court's ability to make a sequestration order, I did not adjourn the proceedings in accordance with paragraph 2 of the notice of motion. 44 I granted leave to Mr Sanders to make further submissions in the terms of paragraphs 3 and 4 of the notice of motion. 45 With respect to the Local Court statement of claim, Mr Sanders' prime contention seemed to relate to the fate of a notice to produce in the Supreme Court proceedings which had been posted to him by the applicant creditors. There is no basis advanced that links the fate of the notice to produce and the alleged effect on Mr Sanders to the outcome of those proceedings. Nothing that Mr Sanders put to me in the further submissions changes my view that he has failed to demonstrate a likelihood of success of his Local Court claim against the applicant creditors. 46 Further, I note that there is no claim or cross-claim against the supporting creditor. I was further informed, as an agreed fact, that Mr Sanders sent to that creditor a bank cheque for one third of the amount claimed. There was no agreement to pay by instalments and the cheque was not accepted as payment of the undisputed debt.

47 Further submissions in terms of paragraph 4 of the notice of motion repeated earlier submissions that the applicant creditors were disentitled to take bankruptcy proceedings before exhausting other avenues. The additional abuses of process alleged were either aimed at the solicitors for the plaintiff in the Supreme Court proceedings or complained that, if Mr Sanders himself had chosen to cross-claim against the applicant creditors in the Local Court instead of commencing fresh proceedings, he would have obtained a stay. The fact that there are other and speedier, cheaper and more effective remedies available to the applicant creditor does not so disentitle the applicant creditor: (Re Poulson; Ex parte Hempenstall Bros Ltd (No 2) (1929) 1 ABC 54. In some circumstances it may be sufficient cause for dismissing a petition that an applicant creditor has other equally good facilities for enforcing judgment, it is for the Court in its discretion to decide whether such sufficient cause has been established: Re Noye; Ex parte Deputy Federal Commissioner of Taxation (1956) 18 ABC 77. The evidence shows that other facilities were not so available to satisfy the debt. Neither of Mr Sanders' submissions in relation to abuse of process struck me as relevant to the issues in these proceedings.

conclusion 48 From the evidence before me and accepting for present purposes that the Basham payments will be made as Mr Sanders suggests, it cannot be concluded that Mr Sanders is able to pay his debts. This applies to the debts that are presently due or, to use his term, pressing. When account is taken of the quantum of costs for which he is liable in the Supreme Court of New South Wales (even accepting that they may be reduced) the other contingent liabilities and those matters referred to above as to which there was evidence that are not reflected in the financial statement, the position is even more unfavourable. Mr Sanders to date seems to have accumulated significant debts in excess of his income and managed to negotiate with some of his creditors to accept a lesser sum and/or payment by instalments. He has not made such arrangements with the applicant creditors or the supporting creditor or others such as Citibank and Mr Patrick. There is no evidence that he would be successful in that regard or that applications to pay by instalments will be successful. 49 In Bond v HongKong Bank of Australia Ltd (1991) 25 NSWLR 286 at 295, Gleeson CJ said that: 'the appellant, being obliged by contract to pay on demand, was entitled to such time as was reasonably necessary for implementing the mechanics of arranging the necessary bank transfers of funds ... He was not, however, entitled to time to go out and try to borrow the money necessary to enable him to discharge his obligations'. Kirby J (at (319)) said: 'the requirement to provide "reasonable time" to meet the demand made on the appellant meant no more than to provide him with time within which to mechanically transfer the amount demanded on the guarantee'. 50 The further matters raised by Mr Sanders do not alter the conclusion in paragraph 31 herein. 51 A petitioning creditor has a prima facie right to a sequestration order unless the debtor establishes some very special circumstances which would justify the Court in departing from its usual practice: Cain v Whyte (1933) 48 CLR 639 at 646. The Court has a discretion to make a sequestration order even if satisfied that the debtor is able to pay his debts: Dunn, in the matter of Dunn v Vangsnes [2000] FCA 1051 ('Dunn') at [17]. As Hely J said in Dunn (at [18]): 'The decision of Finn J in Re Capel; ex parte Caram Finance Australia Limited (unreported) 9 April 1998 is an illustration of a case in which, even if the Court had been satisfied that a particular asset was available to the debtor, it would have been appropriate nonetheless to exercise the discretion in favour of making a sequestration order, because the debtor had no assets or income that could be reached by execution or garnishment'. 52 In this case, the debtor has given evidence that the value of the goods seized by the sheriff in relation to a writ of execution have a value of $2,500 to $3,000. Garnishment is not available given that Fourline is the recipient of the income from the commercial clients of the computer consultancy business, not Mr Sanders who, apparently, has no other income. 53 I see no reason sufficient to decline to make the sequestration order.

Stay of the sequestration order 54 Mr Sanders initially asked that I make an order that any sequestration order not take effect for three months. He later accepted that such an order could not be made and sought a stay for 21 days pursuant to s 52(3) of the Act. That is not opposed. In these circumstances, I will grant the stay sought. 55 Mr Sanders has not established that he is able to pay his debts. In view of Mr Sanders' financial situation, a sequestration order is appropriate. I will grant a stay for 21 days.

ORDERS 56 I make the following orders: 1. A sequestration order be made against the estate of Basil Charles Sanders. 2. The sequestration order be stayed until 30 October 2003. 3. The applicant creditors' costs (including reserved costs, if any) be taxed and paid in accordance with the Act. 4. Under the Bankruptcy Regulations a copy of this order be given to the Official Receiver in Sydney within 2 days after the order is entered. 57 The Court notes that the date of the act of bankruptcy is 25 February 2003.

I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

Solicitor for the Applicant Creditor: The Hargreaves Practice

Solicitor for the Supporting Creditor: Bray Jackson & Co

Date of Hearing: 9 and 23 September 2003

Date of Judgment: 9 October 2003