Ozer v Australian Liquor Marketers Pty Ltd, in the matter of Ozer

REASONS FOR JUDGMENT 1 There is before me an application which has been made by Ms Nazile Ozer, who is a bankrupt. Ms Ozer's application is one made in reliance on s 153B of the Bankruptcy Act 1966 (Cth) ("the Act"), which section provides: "If the Court is satisfied that a sequestration order ought not to have been made …, the Court may make an order annulling the bankruptcy." There are two respondents to Ms Ozer's application, Australian Liquor Marketers Pty Ltd ("ALM") and Mr Scott Darren Pascoe. The former is the person on whose petition a Registrar of this Court made the relevant sequestration order against Ms Ozer's estate and the latter is Ms Ozer's trustee in bankruptcy. Each respondent appeared on the hearing of Ms Ozer's application and each made substantive submissions with respect to the application. 2 Ms Ozer's application for an order annulling her bankruptcy was before me on an earlier occasion: see Ozer v Australian Liquor Marketers Pty Ltd [1999] FCA 1206 (5 October 1999, unreported) ("my first reasons"). Although ALM and Mr Pascoe each appeared on the hearing of Ms Ozer's application on that occasion also, only the former of them then made substantive submissions with respect to the application. 3 It is convenient to begin these reasons for judgment by summarising the way in which I disposed of Ms Ozer's application on the first occasion on which it was before me. 4 In my first reasons (at [17]), I identified, as a fundamental question obviously arising on an application like Ms Ozer's, the question whether the Court is satisfied that the sequestration order which has earlier been made ought not to have been made. I also identified a second question potentially arising on an application like Ms Ozer's, which second question only actually arises if the Court answers the first question affirmatively, namely, whether the Court should exercise the power, conferred on it by s 153B of the Act, to make an order annulling the bankruptcy. I said that that second question arises, even though the first question is answered affirmatively, because it was my view, based on existing authority, that s 153B of the Act confers on the Court a true discretion. 5 Although, on the first occasion on which Ms Ozer's application was before me, I answered affirmatively the first of the two questions which I have just mentioned, I answered negatively the second of those two questions. It was because of my negative answer to the second of those two questions that I dismissed Ms Ozer's application for an order annulling her bankruptcy. 6 As to the question whether I was satisfied that the sequestration order which had earlier been made ought not to have been made, I answered it affirmatively in the circumstances which I set out in the following paragraph. 7 ALM had obtained a default judgment against Ms Ozer in a New South Wales Local Court, based on an alleged breach by her of a written guarantee. ALM had then served a bankruptcy notice on Ms Ozer, based on that default judgment, which bankruptcy notice she had neither complied with nor moved to have set aside. ALM had then served a creditor's petition on Ms Ozer, based on her having neither complied with nor had set aside that bankruptcy notice, which petition she had not defended and on the basis of which petition the sequestration order had been made against her estate. Then, having applied to have her bankruptcy annulled, Ms Ozer asserted in the course of her annulment application that (contrary to appearances) she had not signed the written guarantee which ALM had alleged in the Local Court proceeding that she had breached. She further asserted in the course of her annulment application, as I understood her, that her brother, Mr Hakan Ozer, had forged her signature to the written guarantee. Before me, ALM neither cross-examined Ms Ozer on the two assertions of hers which I have just mentioned nor sought to contradict them otherwise. In those circumstances, I decided (see my first reasons at [23]) to proceed for the purpose of Ms Ozer's annulment application on the bases that Ms Ozer had not been responsible under the written guarantee and that the sequestration order earlier made against her estate ought not to have been made. 8 As to the question whether I should exercise the power, conferred on the Court by s 153B of the Act, to make an order annulling Ms Ozer's bankruptcy, ALM put forward before me a number of matters on the basis of which it submitted that I should, in the exercise of my discretion, refuse to make such an order. In the result, however, I found it unnecessary (see my first reasons at [41]) to focus in a substantial way on any discretionary matter but one. It was my view (see my first reasons at [14]) that I should proceed for the purpose of Ms Ozer's annulment application on the basis that, after becoming a bankrupt on 12 April 1999, she had, in breach of subs 7(1) of the Crimes Act 1914 (Cth) (read together with par 269(1)(a) of the Act), attempted, on 12 July 1999, to obtain credit to the required extent from the St George Bank ('the bank"), without informing the bank that she was then a bankrupt. That she had engaged in such conduct had effectively been conceded before me by Ms Ozer (see my first reasons at [40]). I took the view that I should not exercise the discretion conferred on me by s 153B of the Act to make an order annulling the bankruptcy of a person who had engaged in such conduct. 9 Ms Ozer appealed to a Full Court of this Court against my decision to refuse to make an order annulling her bankruptcy. The Full Court allowed that appeal and remitted "[t]he matter" to me "for reconsideration", declining, however, to make an order for costs in Ms Ozer's favour: see Ozer v Australian Liquor Marketers Pty Ltd [2000] FCA 291 (Finn, Marshall and Goldberg JJ, 20 March 2000, unreported) ("the Full Court's reasons"). 10 It appears from the Full Court's reasons that Ms Ozer had not included among her grounds of appeal a ground that I had erred in holding that s 153B of the Act conferred on the Court a true discretion. It further appears from the Full Court's reasons that Ms Ozer had not included among her grounds of appeal a ground that, in light of the circumstances which had led me to conclude that the sequestration order ought not to have been made against her estate, I had erred in exercising my discretion by giving any consideration whatever to her post-sequestration conduct in relation to the bank. Instead, Ms Ozer's appeal to the Full Court had been based primarily on my having allegedly placed "excessive reliance" in exercising my discretion on her post-sequestration conduct in relation to the bank, given the circumstances which had led me to conclude that the sequestration order ought not to have been made against her estate. As to that attack on my exercise of discretion, the Full Court said, "[15] In exercising his discretion, it was clearly open to the primary judge to take into account what might be termed 'adverse conduct' of Ms Ozer. So much was well established after Marek (supra) [that is, Marek v Tregenza (1963) 109 CLR 1]. Ms Ozer's complaint, nonetheless, is that excessive reliance was placed on that conduct notwithstanding that sequestration should never have occurred. The first step for the primary judge was to consider whether sequestration should not have occurred. Having so found it was not automatic that his discretion would be exercised in favour of Ms Ozer. Her 'adverse conduct' was relevant and his Honour was entitled to give it considerable weight. A complaint that there was 'excessive reliance' on that conduct by his Honour is not an appropriate attack on the exercise of a discretion." 11 However, immediately after expressing the views which I have just quoted, the Full Court then stated (see the Full Court's reasons at [15]) that it considered it to be a "significant matter" that my attention had not been drawn at the hearing before me to the fact that, before Ms Ozer had attempted to obtain credit from the bank, her solicitor, Mr John Jervis Kells, had served on the bank notice of her application for an order annulling her bankruptcy. As to that omission by Ms Ozer at the hearing before me, the Full Court said: "[16] The authorities establish that it is an offence not to disclose one's bankruptcy at each dealing with another person when credit in excess of $3,000 is sought to be obtained. (See for example R v Scott (1996) 137 ALR 347 at 353 per Doyle CJ, with whom Cox and Matheson JJ agreed). The severity of that offence may be lessened when one considers the circumstances in which the bank had been informed of Ms Ozer's bankruptcy in the previous month. The evidence, though, does not reveal whether Ms Ozer was aware prior to her loan application that her solicitor had served notice of the annulment application on the bank and, if she was so aware, what belief she entertained as to the bank's knowledge of her bankruptcy at the time of the [loan] application. [17] Given the significance the primary judge attributed to Ms Ozer's making of the loan application, we consider that were his Honour alerted to the solicitor's notice, further inquiry would probably have been suggested before his Honour was prepared to characterise her conduct in the manner that he did and, hence, exercise his discretion as he did. The lack of consideration of the service of the notice and of any examination of Ms Ozer's state of mind concerning the notice and its effects at the time, makes it necessary for the matter to be remitted to the trial judge. Such is the possible materiality we attribute to the notice. We would emphasise, though, that we regard this course as unfortunate. Its need arises for reasons unrelated to his Honour's treatment of the issues raised before him. [18] Additionally it should be borne in mind that his Honour specifically referred to other submissions having been put to him to urge him to exercise his discretion against the annulment. Were his Honour to have regarded the loan application in a somewhat different light having been alerted to, and examined, the service of the notice and its significance in the circumstances, his Honour may well have taken a different view of the need to deal with those other submissions." 12 My understanding, given the passage from its reasons for judgment which I have just quoted, of the tasks which the Full Court had in mind that I either would or might undertake on its remittal of the matter to me for reconsideration is as follows: first, I would examine "Ms Ozer's state of mind concerning the [service on the bank by her solicitor of] notice [of her annulment application] and its effects [on the bank's knowledge of her bankruptcy] at the time" of her attempt to obtain credit from the bank. Secondly, in light of that examination, I would then reconsider the seriousness which I had earlier attributed, for the purpose of the exercise of my discretion under s 153B of the Act, to Ms Ozer's attempt to obtain credit from the bank without informing it that she was then a bankrupt. Thirdly, if, on such reconsideration, I still considered sufficiently serious Ms Ozer's attempt to obtain credit from the bank, then I would again dismiss her annulment application by reason of that conduct. However, if, on such reconsideration, I no longer considered Ms Ozer's attempt to obtain credit from the bank sufficiently serious to justify dismissing her application, then, fourthly, I would consider other matters submitted as telling against the exercise of my discretion to make an order annulling Ms Ozer's bankruptcy and would then decide her application by reference to my view of those other matters. 13 Before, however, turning to the first of those tasks to which I have just referred, I should deal with a number of submissions on topics other than those tasks which were made before me by Ms Ozer on the hearing of the remitted matter. 14 First, although no similar submission had been made on the first occasion on which Ms Ozer's annulment application had been before me and although, so far as I can tell from the Full Court's reasons, no similar submission had been made before the Full Court, Ms Ozer submitted before me on the hearing of the remitted matter that "[a] real question arises as to whether ALM has a legitimate relevant interest sufficient for this Court to seriously entertain its submissions" opposing her annulment application. I take that submission to have been intended to convey that I should not seriously entertain ALM's submissions opposing Ms Ozer's annulment application because ALM did not have a legitimate relevant interest sufficient for me to do so. That submission was, however, preceded by the submission that "one can only conclude that ALM's opposition to the annulment application is because it seeks to protect its position as to the payment of costs". 15 I do not accept that ALM was required to establish before me some level of "legitimate relevant interest" without which I was not to entertain its submissions opposing Ms Ozer's annulment application, whether "seriously" or otherwise. It was sufficient that ALM had been named as a respondent to Ms Ozer's annulment application. However, even if ALM had been required to do so, it appears to me that the fact that it was seeking to protect its position as to the payment of costs would have sufficed for the purpose. 16 Secondly, Ms Ozer submitted that, in light of the circumstances which had led me to conclude on the first occasion on which her annulment application had been before me that a sequestration order ought not to have been made against her estate, it was not open in law to me, when exercising my discretion in the remitted matter, to give consideration to any post-sequestration conduct by her, including her conduct in relation to the bank. 17 Although Ms Ozer placed reliance in support of that submission on a passage from Lewis' Australian Bankruptcy Law (11th ed.) at p. 251, she cited no cases in support of it. Instead, she devoted much effort to seeking to demonstrate that statements in certain cases which she nominated and which, according to her, appeared to support the contrary of her submission either did not in truth do so or were obiter only and should not be applied by me. 18 As to the passage from Lewis, it plainly had nothing whatever to do with the matter, being directed to what I have described above as the first (and necessarily arising) question on an annulment application, rather than to the second (potentially arising) question. 19 As to the cases mentioned solely for the purpose of being explained away, what is striking about them is that they did not include the Full Court's decision in this very matter. Ms Ozer's submission which I am presently discussing is inconsistent with that decision (as well, incidentally, as being inconsistent with the position which Ms Ozer took before the Full Court). The primary task with which I was charged by the Full Court on remittal was to decide whether to attribute to Ms Ozer's post-sequestration conduct in relation to the bank the same seriousness as that which I had attributed to it on the first occasion on which her annulment application had been before me. Necessarily implicit in my being charged with such a task on remittal was the Full Court's view that it was open to me in law, when exercising the discretion conferred on me by s 153B of the Act, to give consideration to Ms Ozer's post-sequestration conduct. If I were to accept Ms Ozer's submission which I am presently discussing, I would be holding, among other things, that I am unable to perform the very primary task with which I was charged by the Full Court on remittal, something which it is obviously impossible for me to hold. 20 Thirdly, it was submitted that I would not be satisfied, for the purpose of determining her annulment application, that Ms Ozer had, within the meaning of par 269(1)(a) of the Act, obtained anything from the bank as a result of her dealings with it on 12 July 1999, so that I could not be satisfied, for the purpose of determining her annulment application, that Ms Ozer had breached that provision. As the matter was put in oral submissions, "Seeking something isn't obtaining it in terms of 269". 21 That is a submission the point of which I have great difficulty in understanding, since it has never been suggested by anyone against Ms Ozer that she did in fact obtain anything from the bank as a result of her dealings with it on 12 July 1999. Instead, it has merely been suggested, and, as I have already mentioned, I proceeded on the first occasion on which Ms Ozer's annulment application was before me on the basis, that Ms Ozer had, on 12 July 1999, attempted to obtain something (namely, credit to the required extent) from the bank. 22 There was evidence before me on the hearing of the remitted matter which again satisfied me for the purpose of her annulment application that Ms Ozer had made such an attempt. That evidence included a business record of Mr Pascoe's, recording a conversation held on 12 July 1999 between a named employee of Mr Pascoe's and a named employee of the bank regarding Ms Ozer's conduct on that day in relation to the bank, which business record I admitted into evidence pursuant to subs 69(2) of the Evidence Act 1995 (Cth). (I should perhaps mention here two matters in connection with that business record: first, Ms Ozer made no submission before me on the hearing of the remitted matter that I should exclude the business record under s 135 of the Evidence Act; and, secondly, Ms Ozer made no attempt in the remitted matter to use the request procedure provided for by Pt 4.6, Div 1 of the Evidence Act in respect of either Mr Pascoe's employee or the named bank employee.) As well as that business record, there was also Ms Ozer's own evidence on the topic in cross-examination. As to the latter, Ms Ozer asserted in cross-examination, for instance, that, when she had contacted the bank on 12 July 1999, she had asked it for "three to four thousand dollars" or, as she also put it elsewhere in her evidence, "three or four thousand dollars". (I should, perhaps, add here that that request was, on the evidence before me, made orally. I can see no reason, however, why the fact that that request was made orally, rather than in writing, would disqualify it as an attempt to obtain credit for present purposes.) 23 The fact that Ms Ozer's own evidence (as opposed to that consisting of the business record) was that she had asked the bank only for "three to four" (or "three or four") thousand dollars provoked a particular submission by her as part of a broader submission that I would not be satisfied that she had breached par 269(1)(a) of the Act. I consider that I should deal with that particular submission, even though I have already rejected the broader submission of which it was a part. In order to make that particular submission explicable, I should first refer to my first reasons at [32]. There, I said: "I note … that, because of s 304A of the Act, the $3,000 figure in par 269(1)(a) has, since 1 July 1992, been increased quarterly in accordance with increases in the CPI. I am not aware of the precise figure presently, but am confident that it does not exceed $3,500, since, according to McDonald, Henry & Meek, Australian Bankruptcy Law & Practice, p 9408, the appropriate figure as of 1 January 1997 was $3,363.)" (Incidentally, I see no reason as a result of anything which occurred on the hearing of the remitted matter to conclude that my confidence at the time of my first reasons was misplaced. I therefore remain confident that, on 12 July 1999, the relevant sum for the purpose of par 269(1)(a) of the Act was no more than $3,500.) Ms Ozer's particular submission, in light of s 304A of the Act, was that an obtaining of credit by her as a result of her dealings with the bank on 12 July 1999 to the extent of $3000 would not, in any event, have brought her within par 269(1)(a) of the Act. While that submission was, of course, correct, it can have no present application, since I am satisfied, even on her own evidence, that Ms Ozer was attempting to obtain credit from the bank to the extent of four thousand dollars, although she would have been prepared to accept credit of three thousand dollars, if that had been all that the bank had been prepared to extend to her. 24 With those submissions by Ms Ozer dealt with, I now turn to an examination of "Ms Ozer's state of mind concerning the [service by her solicitor on the bank of] notice [of her annulment application] and its effects [on the bank's knowledge of her bankruptcy] at the time" of her attempt to obtain credit from the bank, namely, on 12 July 1999. 25 That examination is best conducted in two stages: first, what was Ms Ozer's state of mind on 12 July 1999 concerning the service by her solicitor on the bank of notice of her annulment application; and, secondly, what was Ms Ozer's state of mind on 12 July 1999 concerning the bank's knowledge of her status as a bankrupt on that date? Before, however, dealing with both of those questions, I should mention that Ms Ozer did not deign, either in her written or in her oral submissions before me on the hearing of the remitted matter, to make any submission whatever on either of those two questions. That was, in my view, a most surprising approach to take to the remitted matter, given the Full Court's reason for having remitted her annulment application to me for reconsideration. 26 As to the question of Ms Ozer's state of mind on 12 July 1999 concerning the service by her solicitor on the bank of notice of her annulment application, it will be recalled (see [11] above) that, in its reasons, the Full Court said, "The evidence … does not reveal whether Ms Ozer was aware prior to her loan application that her solicitor had served notice of the annulment application on the bank". I must confess that I have not found it easy to reconcile that statement by the Full Court with its acknowledgment earlier in its reasons for judgment (see the Full Court's reasons at [4]) that, "On 17 June 1999, Ms Ozer swore an affidavit in which she deposed to the service of [notice of] the annulment application on her creditors[,] which included the bank". In fact, when one examines Ms Ozer's affidavit sworn on 17 June 1999, one finds annexed to it, not only a copy of the relevant notice of annulment application, to the service of which on her creditors Ms Ozer had deposed, but also (as part of the same annexure) additional material from which one would comfortably infer that the notice had been served on the bank on 3 June 1999. In any event, I am satisfied that, at least from 17 June 1999, Ms Ozer was aware that the bank had been served on 3 June 1999 with a copy of the notice of her annulment application which was annexed to her affidavit of 17 June 1999. 27 Turning next to the question of Ms Ozer's state of mind, on 12 July 1999, concerning the bank's knowledge of her status as a bankrupt on that date, Ms Ozer gave evidence before me the effect of which was that it was her belief on that date, by reason of her knowledge of her solicitor's service on the bank on 3 June 1999 of the notice of her annulment application, that the bank then knew that she had the status of a bankrupt. I accept that evidence as to her belief. 28 Ms Ozer further gave evidence more than once in the course of her cross-examination that she did not tell the bank on 12 July 1999 that she was a bankrupt "because they already knew". It follows from that evidence that Ms Ozer's position was that, not only had she believed on that date that the bank then knew that she had the status of a bankrupt, but she had also adverted to that belief in the course of her attempt to obtain credit from the bank and had relied on it as the reason for not telling the bank about her status. I accept that that was the case. 29 There is one further matter concerning Ms Ozer's state of mind on 12 July 1999 with which it appears to me to be appropriate to deal now, even though it was not explicitly referred to in the Full Court's reasons, namely, whether Ms Ozer knew on that date that she was obliged to tell the bank when attempting to obtain credit from it that she then had the status of a bankrupt. 30 As to that matter, I am satisfied that she did know. 31 In reaching that conclusion, I rely on a number of matters. 32 First, on 11 May 1999, Ms Ozer had signed a document headed "warning notice" which she had received from Mr Pascoe. That document had set out certain provisions of the Act which the reader was warned to read immediately, including s 269. Ms Ozer had expressly acknowledged when signing that document that she had "read and understood its contents". 33 Secondly, since, at the latest, 3 May 1999, Ms Ozer had had legal representatives acting for her in connection with her bankruptcy, from whom she could obtain independent advice about her obligations as a bankrupt, including independent advice about the warning notice before acknowledging that she had "read and understood its contents". It is apparent that she must have been in close contact with those legal representatives contemporaneously with her signing of the warning notice. For instance, her initial affidavit in support of her application for an order annulling her bankruptcy was sworn on the very same day as she signed the warning notice. In those circumstances, it would be surprising if she had not obtained such advice about the warning notice. 34 Thirdly, Ms Ozer's evidence before me in the remitted matter that the reason why she did not tell the bank on 12 July 1999 that she was then a bankrupt was her belief that it already knew that fact appears to me to be consistent only with her awareness on that date of the existence of her relevant obligation. 35 Fourthly, during the course of Ms Ozer's cross-examination, the following exchanges occurred: "It is certainly the case, is it not ma'am, that you did not tell St George bank at the time that you made application for that extra money, that you were in fact a bankrupt. You didn't, did you. You didn't do it? --- I didn't do it. And you knew that you ought to do it, because you signed a document saying, and you gave it to Mr Pascoe, saying that you understood that you weren't allowed to apply for credit, without first telling them that you were a bankrupt, isn't that correct? --- That's correct." 36 As against the matters to which I have referred above, I must mention that Ms Ozer did deny elsewhere in her evidence her awareness, on 12 July 1999, of her relevant obligation. (Such self-contradiction was, incidentally, a feature of Ms Ozer's evidence before me.) However, I prefer her evidence which I have set out in the preceding paragraph, reinforced as it is by the first three matters which I have mentioned above. 37 Having now performed the first of the tasks which, on my understanding of the Full Court's reasons, the Full Court required me to undertake on its remittal of the matter to me for reconsideration, I turn to the second of those tasks, a reconsideration, in light of the result of my undertaking of the first task, of the seriousness which I had earlier attributed, in the exercise of my discretion under s 153B of the Act, to Ms Ozer's attempt to obtain credit from the bank without informing it that she was then an undischarged bankrupt. 38 The findings which I have made above concerning Ms Ozer's state of mind on 12 July 1999 have not caused me to alter in any significant way my view of the seriousness of her conduct on that day. Ms Ozer's belief on that day that the bank knew that she was then a bankrupt, based as that belief was solely on the fact of service on the bank over five weeks earlier of notice of her annulment application, does not, in my view, provide a satisfactory excuse for her having omitted to tell the bank that which she knew she was obliged to tell it. (I add, incidentally, that if, contrary to the view which I have expressed above, Ms Ozer did not know on 12 July 1999 that she was obliged to tell the bank that she was a bankrupt, then any belief by her as to the bank's state of mind as to that matter could hardly extenuate her omission.) The very document which had put the bank on notice over five weeks earlier that Ms Ozer was then a bankrupt had also put the bank on notice that Ms Ozer would soon have heard before this Court an application which she had made to have that status terminated. In fact, the notice had informed the bank that her annulment application would be heard on 22 June 1999. (In the result, her annulment application was not heard on that date, but that is irrelevant for present purposes.) Ms Ozer, knowing nothing more about the bank's state of mind than that it had received such notice could not justifiably, in my view, over five weeks later and after the date nominated in the notice as the date for the hearing of Ms Ozer's annulment application, proceed on the basis that the bank then believed (correctly) that Ms Ozer remained a bankrupt. The bank could well have believed instead that Ms Ozer's application for an order annulling her bankruptcy had been heard and determined in her favour on 22 June 1999 and that she was no longer a bankrupt. 39 Accordingly, as on the first occasion on which her application for an order annulling her bankruptcy was before me, I again decline, in reliance on Ms Ozer's conduct in relation to the bank, to make such an order. Also as on the first occasion on which her application for an order annulling her bankruptcy was before me, it is therefore unnecessary for me to deal with other discretionary matters put forward before me as justifying dismissal of Ms Ozer's application. However, I have decided on this occasion to say something of one of those other matters. 40 As well as being a customer of the bank at all material times, Ms Ozer was also a customer of Citibank, to which she stood in the relation of a borrower. There is before me evidence of the state of her account with Citibank between 8 January 1999 and 7 August 1999. During that seven month period, only two events are shown as having occurred in relation to that account apart from Ms Ozer's regular monthly payments reducing her indebtedness to Citibank. First, on 6 April 1999 or, in other words, six days before the relevant sequestration order was made against her estate on 12 April 1999, Ms Ozer obtained an increase of $40,000 in her line of credit. Secondly, on the day on which the relevant sequestration order was made against her estate, she drew down $10,450 of that increase. 41 On 6 April 1999, Ms Ozer apparently owed her brother, Mr Ali Ozer ("Ali"), $80,000. It was her evidence before me that she had obtained the $40,000 increase in her line of credit for the purpose of paying that sum to Ali, so that Ali could buy a house for his son. According to Ms Ozer's evidence, "When I went to them [that is, Citibank] they made a cheque and I gave it to, hand it to my brother [that is, Ali], and then a week later cheque was come up frozen. At that time I didn't know what does it mean, it never happen to me, and apparently they had an investigation which happen, must have been after 12 April [1999], they said because you been bankruptcy your money been stopped, you're not entitled to have that [$]40,000 cheque to give to your brother." However, it appears that, as well as giving Ali a $40,000 cheque which was not paid by Citibank, Ms Ozer had also given him a cheque for $10,450 (whether at the same time as the $40,000 cheque, I cannot tell from the evidence). That cheque was paid by Citibank on 12 April 1999, the date of her bankruptcy, and represented the drawing down shown on that date in her relevant statement of account. 42 Ms Ozer was naturally asked in cross-examination before me whether her attempted payment of $40,000 to Ali and her actual payment to him of $10,450 were made because she was aware that she was at risk of being made bankrupt on 12 April 1999. She denied that that was so. I see no need for me to determine that issue for present purposes. 43 As to how the actual payment of $10,450 had been treated as between Ali and her, Ms Ozer gave conflicting accounts before me. One account was that it had been treated as reducing her $80,000 indebtedness to him. Another, subsequent, account was that it had been a gift from her to him. Again, I see no need for me to determine that issue for present purposes. 44 However, what is significant for present purposes is that, in spite of her acknowledgment before me that she had understood, from things said to her both by Mr Pascoe and by her own legal representatives, the importance and seriousness of the accurate preparation of her statement of affairs, Ms Ozer had included no reference in that statement to the $10,450 payment to Ali, which had occurred only one month earlier. She claimed in that statement still to owe Ali $80,000, which was false if the payment had reduced her indebtedness to him by $10,450. Further, she showed no gift to Ali of the payment, something which she was required to do in the statement if the payment had been a gift from her to him. Thus, on either of her accounts as to how the payment had been treated, her statement was defective in a significant respect. 45 (I add incidentally that if Ms Ozer's first account before me as to how the payment had been treated is true, that means that, after completing her statement of affairs, she falsely swore in her affidavit of 17 June 1999 to which I have already referred above that she still owed Ali $80,000.) 46 Ms Ozer's explanation before me in evidence of her failure to refer in her statement of affairs, in one way or another, to the $10,450 payment was, in substance, that, "the trustee didn't bring up as a question. If they did ask me I would have told them". I do not accept that that was a satisfactory explanation for her failure to refer to a transaction which she is most unlikely to have forgotten in the short time since it had occurred and which was plainly relevant in stating her affairs, regardless of which of Ms Ozer's accounts about the treatment of the payment is accepted. (I add that the trustee did not know of the existence of the payment at the time of the completion by Ms Ozer of her statement of affairs and so could hardly have raised it with her.) 47 In her final submissions before me on the remitted matter, Ms Ozer's reference closest to being relevant to the issue which I am presently discussing was as follows: "[T]here's an allegation in [ALM's submissions] that the bankrupt concealed the payment of $10,450. In my respectful submission, no such evidence exists. The evidence is quite simply that the trustee had all the bank statements and all the financial information." That submission failed to address the real issue. The concealment being referred to in ALM's submissions to which Ms Ozer was referring (and in Mr Pascoe's, as well, as it happens) was plainly concealment in her statement of affairs and it is undoubted that there was no reference in that statement to the payment, whether by way of reducing the $80,000 debt to Ali or by way of a gift to him. Even if the seriousness of such an omission could be reduced if Ms Ozer had justifiably believed at the time of completing her statement of affairs that Mr Pascoe was already aware of the existence of the payment and of all of the circumstances surrounding it, she gave no evidence before me, in terms, of such a belief nor any evidence of any grounds for such a belief. 48 Further, as I have already mentioned, the evidence discloses that it was not until some considerable time after Ms Ozer had completed her statement of affairs that Mr Pascoe first became aware of the existence of the $10,450 payment. Even then, he knew nothing of either the identity of the payee or the other circumstances surrounding the payment. Then, when Mr Pascoe requested information on those matters from Ms Ozer via Mr Kells, Mr Kells in effect refused to disclose the payee's identity to Mr Pascoe, although he (Mr Kells) then knew from Ms Ozer that the payee had been Ali. (I add that it may be that such refusal to disclose the payee's identity had been conceived of as clever lawyering by Mr Kells, but was contrary to his instructions from Ms Ozer; however, I need not decide whether that was so.) In fact, it was not until Ms Ozer gave oral evidence before me that it transpired, in cross-examination, that it had been Ali who had been the payee of the $10,450. 49 In the circumstances, I need not rest my decision in this matter on Ms Ozer's failure to disclose in her statement of affairs the $10,450 payment to Ali. However, if that had been her only "adverse conduct" in the present matter (to use the term used in the Full Court's reasons), then that conduct alone would have led me to refuse her application for an order annulling her bankruptcy. 50 Ms Ozer's application is dismissed with costs. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katz.