Re Bloomer, G. v. Ex part Ford Credit Australia Ltd [1985] FCA 282

JUDGE MAKING ORDER : Toohey J. DATE OF ORDER 3 26 June 1985 WHERE MADE 3 Perth

1. There be a_ sequestration order against the estate of

2. The costs of the petition be taxed and paid out of the

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALIA

Judgment Debtor EX PARTE: FORD CREDIT AUSTRALIA LIMITED

Ford Credit Australia Limited ("Ford Credit") petitions the Court for a sequestration order against the estate of Gilbert Bloomer. The act of bankruptcy relied on is failure to comply

with a bankruptcy notice calling upon Mr. Bloomer to pay the sum

This sum was the amount of a final judgment obtained by Ford Credit against Mr. Bloomer in the District Court of Western Australia on 27 February 1984. I was told by counsel for Ford Credit that the judgment was the result of an application for summary judgment following the filing of an appearance by Mr. Bloomer to the writ of summons issued against him. Mr. Bloomer was not represented on the hearing of the application for summary

judgment nor was he represented in the proceedings before this

Mr. Bloomer has not applied to set aside the bankruptcy notice or tor an extension ofr time in which to comply with the notice. Hence there are practical difficulties as were outlined

by Lockhart J. 1n Re Sterling; Ex parte Esanda Ltd. (1980) 44 FLR

125 at 129-130. It was apparent from earlier occasions on which the hearing of the petition was before me that Mr. Bloomer considered that he did not owe Ford Credit the amount of the judgment obtained by it or, at any rate, that he did not owe the whole of the amount. I invited Mr. Bloomer to give evidence which he did. Counsel for Ford Credit did not cross-examine him. I found Mr. Bloomer entirely credible and accept what he told the

In November 1982 Mr. Bloomer was interested in trading in his Datsun 200B on another vehicle. To that end he went toa dealer, Range Ford. There he decided to buy a Ford Meteor. Ford

Credit finances the sale of motor vehicles by Range Ford.

Mr. Bloomer's dealings at Range Ferd were with one individual. I shall not name him because the allegations made by

Mr. Bloomer against him were serious and he has had no opportunity

to answer then. Mr. Bloomer was persuaded to enter into a lease agreement rather than a hire purchase agreement. A lease agreement had no apparent advantages for him. He is a linesman with Australian Telecommunications Commission and could gain no income tax benefits by taking a lease. The explanation may have been in part that Mr. Bloomer was interested in some cash in hand. In any event Range Ford sold his Datsun and accounted to him for

the proceeds. It seems that, to persuade Ford Credit to accept

Mr. Bloomer under a lease aaqreement, kange Ford's emplovee told Ford Credit that Mr. Bloomer had substantial sums in government bonds and other securities. Counsel for Ford Credit confirmed that 1n the companv's file there was a notation to this effect.

Mr. Bloomer had no securities; he was dependent upon his earnings

Before he executed the lease agreement, Mr. Bloomer asked Range Ford''s employee what the position would be if, ata later stage, he was unable to keep up his payments. He was told

that he would lose such monies as he had paid and that he might be up for another $500 or $1000.

Under the lease agreement Mr. Bloomer had to make 48 Monthly payments of $260.58, a total of $12,507.84. The purchase price of the vehicle was $9,300. After making about 7 payments, Mr. Bloomer got into financial difficulties and was unable to continue with the agreement. Eventually he returned the vehicle to Range Ford. Under the terms of the lease agreement he was liable for the total of any rent instalments accrued due but not paid, the aqgregate of rent instalments not accrued due (rebated

to reflect their then value by applying an interest rate of 10% per annum to each instalment over the period by which the date for payment was brought forward) plus the residual value of the vehicle and repossession expenses, less the proceeds of its sale. In consequence he became liable to Ford Credit in the sum of

$7,041.76. He also became liable for interest and for the costs

In Re Wong; Ex parte Kitson (1979) 38 FLR 207 at 218

"Courts having jurisdiction in bankruptcy do not go behind or round judgments unless good reason 1s shown".

See also McDonald Henry & Meek's Australian Bankruptcy Law and

Practice 5th Ed. para. 205. No matter how widely the power of a court in bankruptcy to go behind a judgment is viewed, I can find no basis for going behind the judgment of the District Court. Although there was no trial of the action, judgment was not obtained by default. As a lease agreement, the contract made between Mr. Bloomer and Ford Credit did not come within the

provisions of the Hire-Purchase Act 1959 of Western Australia so

that none of the statutory rights conferred on a hirer against an owner, where there have been misrepresentations by a dealer, were available to him. Mr. Bloomer may have an action against Range Ford by reason of statements made by its employee to him notwithstanding that the lease agreement itself was made with Ford

Credit. See Cheshire & Fifoot Law of Contract 4th Aust. Ed.

para.155. I express no view on that matter. But I can see no

basis upon which Mr. Bloomer may challenge the judgment obtained

It is impossible not to feel a great deal of sympathy for Mr. Bloomer and it may be that, having regard to the circumstances of the transaction, Ford Credit could have shown more sympathy for his position than it has. In fairness to the

company, I should add that it did agree to accept the sum of

$2,000 in full settlement of its claim but this was conditional upon a payment in cash within a short time and Mr. Bloomer was unable to meet the deadline. But, so far as the present application 1s concerned, Ford Credit has established an act of

bankruptcy and otherwise made out its entitlement to a

I certify that this and the four preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Toohey