SHOULD THE APPLICANT'S BANKRUPTCY BE ANNULLED?
27 Section 153A of the Bankruptcy Act provides:
(1) If the trustee is satisfied that all the bankrupt's debts have been paid in full, the bankruptcy is annulled, by force of this subsection, on the date on which the last such payment was made.
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(2) The trustee must, as soon as practicable after that date, give to the Official Receiver a written certificate setting out the former bankrupt's name and bankruptcy number and the date of the annulment.
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(6) In this section:
'bankrupt's debts' means all debts that have been proved in the bankruptcy and includes interest payable on such of those debts as bear interest, and the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee."
28 Section 153B(1) of the Bankruptcy Act provides:
"If the Court is satisfied that a sequestration order ought not to have been made or, in the case of a debtor's petition, that the petition ought not to have been presented or ought not to have been accepted by the Official Receiver, the Court may make an order annulling the bankruptcy."
29 The applicant has filed three affidavits in support of his application. A substantial amount of the material contained in those affidavits relates to the history of his claims for compensation arising out of the injury he sustained at work on 2 January 1991. None of that material is relevant to, nor does it bear upon, his application for annulment of the sequestration order made on 28 February 2008. The only material which relates to his application for annulment is found in the last two paragraphs of the affidavits filed on 30 July 2008 and 25 August 2008. Those paragraphs are in identical form as follows:
"(1) That the reasons I explained above are entirely satisfactory for the Court to annul the applicant's bankruptcy status pursuant to the provisions of section 153B of the Bankruptcy Act 1966 because the original decision of the respondent still did not became [sic] the subject of determination by Tribunal and Courts despite three different proceedings in relation to review of the original decision of the respondent. Therefore the sequestration order ought not to have been made by the Federal Magistrates' Court and the petition by the respondent ought not to have been presented and ought not to have been accepted by the official receiver.
(2) That for the annulment of my bankruptcy status pursuant to the provisions of section 153A of the Bankruptcy Act, I have paid the total debt of the said creditor, approved by the Court. The official receiver is breaching the law by not providing me with a certificate of annulment although I requested the trustee to send me a bill of any outstanding related cost. Therefore I request that this Honorable [sic] court make an order to annul my bankrupt status."
Almost all of the applicant's oral submissions were directed to challenging and re‑opening the decision of Centrelink on 4 November 1999, the decision of the Social Security Appeals Tribunal on 22 March 2006, the decision of the Administrative Appeals Tribunal on 3 July 2006 and to setting aside the orders of Weinberg J on 23 October 2006 and the Full Court on 22 November 2007.
30 There are presently other amounts payable by the applicant in respect of costs awarded against him or out of his estate to DEWR. These amounts are:
· On 8 November 2001 the Full Court ordered that the applicant pay the costs of DEWR in respect of the appeal which it had dismissed on 21 September 2001. $630 remains outstanding under that order;
· On 9 February 2007 Sundberg J ordered that the applicant pay DEWR's costs of an application that the applicant lodge security for DEWR's costs of the applicant's appeal to the Full Court;
· On 22 November 2007 the Full Court ordered that the appeal by the applicant from the judgment and orders of Weinberg J on 23 October 2006 be dismissed and that he pay DEWR's costs of the proceeding;
· On 28 February 2008 the sequestration order was made against the estate of the applicant and the Court ordered further that DEWR's costs of and incidental to the petition be taxed pursuant to O 62 of the Federal Court Rules and paid in accordance with the Statute.
31 I do not consider that there are any grounds on which, for the purposes of s 153B of the Bankruptcy Act, I can be satisfied that the sequestration order made on 28 February 2008 ought not to have been made. The bankruptcy notice and creditors' petition pursuant to which the sequestration order was made were in order and there are no defects in them. The debt payable by the applicant identified in the bankruptcy notice was a debt which related to judgments and orders of various courts in relation to costs. None of those orders were set aside or reversed by any appellate court. The reasons set out by the applicant in his affidavits to which I have referred in par [29] above, and in his oral submissions, do not identify any ground which warrants the Court being satisfied pursuant to s 153B(1) of the Bankruptcy Act that the sequestration order ought not to have been made. The reasons set out in those affidavits appear to be based on what the applicant calls "the original decision" by Centrelink on 4 November 1999 whereby it advised the insurer, who was liable to pay compensation to the applicant, to pay Centrelink $88,633.34 in respect of payments of social security received by the applicant and his wife before 26 October 1999. The insurer paid that amount to Centrelink out of moneys it would otherwise have paid to the applicant pursuant to a judgment of the County Court. The applicant has sought to reopen that original decision in a number of proceedings before the courts, culminating in the special leave application to the High Court, to which I have referred earlier. That issue has been finally decided against the applicant and there is no basis upon which he can challenge the decision in any way which would have any effect on, or consequence for, the sequestration order made on 28 February 2008. There is no basis upon which I can review, set aside or otherwise interfere with any of the judgments or orders which resulted in orders for costs which formed the subject of the bankruptcy notice. Further, I have no jurisdiction to set aside the orders of Weinberg J on 23 October 2006 or the Full Court on 22 November 2007.
32 The applicant's application pursuant to s 153A of the Bankruptcy Act must also fail. There is no basis upon which the Court can order an annulment of a bankruptcy pursuant to s 153A because the operation of that section depends upon the satisfaction of the Trustee that the applicant's debts "have been paid in full". That section does not allow for an order to be made by the Court implementing its provisions. If the Official Trustee is satisfied that all the bankrupt's debts have been paid in full, the bankruptcy is annulled by force of subs 153A(1). The need to obtain an order from the Court does not arise.
33 The Court's only power to annul a bankruptcy is found in s 153B but the exercise of that power requires the Court to be satisfied that the sequestration order ought not to have been made: Willoughby v Official Trustee in Bankruptcy (WA) (2000) 102 FCR 261 at 267.
34 The applicant says in the affidavits, to which I have referred in par [29]above, that he has paid the "total debt" due to the Official Trustee. It is true that he paid the sum of $36,066.20 on 10 June 2008 but there is evidence before me, firstly, that there are other debts due and outstanding to DEWR and secondly, there is evidence from the Official Trustee that he is not satisfied that all the applicant's debts have been paid. The Official Trustee says, and I accept his evidence, that until such time as the applicant files a statement of affairs and the Official Trustee is able to consider its contents, he is unable to be satisfied that all the applicant's debts have been paid.
35 Further, there is an inconsistency or incongruity in the applicant's assertion firstly, that he has paid the total debt due either to DEWR or to the Official Trustee and secondly, his claim for interim relief that the amount of $36,066.20 be reimbursed to him.