Vassis, Re B.W. Ex Parte Leo Leung [1986] FCA 19

Barton v. Deputy Federal Commissioner of Taxation (1974) 131 CLR Re Cook (1946) 13 ABC 245

Re Smith; Ex parte Kern Corporation Lta., Pincus J., unreported, 19/6/85.

Commissioners of Inland Revenue v. Lysaght [£1928] AC 234 Akbarali v. Brent London Borough Council (1983) 2 AC 309

Re: Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR Mann v. Hulme (1961) 106 CLR 136

Emma Silver Mining Co. v. Grant (1880) 17 Ch.D. 122

Re Dawson (dec'd); Union Fidelity Trustee Co. Ltd. v. Perpetual Trustee Co. Ltd. £1966] 2 NSWR 211

Re O'Leary; Ex parte Bayne (1985) 61 ALR 674 In re Small; Westminster Bank v. Trustee [19341 1 Ch. 541

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his family. He does, however, assert that the period of his

absence was somewhat prolonged, even after those fears had been

allayed, by a shortage of cash with which to pay his fare home.

There was no evidence to support this defence other than the evidence of Mr. Vassis himself. He asserted that he had been subjected to threats against his life, if monies were not paid. He gave no evidence of any threat uttered to him in respect of his family, but only of threats in respect of himself. However, he asserted that, after he tleft, his family also had been threatened, and he claimed that a motive of his departure was to draw the blame away from his family for its protection. His statement that the family had been threatened after his departure

was not supported by any evidence from his wife or adult' son,

In the circumstances, the extent to which I give credence to the evidence of Mr. Vassis is a vital matter. There are several considerations which make it difficult to accept his assertion that the only substantial reason for his flight from Australia was the threats to which I have referred. In the first place, when he was asked by his own counsel to elaborate upon the alleged threats, the first threat which he mentioned, and the only one of which he specified any details, was a threat alleged to have been uttered by a client expert in karate, some eight months before his departure. He had made no complaint to the

police, and had not paid the claim or any part of the claim of

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Che person who threatened him. Indeed, he had filed defences to proceedings brought by that person. If any threat had been uttered, it seems clear that the person concerned had afterwards decided to enforce his rights by legitimate means through the courts. I donot accept that, eight months later, any threat made by this man remained a matter of serious concern to Mr. Vassis. No circumstances were stated in respect of other threats alleged to have been made shortly before Mr. Vassis left. It seems reasonable to conclude that Mr. Vassis himself did not put them forward as having the serious impact he claimed for the

If strong language was used by someone seeking a payment from Mr. Vassis, it would be easy to understand that Mr. Vassis might later be tempted to justify his flight by asserting that he had been threatened. There are a number of indications in his evidence of a proneness to self-justification and a failure, even

after all that has happened, to accept fully the realities which

'led to his present situation. Under cross-examination, he

declined squarely to accept that in December 1982 the company Bemva could not repay the monies of Mr. Bakopoulos which he invested in it. Even more tellingly, he attempted to justify the unsecured and unauthorised investment of the proceeds of Mr. Laspatizos's sale, which he knew were required for his purchase. He was asked the question: "But you knew that they were to be paid toward the purchase price... didn't you?" He answered:

"Because the settlement was to take place in the New Year we

organised a bit of interest for him in the interim period and I did not get an authority in writing." This answer dishonestly suggests that the purpose of the unauthorised investment was to obtain interest for Mr. Laspatizos, and even hints that the offence consisted merely in not having written authority. On the evidence of Mr. Laspatizos, which I accept, his money must have been invested, contrary to his instructions, in the company Bemva late in December 1982, at a time when Mr. Vassis could not possibly have believed that this investment would be for his benefit and would actually result in his receiving interest. There was no suggestion in cross-examination of Mr. Laspatizos that he had authorised the investment, but not in writing; indeed the cross-examiner put to him: "What happened, did it not, is that you gave instructions to your solicitor, Mr. Vassis, to apply the proceeds of the sale of one property to the purchase of the other, is that correct?" to which he replied: "That is

I have given careful consideration to the evidence of Mr. Vassis, including his assertion that a number of years earlier he had been the victim of a knife attack by a client's tenant, but I reject the proposition that he was motivated solely or substantially by fear of personal attack, or attack upon his family, to flee from Australia. He left the day after he learned of the appointment of a receiver. Till then, he had, by

desperate expedients, bought time to get in money froma large

debtor of Bemva, but he now realized that the balance of about

$700,000-00 was irrecoverable, and in any case there was no more time. The "continual pressures", as he called them, of his creditors' pursuit of him, by legitimate means, could no longer be escaped except by flight from Australia. Having regard to his

long struggle with financial adversity, in which disastrously for

himself and others he had resorted to dishonest means, and the existing and impending circumstances immediately before his

departure, which I infer precipitated it, I conclude that when

Mr. Vassis fled from Australia he did so with intent to defeat or delay his creditors. I think, despite his denial, concern about steps which would inevitably be taken by the Law Institute of

Victoria and about criminal prosecution were also significant

In the absence of any suggestion from Mr. Vassis himself of a change of intention after his departure, or of any supervening reason to remain away other than the assertion that return became financially difficult, I further conclude that, at least until shortly before his return, and within the period

alleged in the petition, Mr. Vassis remained out of Australia

Section 40(1)(c) of the Bankruptcy Act does not require that the intent in question should be a debtor's sole intention.

As Stephen Jd. put it in Barton v. Deputy Federal Commissioner of

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exclusive, for instance an intent to defeat creditors and an intent to avoid the

sanctions of the criminal law. In such a case I see no reason why the existence of the second such intent should prevent a creditor from relying upon s.40(1)(c)."

See also Re Cook (1946) 13 ABC 245 at 270-1 where the desire to

pursue overseas an emotional entanglement with a mistress was not

inconsistent with the co-existence of the statutory intent. In Barton's Case the High Court placed reliance upon "the absence of evidence of any honest reason for (the debtor) remaining overseas". In the present case I have rejected the evidence proffered of a reason. As ina case where no reason is evidenced, so also in a case where a reason is evidenced but rejected, the surrounding circumstances may speak clearly enough of what the reason in fact was. Barton's Case was applied by

Pincus J. in Re Smith; Ex parte Kern Corporation Ltd.

(unreported, 19 June 1985), where also the petitioning creditor

relied upon circumstantial evidence. Pincus J. said:

"There may have been other reasons for his departure, but it has certainly had the effect of delaying the creditors and that was probably an intended outcome.

apparent approval, given in Barton v. Deputy Commissioner of Taxation 131 C.L.R. 370 at

p.375, to the discussion by Evershed M.R. in Re Cohen £1950] 2 All E.R. 36 at pp.39-40. That case evinces a readiness to draw the inference that the intention to defeat or delay has been proved, on the basis that the debtor must have known that the likely result of his absenting himself would be to delay creditors."

Even without this consideration, in the present case, as I have already indicated, I have concluded that the proper inference

from the circumstances is that the requisite intent was involved.

But that it is proper to take into account the inevitable result of an action, in order to assist in drawing an inference as to the intent with which it was performed, is also

confirmed by the decision of the Full Court in Noakes v. Harvey

Holmes & Son (1979) 26 ALR 297 at p.303 (per Brennan J.),. See too per Gibbs J. (as he then was) in Re Williams (1968) 13 FLR 10 at p.21. In Re Cohen (supra) at p.39 Evershed M.R. treated the circumstances that the debtor had "gone suddenly to France", that the time when he left was "at a time when he was financially

embarrassed to a serious extent", that his whereabouts in France

were at a place where it was "not... at all easy to find him", and that there was "something surreptitious about the conduct of the bankrupt at or shortly after the time of his departure", as circumstances which in that case were significant indications of the requisite intent. What should be concluded in a particular case 18 of course a question of fact, and the same circumstances may be more or less compelling in a different context. In the present case, each of the circumstances which I have drawn from the judgment of the Master of the Rolls is also present, and is part of a total situation which I find leads compellingly to the conclusion I have indicated. The fact that the departure was

outside the period of six months before the petition does not

matter, since the act of bankruptcy is a continuing one which did

continue into that period: Re Cook (supra), at p.270; Re Smith

The next question is whether the Court has jurisdiction, pursuant to the terms of s.43 of the Bankruptcy Act, in the circumstances of the present case. In the petition it is alleged that the debtor was, at the time that the act of bankruptcy was committed, "ordinarily resident in Australia". These words are

found in s.43(1)(b)(i). On behalf of Mr. Vassis, it is submitted

that although he was ordinarily resident in Australia immediately before his departure, on 8 January 1983, by 28 December 1983 when the six month period before the presentation of the petition commenced to run, he could only be properly described as

The question where a person is ordinarily resident is a

question of fact: Levene v. Commissioners of Inland Revenue

£19283 AC 217. It is obviously not to he answered, in respect of any particular time, by asking where that person was then resident. Otherwise, the word ""ordinarily" would have no meaning. But even the unqualified concept of residence is not tied to the accidents of a day; for, as Viscount Sumner said in

Commissioners of Inland Revenue v. Lysaght £1928] AC 234 at

p.245: "One thinks of a man's settled and usual place of abode as his residence". At the same time, his Lordship pointed out that "in many cases in ordinary speech one residence at a time is

the underlying assumption and, though a man may be the occupier

of two houses, he is thought of as only resident in the one he lives in at the time in question." In s.43 of the Bankruptcy Act, the phrase is not "resident in Australia", but "ordinarily resident in Australia", and it expresses an alternative to "personally present... in Australia". In such a context, it must convey the former of the meanings which I have quoted from Viscount Sumner's speech rather than the latter. If a man's home 1s in Australia, a merely temporary absence will not prevent his being "ordinarily resident in Australia". It is a question of fact and degree at what point a temporary absence might, if sufficiently prolonged, prevent its being proper to continue to

regard him as ordinarily resident in Australia. In Akbarali_ v.

Brent London Borough Council £1983] 2 AC 309 at 344, Lord Scarman said: "For if there be proved a regular, habitual mode of life ina particular place, the continuity of which has persisted despite temporary absences, ordinary residence is established provided only it is adopted voluntarily and for a settled

In the present case, Mr. Vassis flew from Australia to Greece via New Zealand. Upon leaving New Zealand, he completed a departing passenger's card which gave his nationality or citizenship as Australian, the reason for his journey as a holiday, and the state and country in which he next intended to live for twelve months or more as Victoria, Australia. He also stated that the country in which he would spend the longest time

on his overseas trip was Greece. When he gave evidence, Mr.

Vassis did not resile from the implications of the card to which

I have referred. He did not deny that his settled place of abode had at all times continued to be in Victoria. He admitted that he had signed the departing passenger card in January 1983, and said: "I just felt that I would be away for a short time and come back to Australia to live." He added: "I intended to come back to Australia and Victoria ... I just did not know where I was going to live, but Victoria for sure." He said that overseas he stayed in Greece, but that while he was staying there he did not intend to stay permanently. He had lived in Australia virtually all his life, though he was born in Greece. His wife

and son, who was then still at school, remained in Victoria.

Having regard to this evidence, it seems to me that the proper conclusion of fact is that Mr. Vassis was ordinarily resident in Australia, both at the time that he departed, and

throughout the period until his return two years later in

February 1985, or at least until the crucial date, 28 December 1983, which was barely a year from his departure. There is no suggestion that during his absence he established any other ordinary residence at any particular place in Greece. His own evidence, to which I have referred, clearly indicates that he regarded his journey overseas, desperate flight though it was, as no more than a temporary interruption of his ordinary residence in Victoria. I do not think the law requires it to be regarded in any different light. It may be compared, for example, to an

absence overseas by a Melbourne university lecturer upon

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sabbatical leave at Athens University who would, in my opinion, still be correctly described as ordinarily resident in Australia if at the conclusion of his sabbatical leave he intended to

If it had not been the proper conclusion that Mr. Vassis was ordinarily resident in Australia, the question might have arisen whether within s.43(1)(b)(iii) he "was carrying on

business in Australia, either personally or by means of an agent

or manager". In Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR 256 at p.260-1 Gibbs J. (as he then was) referred to "the somewhat wide understanding of those words (i.e., "was carrying on business") that has come to be established in

Solicitor-General £19501] AC 186; and In Re Bird v. Inland Revenue

Commissioners; Ex parte The Debtor £19621 1 W.L.R. 686. In Theophile's Case Lord Porter at p.201 said: "(T)rading does not

cease when, as the expression is, 'the shutters are put up,' but continues until the sums due are collected and all debts paid." In this sense, it seems clear that at the relevant time Mr. Vassis "was carrying on business in Australia", since the winding up of the business of his practice and the payment of its debts had not been concluded. The payment of the debts of a business, in order to conclude its carrying on, is to be understood in no narrow sense, as the second case cited by Gibbs J. shows. Furthermore, I do not think the additional words, "either

personally or by means of an agent or manager", should be

regarded as cutting down the broad meaning of "was carrying on

business in Australia"; for I think they are words of extension, not limitation (cf. Federal Commissioner of Taxation v. Lutovi Investments Pty. Ltd. (1978) 140 CLR 434 at p.444; Bank of New South Wales v. The Commonwealth (1948) 76 CLR 1 at p.383).

creditor has, within the meaning of s.44 of the Bankruptcy Act,

shown a debt owing to him by the debtor that amounts to $1,000-00, "is a liquidated sum due partly at law or partly in equity", and "is payable either immediately or at a certain

future time". I note that by s.5(1) "debt" includes "liability".

By s.104GA(8) of the Legal Profession Practice Act 1958

"Whenever a person who has suffered pecuniary loss by reason of a defalcation has received payment of compensation from the Fund for the whole or any part of that loss, the receiver shall to the extent of the payment have all the rights and remedies against the solicitor or firm or individual partners in the firm of

solicitors which that person had in respect of the loss suffered by him from the defalcation immediately before he received compensation from the Fund."

The word "defalcation" used in this section is defined in s.51 as follows: "'Defalcation' means any larceny

embezzlement failure to account fraudulent misappropriation or

other act punishable by imprisonment of or in relation to any

money or other property." The fund referred to in the

sub-section is the Solicitors' Guarantee Fund provided for by s.52. It was not disputed that the petitioning creditor was a receiver within this provision, or that persons suffered pecuniary loss by reason of actions of the debtor which would fall within the definition of a defalcation, nor was it disputed that such persons had received payments of compensation from the fund for the whole or part of their losses. But those former clients who were called to give evidence were cross-examined with a view to establishing that the compensation received by them somewhat exceeded the amounts received by Mr. Vassis as their solicitor on their. behalf, because the receiver also paid interest. It was submitted that neither the rights and remedies which the clients originally had against their solicitor, in respect of the loss suffered by them from the defalcations, nor the statutory right of the receiver pursuant to the sub-section, could be regarded as creating debts. It was argued that these

In my view, the pecuniary losses referred to in the sub-section must include the sums received by Mr. Vassis in his capacity as a solicitor, on behalf of his clients, and lost by his unauthorised investments. Mr. Vassis was a trustee: Mann v. Hulme (1961) 106 CLR 136 at 141. Monies obtained in fraud by forged mortgages, which Mr. Vassis was enabled to enter into because he held title deeds on behaif of clients, would also, in my opinion, fall within the scope of the sub-section. In such

cases, it seems to me that the rights and remedies of the

clients, to which the sub-section subrogates the receiver,

included liquidated claims. In Williams and Muir Hunter on

action for unliquidated damages, was always held to create a debt in equity, and is now provable."

I think such a debt is equally provable under s.44 of the

Bankruptcy Act. In Jacobs' Law of Trusts in Australia, 4th

Edition at p.510 it is said, of the liability to make good the loss of trust property caused by the wrongful act or omission of the trustee: "In view of equity, this obligation of restitution is but a species of equitable debt unless the trustee has in any way bound himself by covenant so that the breach of covenant gives rise to a specialty debt." In Emma Silver Mining Co. v. Grant (1880) 17 Ch.D. 122 at p.130 Jessell M.R. was concerned with a claim in a bankruptcy for monies paid by way of a secret commission and received in breach of fiduciary duty. He rejected an argument that the claim was for unliquidated damages, saying:

fiduciary in breach of his duty) for which he is liable to account."

The liability of a trustee to account for the very sum lost by

his breach of trust is also emphasised by Street J. (as he then

was) in Re Dawson (dec'd); Union Fidelity Trustee Co. Ltd. v. Perpetual Trustee Co. Ltd. £15663 2 NSWR 211. See also Law

Institute of Victoria v. Cowan Investment Survey Pty. Ltd. (1973) VR 293 at 299.

Under s.44(1)(b) the petitioning creditor's debt may be

"a liquidated sum due at law or in equity or partly at law and partly in equity". I think such a debt was owed in respect of monies received by Mr. Vassis and not accounted for congruently

with the basis upon which the monies had been received.

Furthermore I think that monies received by the device of forged mortgages, once received, were held in law on behalf of the clients in question, and could have been claimed by them at their election as monies had and received to their use (see

Cheshire and Fifocot, Law of Contract, 4th Australian Edition,

pages 78-9; and see Barewa Oil and Mining N.L. (Cin Liquidation) v. Isim Mineral Development Pty. Ltd. (1981) 59 FLR 451 at 456).

The petitioning creditor limited his case to that portion (in any event by far the largest portion) of each claim upon the Solicitors' Guarantee Fund which represented the actual monies of the client lost by the breach of trust or fraud of his solicitor. In other words, no claim was made to include interest added to payments. On this footing, and without pausing to consider whether the interest could have been included (cf. Re Dawson, supra), the whole of the amounts alleged did in my opinion constitute liquidated sums, which by virtue of s.104GA(8)

of the Legal Profession Practice Act were due from Mr. Vassis to

the petitioning creditor. Of the amounts due at the presentation

of the petition, the bulk was also due at the earliest date

Falling within the act of bankruptcy which I have found. This is so because the bulk of the sum is represented by payments of compensation which were made prior to that date, so that s.104GA(8) had already operated. (Thus no problem is caused by the principle of bankruptcy law that a petitioner's debt should have been in existence at the date of the act of bankruptcy, a Principle which in any event may not bar reliance upon a subrogation, by virtue of a subsequent event, toa right in respect of a debt that was in existence at that date.) For the purpose of this finding, I have regard to the documentary evidence. In view of the admissions which were implicit in the pleas of guilty entered by Mr. Vassis to the counts in the indictment, and in the light of his own evidence, as well as that of the petitioning creditor, I do not think I should limit my findings to the sums of which individual clients gave oral evidence before me, but should find, as I do, that the petitioning creditor has established to my satisfaction his entitlement concerning the full sum paid in respect of monies lost, as disclosed by the computer print-outs which were tendered

But it was argued, for the debtor, that the petitioning

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"3. The petitioning creditor does not, nor does any person on his behalf, hoid any security over the property of the debtor or any part of it for the payment of the amount specified in the last preceding paragraph or any part thereof. However, the petitioning creditor in his capacity as receiver of certain property of the debtor pursuant to the said Order of the Honourable Mr. Justice Gobbo, has received certain property and moneys the total value of which does not exceed $29,100.00 in addition (sic.), the sum of $139,485.69 is held by Pourvie Nominees Pty. Ltd. (a company in the control of Messrs. Purvis & Purvis) pursuant to a stakeholder agreement made the 10th day of August, 1983 between the petitioning creditor, the said Pourvie Nominees Pty. Ltd. and one Christine Vassis to abide the outcome of Supreme Court action No. 4834 of 1983 by the petitioning creditor against the said Christine Vassis (from which action the petitioning creditor cannot hope to receive more than the said sum of $139,485.69 and interest thereon, and

then only in his capacity as a trustee for the creditors of the debtor

generally). Even in the unlikely event that the petitioning creditor should ultimately become entitled to credit against the total amount referred to in paragraph 2 hereof, the total of all amounts already received by him as

aforesaid and the moneys held by Pourvie Nominees Pty. Ltd., there would be not less than $2,000,000.00 due and payable

by the debtor to the petitioning creditor pursuant to his right of

In the course of cross~-examination of the petitioning creditor, it was suggested that there might be further properties in respect of which he might have rights to recoup some part of

the mgnies claimed. He had lodged caveats against properties

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registered in names including the name of Mr. Vassis, or

otherwise connected with him, though there was no evidence before me to establish that he in fact had an entitlement in respect of

those properties. It was submitted on behalf of Mr. Vassis that

the petition ought to be dismissed on the ground that the

petitioner was a secured creditor who had not complied with s.44

In Re O'Leary; Ex parte Bayne (1985) 61 ALR 674 the

petitioning creditor stated in the petition that he had a security but estimated its value at nil. Sheppard J. referred to

5.44 of the Bankruptcy Act, sub-sections 2, 3 and 4, which I also

"(2) Subject to sub-section (3), a secured creditor shall, for the purposes of paragraph (1)(a), be deemed to be a creditor only to the extent, if any, by which the amount of the debt owing to him exceeds the value of

(3) A secured creditor may present, or join in presenting, a creditor's petition as if he were an unsecured creditor if he includes in the petition a statement that he is willing to surrender his security for the benefit of creditors generally in the event of a sequestration order being made against the debtor.

secured creditor, he shall set out in the petition particulars of his security."

"At first sight it might appear that the provisions of s 44(2), (3) and (4) operate to

require a secured creditor who petitions in bankruptcy to surrender his security, notwithstanding that the value of his security is less by $1000 or more than the amount of the debt owed to him. This is not, however, the case. In Re Wiggins; Ex parte Credit Assistance Pty Ltd (1979) 30 ALR 443; 36 FLR 182 Lockhart J. held that s.44 of the Bankruptcy Act permitted a petitioning creditor who held security, either to estimate the value of his security, in which case he would be deemed to be an unsecured creditor of the debtor for the amount by which the value of the debt exceeded the value of the security, or state his willingness to surrender his security for the benefit of creditors generally in the event of a sequestration order being made, in which case he might prove for the full amount of his debt. His Honour rejected a submission that s 44(2) and (3) were cumulative so that a petitioning creditor must both value his security and include in the petition a statement as to his willingness to surrender it. His Honour referred to the former provisions of s 55 of the Bankruptcy Act 1924 and to the provisions of s 4(2) of the Bankruptcy Act 1914 (UK). Both these provisions made it clear that the two courses were alternative. It was the absence of any such statement in the 1966 Act which was the foundation for the debtor's argument in Re

Iam in respectful agreement with his Honour's views. No other conclusion would give effect to the true intendment of the Act which appears to have been to allow a secured creditor, not wishing to surrender his security, to retain his security in order to obtain as much as possible as a secured creditor, and, at the same time, to petition in respect of the balance which was unlikely to be yielded upon the realization of the security, provided, of course, that the balance amounted to at least $1000. It is important to bear in mind the distinction

between the purposes served by the relevant sub-sections of s 44, on the one hand, and

the provisions of ss 90 to 94 inclusive, dealing with proofs of debt by secured creditors, on the other. The only purpose of s 44 is to specify the conditions upon which

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a creditor may present a petition. One of the conditions is that the petitioning creditor must have a debt which amounts to

$1000. If the creditor is secured he may not petition, unless he surrenders his security

or shows that the realization of his security will not yield sufficient to enable him to be paid in full. If he establishes that to he the case, provided other requisite conditions are satisfied, he is entitled to a sequestration order. When he comes to prove his debt in the ensuing bankruptcy, none of what has gone before binds him. He proves in accordance with s 90 of the Act and the succeeding sections provide for the various eventualities which may occur. In short then, the provisions of s 44 determine whether or not a creditor may successfully present a petition; the provisions of ss 90 to 94 determine how the amount of his debt is

to be guantified when he comes to prove in the bankruptcy.

Lockhart J. followed Re Wiggins in Re Florance; Ex parte Turimetta Properties Pty Ltd (No. 2) (1980) 39 FLR 400 at 403-4.

Fitzgerald J. followed both Wiggins and Florance in Re Finn; Ex parte Finn v. Amoco Australia Ltd (1982) 41 ALR 487; 58 FLR 54 at 60-1." ~

In the present case it is clear, on my findings, that the petitioning creditor is an unsecured creditor to the extent of an extremely large sum over and above any amount in respect of which any argument is raised that there is a security. In the words of Sheppard J., therefore, he has shown "that the realization of his security will not yield sufficient to enable him to be paid in full... (P)rovided other requisite conditions are satisfied, he is entitled to a sequestration order." One such condition, of course, is that the amount in respect of which he is an unsecured creditor is $1,000. In this case, I hold that

it is. But counsel for the petitioning creditor, against the

eventuality that I should find in favour of the argument presented on behalf of the debtor that any alleged security was in fact a security, sought leave to amend in order to include in the petition a statement of willingness to surrender such a security, for the benefit of creditors generally, in the event of a sequestration order being made against the debtor (see s.44(3)). I heard argument on this matter, and I have concluded that if that leave is required, it should be granted (cf. the remarks of Farwell Jd. in In re Small; Westminster Bank v. Trustee

However, I am not satisfied that the petitioning creditor has any security beyond such securities, if they should both properly be regarded as securities, as are set out in the petition. There is nothing to suggest that higher values should be put upon these than the values indicated by the petitioner. It may indeed be that each is valueless: as to the claim involving Christine Vassis, because it may not be established on the facts, or because the proceeds may belong in equity to the creditors generally; and as to the property obtained as receiver, because the order appointing him may not have effectively empowered him to do more than receive property (cf. In re Gershon

and Levy £19153 2 KB 527). As regards the lands the subject of caveats lodged by the petitioner, the curious position is that Mr. Vassis, by his counsel, argues these constitute securities within s.44(4), while Mr. Vassis in evidence denied there was any

basis for the caveats! There was no evidence to enable me to

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make a finding that there exist securities over these properties,

of which the petitioner ought to have set out particulars in his

petition, or that, if any security existed, any value should be ascribed to it, bearing in mind the difficulties of proof, and the evidence presently available to the petitioner to support it. That being so, I do not find it necessary to decide whether the respondent is entitled to approbate and reprobate in the manner evinced by the submission and his denial of the validity of the

caveats. I hold the petitioner is justified in pursuing the

For these reasons, I am satisfied that the debtor has committed the act of bankruptcy alleged in the petition, and I am satisfied of the proof of the other matters of which s.52(1) of the Act requires proof, I note that David Anthony Bradshaw, a registered trustee, has consented to act as trustee of the estate of the debtor. I make a sequestration order against the estate of the debtor. I order that the costs (including reserved costs) of the petitioner be taxed and paid according to the Act. I direct that a draft of this order be delivered to the Registrar

I certify that this and the preceding twenty-six (26) pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice