IN THE FEDERAL COURT OF AUSTRALIA)

GENERAL DIVISION                  )

BANKRUPTCY DISTRICT OF THE        )  Nos. NP671-674 of 1995

STATE OF NEW SOUTH WALES              )

              RE:           STANLEY STREET,

                             JUNE SHEILA STREET,

                             FRANCIS TERENCE HALLS and

                             COLLEEN MAY HALLS

                             Judgment Debtors

              EX PARTE:     RETRAVISION (NSW) LIMITED

                             Creditor

CORAM:    HILL J

PLACE:    SYDNEY

DATED:    15 JUNE 1995

                    REASONS FOR JUDGMENT

          On 30 May 1995 the first and second respondents filed a motion that the proceedings be dismissed and also seeking orders for costs on an indemnity basis both against the applicants and their solicitor.  The application has not been served on the third respondent.

          The proceedings as set out in the amended application were for four declarations concerning the liability of the respondents, under s592 of the Corporations Law, in respect of debts incurred by Terry's Sound Lounge Pty Limited which had been guaranteed by the applicants.  In due course the parties sought the determination of separate questions of law.  The application to this effect was acceded to and on 11 April 1995 Gummow J delivered judgment answering, on the assumptions which he was asked to make, the question whether the applicants were entitled to declarations in, and to the effect of, paras 1, 2 and 3 of the amended application.  For the reasons given by his Honour, the separate question was answered in the negative.

          There is sought in the amended application a fourth declaration, but it is clear that that fourth declaration depends upon there being ultimately an entitlement on the part of the applicants to $2,134,375.33.  Consistent with what I understand his Honour decided, that entitlement did not exist.  The notice of motion has been served upon the applicants.  The applicant's solicitors filed notice of discontinuance and it is clear that the applicants were aware that the notice would come on for hearing today.  There has been no appearance on behalf of the applicants.

          I am satisfied that in these circumstances the proceedings should be dismissed and that an order for costs should be made against the applicants.  The circumstances do not justify an order that costs be paid on an indemnity basis.

          Accordingly, the applicants should pay the respondents' costs of the proceedings, including the costs of the motion, on an ordinary party to party basis.  The motion
for costs to be paid by the applicant's solicitors is not pressed.

I certify that this and the

preceding two (2) pages

are a true copy of the Reasons

for Judgment herein of his Honour

Justice Hill.

Associate:

Date:  5 December 1995

Counsel and Solicitors       J Chippendall instructed by

for Applicant:               A Jackson

Counsel and Solicitors       J Johnson instructed by

for Respondent:              JR Gibb & Co

Date of Hearing:             15 June 1995

Date Judgment Delivered:          15 June 1995