FEDERAL COURT OF AUSTRALIA

Day v Gould [2000] FCA 1397

BANKRUPTCY – Failure to comply with Bankruptcy Notice – Sequestration Order made.

JULIAN DAY & ANOR v STEPHEN GOULD

N7178 of 2000

JUDGE:          CONTI J

DATE:            7 SEPTEMBER 2000

PLACE:          SYDNEY

THE COURT ORDERS THAT:

1.                  That the estate of the Respondent Stephen Gould be sequestrated.

2.                  That the Official Receiver in Bankruptcy be appointed the trustee in bankruptcy of the estate.

3.                  That the Applicants’ costs of the Petition for Sequestration be paid out of the estate.

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

REASONS FOR JUDGMENT

1.         HIS HONOUR: The ground set out in the Creditors’ Petition as to non compliance with the Bankruptcy Notice which was filed in this Court on 23 August 1999 has been established, and Mr Gould, has not satisfied me that he has a counter claim set off or cross demand equal to or exceeding the amount of the judgment debt the subject of the Bankruptcy Notice, being a counter claim set off or cross demand that he could not have set up in the action in which the District Court judgment was obtained. 

2.         The creditors have complied with the requirement of the rules and in particular the requirements of rule 19 as to the additional affidavits to be filed by the applicants before the hearing.  I have a discretion, nevertheless, as to whether I should make an order for the sequestration of Mr Gould's estate.  It has been obvious to me that these proceedings have an overlay of enormous mutual distrust and animosity between the parties and it is not for me to form any view at all as to where the merits of that distrust and animosity may lie.

3.         I have urged upon Mr Gould that if he has available to him the business prospects having the value in terms of intellectual property which he asserts and if that property is of the dimension which he has claimed (he has one document filed in court which has placed an amount of $1 million by way of value upon that interest, then he would in his own interests be best to put all of this bitter litigation behind him and pay out the debt, even though that will cause some obvious damage to his pride and self esteem arising out of the conflicts that have occurred.

4.         Mr Gould will not, I think, in my judgment ever take advantage of the opportunity which I have extended to him previously to adjourn the proceedings in order to make such payment.  I think that the matters that he continues to put to me and the way he puts them to me are such that this proceeding would go on forever if I continued to adjourn and adjourn it.

5.         I propose in fairness and justice to the applicants who hold the benefit of the unsatisfied judgment of the District Court and have held the same for such a long time, despite a package of litigation that has subsequently ensued, that they are entitled to have their present petition upheld and a sequestration order made.  As I say I think that the fairness and justice of the matter requires that course and that Mr Gould can still exercise the right which he has pointed out to me, namely his statutory right to apply for a stay within 21 days of the order which I will make. 

6.         To do so he will have to put forward much more tangible material and information than he placed before Sackville J.  His Honour was also dismissive of the basis of the counter claim; that was put before him and I have been similarly dismissive.  Mr Gould will need to be, within such period of 21 days, much more demonstrative of the substantive interest which he claims to hold and its value, or else it may be within that 21 day period that he will finally take the opportunity of satisfying this outstanding indebtedness and get on with his life.

7.         I think that in the exercise of my discretion I must, as I have said as a matter of fairness and justice to the applicants, make an order which I hereby make for the sequestration of Mr Gould's estate.  I am not prepared to stay that order on Mr Gould's application or on anything else that he has told me this morning.  I will leave it to him

to understand from what I have said as to the kind of application and supporting material that he will need to put forward to the Court if he wishes to obtain a stay of my order.

Associate:

Dated:              4 October 2000