Re Capel, Elwyn John; Ex Parte Caram Finance Australia Ltd (formerly called Marac Finance Australia Ltd [1998] FCA 372

Re Capel, Elwyn John; Ex Parte Caram Finance Australia Ltd (formerly called Marac Finance Australia Ltd [1998] FCA 372

Because Mr Capel conceded the matters in s 52(1) were satisfied and failed to prove either that he was able to pay his debts or that there was other sufficient cause not to make a sequestration order, the estate was to be sequestrated. His alleged causes of action were not shown by evidence to be real claims with sufficient validity or likely value, and any asserted borrowing capacity did not establish solvency, particularly where he refused to borrow to pay Caram and Caram had no effective alternative remedy.

Jurisdiction
Australia
Judgment Date
09 April 1998
Procedural Posture
Bankruptcy Creditor's Petition for a Sequestration Order / Hearing and Determination of Petition
Outcome
Sequestration order made.
Legal Topics
['sequestration Order' 'ability to Pay Debts' "other Sufficient Cause to Dismiss or Adjourn Creditor's Petition" 'claims Against Petitioning Creditor' 'borrowing Against Causes of Action']
['bankruptcy'] ['sequestration Order' 'ability to Pay Debts' "other Sufficient Cause to Dismiss or Adjourn Creditor's Petition" 'claims Against Petitioning Creditor' 'borrowing Against Causes of Action']

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Procedural Posture

Bankruptcy Creditor's Petition for a Sequestration Order / Hearing and Determination of Petition

Legal Issues

  1. 1 ['Whether the debtor was able to pay his debts within the meaning of s 52(2) of the Bankruptcy Act 1966 (Cth) by relying on alleged causes of action and an asserted capacity to borrow against them.' 'Whether alleged claims against the petitioning creditor or other causes of action had sufficient validity or likelihood of success to justify treating them as assets or as other sufficient cause to dismiss or adjourn the petition.' "Whether, despite any possible ability to borrow, the debtor's refusal to borrow to pay the petitioning creditor warranted making a sequestration order." 'Whether the claim against the petitioning creditor and the prospect of no dividend to creditors constituted other sufficient cause why a sequestration order ought not be made.']

Ratio Decidendi

Because Mr Capel conceded the matters in s 52(1) were satisfied and failed to prove either that he was able to pay his debts or that there was other sufficient cause not to make a sequestration order, the estate was to be sequestrated. His alleged causes of action were not shown by evidence to be real claims with sufficient validity or likely value, and any asserted borrowing capacity did not establish solvency, particularly where he refused to borrow to pay Caram and Caram had no effective alternative remedy.

Court Disposition

Sequestration order made.

Orders

  • ['The estate of the debtor be sequestrated.' "The Petitioning Creditor's costs, including any reserved costs be taxed and paid in accordance with the Bankruptcy Act 1966."]