Clyne, P.L. v. Deputy Commissioner of Taxation & Ors [1984] FCA 9

Clyne, P.L. v. Deputy Commissioner of Taxation & Ors [1984] FCA 9

A sequestration order may be made on a creditor's petition even after the debtor has become bankrupt by presenting a debtor’s petition, and the order may be backdated to the day preceding the debtor's petition to maximise the period of relation back for the benefit of creditors. The Court's broad discretion supports such orders, and statutory bankruptcy does not extinguish the debt for these purposes. Where consents by different trustees are filed on different petitions and both trigger bankruptcy, more than one trustee may be appointed by force of statute.

Parties
Appellant / First Respondent (cross Appellant) / Debtor / Bankrupt: Peter Leopold Clyne; First Respondent / Appellant (cross Respondent) / Petitioner / Creditor: Deputy Commissioner of Taxation; Second Respondent: Official Trustee in Bankruptcy; Third Respondent / Second Cross Respondent / Registered Trustee: William Edward Andrew
Jurisdiction
Australia
Judgment Date
08 February 1984
Procedural Posture
Bankruptcy Appeal and Cross Appeal / Final Appellate Judgment
Outcome
Appeals by the bankrupt and cross-appeal dismissed with costs; appeal by the Commissioner allowed with costs.
Legal Topics
Sequestration Order, Presentation of Debtor's Petition While Creditor's Petition Pending, Control Order Under S.50, Backdating of Sequestration Order, Appointment of Trustees Under Bankruptcy Act, Relation Back of Bankruptcy, Jurisdiction Under Bankruptcy Act 1966
Bankruptcy Sequestration Order Presentation of Debtor's Petition While Creditor's Petition Pending Control Order Under S.50 Backdating of Sequestration Order Appointment of Trustees Under Bankruptcy Act Relation Back of Bankruptcy Jurisdiction Under Bankruptcy Act 1966

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Parties

Peter Leopold Clyne

Appellant / First Respondent (cross Appellant) / Debtor / Bankrupt

Deputy Commissioner of Taxation

First Respondent / Appellant (cross Respondent) / Petitioner / Creditor

Official Trustee in Bankruptcy

Second Respondent

William Edward Andrew

Third Respondent / Second Cross Respondent / Registered Trustee

Procedural Posture

Bankruptcy Appeal and Cross Appeal / Final Appellate Judgment

Legal Issues

  1. 1 Whether a sequestration order may be made after the debtor has already become bankrupt by presenting a debtor's petition
  2. 2 Whether the making of a sequestration order is precluded by statutory bankruptcy
  3. 3 Whether a sequestration order may be backdated to a date prior to the statutory bankruptcy for relation-back purposes

Ratio Decidendi

A sequestration order may be made on a creditor's petition even after the debtor has become bankrupt by presenting a debtor’s petition, and the order may be backdated to the day preceding the debtor's petition to maximise the period of relation back for the benefit of creditors. The Court's broad discretion supports such orders, and statutory bankruptcy does not extinguish the debt for these purposes. Where consents by different trustees are filed on different petitions and both trigger bankruptcy, more than one trustee may be appointed by force of statute.

Court Disposition

Appeals by the bankrupt and cross-appeal dismissed with costs; appeal by the Commissioner allowed with costs.

Orders

  • The bankrupt’s appeal is dismissed; costs to be paid to the Commissioner.
  • The cross-appeal is dismissed; costs to be paid to the Commissioner.