Ronald Grafton Sarina v The Council of the Shire of Wollondilly [1980] FCA 85

Ronald Grafton Sarina v The Council of the Shire of Wollondilly [1980] FCA 85

A bankruptcy petition must be dismissed if the debtor demonstrates solvency and ability to pay debts, regardless of actual willingness to pay. The word 'able' in s.52(2)(a) is to be given its ordinary meaning referring to capacity, not willingness, so the debtor's refusal does not warrant a sequestration order.

Parties
Debtor: Ronald Grafton Sarina; Petitioning Creditor: The Council of the Shire of Wollondilly
Jurisdiction
Australia
Judgment Date
06 June 1980
Procedural Posture
Bankruptcy Petition / Judgment (first Instance)
Outcome
petition dismissed
Legal Topics
Sequestration Order, Ability to Pay Debts, Bankruptcy Act S.52(2)
Bankruptcy Sequestration Order Ability to Pay Debts Bankruptcy Act S.52(2)

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Parties

Ronald Grafton Sarina

Debtor

The Council of the Shire of Wollondilly

Petitioning Creditor

Procedural Posture

Bankruptcy Petition / Judgment (first Instance)

Legal Issues

  1. 1 Whether the debtor is 'able to pay his debts' within the meaning of s.52(2)(a) of the Bankruptcy Act 1966.
  2. 2 Whether cross actions or counter claims exist or exceed debts owed.
  3. 3 Whether there is 'other sufficient cause' (s.52(2)(b)) to refuse a sequestration order.

Ratio Decidendi

A bankruptcy petition must be dismissed if the debtor demonstrates solvency and ability to pay debts, regardless of actual willingness to pay. The word 'able' in s.52(2)(a) is to be given its ordinary meaning referring to capacity, not willingness, so the debtor's refusal does not warrant a sequestration order.

Court Disposition

petition dismissed

Orders

  • The Petition be dismissed.
  • The debtor pay to the petitioning creditor its costs of the proceedings up to and including the proceedings before the Court on 28 April, 1980.