Re Cooper, E. & Ors v. Ex parte First National Finance Ltd [1987] FCA 252

Re Cooper, E. & Ors v. Ex parte First National Finance Ltd [1987] FCA 252

The existence of outstanding debt at the hearing of the creditor's petition satisfies the jurisdictional requirement for a sequestration order even if the proceeds from a realised security may be sufficient to discharge the debt in the future. There is no obligation, where a single debt is guaranteed, for the creditor to appropriate proceeds to the specific amount in the bankruptcy notice; the court retains jurisdiction to make a sequestration order.

Parties
Debtor: Edward Cooper; Debtor: Shirley Gladys Cooper; Debtor: Kym Pamela Cooper; Debtor: Craig Henry Cooper; Debtor: Alan Edward Cooper; Petitioning Creditor: First National Finance Limited (formerly Chase NBA Finance Limited)
Jurisdiction
Australia
Judgment Date
20 May 1987
Procedural Posture
Bankruptcy Petition / Orders on Creditor's Petition; Judgment and Orders Following Hearing
Outcome
Sequestration order made against each debtor's estate; costs ordered; proceedings stayed by consent until 11 June 1987; order to be delivered to Registrar.
Legal Topics
Sequestration Order, Surety Liability, Creditor's Petition, Application of Sale Proceeds, Guarantee Interpretation
Bankruptcy Sequestration Order Surety Liability Creditor's Petition Application of Sale Proceeds Guarantee Interpretation

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Parties

Edward Cooper

Debtor

Shirley Gladys Cooper

Debtor

Kym Pamela Cooper

Debtor

Craig Henry Cooper

Debtor

Alan Edward Cooper

Debtor

First National Finance Limited (formerly Chase NBA Finance Limited)

Petitioning Creditor

Procedural Posture

Bankruptcy Petition / Orders on Creditor's Petition; Judgment and Orders Following Hearing

Legal Issues

  1. 1 Whether the Court has jurisdiction to make a sequestration order if proceeds from sale of mortgaged property potentially satisfy the debt in the bankruptcy notice
  2. 2 Whether a creditor is bound to apply proceeds of realized security in reduction of specified judgment debt where sureties guarantee the debt

Ratio Decidendi

The existence of outstanding debt at the hearing of the creditor's petition satisfies the jurisdictional requirement for a sequestration order even if the proceeds from a realised security may be sufficient to discharge the debt in the future. There is no obligation, where a single debt is guaranteed, for the creditor to appropriate proceeds to the specific amount in the bankruptcy notice; the court retains jurisdiction to make a sequestration order.

Court Disposition

Sequestration order made against each debtor's estate; costs ordered; proceedings stayed by consent until 11 June 1987; order to be delivered to Registrar.

Orders

  • A sequestration order be made against the estate of each debtor.
  • Costs (including reserved costs) be taxed and paid according to the Act.