Re Roy Finn and Barbara Maria Finn and Re Roy Finn (In His Separate Estate) Ex Parte: Roy Finn and Barbara Maria Finn v Amoco Australia Limited v the Official Trustee In Bankruptcy [1982] FCA 49; (1982) 58 FLR 54 Sq (7 April 1982)

FEDERAL COURT OF AUSTRALIA

Re: ROY FINN AND BARBARA MARIA FINN
And Re: ROY FINN (IN HIS SEPARATE ESTATE)
Ex parte: ROY FINN AND BARBARA MARIA FINN
And: AMOCO AUSTRALIA LIMITED
And: THE OFFICIAL TRUSTEE IN BANKRUPTCY [1982] FCA 49; (1982) 58 FLR 54
SQ No. 510 of 1980
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Fitzgerald J.(1)

CATCHWORDS

Bankruptcy - application for annulment of Sequestration Order - Sequestration order granted to defective creditor's petition - whether defect critical - discretion - Bankruptcy Act 1966 s. 154(1)(a)

Re Williams (1968) 13 FLR 10 followed.

Re a Debtor (No. 39 of 1974), ex parte Oskill and Another v. Gething and Another (1977) 1 WLR 1308; (1977) 3 All ER 489 (D.C.) distinguished.

Bankruptcy - application for leave to amend creditor's petition after sequestration - amendment to remove defect - Bankruptcy Act 1966, s. 33(1)(b).

Re Florance; Ex parte Turimetta Properties Pty Ltd (No. 2) [1980] FCA 5; (1980) 39 F.L.R. 400 applied.

Bankruptcy - Sequestration order - Application for annulment - Sequestration order based on defective bankruptcy petition - Creditor failed to disclose security - Whether sequestration order ought not to have been made - Whether court bound to annul sequestration order - Bankruptcy Act 1966 (Cth), ss. 44, 154 (1) (a).

Bankruptcy - Sequestration order - Application to amend bankruptcy petition after sequestration order made - Sequestration order granted upon defective petition - Amendment sought to remove defect - Bankruptcy Act 1966 (Cth), ss. 33 (1) (b), 44. The first respondent (the creditor) held a second mortgage over a house property owned by the male applicant which operated as a security form the male applicant to the creditor in respect of a judgment debt of some $11,000. The value of the house was considerably in excess of the amounts secured by the first and second mortgages. The creditor, having failed to obtain satisfaction, issued a bankruptcy notice and, after the applicants had failed to respond, presented a bankruptcy petition. Neither the bankruptcy notice nor the petition made any reference to the creditor's security. The only act of bankruptcy relied upon was noncompliance with the bankruptcy notice. The sequestration order was made by the court after a hearing in the presence of the applicants at which the facts in the bankruptcy petition were not disputed. After some delay the applicants applied to the Federal Court of Australia under s. 154 (1) (a) of the Bankruptcy Act 1966 (Cth) for an order annulling the sequestration order made against them. The creditor applied for leave under s. 33 (1) (b) of the Act to amend the bankruptcy petition.

Held, that the bankrupts' application should be refused and the application of the creditor should be granted because even if the court were satisfied that the sequestration order ought not to have been made it was not bound as a matter of course to annul the order but must consider in the light of all the circumstances of the case whether the order ought to be annulled. In the present case there were overwhelming reasons for refusing to annul the sequestration order.

Re Williams (1968), 13 FLR 10; Re Florance; Ex parte Turimetta Properties Pty. Ltd. (No. 2) [1980] FCA 5; (1980), 39 FLR 400, followed.

Re a Debtor; Ex parte Okill v. Gething, (1977) 1 WLR 1308, distinguished.

Cameron v. Cole [1944] HCA 5; (1944), 68 CLR 571; Sneade v. Wotherton Barytes and Lead Mining Co. Ltd., (1904) 1 KB 295; Wigan v. Edwards (1973), 47 ALJR 586, referred to.

HEARING

Brisbane, 1982, April 6-7. 7:4:1982
APPLICATIONS.

Application by the bankrupts and by the creditor on whose petition the sequestration order was made seeking annulment of the sequestration order under s. 154 (1) (a) and leave to amend the bankruptcy petition under s. 33 (1) (b) of the Bankruptcy Act 1966 respectively.

M. W. D. White, for the applicants.

E. J. Lennon, for the first respondent.

H. A. Richards (Official Trustee in Bankruptcy), for the second respondent.

Cur. adv. vult.

Solicitor for the applicants: Harry G. Smith.

Solicitors for the first respondent: Trout Bernays & Tingle.
E. F. FROHLICH

DECISION

There are before the Court two applications under the Bankruptcy Act 1966 (Cwlth).

Mr and Mrs Finn (the bankrupts) have applied for an order under s.154(1)(a) of the Act annulling a Sequestration Order made against them by the Supreme Court of Queensland exercising Federal Jurisdiction in Bankruptcy: that subsection empowers the Court to annul a sequestration order which ought not have been made. When the bankrupts' application came on for hearing, Amoco Australia Limited (the creditor), on whose petition the Sequestration Order was made, made an application for an order under s.33(1)(b) of the Act allowing an amendment of the petition: under that subsection any written process proceeding or notice under the Act may be allowed to be amended at any time.

From 1976 the bankrupts were licencees from the creditor of an Amoco Service Station. The creditor held a Bill of Sale over the bankrupts' equipment and a second Bill of Mortgage over a house property at 13 Pareena Crescent, Mansfield, which is owned by the male bankrupt and is the matrimonial home.

On 27 May 1976, the creditor commenced proceedings against the bankrupts in the Supreme Court of Queensland claiming, inter alia, money alleged to be owing and secured by the Bill of Sale and second Bill of Mortgage, and money alleged to be owing for goods sold and delivered.

Whether or not the Bill of Sale was ever formally released, the chattels to which it related were sold by the creditor in January and February 1977 and the proceeds of sale were credited to the bankrupts. It was not argued that the Bill of Sale did not thereupon cease to operate as a security in favour of the creditor.

The Supreme Court action, including the bankrupts' counter-claim against the creditor, was compromised on the basis that the creditor should have judgment in the action against the bankrupts for a sum of money including costs; the judgment was entered on 14 February 1979.

It is not disputed that the total judgment debt, including costs, was $11,831.66 or that, subsequent to the compromise, the Bill of Mortgage operated as a security from the male bankrupt to the creditor in respect of the judgment debt. Nor is it in dispute that the value of the house property is, and at all material times was, considerably in excess of the aggregate of the amounts secured by the first and second mortgages.

The creditor attempted to obtain satisfaction of its judgment by execution upon the house property but an auction by the Sheriff of Queensland under a Writ of Execution on 28 May 1980 was unsuccessful.

About a week later, a Bankruptcy Notice was issued by the creditor against the bankrupts in respect of the sum of $11,831.66 due by the bankrupts to the creditor under the judgment. The Bankruptcy Notice, which was in the usual form, made no reference to the creditor's security.

Nor did the bankruptcy petition which was presented by the creditor when the bankrupts did not take any steps available to them in response to the Bankruptcy Notice. Paragraphs 2 and 3 of the petition were in the following terms:
"2. The debtors are justly and truly indebted to Amoco Australia Limited in the sum of ELEVEN THOUSAND EIGHT HUNDRED AND THIRTY ONE DOLLARS AND SIXTY SIX CENTS (11,831.66) inclusive of costs of moneys payable under a Final Judgment obtained in the Supreme Court of Queensland held at Brisbane on the fourteenth day of February 1980 being moneys owed pursuant to the Bill of Sale dated 3rd June 1975, and a Licence Agreement dated 10th November
1975.
3. Amoco Australia Limited does not nor does any person on its behalf hold any security over the property of the debtors or any part of it for the payment of the amount specified in the last preceding paragraph."

The petition was verified by an affidavit by the Accounting Operations Manager of the creditor who swore that the statements in paragraphs 2 and 3 of the petition "are within my own knowledge true". No explanation was offered before me for this patent inaccuracy, save that the solicitor with the overall control of the matter for the creditor, in his affidavit in support of the creditor's present application, said that the petition omitted reference to the security held by the creditor by an "oversight", and that this was due to a "clerical error". Counsel for the creditor described the inaccuracy in the petition as "due to inadvertence", and as "not deliberate".

The only act of bankruptcy relied on in the petition was non-compliance by the bankrupts with the Bankruptcy Notice and no amendment was sought before me to set up any other act of bankruptcy. The bankrupts made no complaint concerning the Bankruptcy Notice and did not deny that the act of bankruptcy alleged in the petition had been committed.

The bankrupts appeared at the hearing of the petition which bore the usual notice as to their right to dispute facts alleged therein. They did not do so. The Sequestration Order was made by the Supreme Court on 2 October 1980. In an affidavit filed in support of their current application, the bankrupts say that they were not legally represented when the Sequestration Order was made and that they were not aware that they "could have objected to the making of the Sequestration Order" on the ground of the creditor's second mortgage over the house property.

On 17 October 1980 the bankrupts' trustee requested the creditor to surrender that mortgage. The creditor executed a release on 18 December 1980 but it seems that it may not have provided it to the trustee until 16 February 1981. The mortgage has now been released.

Before me, Counsel for the creditor robustly argued that it should be inferred from the Bankruptcy Notice and other events up to and including the release of the mortgage that the creditor already had an intention to surrender the mortgage when it presented the petition. I am totally unconvinced that any such intention existed. I would not in any event have drawn the inference, but I note that communications between the creditor's solicitors and the bankrupts' trustee indicate that the creditor is still persevering in an attempt to support a proof of debt for almost twice the amount of the judgment debt, and that the difference is at least in part interest and solicitor and own client costs which are claimed by reference to the Bill of Sale and the Bill of Mortgage. Even if most of the amount so claimed relates to the period up to the Sequestration Order, there is no suggestion that it is confined to the period prior to the presentation of the petition.

On the other hand, I do not find that when it presented the petition the creditor intended to retain its Security. The reality, I think, is that the need to decide one way or another was not adverted to.

The bankrupts have three unsecured creditors, including the creditor which presented the petition, with debts totalling $16,411.66 as at the date of the Sequestration Order. There were no significant assets except the interest of the male bankrupt in the house property. The first mortgagee, a secured creditor in the separate estate of the male bankrupt, was owed $5,000 at the date of the Sequestration Order, but this amount has since been reduced. No payment has been made to the unsecured creditors. There will be a significant surplus from any sale of the house property over and above what is needed to meet the bankrupts' debts including the debt of the creditor.

The bankrupts' trustee attempted unsuccessfully to auction the house property in April 1981. I have already referred to the abortive Sheriff's sale in May 1980. Further, there is evidence of attempts to sell by the bankrupts. It seems that a garage which is built traversing the border between the house property and an adjoining house property owned by the male bankrupt's mother may be one obstacle to a sale.

Nonetheless, the bankrupts' trustee has found a purchaser willing to sign a contract at a price in excess of the figure at which he may sell according to a direction which he obtained from the Supreme Court of Queensland in its Federal Bankruptcy Jurisdiction. The bankrupts assert that the property is worth more but have been unable to obtain an offer. On 23 February 1981 this Court ordered the male bankrupt vacate the house property within 14 days from that date in order to permit the bankrupts' trustee conclude a contract of sale. As yet, the male bankrupt has not done so. I attribute his disobedience to that order to the existence of these proceedings.

The bankrupts have formulated no proposal for the payment of their debts if the Sequestration Order is annulled and are plainly unable to make payment unless the house property is sold. They have given no indication that they are willing to sell at the price which is available to their trustee, nor do they establish that they can obtain a better price.

The amendment which the creditor sought to be allowed to make to the petition was the deletion of paragraph 3 and the insertion in lieu thereof of the following paragraph -
"3. Amoco Australia Limited is the holder of a second registered Bill of Mortgage No. E980845 against the property of ROY FINN described as Lot 1 on Registered Plan No. 138325 County Stanley Parish Bulimba being the whole of the lands contained in Certificate of Title Volume 5221 Folio 109 and being situated at 13 Pareena Crescent, Mansfield Brisbane aforesaid. Amoco Australia Limited is willing to surrender its security for the benefit of the creditors generally in the event of a Sequestration Order being made against ROY FINN. ."

The source of the creditor's problem in s.44 of the Bankruptcy Act which provides -
"44(1) A creditor's petition shall not be presented against a debtor unless -

(a) there is owing by the debtor to the petitioning creditor a debt that amounts to $1000 or 2 or more debts that amount in the aggregate to $1000, or, where 2 or more creditors join in the petition, there is owing by the debtor to the several petitioning creditors debts that amount in the aggregate to $1000;

(b) that debt, or each of those debts, as the case may be -

(i) is a liquidated sum due at law or in equity or partly at law and partly in equity; and

(ii) is payable either immediately or at a certain future time; and

(c) the act of bankruptcy on which the petition is founded was committed within 6 months before the presentation of the petition.

(2) Subject to sub-section (3), a secured creditor shall, for the purposes of paragraph (1)(a), be deemed to be a creditor only to the extent, if any, by which the amount of the debt owing to him exceeds the value of his security.
(3) A secured creditor may present, or join in presenting, a creditor's petition as if he were an unsecured creditor if he includes in the petition a statement that he is willing to surrender his security for the benefit of creditors generally in the event of a sequestration order being made against the debtor.

(4) Where a petitioning creditor is a secured creditor, he shall set out in the petition particulars of his security.

(5) Where a secured creditor has presented, or joined in presenting, a creditor's petition as if he were an unsecured creditor, he shall, upon request in writing by the trustee within the prescribed time after the making of a sequestration order, surrender his security to the trustee for the benefit of the creditors generally.

(6) A secured creditor to whom sub-section (5) applies who fails to surrender his security when requested to do so by the trustee in accordance with that sub-section is guilty of contempt of court."

Attention was also directed to s.52(2), Rule 12 and Form 5.

In Re Florance; Ex Parte Turimetta Properties Pty Ltd (No.2) [1980] FCA 5; (1980) 39 F.L.R. 400, a petitioning creditor, which had not complied with the requirements of the Act and the rules relating to the presentation of petitions by secured creditors, including the requirements of s.44, made a application for leave to amend similar to that made by the creditor in the present proceedings. That application was there made after it had been held that the petitioning creditor was a secured creditor but before a sequestration order was made. The debtor argued that there was no power in the Court to allow the petition to be amended because the relevant provisions of s.44, namely sub-sections (3) and (4), required on their proper construction, as a condition precedent to the right of a secured creditor to present a petition in bankruptcy, that it include in the petition a statement that it was willing to surrender its security for the benefit of creditors generally in the event of a sequestration order being made against the debtor (sub-section (3)), and that it set out in its petition particulars of its security (sub-section (4)); and that those requirements were not merely as to the matters which must be stated in the petition.

Lockhart J. rejected the debtor's submissions and held that, notwithstanding differences in language, the relevant provisions of s.44 are not different in effect from s.55 of the 1924 Act, or the relevant provisions of the English Bankruptcy Act 1914 and earlier English Bankruptcy legislation. His Honour referred to cases on the English legislation, which were amongst those referred to me, and are more apposite to the proceedings before me. At page 402 he said:
"The cases include Re a Debtor (1922) 2 K.B. 109; Re Small (1934) 1 Ch 541; and Re a Debtor (1977) 1 W.L.R. 138. They are cases where petitioning creditors being secured creditors, were allowed to amend the petitions to make the appropriate allegations relevant to their security; but the leave to amend was sought and given after sequestration orders were made. I do not regard that fact as material. What matters is that courts have given leave to petitioning creditors to amend petitions to allege the matters required by the relevant bankruptcy legislation corresponding to s.44 of the Act notwithstanding that the relevant allegations were not made in the petitions at the time of their presentation."
Lockhart J. went on to consider whether, as a matter of discretion, the leave sought to amend the petition ought to be granted.

I respectfully adopt and follow the decision in Re Florance.

However, it does seem to me that where a sequestration order has been made on a petition presented contrary to s.44 of the Act, and an application to correct the petition is made in the context of an application to annul the bankruptcy, it will be appropriate, at least in most cases, to consider first the application for annulment. It may well be that a wider range of considerations, including the interests of other creditors and perhaps the public interest as reflected in the Act's objectives, are relevant to the question of whether or not a sequestration order ought be annulled.

Nothing turns on that in the present case. The argument before me proceeded on the footing that, if the bankrupts' application was refused, the amendment asked for would be allowed; there is accordingly no occasion for me to consider whether it is strictly speaking necessary for the amendment in such circumstances. Conversely, the argument proceeded on the footing that, if the bankrupts' application were allowed, the amendment would be refused. The creditor did not suggest that there was an intermediate position; for example that I might, though annulling the present sequestration order, allow the petition to be amended so that it might in due course be reheard: cf Cameron v. Cole [1944] HCA 5; (1943) 68 C.L.R. 571. Common assumptions appear to have been that the cross applications merely presented for consideration the opposing sides of the same argument, and that any amendment which was allowed would date back to the original presentation of the petition: cf Sneade v. Wotherton Barytes and Lead Mining Co Ltd (1904) 1 K.B. 295, 298 per Collins M.R.; Wigan v. Edwards (1973) 47 A.L.J.R. 586, 596 per Mason J.

The Court's power to annul a sequestration order under s.154 was authoritatively considered by the present Chief Justice of Australia when sitting as the Federal Court of Bankruptcy. In Re Williams (1968) 13 F.L.R. 10, a sequestration order was made against a debtor on an undefended creditor's petition supported by affidavit evidence, some of which was hearsay although sworn by the deponent to be true to his personal knowledge. An application to annul the sequestration order was made some two years later by the debtor who neither gave evidence himself nor offered any evidence to explain his failure to appear on the hearing of the petition or to show that he was in truth solvent. The application was refused.

Gibbs J. said at p.23 -

"The power to annul a sequestration order is conferred by s.154(1) of the Bankruptcy Act 1966, which is applicable to the present case, by virtue of s.278, notwithstanding that the sequestration order was made under the repealed Act. Section 154(1) provides that where the Court is satisfied (inter alia) that a sequestration order ought not to have been made the Court may make an order annulling the bankruptcy. Under this section there are two matters which the Court has to consider, first, whether a sequestration order ought not to have been made, and then, if the Court is satisfied of that, whether in the exercise of the Court's discretion the order should be discharged (see Delph Sing v. Wood [1961] HCA 29; (1961) 105 C.L.R. 327, at p.332, per Street J., whose decision was affirmed by the High Court). In determining the question whether the sequestration order ought not to have been made, the Court is entitled to consider not only the case as disclosed at the time the order was made, but as it would have been disclosed had all the true facts been before the Court on the making of the order (Re Cook (1946) 13 A.B.C. 245, at p.249). If the Court is satisfied that the order ought not to have been made, it is not bound as a matter of course to annul the order, but must consider in the light of all the circumstances of the case whether the order ought to be annulled (Delph Sing v. Wood at pp. 498-499; Re Lawson (1939) 11 A.B.C. 137, at p.139)."

At pp. 24 and 25 he said:
"In the present case there was, it is true, a misleading statement in one of

the affidavits used before Clyne J., namely, the assertion by Mr Stapleton that the statements in the petition "are within my own knowledge true". It would have been correct (although not sufficient) for Mr Stapleton to have said that the statements were to the best of his knowledge true, or were in his belief true, but the affidavit wrongly suggested that he had personal knowledge of the matters in question. However, on the evidence that has been placed before me I find that the statements were in fact true. If the matter is viewed in the light of the evidence that has been placed before me as well as in the light of the affidavits placed before Clyne J., it seems to me that it cannot be held that the sequestration order ought not to have been made.

Even if, however, it were possible to say that because the petition for the sequestration order was founded on hearsay, and this fact was not made clear to Clyne J., the sequestration order ought not to have been made, in my opinion the proper exercise of my discretion requires me to refuse the application to annul the sequestration order. While I agree that it is right for this Court to insist upon a strict adherence to the rules of evidence in the conduct of bankruptcy proceedings, it does not follow that because hearsay evidence has been received it can necessarily be said that there has been a miscarriage of justice, and if the direct evidence that has been given in relation to the issues shows that what was stated on hearsay was true, justice has not miscarried. In the present case Williams has had an opportunity to present all the evidence that he wished to present on the issues whether the debt was owed and the act of bankruptcy committed. On the evidence which he has seen fit to put before me, I have, as I have said, found that the findings made by Clyne J. were correct. There has been an unexplained delay of over two years in making this application. The bankrupt has not chosen to produce any evidence to show that he is in truth solvent. In all the circumstances of the case, even if it were right to say, contrary to the view that I have formed, that the sequestration order ought not to have been made, I would in the exercise of my discretion refuse this application for annulment.

The application is dismissed."

I do not propose to review the English Cases to which I was referred. However, some reference is appropriate to the decision upon which the creditor principally relied, Re a Debtor (No. 39 of 1974), ex parte Okill and Another v. Gething and Another (1977) 1 W.L.R. 1308; (1977) 3 All E.R. 489 (D.C.).

1. In my opinion, the defect in the present petition was not a mere "technical irregularity". In arriving at his conclusion in Okill's Case that the error there was a "technical irregularity" Goulding J. who delivered the judgment of a court consisting of himself and Fox J., emphasised that the full facts had been disclosed to the court which made the adjudication order, albeit at an interlocutory stage. I cannot accept that a totally incorrect assertion, not only sworn to but sworn, quite wrongly, to be within the deponent's own knowledge, is a "technical irregularity".
2. Nor do I think that it is sufficient for a creditor, which has obtained a sequestration order on the basis of a petition containing such a defect as that in the present case, to assert that the error arose through inadvertence. No doubt if a petition was deliverately false that would weigh heavily against a refusal to annul the sequestration order. But it by no means follows that it is sufficient that the error was not deliberate.

3. The creditor also relied upon the fact that the bankrupts were at all material times aware of the security. So much may be acknowledged, and it may be conceded that that is not without relevance. However, it cannot be suggested that the creditor was any less aware than the bankrupts of the existence of the security, or that the court which made the sequestration order was aware of its existence.

4. It was a most material consideration in Okill's Case that the creditor had acted throughout in accordance with the position which he sought to regularize by amendment of his petition, having wholly ignored his security in both petition and proof. The court, in considering whether there would be any injustice if the amendment were allowed, was able to point to a total absence of any unmeritorious conduct on the part of the petitioning creditor. At (1977) 1 W.L.R., p.1314F ((1977) 3 All E.R. p.496b)
"There was here nothing unfair in the petitioning creditors' attitude, no attempt to get paid twice, no withholding of assets from other creditors, no concealment of facts from the debtor or from the court. In our judgment the petitioning creditors' conduct was in the circumstances no more unmeritorious than an omission due to inadvertence."
The creditor's position in the present case is by no means as strong. The failure to surrender the security in the petition was not deliberate but there was a significant period between the Sequestration Order and the delivery of an executed release to the bankrupts' trustee, and there is still an attempt to rely upon the security in respect of a period subsequent to the presentation of the petition, although not, I assume, in respect of a period subsequent to the release of the security.

However, that can be accounted for in an appropriate decision on the creditor's proof. And, to my mind, there are overwhelming reasons for refusing to annul the Sequestration Order.

I will not attempt to deal exhaustively with the relevant factors. However, in my opinion, it is proper to take into account the following matters:
. the bankrupts cannot pay their debts;

. the unsecured creditors have received nothing although the Sequestration Order was made in October 1980;

. the only prospect which the unsecured creditors have of being paid is the sale of the house property;

. there is a sale available to the bankrupts' trustee at a price which has been held by the Supreme Court of Queensland in the exercise of its Federal Bankruptcy Jurisdiction to be appropriate;

. the bankrupts give no indication that they themselves are willing to sell the house property and pay their creditors;

. attempts to sell the property over a considerable period, including two auctions, one an unsatisfied execution, have been unsuccessful;

. the Sequestration Order was made by reference to an act of bankruptcy which remains unchallenged;

. it is in accordance with the spirit of the Bankruptcy Act that persons such as the bankrupts, who are unable to pay their debts, should have their estate administered for the benefit of their creditors by a trustee;

. the creditor has in fact obtained no advantage through its failure to comply with the Act;

. the debtors have not been prejudiced and were not misled;

. not only the creditor but the bankrupts' other creditors will be prejudiced if the Sequestration Order is set aside.

It is proper also, I think, to take into account the delay by the bankrupts in making their application to annul the Sequestration Order, and that it was not made until other attempts by the bankrupt to obstruct the sale of the house property, including an application for that purpose to the Supreme Court in its Federal Bankruptcy Jurisdiction and a refusal by the male bankrupt to vacate the property, had all failed. There has also been delay by the creditor but, in the circumstances, I do not think that it was improper for the creditor not to make its application to amend except as a response to the bankrupts' application for an annulment of the Sequestration Order.

Mr Lennon for the creditor submitted that, in any event, the creditor was not a secured creditor in respect of the female bankrupt. That may very well be correct; see the definition of "secured creditor" in s.5 and cf. Re Wiggins; Ex parte Credit Assistance Pty Ltd [1979] FCA 61; (1979) 36 F.L.R. 182. However, a petition against both bankrupts was no doubt justifiable under s.46 of the Act. It is unnecessary, in the circumstances, for me to comment upon the appropriate form of the petition in a case such as this.

I refuse the bankrupts' application and grant the creditor's application. The bankrupts asked that, in the event of my making such an order, I extend until 14 days after delivery of this judgment the period within which the male bankrupt must vacate the house property. This course was acceptable to the creditor and to the bankrupts' trustee and I so order. The creditor did not dispute that the appropriate order for costs was that the creditor should pay all costs of both applications and I order accordingly.