Background
Joshua Marc Storey and Samantha Ruth Erskine Storey brought a creditors’ petition against Michelle Susan Britton and Andrew John Britton. The petition relied on quantified costs judgments arising from proceedings between the parties in the Supreme Court of Queensland and the Queensland Court of Appeal.
The petition was listed for hearing under earlier case-management orders. Neither respondent had complied with the filing timetable. Mr Britton, who was self-represented, sought leave to rely on his written submissions and notice stating grounds of opposition. Both respondents orally sought an adjournment, including on the basis that they were solvent.
The Court’s Holding
Justice Wheatley granted a short adjournment of the creditors’ petition and made directions for evidence, submissions, and authorities to be filed before a further hearing on 22 October 2026, with 26 October reserved. The Court also granted Mr Britton leave to file his notice stating grounds of opposition.
The Court did not determine whether the respondents were solvent. It held that the material then available was insufficient to reach a concluded view, but that the asserted solvency warranted an opportunity to file proper supporting material. Bankruptcy jurisdiction concerns a change in the status of insolvent persons, not ordinary debt collection, and a sequestration order should not be made against a solvent person. The claimed solvency could also be relevant to the residual discretion to dismiss a petition under s 52(2) of the Bankruptcy Act 1966 (Cth).
Key Takeaways
- A creditors’ petition may be adjourned where a respondent’s claimed solvency requires proper evidentiary examination.
- Bankruptcy proceedings are not simply a mechanism for collecting judgment debts.
- Even where statutory conditions are met, the Court retains discretion under s 52(2) to dismiss a creditors’ petition.
Why It Matters
The decision underscores the Court’s caution before making a sequestration order, given bankruptcy’s serious personal and legal consequences. A claimed ability to pay debts must be supported by admissible material, but a respondent may receive a short further opportunity to provide it where the issue is genuinely material.
The ruling is procedural only: the Court neither dismissed nor granted the creditors’ petition, and indicated that the petition would be determined at the relisted hearing unless unforeseen circumstances arose.