Ademi, Abduladi v Deputy Commissioner of Taxation of the Commonwealth of Australia
[1995] FCA 608
•9 AUGUST 1995
CATCHWORDS
BANKRUPTCY - sequestration order made by registrar - application for reviews by a judge - s.31A(6) Bankruptcy Act 1966 - hearing de novo - whether order should be set aside - no serious question to be tried
Re Kwiatek and Kwiatek; Ex parte Big J Ltd v. Pattison (1989) 21 FCR 374
Ginnane v. Diners Club Ltd (1993) 120 ALR 375
Re Young; Ex parte Hunter MMI Finance Ltd (unreported 23 March 1993)
Clyne v. Deputy Commissioner of Taxation (1983) 48 ALR 545
ABDULADI ADEMI v DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA VB 870 of 1995
COURT:Sundberg J
PLACE:Melbourne
DATE:9 August 1995
IN THE FEDERAL COURT OF AUSTRALIA )
BANKRUPTCY DISTRICT OF )
THE STATE OF VICTORIA ) No VB 870 of 1995
GENERAL DIVISION )
RE:ABDULADI ADEMI
Debtor
EX PARTE:DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
Creditor
COURT:Sundberg J.
DATE:9 August 1995
PLACE:Melbourne
MINUTES OF ORDER
The Court orders that:
The application is dismissed with costs.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
BANKRUPTCY DISTRICT OF )
THE STATE OF VICTORIA ) No VB 870 of 1995
GENERAL DIVISION )
RE:ABDULADI ADEMI
Debtor
EX PARTE:DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
Creditor
COURT:Sundberg J.
DATE:9 August 1995
PLACE:Melbourne
REASONS FOR JUDGMENT
SUNDBERG J:
On 2 September 1994 in the Magistrates' Court judgment was entered against the Debtor for $2,797.83 at the suit of the Deputy Commissioner of Taxation. A Bankruptcy Notice was issued in reliance on the judgment, and served on the Debtor. He did not comply with the Notice.
On 26 April 1995 Registrar Agnew made a Sequestration Order against the estate of the Debtor on the Petition of the Deputy Commissioner. On 1 May 1995 the Debtor applied to set aside the Sequestration Order. I will treat the application as one to review the Registrar's decision under s.31A(6) of the Bankruptcy Act 1966. The Debtor, who appeared in person, relied on two affidavits in support of his Application. The first purports to have been sworn on 1 May 1995 but bears the Registrar's stamp recording that it was filed on 1 April 1995. The second was sworn on 22 May 1995. In the first affidavit the Debtor states that the hearing before the Registrar was set for 26 April 1995 at 9.30 a.m., but that because of heavy traffic he did not arrive at the hearing room until 10.15 a.m. Although his affidavit does not say so, his case had been dealt with before he arrived. It was called on at 9.50 a.m. and the Sequestration Order was made shortly thereafter. The first affidavit also states that "the Taxation Department is wrong" and had been pursuing the Debtor "all these years, without any evidence, without giving me the chance to hear my case". He demanded that "the evidence presented be carefully reviewed". The second affidavit has attached to it a document in which the Debtor estimates that his gross income for the 1986/87 financial year "would have been about $11,000.00". He says that the notice of assessment was for $21,341 and that it is "patently wrong", and that he does not owe the $1,609.97 tax noted on the Assessment.
An application for review under s.31A(6) is by way of a hearing de novo on the evidence presented to the Court on the hearing of the application: Re Kwiatek and Kwiatek; Ex parte Big J. Ltd. v. Pattison (1989) 21 F.C.R. 374; Ginnane v. Diners Club Ltd. (1993) 120 A.L.R. 375, at p.380.
The affidavit material on which the Deputy Commissioner relied justified the making of the Sequestration Order. The provisions of the Act and Rules were complied with save that the date of the act of bankruptcy was wrongly stated as 29 December 1994 when it should have been 30 December 1994. On 26 April 1995 Registrar Agnew permitted the date to be amended, and the amendment was in my view properly allowed. The first of the Debtor's affidavits explains why he was not present when the order was made, and if he were able to show that there was a serious question to be tried as to whether he should be made bankrupt, I would allow him his day in court. Cf. Re Young; Ex parte Hunter MMI Finance Ltd. (unreported, 23 March 1993). But his second affidavit does not raise such a question. As Gibbs C.J. said in Clyne v. Deputy Commissioner of Taxation (1983) 48 A.L.R. 545, at p.547:
The rule that a court of bankruptcy may, in certain cases, go behind a judgment to determine whether it is founded on a real debt can have no application in the present case. If the court were to go behind the judgment it would be faced with the notice of assessment which, under s.177(1) of the Income Tax Assessment Act, is conclusive and with the provisions of s.201 of that Act which permit the recovery of tax as if no appeal were pending.
The provisions of s.201 of the Act before the Court in Clyne are now found in ss.14ZZM and 14 ZZR of the Taxation Administration Act 1953. In the present case, unlike the position in Clyne, there is no evidence that the Debtor has disputed the assessment in the manner provided by the Income Tax Assessment Act.
Accordingly the application is dismissed with costs.
I certify that this and the preceding 3 pages are a true copy of the reasons for judgment of the Honourable Justice Sundberg
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Associate
9 August 1995
The judgment Debtor appeared in person
Representation for the judgment creditor: Mr. B. Netto on behalf of Deputy Commissioner of Taxation of the Commonwealth of Australia
Solicitors for the judgment creditor: Australian Government Solicitor
Date of Hearing: 12 July 1995
Place of Hearing: Melbourne
Date of Judgment: 9 August 1995
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