ALIA v Pattison

[2006] FMCA 690

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ALIA v PATTISON [2006] FMCA 690

BANKRUPTCY – Trustee’s objection to discharge from bankruptcy – Trustee’s ground of objection bankrupt’s failure to respond to annual income questionnaire – Trustee’s ground of objection a special ground – whether efficacy of in continuing bankruptcy.

Bankruptcy Act 1966 (Cth), ss.49B, 149D, 152, 178
Bankruptcy Legislation Amendment Act 2002 (Cth)

Frost v Sheahan [2005] FCA 1014, 220 ALR 733 at [107]-[112]
Nguyen v Pattison [2005] FCA 650
Thomas v Donnelly (No 2) [1997] FCA 1142

Applicant: JOSEPH ALIA

Respondent: PAUL PATTISON (AS TRUSTEE FOR THE ESTATE OF JOSEPH ALIA)

File Number: MLG 1082 of 2005

Judgment of: Phipps FM

Hearing dates: 16 February & 21 March 2006

Last Submission: 21 March 2006

Delivered at: Melbourne

Delivered on: 5 May 2006

REPRESENTATION

Counsel for the Applicant: Mr Irlicht

Solicitors for the Applicant: Irlicht & Broberg

Counsel for the Respondent: Mr Agardy

Solicitors for the Respondent: Harwood Andrews

ORDERS

1. The application is dismissed.

2. The respondent’s costs be paid out of the bankrupt estate in accordance with the Bankruptcy Act 1966 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 1082 of 2005

JOSEPH ALIA

Applicant

And

PAUL PATTISON (AS TRUSTEE OF THE ESTATE OF JOSEPH ALIA)

Respondent

REASONS FOR JUDGMENT

Introduction

1. The respondent, the applicant's trustee in bankruptcy, has objected to the applicant's discharge from bankruptcy.  The applicant appeals against that decision under s.78 of the Bankruptcy Act 1966 (Cth). The Trustee objected to discharge because the bankrupt did not provide a response to an annual income questionnaire, requested by the Trustee in September 2002, until after the Trustee lodged his objection in June 2004.

2. Two matters are not completed in the administration of the bankruptcy.  They are a claim by the Trustee to have declared void the bankrupt’s transfer to his former wife of his half share in a residential property, and a proof of debt by the liquidator of a company, of which the bankrupt was sole director and shareholder. It is claimed that the bankrupt permitted the company to trade while insolvent.

3. The issue in the case is whether, exercising its discretion under the section, the court should allow the appeal against the decision.  That involves examining the circumstances which led to the objection and a whether there is any efficacy in the bankruptcy continuing.

History

1. The applicant was made bankrupt by a sequestration order in the Federal Magistrates Court on 30 April 2002.  Initially, Mr Henry Scott was appointed Trustee.  The respondent, Mr Paul A Pattison, replaced Mr Scott on 3 September 2002.

2. Section 149B of the Bankruptcy Act provides for a trustee to give to the Official Receiver written notice of objection to a bankrupt’s discharge from bankruptcy. The Trustee must file the notice of objection if the Trustee believes that doing so will help make the bankrupt discharge a duty that the bankrupt has not discharged. There is no other way for the Trustee to induce the bankrupt to discharge any duties that…