Bennett, D. v Deputy Commissioner of Taxation of the Commonwealth of Australia

[1992] FCA 979

JUDGMENT No. ........ ... 919 , , .... ,, ,,, 1992

IN THE FEDERAL COURT OF AUSTRALIA

EXERCISING FEDERAL JURISDICTION No P 1314 of 1992

BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA

RE:  DAVID BENNETT

ALSO KNOWN AS DRAG0 KOMLJENOVIC

Bankrupt

EX PARTE: DEPUTY COMMISSIONER OF TAXATION

OF THE COMMONWEALTH OF AUSTRALIA

COURT :	NORTHROP J
PLACE :	MELBOURNE
DATE :	30 OCTOBER 1992

EX TEMPORE REASONS FOR JUDGMENT

This is an application brought by the Deputy Commissioner

of Taxation under s50 of the Bankru~tcv Act 1966. The

application is brought ex parte but during the course of the
hearing, legal representatives of both the Director of Public
Prosecutions-Victoria and the debtor appeared and were granted
leave to appear and make submissions. During the course of

argument I made certain comments as to what the application

necessary in the interests of the creditors, the Court

really was and what the effect of it would be. I do not

propose to repeat now everything that was said during the
course of submissions on that point. There are some aspects
however, which require highlighting and I propose to do that

in these reasons.

Sub-section 50(1) of the Bankru~tcv Act provides:

"If, on application by a creditor, it is shown to be

may, at any time after the presentation of a creditor's petition and before sequestration, direct the Official Trustee or a specified registered trustee to take control

of the property of the debtor and may make such orders in

relation to that property as the Court considers just."

In the present case, what is being sought is an order

directing the Official Trustee to take control of the property

of the debtor. There are no orders being sought as to how he

should deal or make orders in relation to that property.

From the material before the Court, I am satisfied that

the jurisdiction to make the order has been satisfied, namely

that a petition was presented this morning based upon an act

of bankruptcy wh~ch occurred yesterday. The act of bankruptcy

was based on a failure to comply with a bankruptcy notice.
The bankruptcy notice was based upon a judgment for a large
sum of money. The bankruptcy notice was served, not complied

with, and the act of bankruptcy occurred yesterday.

The real purpose of the application to the Court today is

to lay the foundation for an application that the Official
Trustee, lf the order is made, would have the right to appear
and be heard in proceedings pending in the County Court of
Victoria and in the Supreme Court of Victoria under the Crimes
Confiscation of Profits Act 1986 in relation to property
owned, or at least alleged to be owned, by the debtor David
Bennett, also known as Drago Komljenovic. Under the
provisions of the Victorian legislation, it appears that
persons who have an interest in relation to property, means a
person among others, who has a right, power or privilege over
or in connection with the property. That appears from the
definition of interest in s3 of the Crimes Confiscation of
Profits Act. What is being sought by the order the subject of
this application, is an order to give control of the property
of the debtor to the Official Trustee to enable the Official
Trustee to appear in the proceedings pending in the County
Court and in the Supreme Court under the Crimes Confiscation

of Profits Act.	It is not for me to determine whether the
Official Trustee has, in fact, got that right.	It is

sufficient for me to express the view that there is a real
danger - I go no further than that - that if orders are made
in the County Court or in the Supreme Court pursuant to powers
conferred by the Crimes Confiscation of Profits Act that the
rights of the creditors of the debtor may be adversely
affected in that property of the debtor may vest in persons
other than the trustee in bankruptcy or Official Trustee if a
sequestration order is made subsequently, in circumstances

where the property cannot be recovered by that trustee in

bankruptcy or Official Trustee following the making of the

sequestration order.

It is not necessary for me to determine the strength or

otherwise of that position but there is a real danger of it

occurring. Therefore I am sat~sfied that in the interests of

the creditors, it is necessary that an order be made under

subs50(1).

Mr Kewley, who appeared for the debtor, argued that

normally an application of this kind should be done on notice, that there had been no notice in this case and thus the matter should be adjourned to enable material to be prepared on

behalf of the debtor to oppose the making of the order. He
also made submissions that it is necessary to identify the

property involved.

In the present case, having regard to the urgency of the

matter, it is appropriate, in my opinlon, that the application
for the order under s50 of the Bankruutcv Act be done by way
of an ex parte application. The application was made,
initially, at a time when the application was due to come on
in the Supreme Court this morning and it was unclear what

might happen there. The matter in the County Court is due to

come before that Court on 9 November. It is necessary that

this whole matter be determined before then.

The property concerned is that referred to in the

applications in the County Court and in the Supreme Court.

That property has been referred to in the affidavit in support

of the present application before this Court. For present
purposes the property is sufficiently identified. No order is
being sought seeking any orders as to the title to those
properties. They are matters which will need to be determined
in due course either in the County Court, the Supreme Court or
even the Federal Court, depending on what happens subsequent

to today.

The Court does propose, therefore, to grant the orders

sought. The following orders are made:

1.    That the Official Trustee in Bankruptcy take control of the property of the debtor, David Bennett, also known as Drago Komljenovic.

1. That the applicant, the Deputy Commission of Taxation of the Commonwealth of Australia, deposit with the Official Trustee in Bankruptcy the sum of $5000 to meet fees and

expenses of the Official Trustee in taking control of the
property of the debtor.

3 .    The Official Trustee have liberty to make application to the Court in relation to the amount to be provided to meet his fees and expenses.

4.    The applicant's costs be reserved.

I certify that this and the preceding four (4) pages are a

true copy of the Ex Tempore Reasons for Judgment of the

Honourable Mr Justice R.M. Northrop.

Associate:	f	f / :
Date:	3	1 9 9 2