Bobos v Deputy Commissioner of Taxation, in the matter of Bobos

In the case of Bobos v Deputy Commissioner of Taxation, the Federal Court was asked to consider an application to set aside a bankruptcy notice. The applicant, Mr Bobos, sought to challenge the bankruptcy notice issued by the Deputy Commissioner of Taxation (DCT) on the grounds of improper service, the existence of a debt, abuse of process, and exceptional circumstances. Mr Bobos, who was the sole director of Bobos Engineering and Boss Constructions, had previously failed to respond to a director penalty notice for non-payment of PAYG withholding amounts by the company, resulting in a default judgment against him. The DCT then issued a bankruptcy notice to Mr Bobos, which he sought to set aside.

The primary legal issues before the court were whether the bankruptcy notice was served in accordance with the substituted service orders, whether the court should consider the underlying judgment on which the bankruptcy notice was based, whether the bankruptcy notice constituted an abuse of process, and whether there were exceptional circumstances warranting the setting aside of the bankruptcy notice. Additionally, the court considered whether Mr Bobos had entered into a payment agreement with the ATO, which might have precluded the ATO from relying on the director penalty notice, and whether the issuance of the bankruptcy notice was an abuse of process.

The court found that the bankruptcy notice had been served in accordance with the substituted service orders, despite Mr Bobos's claims to the contrary. The court held that it was not appropriate to go behind the default judgment that formed the basis of the bankruptcy notice. The court also determined that the issuance of the bankruptcy notice was not an abuse of process and found no exceptional circumstances warranting the setting aside of the notice. The court further held that Mr Bobos's payment agreement with the ATO did not preclude the ATO from issuing the bankruptcy notice. Consequently, the application to set aside the bankruptcy notice was dismissed, and Mr Bobos was ordered to pay the DCT's costs of the application.