Bowden v Combis as Joint and Several Trustees in the Bankruptcy of the Estate of Bowden

[2016] FCCA 1986

FEDERAL CIRCUIT COURT OF AUSTRALIA

BOWDEN v COMBIS AS JOINT AND SEVERAL TRUSTEES IN THE BANKRUPTCY OF THE ESTATE OF BOWDEN & ANOR [2016] FCCA 1986

Catchwords:
BANKRUPTCY – Whether bankruptcy should be annulled – whether applicant present in Australia – whether power to make applicant bankrupt existed under the Act – whether petition should be rejected in circumstances where trustees have incurred costs – application allowed.

Legislation:

Bankruptcy Act 1966, ss.27, 55(2A), 153B

Applicant: BRIAN WILLIAM BOWDEN

First Respondent: NICK JIM COMBIS AS JOINT AND SEVERAL TRUSTEES IN THE BANKRUPTCY OF THE ESTATE OF BRIAN WILLIAM BOWDEN

Second Respondent: PETER DINORIS AS JOINT AND SEVERAL TRUSTEES IN THE BANKRUPTCY OF THE ESTATE OF BRIAN WILLIAM BOWDEN

File Number: SYG 1255 of 2016

Judgment of: Judge Street

Hearing date: 22 July 2016

Date of Last Submission: 29 July 2016

Delivered at: Sydney

Delivered on: 9 September 2016

REPRESENTATION

Solicitors for the Applicant: Philip Beazley
Beazley Singleton Lawyers

No appearance by or on behalf of the Respondents

ORDERS

1. The bankruptcy of the estate of Brian William Bowden is annulled under s.153B of the Bankruptcy Act 1966 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1255 of 2016

BRIAN WILLIAM BOWDEN

Applicant

And

NICK JIM COMBIS AS JOINT AND SEVERAL TRUSTEES IN THE BANKRUPTCY OF THE ESTATE OF BRIAN WILLIAM BOWDEN

First Respondent

PETER DINORIS AS JOINT AND SEVERAL TRUSTEES IN THE BANKRUPTCY OF THE ESTATE OF BRIAN WILLIAM BOWDEN

Second Respondent

REASONS FOR JUDGMENT

1. This is an application within the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 (Cth). The applicant presented his own debtor’s petition and now seeks an order pursuant to s.153B of the Bankruptcy Act 1966 annulling the bankruptcy. The trustees have been joined as parties and have played no active role in the proceedings, although they have been served with copies of the affidavits and orders made by this Court foreshadowing that the Court will determine the application on the papers, subject to liberty to apply.

2. The trustees identified that they had outstanding fees of $10,800 and evidence has been adduced from the applicant that the trustee’s fees that were outstanding have been paid. The trustees confirmed that subject to their outstanding fees being paid, they did not wish to participate in the application under s.153B of the Bankruptcy Act 1966. The applicant was born in the United Kingdom and between 1990 and 2007 resided in Perth. The applicant permanently left Australia on 28 December 2007.

3. The applicant produced evidence of his Australian passport and his UK passport, supporting his absence from Australia at the time of the presentation of the petition. When the applicant left Australia, there were outstanding debts. The applicant, at the time of signing the debtor’s petition and the filing of the same, was not present in Australia. The applicant spoke to a person from an entity called Strategic Solutions Queensland, who gave him advice in relation to the filing of the debtor’s petition. The applicant was not informed of the significance of the fact that he did not reside in Australia, and that he had been living outside Australia and that he was not present in Australia in relation to the presentation of the debtor’s petition, and that he was not carrying on any business in Australia and did not have a residential address in Australia. 

4. Strategic Solutions Queensland prepared the debtor’s petition, whilst the applicant was abroad. The applicant signed the petition by email and returned it from abroad. It was in those circumstances, that the applicant was made a bankrupt on his own petition. A certificate of appointment of trustees records the date of administration, starting on 15 October 2015, and noting the trustee was appointed on 15 October 2015. 

5. The material before the Court identifies that there was a request for information from the trustee sent to the bankrupt that was not responded to by the bankrupt.  The unsecured creditors were identified as being approximately $4.168 million as a tax debt to the ATO, a debt said to have been incurred in July 2011, and debts relating to purchases from the entities in New South Wales Re-Imagine Pty Ltd and Kool Hunters Pty Ltd in 2012 and 2013 for $5612 and $4680.

6. I am satisfied that this is a matter in which at the time of filing the bankruptcy petition and the time of the appointment of the trustees, the bankrupt was not in Australia and that there was no power pursuant to s.55(2A) of the Bankruptcy Act 1966 for the applicant to be made a bankrupt. Accordingly, this is an appropriate case in which to exercise the Court’s powers under s.153B of the Bankruptcy Act 1966. 

7. The applicant sought an order under s.55(2A) of the Bankruptcy Act 1966 that the petition be rejected in circumstances where the trustees had incurred costs as a result of the debtor’s own presentation of the petition. The more appropriate order, in my opinion, is an order under s.153B of the Bankruptcy Act 1966. I note that the trustee’s costs have been paid.

I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 9 September 2016