Commonwealth Bank of Australia v Oswal (No.2)
[2012] FMCA 1167
•5 December 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| COMMONWEALTH BANK OF AUSTRALIA v OSWAL (NO.2) | [2012] FMCA 1167 |
| BANKRUPTCY – Application by supporting creditor for substituted service of documents. |
| Bankruptcy Act 1966 (Cth), ss.43(1)(b)(iii), 309(2) Taxation Administration Act 1953 (Cth) |
| Commonwealth Bank of Australia v Oswal [2012] FMCA 1082 |
| Applicant: | COMMONWEALTH BANK OF AUSTRALIA |
| Respondent: | PANKAJ OSWAL |
| File Number: | PEG 249 of 2012 |
| Judgment of: | Lucev FM |
| Hearing date: | 5 December 2012 |
| Date of Last Submission: | 5 December 2012 |
| Delivered at: | Perth |
| Delivered on: | 5 December 2012 |
REPRESENTATION
| Counsel for the Supporting Creditor: | Ms M-J de Reus |
| Solicitors for the Supporting Creditor: | Australian Government Solicitor |
| Counsel for the Applicant: | Ms V MacMillan |
| Solicitors for the Applicant: | Corrs Chambers Westgarth |
| For the Respondent: | No appearance |
ORDERS
Pursuant to s.309(2) of the Bankruptcy Act 1966 (Cth), the supporting creditor be given leave to serve the Notice of Appearance of the supporting creditor dated 5 November 2012 and Affidavit of Aris Zafiriou, sworn 14 November 2012 (the “Documents”) on the Respondent, outside Australia in the manner prescribed by these orders.
The Documents be served on the Respondent by way of substituted service and personal service be dispensed with.
The Documents be served as follows:
(a)posting a copy of the Documents by ordinary pre-paid post to:
(i)Hotchkin Hanly, 1st Floor, BGC Centre, 28 The Esplanade, Perth WA 6000;
(ii)Murcia Pestell Hillard, MPH Building, Level 3, 23 Barrack Street, Perth WA 6000; and
(iii)Norton & Smailes Lawyers, Ground Floor, 38 Colin Street, West Perth 6005;
(b)personal service on any person apparently over the age of 16 years at:
(i)Hotchkin Hanly, 1st Floor, BGC Centre, 28 The Esplanade, Perth WA 6000;
(ii)Murcia Pestell Hillard, MPH Building, Level 3, 23 Barrack Street, Perth WA 6000; and
(iii)Norton & Smailes Lawyers, Ground Floor, 38 Colin Street, West Perth 6005;
(c)sending an electronic copy of the Documents to Hotchkin Hanly at [email protected]; and
(d)posting a copy of the Documents by pre-paid airmail (or equivalent) to Sanraj Bhawanm Bhupindera Road, Patiala. Pim 1470001, Punjab India.
Service in accordance with these orders shall be deemed good and sufficient service of the Documents on the Respondent.
Service of the Documents be deemed to have been effected on the Respondent 10 days after posting in accordance with paragraphs (3)(a)(i), (ii) and (iii) of these orders and service in accordance with paragraph 3(b) of these orders.
Costs of an incidental to this Application be reserved.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 249 of 2012
| COMMONWEALTH BANK OF AUSTRALIA |
Applicant
And
| PANKAJ OSWAL |
Respondent
REASONS FOR JUDGMENT
(Edited ex tempore reasons)
This is an interim application for substituted service of a Notice of Appearance and the affidavit of Aris Zafiriou, an officer of the Australian Taxation Office,[1] sworn 14 November 2012.[2] The interim application is brought by the Deputy Commissioner of Taxation[3] as a supporting creditor, the primary creditor in the proceedings being the Commonwealth Bank of Australia.[4] The interim application is made under s.309(2) of the Bankruptcy Act 1966 (Cth).[5]
[1] “ATO”.
[2] Individually “Notice of Appearance” and “Zafiriou Affidavit” and together “the Documents”.
[3] “Deputy Commissioner”.
[4] “CBA”.
[5] “Bankruptcy Act”.
On 19 November 2012 the CBA obtained orders for substituted service of various documents, including a Creditors Petition, on Mr Oswal.[6] In Oswal (No.1) this Court found that the CBA had an arguable case that Mr Oswal, the Respondent, owed CBA US$4,821,655.46 pursuant to judgment on a guarantee.[7]
[6] Commonwealth Bank of Australia v Oswal [2012] FMCA 1082 (“Oswal (No.1)”).
[7] Oswal (No.1) at para.15 per Lucev FM.
In order to obtain orders for substituted service as sought, the Deputy Commissioner must satisfy the Court that:
a)at least provisionally, the Deputy Commissioner has an arguable case in support of the issuance of a sequestration order against Mr Oswal;
b)abnormal difficulty exists in effecting personal service on Mr Oswal; and
c)there is a reasonable probability that Mr Oswal will be informed of the Documents as a result of the proposed means of service.[8]
[8] Oswal (No.1) at paras.2 and 19 per Lucev FM (and cases there cited).
As to whether there is an arguable case in support of the issuance of a sequestration order the Court has read the Zafiriou Affidavit which sets out details of:
a)records and systems maintained by the ATO; and
b)assessments issued to Mr Oswal for income tax and excess contributions tax for the financial years ending 30 June 2009 and 30 June 2010, which are now payable, plus general interest charges on the unpaid amounts of income tax and excess contributions tax, which are now also payable.
On the evidence the Court is satisfied that, based on:
a)Mr Oswal’s income tax assessments for the financial years ending 30 June 2009 and 30 June 2010;
b)Mr Oswal’s excess contributions tax assessments for the financial years ending 30 June 2009 and 30 June 2010; and
c)general interest charges on the above assessments,
Mr Oswal is indebted to the Commonwealth, and liable to pay the Deputy Commissioner the sum of $6,283,543.40, as at 13 November 2012.
The Court accepts that the Deputy Commissioner’s Counsel’s instructions indicate that no part of the sum of $6,283,543.40 has been paid since 13 November 2012.
The Court notes that in Oswal (No.1) it concluded that it was arguable that Mr Oswal was “carrying on business”[9] for the purposes of s.43(1)(b)(iii) of the Bankruptcy Act, when, on 20 August 2012, he committed an act of bankruptcy, in relation to the CBA judgment and guarantee.[10]
[9] Oswal (No.1) at para.14 per Lucev FM.
[10] Oswal (No.1) at para.14 per Lucev FM.
The above evidence enables the Court to reach a provisional conclusion that the Deputy Commissioner has an arguable case in support of the issuance of a sequestration order, sufficient to warrant the grant of leave for substituted service of the Documents, including substituted service outside the jurisdiction.
With respect to service issues the Deputy Commissioner relies on evidence lead in Oswal (No.1) by CBA,[11] and asserts that the same conclusions ought to be reached with respect to the issues of abnormal difficulty in effecting personal service, and whether there is a reasonable probability that Mr Oswal will be informed of the Documents as a result of the proposed means of service.
[11] Oswal (No.1) at para.21 per Lucev FM.
Both the facts relevant to service upon Mr Oswal, and the law with respect to service, remain unchanged since the delivery of judgment in Oswal (No.1), save that there is evidence that a further law firm (Norton & Smailes) is acting for Mr Oswal in Federal Court proceedings under the Taxation Administration Act 1953 (Cth).[12] It follows that the same conclusion should be reached as was reached by the Court in Oswal (No.1), namely, that:
a)abnormal difficulty exists in effecting personal service on Mr Oswal, particularly by reason of the fact that he is outside of the jurisdiction, and that no person within the jurisdiction has instructions to accept service of the Documents on his behalf; and
b)if the Documents are served in the manner proposed by the Deputy Commissioner they will be drawn to the attention of Mr Oswal. The Court observes that lawyers presently acting in other proceedings for Mr Oswal, and served with the Documents pursuant to orders of the Court, would not be acting in accordance with their responsibilities as officers of the Court were they to fail to draw, or attempt to draw, the Documents to Mr Oswal’s attention.
[12] Affidavit of Mandee-Jean de Reus, sworn 3 December 2012, paras.5 and 6.
Conclusions and orders
Having regard to the conclusions reached above, the Court will make orders in terms of the orders sought by the Deputy Commissioner in the interim application. Otherwise, the matter is adjourned to the hearing of the Creditors Petition listed for 2.15pm on 17 December 2012.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate:
Date: 5 December 2012