Cosenza v Tigani

Case [2024] FedCFamC2G 697

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Cosenza v Tigani [2024] FedCFamC2G 697

File number: ADG 7 of 2023
Judgment of: JUDGE BROWN
Date of judgment: 16 August 2024
Catchwords: BANKRUPTCY – Practice and procedure – Application for summary dismissal – Applicant seeks to examine the respondent and various associates – Where the respondent was discharged from bankruptcy 14 years ago – Documents sought relate to a period of 18 years – Where the trustee previously appointed to administer the estate does not support any further efforts being undertaken – Whether the summonses are oppressive and vexatious or an abuse of process – Status of applicant to bring proceedings – Matters to be considered
Legislation:

Administrative Decisions (Judicial Review) Act 1977 (Cth)

Bankruptcy Act 1966 (Cth) ss 5, 58, 81, 116, 127, 139WA, 149, 153, 178, 263, 263A, 265, 267, 269

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 143, 190

Federal Court Act 1976 (Cth) s 31A

Law of Property Act 1936 (SA) s 15

Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) r 6.01

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 2.06, 13.13
Cases cited:

Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175

Austino Wentworthville Pty Limited  v Metroland Australia Limited [2013] NSWCA 59

Cosenza & Denco Holdings Pty Ltd v Tigani & Annatom Pty Ltd [2005] SADC 63

Cosenza v Duncan (Trustee in Bankruptcy) (No 2) [2018] FCCA 1749

Cosenza v Duncan (Trustee in Bankruptcy), in the matter of Tigani [2020] FCA 105

Cosenza v Registrar Federal Circuit Court of Australia [2022] FedCFamC2G 1041

Karounos & Ors v Official Trustee (1988) 19 FCR 330

Re Abrahams; Ex parte Thomas (1985) 9 FCR 232

Re Csidei; Ex parte Andrew (1979) 28 ALR 381

Re Todd; Ex parte Todd [1986] 68 ALR 483

Roufeil v Fiore, in the matter of the Bankrupt Estate of Peter Andrew Fiore (No 2) [2019] FCA 916

Spencer v Commonwealth of Australia (2010) 241 CLR 118

Walton v ACN 004 410 833 Limited (formerly Arrium Ltd) (in liq) [2022] HCA 3

Division: Division 2 General Federal Law
Number of paragraphs: 171
Date of hearing: 6 October & 7 December 2023
Place: Adelaide
Counsel for the Applicant: Mr Lazarevich (direct brief)
Counsel for the Respondent: Ms Flaherty
Solicitor for the Respondent: Scales & Partners

ORDERS

ADG 7 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

IN THE MATTER OF THOMAS TIGANI, A BANKRUPT
BETWEEN:

DEAN COSENZA

Applicant
AND:

THOMAS TIGANI

Respondent

ORDER MADE BY:

JUDGE BROWN

DATE OF ORDER:

16 AUGUST 2024

THE COURT ORDERS THAT:

1.Pursuant to rule 13.13 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) the Applicant’s Application filed 22 December 2022 be summarily dismissed.

2.The applicant pay the respondent’s costs of this application to be as agreed or otherwise taxed.

Note: The form of the…

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AGLC
Cosenza v Tigani [2024] FedCFamC2G 697
Case
[2024] FedCFamC2G 697
Decision Date

CaseChat Overview and Summary

In the case of Cosenza v Tigani, the primary issue before the court was whether the summonses issued by Mr Cosenza for the examination of Mr Tigani and several associates were oppressive, vexatious, or an abuse of process. Mr Cosenza sought to examine Mr Tigani and others to obtain information relating to assets and financial transactions over an 18-year period, despite Mr Tigani having been discharged from bankruptcy 14 years ago. The application for summary dismissal was made on the basis that Mr Cosenza was not a creditor of Mr Tigani and had not demonstrated a legitimate basis for the examination. The court had to determine whether Mr Cosenza's actions constituted an abuse of the court process.

The court considered several key factors in reaching its decision. Firstly, it examined the relationship between the parties and the nature of the proceedings. The court noted the history of animosity between Mr Cosenza and Mr Tigani and found that Mr Cosenza had not been candid about his motivations and his own financial history. The court also highlighted that Mr Cosenza had not received any dividends from Mr Tigani's bankruptcy, which he viewed as a significant grievance. However, the court found that Mr Cosenza's current claim was speculative and not supported by any concrete evidence of assets or financial dealings by Mr Tigani during the relevant period. The court concluded that the summonses were oppressive and vexatious, as they sought information unrelated to any provable debt or asset from a time long after Mr Tigani's discharge from bankruptcy.

The court found that the proceedings amounted to an abuse of process due to Mr Cosenza's lack of standing and the speculative nature of his claims. The court noted that the previous trustee of Mr Tigani's estate did not support any further investigation, further undermining the legitimacy of Mr Cosenza's application. The court determined that the summonses were an improper use of the court's process and ordered the application to be dismissed.

In summary, the court dismissed Mr Cosenza's application for summary dismissal, finding it to be an abuse of process. The court ruled that Mr Cosenza did not have the necessary standing to bring the proceedings and that the summonses were oppressive and vexatious. The court emphasised the importance of the proper use of court process and the need for legitimate grounds when seeking to examine a discharged bankrupt.

Orders

Orders of the court

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Background

Background to the litigation

Mr Tigani summarises his position in the following portion of his affidavit:I am entitled as a discharged bankrupt to earn an income and attempt to rebuild my post-bankruptcy life. I was discharged some 14 years ago. The Applicant, with whom I have a strained relationship, now seeks my current (and post discharge) personal financial information in circumstances where he, himself, was not a creditor of mine and I have seen nothing to suggest that he is. In those circumstances I consider the issuance of the summons for examination to be, amongst other things, unfair.[9][9] See affidavit of Thomas Tigani filed 29 August 2023 at [15.9].BACKGROUND Mr Cosenza and Mr Tigani have apparently known each other for many years, both in a commercial and social setting. There can be no doubt that the relationship between them has soured to a very marked degree. Ms Flaherty has submitted that Mr Cosenza has failed to be candid, with the court about some aspects of his relationship with Mr Tigani and about his own record regarding personal insolvency. As such, it is asserted that it is apparent that Mr Cosenza has a significant level of personal animus against Mr Tigani, which is relevant to whether the current proceedings should be considered to constitute some species of abuse of process. Mr Cosenza asserts that he is a proven creditor of Mr Tigani in an amount of $199,699.00, as a result of a judgment debt entered against Mr Tigani and a company Annatom Pty Ltd, in the District Court of South Australia on 7 June 2005.[10][10] Cosenza & Denco Holdings Pty Ltd v Tigani & Annatom Pty Ltd [2005] SADC 63. As best I can understand, no dividends were received from the administration of Mr Tigani’s estate. Certainly, none were distributed to Mr Cosenza. This has been, and remains, a significant source of grievance, so far as to Mr Cosenza is concerned. Mr Cosenza has deposed that, in 1998, he invested a sum of money – $150,000.00 – with a company Kingsford Olives Pty Ltd of which Mr Tigani and his wife Anna were directors. The company had some form of interest in land at Pinnaroo, in the Riverland District of South Australia, on which it was proposed olive trees would be grown for the purpose of producing olive oil for export. It seems to be the case that the land in question was effectively owned by Mr Tigani’s parents. Much of Mr Cosenza’s case turns on his allegations regarding Mr Tigani’s use of the land and his investment in it during his bankruptcy and afterwards. It would seem to be the case that the mechanism for the advance of the money, which Mr Cosenza asserts is due to him personally, was via a company controlled by Mr Cosenza, namely Denco Holdings Pty Ltd. In Mr Tigani’s statement of affairs Denco Holdings is listed as one of his unsecured creditors in an amount of $238,575.28.[11][11] See Exhibit DC-3 to the affidavit of Mr Cosenza filed 13 December 2022. After the initial advance, both Mr Cosenza and Denco Holdings Pty Ltd sought a personal guarantee from Mr Tigani in respect of this advance, as well as from Annatom Pty Ltd, apparently the holding company operated by Tom and Anna Tigani.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

I agree that Mr Tigani’s affairs appear somewhat convoluted. However, in my view, such complexity, particularly at some many years removed, cannot of itself, justify the process sought to be invoked on behalf of Mr Cozensa. Mr Cosenza is not in position to point to the current existence of any such property currently in the control of Mr Tigani. His case, to adapt the terminology of Charlesworth J is based on optimistic conjecture. In this context, the court is obliged to consider whether a case based on such an assumption is to be characterised as an abuse of process.LEGAL CONSIDERATIONS Section 81(1) of the Bankruptcy Act provides as follows:(1)Where a person (in this section called the relevant person) becomes a bankrupt, the Court or a Registrar may at any time (whether before or after the end of the bankruptcy), on the application of:(a)a person (in this section called a creditor) who has or had a debt provable in the bankruptcy;(b) the trustee of the relevant person’s estate; or(c) the Official Receiver;summon the relevant person, or an examinable person in relation to the relevant person, for examination in relation to the bankruptcy Rule 6.01 of the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 specifies as follows:(1)An application under section 50 of the Bankruptcy Act for a debtor, or an examinable person in relation to a debtor, to be summoned for examination must be in accordance with Form B2.Note: More than one application may be included in the same Form B2.(2)The application must be accompanied by an affidavit complying with this rule.(3)The affidavit must:(a) identify:(i) the person sought to be examined; and(ii)if that person is an examinable person in relation to a debtor—the debtor; and(b)if the person sought to be examined is an examinable person—state the facts relied on by the applicant to establish that the person to be summoned is an examinable person; and(c)if the summons is to require the person sought to be examined to produce books at the examination:(i) identify the books that are to be produced; and(ii)give details of any inquiry by the applicant about the books to be produced and any refusal by the person to cooperate with the inquiry. The expression examinable person is defined in section 5(1) of the Act as follows:examinable person, in relation to a person (in this definition called the relevant person), means:(a)if the relevant person is a debtor and property of the debtor is known or suspected to be in the possession of a person—that person;(b)if the relevant person has become a bankrupt and any of the property of the bankrupt is known or suspected to be in the possession of a person—that person;(c)in any case—a person who is believed to be indebted to the relevant person;(d)if a person, including:(i) a person who is an associated entity of the relevant person; or(ii)a person with whom an associated entity of the relevant person is or has been associated;may be able to give information about the relevant person or any of the relevant person’s examinable affairs—that person; or(e)if books (including books of an associated entity of the relevant person):(i)are in the possession of a person, including a person of a kind referred to in subparagraph (d)(i) or (ii); and(ii)may relate to the relevant person or any of the relevant person’s examinable affairs;that person.