Cuomo v Whitton

[2012] FMCA 670

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CUOMO v WHITTON [2012] FMCA 670

BANKRUPTCY – Application by bankrupt to prevent annulment of bankruptcy pursuant to s.153A of the Bankruptcy Act 1966 (Cth) – summary dismissal – no prospect of success.

Bankruptcy Act 1966, ss.153A, 153B
Federal Magistrates Court Rules 2001 (Cth)

Holiday & Cuomo and Cuomo [2010] FMCAfam 981
Nesci v Cuomo [2008] FMCA 816

Applicant: GINO CUOMO

Respondent: ROBERT WHITTON

File Number: SYG 1377 of 2012

Judgment of: Driver FM

Hearing date: 3 August 2012

Delivered at: Sydney

Delivered on: 3 August 2012

REPRESENTATION

The Applicant appeared in person

Solicitors for the Respondent: Mr S Calabretta
ERA Legal

INTERLOCUTORY ORDERS

1. The application filed on 25 June 2012 is summarily dismissed, pursuant to rule 13.10(a) of the Federal Magistrates Court Rules 2001 (Cth).

2. Costs of the proceedings are costs in the administration of the estate.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 1377 of 2012

GINO CUOMO

Applicant

And

ROBERT WHITTON

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. On 25 June 2012, Gino Cuomo filed an application in this Court seeking relief in respect of a bankrupt estate administration. The final orders sought were to cancel or annul any sequestration order on the Gino Cuomo estate. In the interim, a stay on the administration of the estate was sought against the trustee, who is the respondent to the application. The effect of the application, if granted, would be to prevent the annulment of the bankruptcy pursuant to s.153A of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”).

2. The application is brought by Gino Cuomo in his purported capacity as agent of the Gino Cuomo estate. Gino Cuomo objects to the title “Mr”, and is referred to in this judgment as “Gino” or “Gino Cuomo”. The application is supported by two affidavits made by Gino Cuomo on 31 July 2012 and 26 June 2012. The application is resisted by the trustee, who seeks the summary dismissal of the application, pursuant to rule 13.10 of the Federal Magistrates Court Rules 2001 (Cth) (“the Federal Magistrates Court Rules”). The matter came before me today for hearing on that interlocutory application. Rule 13.10 states:

   The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:

   (a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or

   (b)  the proceeding or claim for relief is frivolous or vexatious; or

   (c)  the proceeding or claim for relief is an abuse of the process of the Court.

3. The trustee relies upon the affidavit of Robert Whitton made on 13 July 2012 and the exhibits thereto, and the affidavit of Katie Impey made on 27 July 2012 and the exhibits thereto.  None of the deponents were required for cross-examination, and the evidence was accepted by me, subject to relevance. 

4. Gino Cuomo was bankrupted on 10 June 2008, upon a sequestration order being made by this Court.  Reasons for that order were given by Raphael FM in Nesci v Cuomo[1].  It appears from that judgment that Gino Cuomo, who appeared at the hearing before Raphael FM, sought to resist a sequestration order on the basis of solvency, but was unable to persuade his Honour that there was any evidence to support the assertion of solvency.  There was no appeal against the Court’s judgment.  There was a significant delay in Gino Cuomo completing a statement of affairs.  It was ultimately provided to the Official Receiver on or about 4 January 2011.  Having regard to that delay, the administration of the bankrupt estate would not be completed in the ordinary course until January 2014.

   [1] [2008] FMCA 816

5. Gino Cuomo asserts that he has never accepted that the sequestration order was lawfully made, or that there is any lawful administration of his estate under the Bankruptcy Act. He has prepared documents, apparently earlier this year, which are in evidence, by which he purports to create his own estate, which he purports to administer.

6. Other proceedings are relevant.  It came to the trustee’s attention during the course of the administration of the estate that the father of Gino Cuomo had died on 20 August 2010, leaving a will in which he left substantial real estate to Gino Cuomo and his brother Filippo.  The trustee claimed Gino Cuomo’s share of that property as after acquired property.  On 29 November 2011, the trustee commenced proceedings in this Court seeking orders to facilitate the recovery of that property so that it could be dealt with by the trustee.  Those proceedings are ongoing[2].  However, they may not have any continuing utility because agreement was reached between the trustee and Filippo Cuomo for the sale of one property devised by the will, and the payment of 50 per cent of the proceeds of the sale of that property to the trustee.

   [2] Whitton v Cuomo SYG2728 of 2011.  On 23 July 2012 Smith FM ordered that those proceedings be adjourned for further directions on 3 September 2012

7. The sale agreed between the trustee and Filippo Cuomo has been completed and 50 per cent of the net sale proceeds were paid to the trustee. On receipt of those funds, the trustee has been able to pay all known debts. About $70,000 remains and the trustee is now in a position to complete the administration of the estate and pay any surplus as required by law after payment of his own expenses. The trustee proposes that the bankruptcy be annulled pursuant to s.153A of the Bankruptcy Act.

8. Other relevant proceedings are proceedings instituted in this Court under the Family Law Act 1975 (Cth) (“the Family Law Act”) by Gino Cuomo’s former wife for an alteration of property interests between them[3].  When the applicant wife became aware of the issue of the will of the late Mr Cuomo, the trustee was joined to those family law proceedings, which are ongoing.

   [3] SYM6993 of 2005

9. By orders made by Kemp FM on 22 June 2012, the trustee was released as a party to those proceedings, upon submitting to an order that any surplus in the bankrupt estate remaining at the completion of the administration of that estate will be paid to the solicitors for Gino Cuomo’s former wife to hold pending further order of the Court.  The trustee desires to complete his administration of the estate as soon as possible.  Accordingly, the trustee seeks the summary dismissal of Gino Cuomo’s application.

10. The application by Gino Cuomo is defective inasmuch as it does not identify what provisions of the Bankruptcy Act it is brought under. I surmise that the interlocutory relief sought is probably sought pursuant to s.30 of the Bankruptcy Act, and the annulment sought is probably sought pursuant to s.153B of the Bankruptcy Act. The evidence relied upon by Gino Cuomo gives no confidence whatsoever that his proceeding has any prospect of success.

11. Although he tells me that he has consistently opposed the administration of his estate in bankruptcy and considers that the sequestration order was not made in consequence of any debt owed by him, and while it is apparent that he has, for a considerable period, failed to cooperate with the trustee in his administration of the estate, there is nothing before me to persuade me that any serious argument could be raised that the sequestration order made by Raphael FM in 2008 should not have been made.

12. Further, even if such an argument could have been advanced, I would not, in the exercise of discretion, pursuant to s.153B of the Bankruptcy Act, annul the bankruptcy when it is so close to being annulled, pursuant to s.153A of the Bankruptcy Act. There is no merit either in granting interlocutory relief to stay steps proposed to be taken by the trustee to complete his administration of the estate. I surmise another purpose in Gino Cuomo’s application that may be related to the ongoing proceedings under the Family Law Act. The application brought by Gino Cuomo, if it continues, would dissipate the funds available to the trustee to ultimately pay to his former wife’s solicitors, in accordance with the orders of this Court under that Act. That purpose, if it is Gino Cuomo’s purpose, should not be permitted any further progress.

13. I am satisfied that the application brought by Gino Cuomo has no prospect of success.  I will accordingly grant the relief sought by the trustee and dismiss the application summarily for that reason.

14. I will also order that the trustee’s costs in relation to these proceedings be costs in the administration of the estate.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Driver FM

Date:  7 August 2012