Deputy Commissioner of Taxation v Douglas

The Deputy Commissioner of Taxation (the Applicant) sought to have the Respondent declared bankrupt. The Respondent sought to have the sequestration orders quashed, arguing that the Registrar's decision was *ultra vires*, exceeded jurisdiction, contravened procedural requirements, contained ambiguity, used misnomers, denied rights, and demonstrated a disregard for natural justice. The Applicant contended that the bankruptcy notice and creditor's petition were properly served and that the debt, comprising a judgment debt from the Magistrates' Court of Victoria, further interest, and income tax and Running Balance Account deficit debts, was due and payable and had not been set aside.

The court was required to determine whether the bankruptcy notice and creditor's petition were validly served and whether the debt claimed was properly particularised and due. Additionally, the court had to consider the Respondent's grounds for review, particularly his assertion that the Registrar's decision was *ultra vires* and invalid, and whether there was sufficient cause, such as solvency or other sufficient cause, to dismiss the creditor's petition under s 52(2) of the *Bankruptcy Act 1966* (Cth).

McNab J found that the bankruptcy notice and creditor's petition had been properly served on the Respondent. The court was satisfied that the debt particularised in the creditor's petition was due and payable and had not been set aside, noting the absence of evidence from the Respondent to dispute the judgment debt or demonstrate solvency. The Respondent's stated assets of "twenty-one silver dollars and one gold sovereign" were considered insufficient evidence of solvency, particularly in light of the substantial debts claimed. The court found no basis to exercise its discretion to set aside the creditor's petition on the grounds of solvency or other sufficient cause.