Deputy Commissioner of Taxation v Fraser

[2015] FCCA 2062

FEDERAL CIRCUIT COURT OF AUSTRALIA

DEPUTY COMMISSIONER OF TAXATION v FRASER [2015] FCCA 2062

Catchwords:
BANKRUPTCY – Sequestration order – lengthy litigation history – adjournment sought but declined – order made.

Applicant: DEPUTY COMMISSIONER OF TAXATION

Respondent: PAMELA LOUISE FRASER

File Number: SYG 2293 of 2013

Judgment of: Judge Altobelli

Hearing date: 30 April 2015

Date of Last Submission: 30 April 2015

Delivered at: Sydney

Delivered on: 30 April 2015

REPRESENTATION

Solicitors for the Applicant: Gadens Lawyers

No appearance by the Respondent

ORDERS

1. A sequestration order is made against the estate of PAMELA LOUISE FRASER.

2. The Petitioning Creditor’s costs, including reserved costs, if any, be taxed and paid in the sum of $5428.00.

NOTATIONS

(A)The date of the act of bankruptcy is 28 March 2013.

(B)The obligations on the applicant creditor to notify, enter and serve these orders in accordance with the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth).

(C)A Consent to Act as Trustee has been signed by Nicholas Malanos on 26 September 2013.

(D)These orders were made in the absence of the Respondent as there was no appearance by or on behalf of the Respondent when the matter was called at 10:06am.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2293 of 2013

DEPUTY COMMISSIONER OF TAXATION

Applicant

And

PAMELA LOUISE FRASER

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. In the matter of SYG 2293 of 2013, which is the Deputy Commissioner of Taxation v Pamela Louise Fraser, I make a sequestration order.  I note that the act of bankruptcy is 1 March 2013.  I order that costs of the Deputy Commissioner be paid, and I presume it is going to be out of the bankrupt estate, in the sum of $5428.00. 

2. Pamela Louise Fraser did not attended today.  My Associate received an email at 5:40 pm on 29 April, that is yesterday, from David Rosenblum, the managing director of a company called AMR Commercial Pty Ltd, in effect seeking an adjournment of today.  It states as follows:

   Dear Madam/Sir

   I formally request that your court grants a further adjournment in the above matter being heard by Judge Altobelli at 10.00am on 30 April, 2015, at Sydney.

   I have requested the ATO to consent to this proposed further adjournment of the hearing of this Creditors Petition and provided them with the same material.

   Pam Fraser has suffered a relapse of a serious medical condition that prevents her from travelling to Sydney to attend the hearing. I attach a copy of the Medical Certificate signed by Dr Rao which outlines the severity of her condition.

   It was Pam Fraser’s intention to attend the hearing and put forward her position personally in the absence of legal representation, which she can not afford.

   My other genuine concern is that, in the event of her estate being sequestrated, she is at real risk of being evicted from her home by her Trustee.  It would be a very unsatisfactory outcome if a 74 year old, seriously ill woman was to be thrown out of her home.

   We seek an adjournment until at least end June, 2015.

3. The attached medical certificate is dated 29 April 2015 and it appears to be provided by a doctor, N.A. Rao.  It certifies that Pamela Fraser was examined by the doctor that day and, in his opinion, is suffering from a “severe degree of chronic renal failure and possible tumour in the liver and proliferative disorder”.  She is unfit to “travel to Sydney to attend court until review by the renal physician in mid-June 2015”. 

4. Mr Marinovic, who appeared on behalf of the Commissioner opposed the adjournment application.  The Court agrees that in the circumstances of this case, even in the face of the medical certificate, it is not appropriate to grant the adjournment. 

5. I will recite the procedural history of this matter and then I will go on to deal with the issue of the substance of Mrs Fraser’s opposition to the Creditors Petition. 

6. The first point that should be made is that there was absolutely nothing to prevent Mrs Fraser attending the proceeding today and, indeed, participating by telephone.  The report said that she was unfit for travel to Sydney and to attend Court, but does not suggest that Mrs Fraser was unable to otherwise participate in the case, for example, by telephone. 

7. In any event, to have granted the adjournment in the circumstances of this case would have been futile and, indeed, possibly an abuse of process.  The matter has a long litigation history.  The matters raised in opposition to the Creditor’s Petition appear to have no substance. 

8. The Creditors Petition was filed on 27 September 2013 together with the usual accompanying documents.  The matter appears to have first come before the Court before Registrar Hannigan on 1 November that year.  A number of directions were made pertaining to the filing of documents.  The matter came back before the Court on 28 November 2013 and, again, further directions were made for the filing of documents. I note that further directions were made for the filing of documents that were ordered to be filed on the first occasion but were not. 

9. The matter appears to have come back before the Court on 16 December 2013, this time before Registrar Segal.  Further directions were made and the matter was adjourned to 24 February.  On 24 February the matter was adjourned by consent.  On 24 March 2014 the matter again came before Registrar Segal and the Petition was adjourned by consent.  On 12 May 2014, once again the Petition was adjourned by consent, likewise, on 16 June.  Then on 14 July 2014, before Registrar Hannigan, again the Petition was adjourned by consent.  On 25 August, another adjournment.  On 8 September, a further adjournment.  

10. On 15 September the matter first came into my docket.  There was no appearance by the Mrs Fraser on that occasion and a number of orders were made, for example, extending the period of the Creditor’s Petition, giving the opportunity to file an amended Notice stating grounds of opposition together with an opportunity to file further evidence. 

11. The matter came before me next on the 27 October.  Both the Frasers appeared in person.  The matter in fact commenced on that date and was adjourned part-heard to 13 January 2015. 

12. On 13 January, Mrs Fraser, who was representing herself, had been invited to explain to the Court what was the substance of her defence or opposition, in circumstances where it was common ground that the only affidavit of evidence filed in their case was from her former solicitor and related to an application to set aside the District Court judgment that founds the debt in question, which application was dismissed by consent.  Mrs Fraser raised the possibility of the debt claimed by the Deputy Commissioner to have been affected by accounting issues and, namely, whether carried forward losses had to have been taken into account.  The notation made by myself on 27 October specifically says that the Respondent will consider what impact, if any, carried forward losses will have on the debt claimed by the Deputy Commissioner.  On 13 January, it was again adjourned by consent but this time on the basis that an agreement had been reached in principle not to proceed.

13. The matter came before me next on 19 February 2015, when I was sitting in Wollongong.  Mrs Fraser attended in person and Mr Lee, from the Deputy Commissioner, attended by telephone.  The matter was set down for final hearing on 30 April, that is today.  A direction was made for the parties to file and serve further material no later than 10 April.  No further material has in fact been filed on behalf of the Respondent. 

14. What becomes apparent from this litigation history is that the Deputy Commissioner has been exceedingly patient with Mrs Fraser in terms of giving her every opportunity to seek to come to a satisfactory arrangement with the Deputy Commissioner and/or, alternatively, to put on a defence to the claim.  As at today, 30 April, almost 18 months after the Creditor’s Petition was first filed, it is apparent that she has not done so. 

15. The debt in question is a judgment debt in the sum of $364,302.90 or thereabouts.  What is apparent as at today’s date is that there has been no attempt, or certainly no evidence before the Court, of any application to stay, vary or set aside that judgment or to appeal it.  None of the material that has been presented before the Court by Mrs Fraser raises any substantive issue that would suggest that there is a legitimate ground or basis under the Bankruptcy Act, or indeed otherwise, not to grant the Creditor’s Petition. 

16. The Deputy Commissioner of Taxation’s Case Outline document correctly sets out all the procedural requirements that were followed and I incorporate the contents of the Case Outline document at schedule one. 

17. All of the relevant matters under the Act have been dealt with.  I note in particular that the affidavits of search and debt have been updated as at yesterday. 

18. Of concern is the assertion that, during the course of these proceedings some further encumbrances have been placed over Mrs Fraser’s  property.  For example, on 24 June 2014 a mortgage was registered to a third party and then a further mortgage was registered on 12 January 2015, a day prior to the scheduled hearing on 13 January 2015, in circumstances where there must be an issue about the solvency of Mrs Fraser.  These are events of concern and it is somewhat ironic that in the email received today, Mr Rosenblum would raise the issue of the potential prejudice to Mrs Fraser at being evicted from her home.  In any event, it is possible that this is not the last that the Deputy Commissioner has heard of Mrs Fraser.

19. In short, there is no reason, either as a matter of law or under the Bankruptcy Act or as a matter of public policy, why, in the circumstances of this case, a sequestration order should not be made and it is so made.  

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Associate: 

Date:     27 August 2015

Schedule one

IN THE FEDERAL CIRCUIT COURT OF AUSTRALIA
REGISTRY: SYDNEY                   

No. SYG2293 of 2013

IN THE MATTER OF:   PAMELA LOUISE FRASER

DEPUTY COMMISSIONER OF TAXATION
  Applicant

PAMELA LOUISE FRASER

Respondent

CASE OUTLINE DOCUMENT

In this matter, the Deputy Commissioner of Taxation (“DCT”) has filed a Creditors Petition (“Petition”) and seeks a sequestration order against the Respondent debtor (“Pamela Fraser”) estate.

All the correct procedural requirements were followed:

1. The Petition was filed on 27 September 2013 and verified by the Affidavit of Narbada Rana affirmed 26 September 2013.

1. This Petition is based upon non-compliance with a Bankruptcy Notice dated 1 March 2013 and grounded upon a District Court Judgment obtained on 4 February 2013 in the sum of $346,347.80.

1. In support of the contention in paragraph 2, the Applicant seeks to rely on the Affidavit of Service of Bankruptcy Notice is that of Andrew Jones, sworn on 16 August 2013 and filed 27 September 2013.

1. The Affidavit of initial search is of Mercia Mitchell, affirmed on 25 September 2013 and filed on 27 September 2013 shows that there has been no other petitions commenced by any other creditor of the debtor or that the debtor has filed any application on their behalf.

1. A sealed copy of the Creditor’s Petition together with copies of the supporting Affidavits were personally served on the Respondent on 2 October 2014.

1. In support of the contention in paragraph 2, the Applicant seeks to rely on the Affidavit of Service of the Creditors Petition and supporting documents is of Andrew Jones, sworn on 4 October 2013 and filed on 8 October 2013.

1. The Affidavit of Final Search is of Goran Marinovic, affirmed on 29 April 2015 what this shows that no other petitions were on foot as of the date of the search.

1. The Affidavit of Debt is of Anita Tiku, affirmed on 29 April 2015 show that debt is still outstanding.

1. The Respondent has also had further encumbrances placed over her property during the course of the Petition. On the 24 June 2013 a mortgage was registered to a third party and further mortgage was registered on the 12 January 2015, a day prior to the scheduled hearing on the 13 January 2015.

10.The DCT seeks a sequestration order against Pamela Fraser based on noncompliance with the Bankruptcy Notice dated 1 March 2013 pursuant Section 43 of the Bankruptcy Act and a order for costs fixed in the amount of $5,522.20.