Deputy Commissioner of Taxation v Paterson

[2016] FCCA 1180

FEDERAL CIRCUIT COURT OF AUSTRALIA

DEPUTY COMMISSIONER OF TAXATION v PATERSON [2016] FCCA 1180

Catchwords:
BANKRUPTCY – Review of a Registrar’s sequestration order – whether the applicant made the review application in a timely manner – whether it is in the interests of the administration of justice to grant an adjournment – whether there is adequate justification for setting aside the order of the Registrar – sequestration order affirmed.

Legislation:

Bankruptcy Act 1966, s.43(1)

Applicant: DEPUTY COMMISSIONER OF TAXATION

Respondent: GARTH RAYMOND PATERSON

File Number: SYG 1432 of 2015

Judgment of: Judge Street

Hearing date: 17 May 2016

Date of Last Submission: 17 May 2016

Delivered at: Sydney

Delivered on: 17 May 2016

REPRESENTATION

Counsel for the Respondent: Mr M O'Connor

Solicitors for the Respondent: ALC Legal

Solicitors for the Applicant: Mr K Metlej
Craddock Murray Neumann

Solicitors for the Supporting Creditor: Ms S Stojanovski
Breene & Breene Solicitors

ORDERS

1. The sequestration order made by the Registrar on 24 September 2015 is affirmed.

2. The costs of the petitioning creditor be paid from the bankrupt estate as taxed or agreed.

THE COURT NOTES THAT:

The act of bankruptcy occurred on 4 December 2014

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1432 of 2015

DEPUTY COMMISSIONER OF TAXATION

Applicant

And

GARTH RAYMOND PATERSON

Respondent

REASONS FOR JUDGMENT

1. This is an application for review of a bankruptcy order made on 24 September 2015 by a Registrar of the court.  An application for review of the Registrar’s order should be dealt with expeditiously, and preferably on the day that the order is made and is a hearing de novo.  In the present case the respondent debtor sought to challenge the order on the basis of alleged solvency or other sufficient cause, and sought and obtained a timetable for putting on evidence in support of those grounds.  The respondent debtor did not comply with those orders and further timetables were ordered. 

2. On 24 February 2016 a Judge of this Court fixed the matter for hearing today and made orders requiring the filing of further affidavit evidence by the respondent debtor on or before 1 April 2016.  That order was not complied with. 

3. Counsel for the respondent sought an adjournment of today’s hearing on grounds relating to compressed nerve pain being suffered by Mr Paterson.  Whilst there is a medical report that supports Mr Paterson having such nerve pain and it being the subject of ongoing treatment, the report does not explain and descend into any detail supportive of the reasons for non-compliance with the earlier Court orders or the inability of Mr Paterson to put on evidence in compliance with the Court orders.

4. It is not in the public interest or in the interest of supporting creditors to have delay in relation to applications to set aside a sequestration order made by a Registrar in the bankruptcy jurisdiction.  Such application should be dealt with expeditiously.  In the present case there is a supporting creditor which the Court has taken into account in considering whether or not the adjournment application should be granted.  The overriding consideration is the interests of the administration of justice.

5. I am satisfied that Mr Paterson has had ample opportunity to put on any case in support of his solvency or other sufficient cause for seeking the setting aside of the order made by the Registrar.  I note that there is a letter from the accountants to Mr Paterson identifying a time period that they would require to prepare material if the adjournment was to be granted.  That letter is dated 12 November 2015.

6. The petitioning creditor’s position in respect to the adjournment was neutral.  That was a proper position for the petitioning creditor to take.  It is, however, one where the Court must take into account the public interest and also the interests of a supporting creditor when considering whether or not any such adjournment application should be granted in the present case. 

7. The Court was informed that a statement of affairs was, in fact, lodged by the respondent debtor on 22 December 2015, and that the trustee has completed and circulated a report to creditors which was not tendered before the Court.  I am not satisfied that the interests of administration of justice require an adjournment in the present case, taking into account the nature of the order that is under challenge and the opportunities that the respondent debtor has already had to advance the application to set aside the Registrar’s order.  I refuse to grant an adjournment. 

8. The petitioning creditor has read affidavits in relation to the service of the petition, verification of the petition, service of the bankruptcy notice, an updated affidavit as to debt and affidavit as to search. I am satisfied that the act of bankruptcy occurred on 4 December 2014. I am satisfied that the debtor committed an act of bankruptcy within s.43(1) of the Bankruptcy Act 1966 (Cth). I am satisfied that the petitioning creditor has established proof of the matters stated in the petition, service of the petition and that part of the judgment debt is still owing.

9. I am not satisfied that the respondent debtor is able to pay his debts.  I am not satisfied that other sufficient cause has been made out not to make a sequestration order.  I am satisfied that this is an appropriate matter in which to affirm the sequestration order made by the Registrar on 24 September 2015.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate: 

Date:  20 May 2016