Deputy Commissioner of Taxation v Soong

[2014] FCCA 330

FEDERAL CIRCUIT COURT OF AUSTRALIA

DEPUTY COMMISSIONER OF TAXATION v SOONG [2014] FCCA 330

Catchwords:
BANKRUPTCY – Sequestration order – whether to grant adjournment of 21 days for financing to occur – whether to make sequestration order – whether to grant stay on proceedings under orders made.

Legislation:  

Bankruptcy Act 1966 (Cth), s.52

Deputy Commissioner of Taxation v Soong [2013] FCCA 2106

Applicant: DEPUTY COMMISSIONER OF TAXATION

Respondent: STEVEN ANDREW SOONG

File Number: SYG 770 of 2012

Judgment of: Judge Raphael

Hearing date: 19 February 2014

Date of Last Submission: 19 February 2014

Delivered at: Sydney

Delivered on: 19 February 2014

REPRESENTATION

Counsel for the Applicant: Mr T Livingston

Solicitors for the Applicant: Australian Taxation Office

Counsel for the Respondent: Mr J T Johnson

Solicitors for the Respondent: Diamond Conway

ORDERS

1. Application for an adjournment dismissed.

2. A Sequestration order be made against the estate of Steven Andrew Soong.

3. The Applicant’s costs (including any reserved costs) be taxed and paid from the estate of the Respondent in accordance with the Bankruptcy Act 1966 (Cth).

4. Under the Bankruptcy Regulations a copy of this order be given to the Official Receiver in Sydney within 2 days.

5. All proceedings under this order be stayed for a period of 21 days.

THE COURT NOTES

1. The date of the act of bankruptcy is 13 December 2011.

2. A consent to act as trustee has been signed by Bruce Gleeson and has been lodged with the Official Receiver in Sydney.

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT SYDNEY

SYG 770 of 2012

DEPUTY COMMISSIONER OF TAXATION

Applicant

And

STEVEN ANDREW SOONG

Respondent

REASONS FOR JUDGMENT

1. In this matter a petition was presented by the Deputy Commissioner of Taxation alleging a debt of some $98,000.00 from the respondent.  The matter came into this court for determination and, over the almost two years since the petition was presented, has been adjourned on several occasions.  The petition came before me on a preliminary point as the respondent had made available to him, and had tendered, a bank cheque for the amount of the debt claimed in the petition.  Unfortunately for him, the amount claimed as a debt in the petition was not all the money that is currently alleged to be owed by him to the Deputy Commissioner, and the Deputy Commissioner declined to accept the tender on the condition that it had been made. 

2. I determined in Deputy Commissioner of Taxation v Soong [2013] FCCA 2106 that the tender was not unconditional and therefore the Deputy Commissioner was entitled to utilise the moneys as he wished, so that I was not prepared either to dismiss the petition or adjourn it because of the tender. My decision was taken on appeal to the Federal Court where Jacobson J refused leave to appeal (the decision being an interlocutory one) on 12 February 2014. The matter comes back to me today for the purpose of considering whether or not it is appropriate to make a sequestration order.

3. Mr Johnson, who has appeared on behalf of the debtor in previous matters and appears today, requests the court to grant an adjournment for 21 days so that summary financing can occur. But he only received those instructions this morning and therefore has no evidence to support it. In those circumstances, and given the affidavit of debt of Jeremy Lappin sworn on 18 February 2014 which reveals that the applicant is owed $631,843-odd by the debtor including the amount referred to in the petition. I have come to the view that it is in the interests of justice and of the debtor that his affairs now be placed in the hands of a trustee.

4. Having considered the affidavits of debt and search, I am satisfied that the respondent committed the act of bankruptcy alleged in the petition. I am satisfied of the proof of the other matters required by section 52 of the Bankruptcy Act 1966 (Cth). The court notes that the date of the act of bankruptcy is 13 December 2011. I note that consent to act as a trustee has been signed by Bruce Gleeson and has been lodged with the Official Receiver in Sydney.

5. Mr Johnson asks that the court grant the maximum period of 21 days stay of all proceedings under these orders.  It seems to me that if there is some possibility of funds being raised within that time, it should be investigated.  I cannot see, given the very length period that has already passed, what real disadvantage the Deputy Commissioner will suffer by granting the stay.   If the amount of the debt is able to be paid in full then it is very possible that an annulment might come about.  In those circumstances, I am prepared to grant a stay of all proceedings under these orders for a period of 21 days. 

6. I make a sequestration order against the estate of Stephen Andrew Soong. I order that the applicant’s costs including reserved costs, if any, be taxed and paid from the estate of the respondent in accordance with the Act. Under the Bankruptcy Regulations, a copy of this sequestration order be given to the Official Receiver in Sydney within two days. The court notes that exhibit 1, being the bank cheque, was requested to be returned by the respondent and, by consent, has been returned.

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Judge Raphael

Associate: 

Date:  25 February 2014