Deputy Commissioner of Taxation v Tadrowski
[2024] FedCFamC2G 707
•2 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Deputy Commissioner of Taxation v Tadrowski [2024] FedCFamC2G 707
File number(s): PEG 185 of 2024 Judgment of: JUDGE STREET Date of judgment: 2 August 2024 Catchwords: BANKRUPTCY – application for adjournment refused - sequestration order affirmed Legislation: Bankruptcy Act 1966 (Cth) Division: Division 2 General Federal Law Number of paragraphs: 15 Date of hearing: 2 August 2024 Place: Sydney Solicitor for the Applicant: Mr K Metlej For the Respondent: The Respondent appeared via video/audio-link ORDERS
PEG 185 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF THOMAS TADROWSKI
BETWEEN: DEPUTY COMISSIONER OF TAXATION
Applicant
AND: THOMAS TADROWSKI
Respondent
ORDER MADE BY:
JUDGE STREET
DATE OF ORDER:
2 AUGUST 2024
THE COURT ORDERS THAT:
1.The oral application for adjournment is refused.
2.The Court affirms orders 1,2 and 3 made by Registrar Trott on 8 July 2024, by reason of which the estate of Thomas Tadrowski was ordered to be sequestrated under the Bankruptcy Act 1966 (Cth).
3.The petitioning creditors costs of the review are to be costs incurred by the petitioning creditor in the bankruptcy proceedings and are to have the appropriate priority in that regard.
THE COURT NOTES THAT:
A.The act of bankruptcy occurred on 4 March 2024.
B.The consent to act as trustee was signed by Gregory Brue Dudley on 4 June 2024.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JUDGE STREET
These are bankruptcy proceedings that were commenced on 4 June 2024 as a result of, service of a bankruptcy notice on 12 February 2024 and an act of bankruptcy that occurred on 4 March 2024. The affidavit of service of the bankruptcy notice dated 20 February 2024 identifies that it was served upon Mr Tadrowski (“the respondent”), and that he had a limited period in which he could bring a challenge in terms of an alleged counterclaim in respect of that bankruptcy notice. No application was brought to set aside the bankruptcy notice. There is evidence as to service of the creditors petition dated 28 June 2024, and it was originally heard before a registrar who made a sequestration order on 8 July 2024. It appears on that occasion that the respondent had failed to attend the hearing.
There was an application for review filed on 24 July 2024. Proceedings in bankruptcy are dealt with expeditiously. As a result of that application, an order was made on 31 July 2024 listing the application for review for hearing today. After the reading of the evidence relied upon by the petitioning creditor and an explanation by the Court as to the process that would be adopted, in the course of hearing submissions, the respondent maintained that he had a genuine counterclaim, and that his accountant was away, and that he wanted an opportunity to put on evidence and that he had not had a reasonable opportunity to do so.
On the material before the Court, the respondent has had ample opportunity within the time after the service of the bankruptcy notice to seek to have the same set aside if he had a genuine counterclaim, however no such application was made. On the evidence before the Court, the respondent was clearly aware of the issue of the bankruptcy notice, aware of the judgement obtained in 2018, and aware of the issue of the creditors petition. No evidence has been put on by the respondent.
The Court is not satisfied that there is any proper basis upon which the proceedings should be adjourned. The Court is satisfied on the material before it that the petitioning creditor is entitled, at a prima facie level to proceed with this application, for a sequestration order. There is a public interest in the expeditious determination of bankruptcy proceedings, and the Court notes that the bankruptcy notice in the present case was issued shortly before the period would have expired within which such a notice could be issued.
Given that the Court is satisfied that the respondent has had a fair opportunity, to challenge the bankruptcy notice within the time that was specified and was given an opportunity to respond to the creditors petition, if he wished to, and was aware of the fixing of the matter today for hearing, the absence of any evidence to support any basis upon which it could be said that there was a genuine counterclaim is entirely unsatisfactory. The proposition that the respondent’s accountant is away is not a basis upon which it is appropriate to adjourn the bankruptcy hearings. The Court is not satisfied an adjournment is warranted in the interests of the administration of justice, and accordingly the adjournment request is refused.
These are bankruptcy proceedings within the Court's jurisdiction under s 27 of the Bankruptcy Act 1966 (Cth) (“the Act”). These proceedings were originally heard, and a sequestration order was made by a Registrar on 8 July 2024. An application for review was filed on 24 July 2024. On 31 July 2024, this Court made an order fixing the application for review and fixing the petition for hearing today. The respondent appeared at the hearing via video and audio-link. At the commencement of the hearing, the Court explained to the respondent the procedure that the Court would adopt, and the respondent confirmed he understood what was said.
The petitioning creditor had read the affidavit verifying paragraphs 1 to 3 of the creditors petition dated 4 June 2024, an affidavit of search of Mr Michael Brandon of 4 June 2024, an affidavit of service of the bankruptcy notice of Helen Shaw of 20 February 2024, an affidavit of service of the creditors petition by Andrew Costa of 28 June 2024, as well as an updated affidavit of debt dated 1 August 2024 and an updated affidavit of search dated 2 August 2024. The affidavit in relation to the service of the bankruptcy notice dated 20 February 2024 identifies that service was affected upon the respondent who was identified at the time of the service of the bankruptcy notice, the respondent was asked:
Is your name Thomas Tadrowski?
He said: Yes. I am.
This respondent was asked: Are you the person referred to in the bankruptcy notice as Thomas Tadrowski?
He replied: Yes. I am.
The bankruptcy notice that was handed to the respondent included, as required, a copy of the judgment in the District Court supporting the bankruptcy notice. On the face of the bankruptcy notice, it complied with the statutory requirements under s 40 and s 41 of the Act. The Court notes that the District Court final judgment in respect of which the bankruptcy notice was issued was obtained in 2018, less than six years before the bankruptcy notice was issued. Accordingly, on its face, the bankruptcy notice was valid.
On the material before the Court, no step was taken by the respondent to seek to set aside the bankruptcy notice or to contend that he had a counterclaim of a genuine kind in relation to the bankruptcy notice within the time required. On the evidence, it is apparent that the respondent has committed an act of bankruptcy within the jurisdictional requirements under s 43(1) of the Act for the making of a sequestration order. On the evidence, it is apparent that at the time the act of bankruptcy was committed, the respondent was personally present or ordinarily resident in Australia. Accordingly, the jurisdictional requirements under s43 of the Act are made out.
In relation to s 52 of the Act, proof of the matters required in s 52(1)(a), (b) and (c) of the Act has been provided, and the Court is satisfied with the proof of those matters and, accordingly, its powers to make a sequestration order are enlivened.
Under s 52(2) of the Act, a Court, if satisfied with proof that the debtor is able to pay his debts or that there is other sufficient cause that a sequestration order ought not to be made, may dismiss the petition. The respondent has sought an adjournment on the basis of a contention that he has a counterclaim and has not had the opportunity to put on his material in support of the same. The respondent made an oral application for an adjournment and, for reasons the Court has already delivered, the Court refused that oral application for an adjournment.
The respondent maintains that he has a genuine counterclaim and contends that he apparently needs an accountant to assist him and that he has material that would irrefutably establish his counterclaim. Not one iota of such material has been put on. The respondent had an opportunity, after service of the bankruptcy notice, to seek to have the same set aside if he had a genuine counterclaim or set off. No such step was taken by the respondent. Not only was the respondent personally served with the bankruptcy notice, but when the creditors petition was issued on 4 June 2024, that was personally served as identified in the affidavit of Andrew Costa on 13 June 2024.Again, there was a conversation with a process server of the petition and supporting documents to the effect of:
Are you Thomas Tadrowski, the person referred to in the document?
The response was: Yes. I am.
In those circumstances, the respondent has had ample time since the service of the creditors petition, if he genuinely believed he had a counterclaim, to seek to advance the same. The respondent has had ample opportunity to seek to advance any such counterclaim from the time of service of the bankruptcy notice, and not a single document has been filed in support of the same. It is apparent that the respondent did not attend before the Registrar in respect of the making of the bankruptcy order and caused an application for review to be filed on 24 July.
The respondent has had a fair opportunity since the making of that application for review to file evidence in support of the existence of a counterclaim and has not done so. The Court is not satisfied that there is other sufficient cause as to why a sequestration order ought not to be made. The Court is not satisfied the respondent is able to pay his debts. The Court is satisfied that this is a matter where the petitioning creditor has established proof entitling them petitioning creditor to a sequestration order. The Court notes that the act of bankruptcy occurred on 4 March 2024. The Court notes that there was a consent to act as trustee signed by Gregory Bruce Dudley on 4 June 2024.
It is for these reasons the Court makes the above orders.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Oral Published Reasons for Judgment of Judge Street. Associate:
Dated: 12 August 2024
0
0
1