Deputy Commissioner of Taxation v Tilli

[2020] FCCA 814

FEDERAL CIRCUIT COURT OF AUSTRALIA

DEPUTY COMMISSIONER OF TAXATION v TILLI [2020] FCCA 814

Catchwords:
BANKRUPTCY – Application for review of a sequestration order – whether any proper basis for an adjournment – whether a sequestration order ought not to be made – orders made affirming the sequestration order.

Legislation:

Bankruptcy Act 1966 (Cth), ss.27, 43, 52

Applicant: DEPUTY COMMISSIONER OF TAXATION

Respondent: JOSEPH TILLI

File Number: PEG 645 of 2018

Judgment of: Judge Street

Hearing date: 8 April 2020

Date of Last Submission: 8 April 2020

Delivered at: Sydney

Delivered on: 8 April 2020

REPRESENTATION

Counsel for the Applicant: Mr C Slater via audio link

Solicitors for the Applicant: AGS

The Respondent appeared in person via audio link

ORDERS

1. The oral application for an adjournment is refused.

2. The Court affirms the sequestration order against the estate of Joseph Tilli made by Registrar Trott on 6 August 2019.

3. The Petitioning Creditor’s further costs be paid out of the bankrupt estate in accordance with the priority to which it is entitled in an amount as agreed or taxed.

4. The Auscript transcript of today’s hearing, other than the transcript of the oral published reasons which must be settled by the Court, is to be made available to the party or any member of the public who seeks to obtain a copy of the same subject to any costs required by Auscript to be paid by the requesting party.

DATE OF ORDER: 8 April 2020

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

PEG 645 of 2018

DEPUTY COMMISSIONER OF TAXATION

Applicant

And

JOSEPH TILLI

Respondent

REASONS FOR JUDGMENT

1. This is an application within the Court’s jurisdiction under s 27 of the Bankruptcy Act 1966 (Cth) (“the Act”) in relation to the review of a sequestration order made by Registrar Trott on 6 August 2019.

2. Ordinarily, an application for review of a sequestration order ought to be heard on the day the sequestration order is made. In this case, the application for review was not sought until 14 August 2019. Any such application for review involves a matter of public interest because of the making of a sequestration order and ought to be heard as promptly as possible.

3. The proceedings were the subject of an order by the learned Judge Kendall on 11 February 2020 fixing the matter for hearing today.

4. At the commencement of the hearing, Mr Tilli sought an adjournment on the basis that he had been belatedly served with material relating to search and debt by the petitioning creditor. Similar affidavits in respect of search and debt had already earlier been served upon Mr Tilli. Mr Tilli’s complaint in relation to the late service of those affidavits is without substance. The petitioning creditor was required to comply with the requirements of the rules in respect of an updated affidavit of debt and search.

5. Insofar as the respondent referred to an affidavit by a supporting creditor, the Court is not dealing with any application concerning a supporting creditor. Rather, the Court is dealing with the application by the petitioning creditor. Mr Tilli’s desire to respond to a supporting creditor’s affidavit does not identify any proper basis for an adjournment.

6. Mr Tilli also suggested that he had not been able to obtain legal representation. These proceedings against Mr Tilli were commenced on 4 December 2018. Nothing said by Mr Tilli provided any proper basis by reason of which the Court could be satisfied that an adjournment would result in the obtaining of any legal representation. Mr Tilli has had ample opportunity to obtain representation if he was able to do so.

7. Mr Tilli also suggested that he wanted to put on further affidavit evidence. It is apparent that Mr Tilli has had ample opportunity to put on any relevant evidence as to other sufficient cause or solvency if he wished to do so.

8. There is a very much outdated report that had been filed annexed to an affidavit of Mr Tilli purporting to identify assumptions upon which it was postulated that Mr Tilli might be solvent. That affidavit and report was not supported by independent evidence from Mr Tilli properly identifying his assets and liabilities. It was, rather, dependent upon assumptions identified within the report relating to a particular alleged entity and a transaction taking place in respect of which there is no evidence before the Court that such transaction has proceeded. Nothing in the report annexed to Mr Tilli’s affidavit identifies any proper basis upon which this Court could be satisfied as at today that Mr Tilli is solvent and able to pay his debts as and when they fall due.

9. The only other basis upon which Mr Tilli sought to oppose the affirming of the sequestration order was by reference to the potential for review of debts being advanced by the petitioning creditor. No application for review has been proceeded with and, further, it does not concern the subject matter of the underlying debt the subject of the judgment that gave rise to the bankruptcy notice.

10. The Court is satisfied on the evidence that has been read by the petitioning creditor that the respondent committed an act of bankruptcy on 10 October 2018.

11. The Court is satisfied that that act of bankruptcy occurred at a time when the respondent was within the requirements of sub-s 43(1)(b) of the Act.

12. The Court is satisfied that the petitioning creditor has established proof of the matters required under sub-s 52(1) of the Act.

13. On the question of whether other sufficient cause has been made out under sub-s 52(2) of the Act, for the reasons already given, the Court is not satisfied that the respondent is able to pay his debts and there is no up to date affidavit by the respondent identifying in proper form his financial position, his liabilities, his assets and his ability to pay his current debts that are due. So far as other sufficient cause is concerned, the respondent’s desire to agitate other disputes with the petitioning creditor is not a basis upon which other sufficient cause has been made out why a sequestration order ought not to be made.

14. In these circumstances, the Court is satisfied that this is an appropriate matter in which to make an order affirming the sequestration order made by Registrar Trott on 6 August 2019.

I certify that the preceding fourteen (14) paragraphs are a true copy of the transcript of the published oral reasons for judgment of Judge Street delivered in open Court on 8 April 2020 and the parties were sent a sealed copy of the Court’s orders

Associate:  

Date:  23 April 2020