Deputy Commissioner of Taxation v Weston
[2010] FMCA 437
•15 June 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DEPUTY COMMISSIONER OF TAXATION v WESTON | [2010] FMCA 437 |
| BANKRUPTCY – Refusal of adjournment and grant of sequestration order. |
| Bankruptcy Act 1966, s.52 |
| Applicant: | DEPUTY COMMISSIONER OF TAXATION |
| Respondent: | DAVID HAROLD WESTON |
| Supporting Creditor: | ADRIAN MICHAEL GRUZMAN |
| File Number: | SYG 916 of 2010 |
| Judgment of: | Raphael FM |
| Hearing date: | 15 June 2010 |
| Date of Last Submission: | 15 June 2010 |
| Delivered at: | Sydney |
| Delivered on: | 15 June 2010 |
REPRESENTATION
| Solicitors for the Applicant: | Australian Taxation Office, Legal Services Branch |
| For the Respondent: | In person |
| Supporting Creditor: | In person |
ORDERS
A sequestration order be made against the estate of David Harold Weston.
The Applicant Creditor’s costs be fixed in the amount of $3,252.00 and paid from the estate of the Respondent Debtor in accordance with the Act.
The costs of the Supporting creditor be taxed and paid from the estate of the Respondent.
Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.
THE COURT NOTES:
That the date of the act of bankruptcy is 4 February 2010.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 916 of 2010
| DEPUTY COMMISSIONER OF TAXATION |
Applicant
And
| DAVID HAROLD WESTON |
Respondent
| ADRIAN MICHAEL GRUZMAN |
Supporting Creditor
REASONS FOR JUDGMENT
The debtor is a solicitor who appears to have incurred debts to the Deputy Commissioner for Taxation in his position as a trustee of a trust. A judgment was obtained against him in the District Court on 22 November 2006. No attempt was made to set aside the judgment until 2009. An application was made to the District Court but by consent that application was dismissed on 18 December 2009. The debtor also made an application to set aside the bankruptcy notice which was issued on 15 October 2009 and that matter came before Registrar Wall of this court, when it was also dismissed by consent.
On 15 June 2010 Mr Weston filed an affidavit in the court seeking an adjournment for eight weeks. The essence of his short affidavit is that a friend of his, who has a claim against the estate of a deceased person, has offered to pay out his debts. The affidavit is sworn by Mr Weston and not by the generous benefactor and there is annexed to it a caveat in respect of the estate of the person against whom the benefactor has a claim. That document is dated 11 June 2010 so I believe that I can assume that any action in the Equity Division of the Supreme Court is some way off.
There is a further affidavit of Mr Weston that was filed on 2 June 2010. In it, he says that he has no recollection of a default judgment being entered, nor of service of the originated claim. Ms Kelly, who appears for the Commissioner, told me from the bar table, that in fact there had been some appearances by a firm of solicitors at the District Court but Mr Weston says he did not instruct them and he believes they were there fraudulently. The affidavit makes some reference to an employee who was employed by Mr Weston as a bookkeeper and to a former de facto partner who deposited with Mr Weston the sum of $50,000. There is reference to a further person with whom Mr Weston claims to have had a close friendship and reference again to certain statements received from the Deputy Commissioner of which he says he had no knowledge prior to their receipt on 14 December 2009.
In my view the affidavit of Mr Weston is deficient and this deficiency is inexcusable given that he is a solicitor. He does not properly explain anything and only adds to the confusion of the court as to what exactly Mr Weston’s complaints are about the debt. In these circumstances, and given the fact that I give no weight to the later affidavit of 15 June as it appears to me to be self-serving, I am unable to grant Mr Weston the adjournment he seeks.
The debtor has filed a notice of grounds of opposition dated 25 May 2010 in which he says:
“(1) District Court judgment was irregularly obtained.
(2)Criminal and civil fraud is alleged by debtor’s business associates.”
In support of that document he filed an affidavit to which I referred in my earlier reasons for not granting an adjournment. I said that the affidavit was unhelpful. It did not tell me anything about the complaints that the debtor had about the debt to the commissioner and although it states in paragraph 15:
“I say that the originating claim in judgment is irregular and the creditor’s petition should be stayed pending referral for criminal investigation and the matter be referred to Australian Federal Police and/or Commonwealth Director of Public Prosecutions.”
It does not say why any of these actions should take place. I am not assisted by this affidavit in making any finding that would prevent me from moving to sequestrate Mr Weston’s estate. Mr Weston himself had told me that he is seeking an adjournment because he has only made one application previously for an adjournment and that he wishes to make every effort to find funds to pay out the debt. This does not sit well with the allegations contained in the affidavit or the notice of grounds of opposition. I am of the view that there is nothing here which would bring into play s.52 of the Bankruptcy Act 1966 (the “Act”) and in particular the discretion available thereunder. I am certainly not satisfied that Mr Weston is solvent.
I am told by Mr Gruzman, the supporting creditor, that he is owed approximately $36,000 in respect of a judgment obtained in 2008. This is an additional reason why I believe that it is appropriate that a sequestration order be granted. I am satisfied that the respondent committed the act of bankruptcy alleged in the petition. I am satisfied that the proof of the other matters required by s.52 of the Bankruptcy Act.
I make a sequestration order against the estate of David Harold Weston. I order that the Applicant Creditor’s costs be fixed in the amount of $3,252.00 and be paid from the estate of the Respondent Debtor in accordance with the Act. The costs of the Supporting Creditor be taxed and paid from the estate of the Respondent. Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days. The Court notes that the date of the act of bankruptcy is 4 February 2010.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 23 June 2010
0
0
1