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Di Cioccio v Official Trustee in Bankruptcy

Di Cioccio v Official Trustee in Bankruptcy

Case [2014] FCA 782 29 July 2014

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FEDERAL COURT OF AUSTRALIA
Di Cioccio v Official Trustee in Bankruptcy [2014] FCA 782

Citation: Di Cioccio v Official Trustee in Bankruptcy [2014] FCA 782

Parties: MARC EDWARD DI CIOCCIO v THE OFFICIAL TRUSTEE IN BANKRUPTCY

File number: VID 1345 of 2013

Judge: PAGONE J

Date of judgment: 29 July 2014

Catchwords: BANKRUPTCY – meaning of “after-acquired property” – whether shares acquired with income below threshold amount constitute after-acquired property vesting in trustee – Re Gillies applied.

Legislation:
Bankruptcy Act 1924 (Cth), s 101

Bankruptcy Act 1966 (Cth), Division 4B, ss 5, 58, 116, 131, 139P, 178

Cases cited:
Bank of Western Australia v Commissioner of Taxation (Cth) (1994) 55 FCR 233

Commissioner of Taxation v Sun Alliance Investments Pty Ltd (in liq) (2005) 225 CLR 488

Davies v Davies [2012] FMCAfam 866

Federal Commissioner of Taxation v Cooke and Sherden (1980) 42 FLR 403, 412-416

Federal Commissioner of Taxation v Montgomery (1999) 198 CLR 639

Federal Commissioner of Taxation v Official Receiver (1956) 95 CLR 300

Federal Commissioner of Taxation v Orica Ltd (1998) 194 CLR 500

Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47

Marr v Australian Telecom Corporation (1991) 34 FCR 82

Nezovic v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2003) 133 FCR 190

Project Blue Sky Inc v Australian Broadcasting Commission (1998) 194 CLR 355

Re Gillies; Ex parte Official Trustee in Bankruptcy (1993) 42 FCR 571

ReWeiss; Ex parte Official Trustee in Bankruptcy (1985) 7 FCR 121

Rodway v White (2009) 233 FLR 262

Scott v Commissioner of Taxation (1935) 35 SR (NSW) 215

Thomas v Federal Commissioner of Taxation (1923) 33 CLR 256

Whitaker v Federal Commissioner of Taxation (1998) 82 FCR 261

Date of hearing: 4 July 2014

Date of last submissions: 4 July 2014

Place: Melbourne

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 14

Counsel for the Applicant: Mr M Y Bearman with Mr S P Thomas

Solicitor for the Applicant: HDL Legal

Counsel for the Respondent: Mr P Bender

Solicitor for the Respondent: Harris Carlson Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1345 of 2013

BETWEEN:
MARC EDWARD DI CIOCCIO
Applicant

AND:
THE OFFICIAL TRUSTEE IN BANKRUPTCY
Respondent

JUDGE:

PAGONE J

DATE OF ORDER:

29 JULY 2014

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The application be dismissed.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1345 of 2013

BETWEEN:
MARC EDWARD DI CIOCCIO
Applicant

AND:
THE OFFICIAL TRUSTEE IN BANKRUPTCY
Respondent

JUDGE:

PAGONE J

DATE:

29 JULY 2014

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The question in dispute in this proceeding is whether shares purchased by the bankrupt (“Mr Di Cioccio”) come within the meaning of “after‑acquired property” in s 58(1) of the Bankruptcy Act 1966 (Cth) which vested in the respondent (“the Official Trustee”) and is divisible amongst the creditors pursuant to s 116. Mr…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Di Cioccio v Official Trustee in Bankruptcy

Details

AGLC: Di Cioccio v Official Trustee in Bankruptcy [2014] FCA 782
Case: [2014] FCA 782
Decision Date: 29 July 2014

CaseChat Overview and Summary

The case of Di Cioccio v Official Trustee in Bankruptcy involved the appellant, Di Cioccio, who appealed a decision made by the respondent, the Official Trustee in Bankruptcy, regarding the classification and disposition of certain shares he had acquired. The dispute centred on whether these shares, bought with income from his business that fell below the bankruptcy threshold, should be considered "after-acquired property" and thus vest in the trustee. This appeal was heard by the Full Court of the Federal Court of Australia.

The primary legal issue before the court was the interpretation and application of the Bankruptcy Act 1966, specifically concerning the definition and scope of "after-acquired property." The court had to determine whether the shares in question were indeed "after-acquired property" under the Act and if they should vest in the trustee as a result. This required the court to consider the specific circumstances under which the shares were acquired, including the income from which they were purchased.

The Full Court found that the shares in question did not constitute "after-acquired property" as defined in the Bankruptcy Act. The reasoning was based on the fact that the income used to purchase the shares was below the threshold amount specified in the Act, and thus, the shares were not acquired with "after-acquired property." The court also applied the principles established in the case of Re Gillies, which provided guidance on the interpretation of similar provisions in the Act. Consequently, the appeal was dismissed, and the orders were made in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The application be dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Actions

Citations

Di Cioccio v Official Trustee in Bankruptcy [2014] FCA 782

Most Recent Citation

Di Cioccio v Official Trustee in Bankruptcy [2015] FCAFC 30

Cases Citing This Decision

1419835 (Refugee) [2016] AATA 4907
Citation 1 (Para 1)

…ederal Court in SZGIZ v Minister for Immigration and Citizenship (2013) 212 FCR 235 and the Federal Circuit Court in SZRNJ v Minister for Immigration [2014] FCA 782. [1] [Deleted].…
Di Cioccio v Official Trustee in Bankruptcy [2015] FCAFC 30
Citation 2 (Para 4)

…facts are not in dispute. The parties agreed that the facts had been stated fully by the primary judge ( Di Cioccio v Official Trustee in Bankruptcy [2014] FCA 782) as follows: 3Mr Di Cioccio acquired shares in several companies between 14 June 2013 and 27 September 2013 during the period of his bankruptcy. … Mr…

See all citing cases →

Cases Cited

Davies and Davies and Anor [2012] FMCAfam 866
Citation 1 (Para 6)

…adoption of that view. The observations in Re Gillies, and the decision in Rodway v White, were followed by a Federal Magistrate in Davies v Davies [2012] FMCAfam 866. The parties agreed that the dicta in Re Gillies and decisions in Rodway and Davies were not binding, but that they ought to be followed unless satisfi…
Rodway v White [2009] WASC 201
Citation 2 (Para 6)

…es; Ex parte Official Trustee in Bankruptcy (1993) 42 FCR 571 and was decided adversely to Mr Di Cioccio’s contention by Heenan J in Rodway v White (2009) 233 FLR 262. In Re Gillies it had been not necessary to decide the issue which arises in this proceeding, but in the context of considering the effect of significa…
Federal Commissioner of Taxation v Sun Alliance Investments Pty Ltd (in liq) [2005] HCA 70
Citation 3 (Para 1)

…eral Commissioner of Taxation v Montgomery (1999) 198 CLR 639; Commissioner of Taxation v Sun Alliance Investments Pty Ltd (in liq) (2005) 225 CLR 488, 504; Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47; Whitaker v Federal Commissioner of Taxation (1998) 82 FCR 261), but what is received as income may not…
Scott v Commissioner of Police [2005] NSWCA 283
Citation 4 (Para 1)

…occasion take the form of shares or other property (see, for example, Thomas v Federal Commissioner of Taxation (1923) 33 CLR 256; Scott v Commissioner of Taxation (1935) 35 SR (NSW) 215, 219; Federal Commissioner of Taxation v Montgomery (1999) 198 CLR 639; Commissioner of Taxation v Sun Alliance Investments Pty Ltd (in liq) (2005) 225…
Nezovic v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1263
Citation 5 (Para 6)

…ed that the earlier decisions were plainly or clearly wrong: see Nezovic v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2003) 133 FCR 190 at [52]; Marr v Australian Telecom Corporation (1991) 34 FCR 82; Bank of Western Australia v Commissioner of Taxation (Cth) (1994) 55 FCR 233 .…
Federal Commissioner of Taxation v Montgomery [1999] HCA 34
Citation 6 (Para 1)

…tion (1923) 33 CLR 256; Scott v Commissioner of Taxation (1935) 35 SR (NSW) 215, 219; Federal Commissioner of Taxation v Montgomery (1999) 198 CLR 639; Commissioner of Taxation v Sun Alliance Investments Pty Ltd (in liq) (2005) 225 CLR 488, 504; Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47; Whitaker v Fe…
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 53
Citation 7 (Para 2)

…objectives. The court “must strive to give meaning to every word of the provision” ( Project Blue Sky Inc v Australian Broadcasting Commission (1998) 194 CLR 355, 382 [71]) and adjust the meaning of “competing provisions to achieve that result which will best give effect to the purpose and language of those provisio…
Federal Commissioner of Taxation v Orica Ltd [1998] HCA 33
Citation 8 (Para 1)

…121; Federal Commissioner of Taxation v Cooke and Sherden (1980) 42 FLR 403, 412-416; Federal Commissioner of Taxation v Orica Ltd (1998) 194 CLR 500) and may, no doubt, on occasion take the form of shares or other property (see, for example, Thomas v Federal Commissioner of Taxation (1923) 33 CLR 256; Scott v Commi…
Whitaker v Commissioner of Taxation [1998] FCA 262
Citation 9 (Para 1)

…ion v Sun Alliance Investments Pty Ltd (in liq) (2005) 225 CLR 488, 504; Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47; Whitaker v Federal Commissioner of Taxation (1998) 82 FCR 261), but what is received as income may not retain its character as income when applied in the acquisition of goods or other assets. The shares in Rodway v Whi…
Re Gillies [1993] FCA 409
Citation 10 (Para 6)

…The point at issue was considered in obiter dicta by French J (as the Chief Justice then was) in Re Gillies; Ex parte Official Trustee in Bankruptcy (1993) 42 FCR 571 and was decided adversely to Mr Di Cioccio’s contention by Heenan J in Rodway v White (2009) 233 FLR 262. In Re Gillies it had been not necessary to d…
Re Tarrant, Janine Maree v Ex parte Putnin, Bernard & Ors [1985] FCA 283
Citation 11 (Para 9)

…ssioner of Taxation v Cooke and Sherden (1980) 42 FLR 403, 412-416) and has a large meaning ( Re Weiss; Ex parte Official Trustee in Bankruptcy (1985) 7 FCR 121, 123-4) extending, “as did the same word in s 101 of the 1924 Act, to payments of a revenue nature”: Re Gillies; Ex parte Official Trustee in Bankruptcy (1…
Federal Commissioner of Taxation v Cooke and Sherden [1980] FCA 62
Citation 12 (Para 9)

…old amount belongs wholly to the bankrupt and does not vest with the Official Trustee. “Income” for these purposes is not restricted to money ( Federal Commissioner of Taxation v Cooke and Sherden (1980) 42 FLR 403, 412-416) and has a large meaning ( Re Weiss; Ex parte Official Trustee in Bankruptcy (1985) 7 FCR 121, 123-4) extending, “as did the same word…
Ransburg Australia Pty Ltd v Commissioner of Taxation [1980] FCA 37
Citation 13 (Para 9)

…t vest with the Official Trustee. “Income” for these purposes is not restricted to money ( Federal Commissioner of Taxation v Cooke and Sherden (1980) 42 FLR 403, 412-416) and has a large meaning ( Re Weiss; Ex parte Official Trustee in Bankruptcy (1985) 7 FCR 121, 123-4) extending, “as did the same word in s 101 of…
Federal Commissioner of Taxation v Official Receiver [1956] HCA 24
Citation 14 (Para 8)

…ion, salary, emoluments, profits, wages, earnings or income” as the court directed. In Federal Commissioner of Taxation v Official Receiver (1956) 95 CLR 300 the view had been expressed that the personal earnings of a bankrupt did not vest in the official receiver in the absence of an order by the Court, and a repor…
Hayes v Federal Commissioner of Taxation [1956] HCA 21
Citation 15 (Para 1)

…missioner of Taxation v Sun Alliance Investments Pty Ltd (in liq) (2005) 225 CLR 488, 504; Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47; Whitaker v Federal Commissioner of Taxation (1998) 82 FCR 261), but what is received as income may not retain its character as income when applied in the acquisition…
Thomas v Federal Commissioner of Taxation [1923] HCA 43
Citation 16 (Para 1)

…d may, no doubt, on occasion take the form of shares or other property (see, for example, Thomas v Federal Commissioner of Taxation (1923) 33 CLR 256; Scott v Commissioner of Taxation (1935) 35 SR (NSW) 215, 219; Federal Commissioner of Taxation v Montgomery (1999) 198 CLR 639; Commissioner of Taxation v Sun Allianc…

Legislation Cited

Bankruptcy Act 1924 (Cth) 101
2 mentions (from Para 8)
Bankruptcy Act 1966 (Cth)
1 mention (from Para 1)
Federal Court Rules 2011 (Cth)
1 mention

Citation:	Di Cioccio v Official Trustee in Bankruptcy [2014] FCA 782
Parties:	MARC EDWARD DI CIOCCIO v THE OFFICIAL TRUSTEE IN BANKRUPTCY
File number:	VID 1345 of 2013
Judge:	PAGONE J
Date of judgment:	29 July 2014
Catchwords:	BANKRUPTCY – meaning of “after-acquired property” – whether shares acquired with income below threshold amount constitute after-acquired property vesting in trustee – Re Gillies applied.
Legislation:	Bankruptcy Act 1924 (Cth), s 101 Bankruptcy Act 1966 (Cth), Division 4B, ss 5, 58, 116, 131, 139P, 178
Cases cited:	Bank of Western Australia v Commissioner of Taxation (Cth) (1994) 55 FCR 233 Commissioner of Taxation v Sun Alliance Investments Pty Ltd (in liq) (2005) 225 CLR 488 Davies v Davies [2012] FMCAfam 866 Federal Commissioner of Taxation v Cooke and Sherden (1980) 42 FLR 403, 412-416 Federal Commissioner of Taxation v Montgomery (1999) 198 CLR 639 Federal Commissioner of Taxation v Official Receiver (1956) 95 CLR 300 Federal Commissioner of Taxation v Orica Ltd (1998) 194 CLR 500 Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47 Marr v Australian Telecom Corporation (1991) 34 FCR 82 Nezovic v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2003) 133 FCR 190 Project Blue Sky Inc v Australian Broadcasting Commission (1998) 194 CLR 355 Re Gillies; Ex parte Official Trustee in Bankruptcy (1993) 42 FCR 571 ReWeiss; Ex parte Official Trustee in Bankruptcy (1985) 7 FCR 121 Rodway v White (2009) 233 FLR 262 Scott v Commissioner of Taxation (1935) 35 SR (NSW) 215 Thomas v Federal Commissioner of Taxation (1923) 33 CLR 256 Whitaker v Federal Commissioner of Taxation (1998) 82 FCR 261
Date of hearing:	4 July 2014
Date of last submissions:	4 July 2014
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	14
Counsel for the Applicant:	Mr M Y Bearman with Mr S P Thomas
Solicitor for the Applicant:	HDL Legal
Counsel for the Respondent:	Mr P Bender
Solicitor for the Respondent:	Harris Carlson Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 1345 of 2013

BETWEEN:	MARC EDWARD DI CIOCCIO Applicant
AND:	THE OFFICIAL TRUSTEE IN BANKRUPTCY Respondent

JUDGE:	PAGONE J
DATE OF ORDER:	29 JULY 2014
WHERE MADE:	MELBOURNE

JUDGE:	PAGONE J
DATE:	29 JULY 2014
PLACE:	MELBOURNE