Donoghue v Russells (A Firm)

In the case of Donoghue v Russells (A Firm), the primary issue was whether the debtor, who had been absent from Australia since July 2014, was carrying on business in Australia and had a place of business in Australia at the time of the alleged act of bankruptcy, namely the failure to comply with a bankruptcy notice. The Federal Circuit Court had made a sequestration order against the debtor, and the debtor appealed to the High Court. The High Court found that the primary judge had not erred in finding that the debtor was carrying on business in Australia and had a place of business in Australia at the time of the alleged act of bankruptcy. The primary judge had drawn inferences from the evidence before him, and the High Court found that those inferences were open to the primary judge and that the primary judge had not erred in drawing them.

The primary judge had found that the debtor was carrying on business in Australia because he had been engaged in litigation with the Commissioner of Taxation, which had resulted in a judgment against him for an amount in excess of $48 million. The primary judge had also found that the debtor had a place of business in Australia because he had been a director of a company and had used his Australian address for the purposes of that directorship. The High Court found that these findings were open to the primary judge and that the primary judge had not erred in making them. The High Court also found that the inference drawn by the primary judge that the debtor had remained out of Australia with intent to defeat or delay his creditors was open to the primary judge and that the primary judge had not erred in drawing it.

The High Court dismissed the appeal and ordered that the appellant pay the respondent’s costs of the appeal. The High Court found that the primary judge had not erred in making the findings that the debtor was carrying on business in Australia and had a place of business in Australia at the time of the alleged act of bankruptcy. The High Court also found that the inference drawn by the primary judge that the debtor had remained out of Australia with intent to defeat or delay his creditors was open to the primary judge and that the primary judge had not erred in drawing it. Accordingly, the High Court dismissed the appeal and ordered that the appellant pay the respondent’s costs of the appeal.