DUMITRASKU v Official Trustee in Bankruptcy
[2003] FMCA 477
•30 October 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DUMITRASKU v OFFICIAL TRUSTEE IN BANKRUPTCY | [2003] FMCA 477 |
| BANKRUPTCY – whether statement of affairs filed – whether section 306(1) of the Bankruptcy Act (Cth) permits a deficiency in filing to be cured. |
Bankruptcy Act 1966 (Cth) – s.33, s.33A, s.54, s.54(1), s.149, s.149(1), s.306(1),
Bankruptcy Amendment Act 1991 (Cth) – s.27
Sofia and Pattison BC9707951 (unreported Federal Court of Australia, Finkelstein J, 20 October 1997),
Tsingaris and the Official Receiver BC9906543 1999 FCA 1389 Weinberg J
| Applicant: | ISTVAN DUMITRASKU |
| Respondent: | OFFICIAL TRUSTEE IN BANKRUPTCY |
| File No: | MZ1063 of 2003 |
| Delivered on: | 30 October 2003 |
| Delivered at: | Melbourne |
| Hearing date: | 27 October 2003 |
| Judgment of: | Connolly FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Peter Fary |
| Solicitors for the Applicant: | Dandanis & Associates |
| Counsel for the Respondent: | Mr Con Nottas |
| Solicitors for the Respondent: | Lewis Holdway |
ORDERS
That the time limited by section 54(1) for filing the applicant’s statement of affairs be extended to 3 October 2000.
It is hereby declared that the applicant has complied with section 54 of the Bankruptcy Act 1966 (Cth) by filing a copy of his statement of affairs dated 14 December 1998 with the Official Trustee on 3 October 2000.
It is hereby declared that the applicant was discharged from bankruptcy by operation of section 149 of the Bankruptcy Act 1966 (Cth) on
4 October 2003.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MZ1063 of 2003
| ISTVAN DUMITRASKU |
Applicant
And
| OFFICIAL TRUSTEE IN BANKRUPTCY |
Respondent
REASONS FOR JUDGMENT
The proceedings
This is an extempore judgment arising from the applicant seeking the following orders:
a)
A declaration that the applicant has complied with section 54 of the Bankruptcy Act 1966 (Cth) by filing a copy of his statement of affairs dated 14 December 1998 with the Official Trustee on
3 October 2000.
b)An order extending the time limited by section 54(1) for filing the applicant’s statement of affairs to 3 October 2000.
c)A declaration that the applicant was discharged from bankruptcy by operation of section 149 of the Bankruptcy Act 1966 (Cth) on 4 October 2003.
d)
In the alternative to 1, 2 and 3 an order under section 33A of the Bankruptcy Act 1966 (Cth) that the statement of affairs dated
25 August 2003 is to be treated as having been filed with the Official Receiver three years and thirty days before the making of this order.
Counsel for the Applicant, Mr Fary indicated that he did not intend to pursue the orders sought in paragraph 1(e) of the outline of submissions, that is that the respondent pay the applicant’s costs. Mr Fary explained that this position had been adopted on the basis that the respondent was no longer opposing the orders sought. Counsel for the Respondent, Mr Nottas confirmed that he was neither opposing nor consenting to the orders sought, albeit on a number of occasions he attempted to stray from that path.
The application is supported by the applicant’s affidavit sworn
19 September 2003, filed on 24 September 2003 together with the exhibits referred to therein. The respondent filed on 24 October 2003 an affidavit sworn by Peter Dwyer, Assistant Official Receiver on
17 October 2003.
The history of the matter
On 18 November 1998 the applicant became a bankrupt and on
20 November 1998 he received a letter from the Official Trustee enclosing the statement of affairs and requesting that it be completed and returned. On 14 December 1998 the applicant with the assistance of his solicitor, Mr Dandanis prepared a statement of affairs which he signed. He then left the document with Mr Dandanis with instructions to forward it to the Official Trustee. In August 2000 the applicant received a letter from the Official Trustee advising that it had not received the statement of affairs. On 27 September 2000 a copy of the first statement of affairs was sent to the Official Trustee. That document was received by the Official Trustee on 3 October 2000. A further copy was sent on 14 December 2000. On 17 March 2003 the Official Trustee advised that the copy statement of affairs could not be accepted because it was not in the correct format and had three pages missing. On 25 August 2003 the applicant signed a new form of statement of affairs and arranged for it to be sent to the Official Trustee. On 24 September 2003 the applicant filed this application.
The law
Section 33 of the Bankruptcy Act 1966 (Cth), which came into force on 5 May 2003, provides:
Alteration of filing date for statement of affairs
(1)This section applies to a statement of affairs that was filed for the purposes of sections 54, 55, 56B, 56F or 57 by a bankrupt, or by a person who later became a bankrupt.
(2)If the Court is satisfied that the person believed, on reasonable grounds, that the statement had already been filed at a time before it was actually filed, the Court may order that the statement is to be treated as having been filed at a time before it was actually filed.
(3)The Court cannot make an order that would result in the person being discharged from bankruptcy earlier than 30 days after the order is made.
(4)In this section: filed includes presented, lodged or given.
Subsection 54(1) of the Bankruptcy Act 1966 (Cth) provides:
Where a sequestration order is made, the person against whose estate it is made shall, within 14 days from the day on which he or she is notified of the bankruptcy:
(a)make out and file in the office of the Official Receiver for the District in which the sequestration order was made a statement of his or her affairs; and
(b)furnish a copy of the statement to the trustee.
Subsection 149(1) of the Act provides:
(1)Subject to section 149A, a bankrupt is, by force of this subsection, unless sooner discharged in accordance with Division 3, discharged from bankruptcy in accordance with this section.
(4)If a bankrupt becomes a bankrupt after the commencement of section 27 of the Bankruptcy Amendment Act 1991, the bankrupt is discharged at the end of the period of 3 years from the date of which the bankrupt filed his or her statement of affairs.
Subsection 306(1) of the Act provides:
(1)Proceedings under this Act are not invalidated by a formal defect or an irregularity, unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of that court.
Item 75 of the Bankruptcy Legislation Amendment Bill Explanatory Memorandum provides:
Alteration of filing date for statement of affairs
Item 15 proposes to insert new section 33A into the Act. The effect of this new section is to allow the Court to order that a statement of affairs be treated as having been filed at a time before it was actually filed, provided that the Court is satisfied that the bankrupt believed, on reasonable grounds, that this statement had been filed at a time before it actually was filed. Proposed subsection 33A(3) allows a period of grace of 30 days before the order can take effect to allow the trustee to disengage from the role of trustee. By transitional provision item 204, the change will apply to statements of affairs filed at any time, whether before or after commencement.
Conclusions and findings
Counsel for the applicant conceded that there were four potential defects or irregularities in connection with the filing of the first statement of affairs:
i)filing with the Official Trustee and not the Official Receiver;
ii)filing a copy and not an original;
iii)filing a document with missing pages;
iv)filing of old form of statement of affairs.
In Sofia and Pattison BC9707951 (unreported Federal Court of Australia, Finkelstein J, 20 October 1997), Finkelston J held that section 306(1) of the Act does apply to “proceedings” under section 54 of the Act (ie; filing of statements of affairs). Accordingly, a defect or irregularity in connection with the filing of a statement of affairs may be cured by section 306(1).
With respect to the filing of the document with the Official Trustee and not the Official Receiver, the obligation has since December 1996 been to file the statement of affairs in the office of the Official Receiver. While the statement of affairs has been addressed to the Official Trustee because of the structure of the insolvency and trustee service, the person who received the statement of affairs on behalf of the Official Trustee was also an employee of the Official Receiver. In Tsingaris and the Official Receiver BC9906543 1999 FCA 1389 Weinberg J held that a similar defect was cured by section 306(1) of the Act. I am satisfied that the filing with the Official Trustee rather than the Official Receiver has not caused any substantial injustice particularly in view of the fact that it is the Trustee who has the primary duty of investigating the bankrupt’s examinable affairs.
In respect to the potential defect of filing a copy and not the original document Finkelstein J in Sofia and Pattison (ibid) held that the filing of a photocopy of the statement of affairs and not the original as required by section 54 was a defect or irregularity that could be remedied by section 306(1) of the Act. I am satisfied that in the present instance the filing of the copy rather than the original has not caused any substantial injustice.
With respect to the irregularity of the missing pages and the wrong form, exhibit “ID2” to the affidavit of the applicant, sets out the missing pages 14 to 17. It is clear from that, they would have revealed to the trustee that there were no matters of the type likely to be referred for investigation and it has not caused any substantial injustice.
Finally, the filing of a document in the wrong format has not caused any substantial injustice because the form used, was the one provided by the Trustee and was current at the commencement of the bankruptcy when it was prepared and signed by the applicant.
Furthermore, the applicant has been bankrupt for almost five years now which ought to have provided the Official Trustee with adequate time to investigate his examinable affairs. Accordingly, I propose to grant the relief sought by the applicant in paragraphs 1(a) to (c).
It was further argued by Mr Fary in the alternative that the Court should make an order pursuant to section 33A of the Act in respect of the second statement of affairs. I am satisfied the applicant believed on reasonable grounds that he had filed his statement of affairs with the Official Receiver sometime shortly after 14 December 1998 when he signed the document which had been prepared by his solicitor and then instructed the solicitor to forward the same to the Official Trustee. Accordingly, I would have been prepared to make an order pursuant to section 33A if the applicant had not succeeded in his earlier application.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Connolly FM
Associate: Loveless S
Date: 29 October 2003
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