FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Gouras v Voitin (No 3) [2024] FedCFamC2G 5
File number(s): MLG 1487 of 2022 Judgment of: JUDGE MANSINI Date of judgment: 10 January 2024 Catchwords: BANKRUPTCY – application for leave to proceed against the First Respondent in the Supreme Court of Victoria pursuant to s.58(3) of the Bankruptcy Act 1966 (Cth) – application allowed. Legislation: Bankruptcy Act 1966 (Cth) ss. 53, 58, 82, 117 Cases cited: Allanson v Midland Credit Ltd (1977) 30 FLR 108; [1977] FCA 66
Coventry v Charter Pacific Corporation Limited (2005) 227 CLR 234
GFIN Pty Limited v Gooden, in the matter of GFIN Pty Limited (No 2) [2020] FCA 1440
Lovell v Penkin, in the matter of the bankrupt estate of Kevin Michael Penkin (2008) 101 ALD 335; [2008] FCA 637
Division: Division 2 General Federal Law Number of paragraphs: 23 Date of last submission/s: 8 January 2024 Date of hearing: 12 December 2023 Place: Melbourne Counsel for the Applicant: Mr J Levine Solicitor for the Applicant: Maciel Pizzorno & Co Solicitor for the Respondents: No appearance ORDERS
MLG 1487 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF IN THE MATTER OF JOHN MICHAEL VOITIN, BANKRUPT
BETWEEN: MR ATHANASIOS GOURAS
Applicant
AND: MR JOHN MICHAEL VOITIN
First Respondent
PAUL ANTHONY ALLEN IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF JOHN MICHAEL VOITIN
Second Respondent
ORDER MADE BY:
JUDGE MANSINI
DATE OF ORDER:
10 JANUARY 2024
THE COURT ORDERS THAT:
1.To the extent necessary, the Applicant have leave to proceed by commencing and/or taking a fresh step as against the First Respondent in the Supreme Court of Victoria proceeding no. S ECI 2021 03605.
2.There be no order as to costs.
3.By 4.00 pm on 17 January 2024, the Applicant is to serve a copy of these orders and written reasons for judgment delivered on 10 January 2024 on the First Respondent and the Second Respondent.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
Judge Mansini
IN SUMMARY
Before the Court is an application for the Applicant as creditor to have leave to proceed as against the First Respondent in the Supreme Court of Victoria, in respect of a provable debt and after the First Respondent debtor became a bankrupt pursuant to s.53 of the Bankruptcy Act 1966 (Cth) (Act).
The matter involves the following parties or persons:
(a)Mr Athanasios Gouras is the Applicant to these proceedings and has sought…
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- Gouras v Voitin (No 3) [2024] FedCFamC2G 5
- Case
- [2024] FedCFamC2G 5
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was whether the application for leave to proceed with the action against Mr Voitin, a bankrupt, was permissible under section 58(3) of the Bankruptcy Act 1966 (Cth). This section allows the court to grant leave to proceed against a bankrupt in specific circumstances, particularly when the bankrupt's property has vested in the Official Trustee and the action concerns a provable debt. The court needed to consider whether Mr Gouras's claims constituted a provable debt and whether the bankrupt had an opportunity to participate in the proceedings but failed to do so.
The court allowed the application, reasoning that section 58(3) operates to ensure that the property of the bankrupt, which vests in the Official Trustee for distribution to creditors, is not depleted to the advantage of individual creditors at the expense of others. The court found that Mr Gouras had made a diligent effort to serve Mr Voitin and provide him with the opportunity to participate in the proceedings, which he failed to do. Additionally, the Official Trustee did not oppose the application and was excused from the proceedings. Consequently, the court determined that the action against Mr Voitin could proceed as it related to a provable debt.
The final orders of the court granted Mr Gouras leave to proceed with the legal action against Mr Voitin, under the conditions specified by section 58(3) of the Bankruptcy Act 1966 (Cth). The Official Trustee was excused from participating in the proceedings, and Mr Voitin was deemed to have forfeited his right to participate by not engaging in the process despite being served.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Section 58(3) operates in aid of s.58(1) to ensure that the property of the bankrupt which has vested in the Official Trustee, so as to be available for distribution to creditors in accordance with the other provisions of the Act, is not depleted to the advantage of individual creditors and the disadvantage of creditors generally.CONSIDERATION Mr Gouras was involved in an investment scheme and, relatedly, party to a series of agreements. In the Supreme Court claim, Mr Gouras variously alleges that Mr Voitin breached obligations owed to Mr Gouras. The pleadings are detailed and not necessary to extract in full here. In summary: (a)Before Mr Voitin practised with Stanton Grant Legal:(i)Breach of contract when Mr Voitin did not meet his obligations pursuant to a partly oral and partly implied retainer to provide legal services to him and act on his behalf in relation to a scheme for the sale of a portion of leases of land in Vanuatu referred to as “the Whitesand land” and “the Whitesand leases”.(ii)In negligence for breach of duty of care in circumstances where Mr Gouras had relied on the professional expertise and skill of Mr Voitin, Mr Voitin knew or ought to have known that Mr Gouras so relied and would suffer loss and damage if not advised in a competent manner and to a professional standard and where Mr Voitin failed to inform Mr Gouras of critical factors said to be within the scope of his professional expertise and skill.(iii)Breach of fiduciary duty(ies) including (but not limited to) failing to act in good faith, to act in the best interests of Mr Gouras, to make full disclosure, to not improperly use his position or powers to gain an advantage for himself or someone else and to avoid a conflict of interest.(b)When Mr Voitin practised with Stanton Grant Legal:(i)Breach of contract when Mr Voitin (and/or Stanton Grant Legal) did not meet their obligations pursuant to a retainer to provide legal services to him and act on his behalf in relation to the structure of the Gouras assets and a loan referred to as “the Dinh loan”.(ii)In negligence related to advice on the asset structure, the Dinh loan and various other matters.(iii)Breach of fiduciary duty(ies) including (but not limited to) failing to disclose a conflict of interest and failing to comply with instructions. By the Supreme Court claim, it is apparent that Mr Gouras is a person who claims to be owed obligations by Mr Voitin and or in the alternative by others (namely the 2 other defendants to the Supreme Court claim). Further, Mr Gouras is not the only person to whom it is alleged obligations were owed. For present purposes it is sufficient that Mr Gouras seeks to pursue Mr Voitin who remains an undischarged bankrupt and one of three defendants named therein. As the Supreme Court claim was initiated after Mr Voitin became a bankrupt, leave of this Court is required in relation to that which relates to a “provable debt”. Since the present application was lodged in this jurisdiction, by which such leave was sought pursuant to s.58(3) of the Act, considerable lengths were taken to identify the whereabouts of Mr Voitin as to attend to service and substituted service and substantial opportunity was afforded for his participation but at no time did he participate. The Trustee did not consent to or oppose the application and was granted leave to be excused from these proceedings.