Health Insurance Commission v Trustee in Bankruptcy of the Estate of Ioakim Alekozoglou

In the Federal Court of Australia, the Health Insurance Commission (“the HIC”) sought to have a debt admitted in the bankruptcy of Dr Ioakim Alekozoglou expunged. Dr Alekozoglou had received payments of Medicare benefits from the Commonwealth under the Health Insurance Act 1973 (Cth) for which he subsequently was ordered to repay a proportion of the amount in accordance with the Act. Following a review, a Determining Officer ordered that Dr Alekozoglou repay a proportion of the Medicare benefits paid for services rendered during a particular period. The trustee in bankruptcy of Dr Alekozoglou admitted the proof of debt provided by the HIC. The HIC applied to the court to have the debt expunged. The primary issue for the court was whether the trustee was correct to admit the proof of debt provided by the HIC. The court found that the proof of debt provided by the HIC was not a debt provable in the bankruptcy of Dr Alekozoglou and was correctly expunged. The court reasoned that the debt was not “due” within the meaning of the Bankruptcy Act 1966 (Cth) as the amount was not payable at the time of the bankruptcy, and it had not been formally assessed or determined as a debt owing by Dr Alekozoglou to the Commonwealth prior to the bankruptcy. The court held that the HIC was required to follow the statutory process to recover the debt before it could be admitted in the bankruptcy. The court ordered that the proof of debt provided by the HIC be expunged and that the application otherwise be dismissed. There was no order as to costs.