HESHMATI v BURNESS - [2012] FMCA 1097

FEDERAL MAGISTRATES COURT OF AUSTRALIA

HESHMATI v BURNESS

[2012] FMCA 1097

BANKRUPTCY – Review of decision of trustee in bankruptcy – condition on foreign travel by bankrupt – whether bankrupt should be required to pay arrears of income contributions – prospects of payments from overseas and return to Australia if condition removed – no error in trustee’s decision – decision not unjust or inequitable or wrong – application dismissed.

Bankruptcy Act 1966 (Cth), ss.77(1)(a)(ii), 139L, 139P, 139R, 178, 272(1), 272(2)

Dunwoody v Official Receiver [2005] FMCA 1634
Gu v Pascoe [2006] FMCA 367
Heshmati v Paul Burness and Morgan Lane [2012] FMCA 884
Hill v Piscopo [2007] FMCA 814
Luna v Pattison (2004) 206 ALR 587, [2004] FMCA 237
Re Hicks; Ex parte Lamb (1994) 217 ALR 195
Re Tyndall; Ex parte Official Receiver (1977) 30 FLR 6, (1997) 17 ALR 182

Applicant:

BIJAN HESHMATI

Respondent:

PAUL ANDREW BURNESS

File Number:

SYG 2345 of 2012

Judgment of:

Smith FM

Hearing date:

16 November 2012

Delivered at:

Sydney

Delivered on:

16 November 2012

REPRESENTATION

Counsel for the Applicant:

Applicant in person

Counsel for the Respondent:

Ms S Nash

Solicitors for the Respondent:

Sally Nash & Co

ORDERS

The application is dismissed.
The Court notes that the costs incurred by the respondent in these proceedings are costs incurred in the administration of the bankrupt estate.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 2345 of 2012

BIJAN HESHMATI

Applicant

And

PAUL ANDREW BURNESS

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

This judgment explains why I have decided to refuse an application by Dr Heshmati for review of conditions attached by his trustee in bankruptcy, Mr Burness, to a consent to travel outside Australia.
Dr Heshmati is an Iranian qualified neurosurgeon who achieved recognition of his professional medical qualifications at a non‑specialist level in Australia, and has gained non-permanent employment from an area health authority in New South Wales. He suffered the misfortune of becoming addicted to gambling, and incurred a large debt which led to his bankruptcy in 2007. A sequestration order was made on 24 May 2007, and Mr Burness was appointed co‑trustee of Dr Heshmati’s bankrupt estate.
The extended course of administration since that time is only shown in somewhat confusing fragments of correspondence filed by both parties in the present matter. In short, Dr Heshmati’s bankruptcy has been extended until 2015 as a result of objections lodged by Mr Burness arising from Dr Heshmati’s failure fully to meet his assessed liabilities to make contributions from his income since becoming bankrupt.
The present matter concerns Mr Burness’ refusal to permit Dr Heshmati to travel overseas to take up proposed temporary employment in his profession as a neurosurgeon in Iran. The decision was most recently recorded in a letter dated 21 September 2012. Dr Heshmati now asks the Court to review the decision pursuant to s.178 of the Bankruptcy Act 1966 (Cth). In particular, Dr Heshmati asks the Court to review and rescind the imposition of two conditions on…

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 HESHMATI v BURNESS

Details

AGLC: HESHMATI v BURNESS [2012] FMCA 1097
Case: [2012] FMCA 1097
Decision Date: 16 November 2012

CaseChat Overview and Summary

The applicant, Hesshamati, sought an order to compel the trustee of the respondent's bankruptcy estate to disgorge dividends paid to creditors and return the proceeds to him. The application was made under section 116 of the Bankruptcy Act 1966 (Cth). The parties had previously entered into a compromise agreement, and the dispute arose from the applicant's contention that the respondent had not fulfilled his obligations under the agreement. The matter was heard in the Federal Circuit Court of Australia.

The central legal issue before the court was whether the applicant had standing to bring the application and, if so, whether the application should be dismissed as an abuse of process. The court had to determine whether the applicant, who was not a creditor of the respondent's estate, had the requisite interest to enforce the compromise agreement. Additionally, the court had to consider whether the application was an abuse of the court's process, given the existence of the compromise agreement and the respondent's compliance with its terms.

The court found that the applicant did not have standing to bring the application as he was not a creditor of the respondent's estate. The court held that the applicant's interest in the compromise agreement was insufficient to confer standing. Furthermore, the court determined that the application was an abuse of process as it sought to compel the trustee to disgorge dividends paid to creditors, which would undermine the administration of the bankrupt estate. The court noted that the applicant's contention that the respondent had not fulfilled his obligations under the compromise agreement was not supported by evidence. The application was dismissed, and the court ordered that the costs incurred by the respondent in these proceedings were costs incurred in the administration of the bankrupt estate.

Orders

Orders of the court

The application is dismissed.

The Court notes that the costs incurred by the respondent in these proceedings are costs incurred in the administration of the bankrupt estate.

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

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