Iliopoulos v BM2008 Pty Ltd (in liq)

The appellant, Iliopoulos, sought to extend the time to comply with a bankruptcy notice issued against him by BM2008 Pty Ltd (in liq). The bankruptcy notice was founded on a judgment debt of $2,577,072.49 awarded to BM by an arbitrator and made enforceable by the Supreme Court of Victoria. The appeal focused on whether Iliopoulos could rely on a cross-claim, set-off cross demand, or other assets to argue that the judgment debt was not due and payable, thereby seeking to set aside the bankruptcy notice.

The court had to determine whether the cross-claim, set-off cross demand, or other assets, including potential causes of action against directors, former directors, and a related company, Ataquil Pty Ltd, were equal to or exceeded the judgment debt. The key issue was the existence and potential value of these assets, particularly the causes of action against the directors and Ataquil, and whether they would contribute to the distributable fund upon the completion of the voluntary winding up of BM. The court examined whether these assets, if realised, would add to the distributable fund in the amounts claimed by Iliopoulos.

The court concluded that there was insufficient evidence to support the existence or value of the claimed assets. The court found that the potential claims against Ataquil and others were speculative and unlikely to realise significant value. The court also noted that the decision to pursue such claims lay with the liquidator, not Iliopoulos. Consequently, the court held that Iliopoulos had not demonstrated that the cross-demand or other assets met the requirement of being equal to or exceeding the judgment debt. The application to set aside the bankruptcy notice was refused.

The court dismissed the appeal and ordered that Iliopoulos pay the respondent’s costs of the appeal. The Federal Magistrate’s reasons and the grounds of appeal raised by Iliopoulos were largely irrelevant to the issues before the court, which had evolved since the initial hearing.