Kakavas v Paradise Enterprises Limited

FEDERAL MAGISTRATES COURT OF AUSTRALIA

KAKAVAS v PARADISE ENTERPRISES LIMITED [2010] FMCA 574

BANKRUPTCY – Bankruptcy notice – extension of time for compliance – application refused.

Bankruptcy Act 1966, ss.41, 306

McCormac; ex parte Taylor [1985] FCA 334; (1985) 10 FCR 162
Byron v Southern Star Group Pty Ltd [1997] FCA 151; (1997) 73 FCR 264
Cook v Tagamalitsky [2001] FMCA 117
Kavakas v Crown Limited & Ors [2010] VSCA 102
Re Nguyen; ex parte Deputy Commissioner of Taxation [1995] FCA 1036; (1995) 30 ATR 63; (1995) 54 FCR 403

Applicant: HARRY KAKAVAS

Respondent: PARADISE ENTERPRISES LIMITED

File Number: MLG 779 of 2010

Judgment of: Riethmuller FM

Hearing date: 20 July 2010

Date of Last Submission: 20 July 2010

Delivered at: Melbourne

Delivered on: 20 July 2010

REPRESENTATION

Counsel for the Applicant: Mr Kohn

Solicitors for the Applicant: Madgwicks

Counsel for the Respondent: Mr Horgan SC

Solicitors for the Respondent: Kliger Partners

ORDERS

1. The time for compliance with bankruptcy notice no. VN 359/2010 be extended until 4.30 p.m. on 27 July 2010.

2. The application filed on 23 June 2010 be otherwise dismissed.

3. The applicant pay the respondent’s costs as agreed or, failing that, as assessed on the Federal Court’s scales.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 779 of 2010

HARRY KAKAVAS

Applicant

And

PARADISE ENTERPRISES LIMITED

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. This is an application filed 27 May 2010 for a declaration that the bankruptcy notice in this case was not served in accordance with substituted service orders made by the court and, alternatively, that the notice be set aside and in the further alternative, for a stay pending the outcome of the appeal to the Court of Appeal of Victoria with respect to the judgment upon which the bankruptcy notice is founded.

2. The application was initially dismissed by Registrar Allaway on 21 June 2010.  The reasons of the Registrar are not available but are not required for a hearing such as this.  The matter comes as a review application, on review de novo, that is, it is to be heard again before me on the materials that are now available, without regard to the Registrar’s decision.

3. The applicant in this case is a gambler and the respondent, a casino operator.  The applicant travelled to the Bahamas in November of 2006 for his honeymoon and there he attended at the casino of the respondent.  The respondent provided him with a line of credit of around $US1 million in order to facilitate his gambling at the casino.  This was not an unusual feature of the applicant’s life, he had received lines of credit at various casinos around the world.  Recorded in the Supreme Court judgment is the proposition that he had received lines of credit from a large number of casinos for large sums elsewhere in the world which appeared on credit searches undertaken by the respondent.

4. The applicant gambled for a number of days at the casino and ultimately lost…