Lahiri & Saha

Case [2022] FedCFamC1F 271

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Lahiri & Saha [2022] FedCFamC1F 271

File number(s): BRC 8518 of 2020
Judgment of: JARRETT J
Date of judgment: 27 April 2022
Catchwords:

FAMILY LAW – BANKRUPTCY – Administration of property – Contribution of bankrupt and recovery of property – Recovery of property from party to transaction where void against trustee – Notice under s 139ZQ(1) Bankruptcy Act 1966 (Cth) – setting aside

FAMILY LAW – PRACTICE AND PROCEDURE – Trial of separate issues or questions

FAMILY LAW – PRACTICE AND PROCEDURE – Finalising a proceedings – Discontinuance – Leave to discontinue

Legislation:

Bankruptcy Act 1966 (Cth) ss, 5(1), 33(1)(c), 120(2), 120(3), 139ZQ, 139ZQ(5), 139ZS, 139ZS(1), 139ZS(1A), 139ZS(1A)(b)

Family Law Rules 2004 rule 10.02, 10.13

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rule 10.10(1)
Cases cited:

Calafiore & Netia [2018] FamCAFC 220

Calafiore and Netia (2019) 60 Fam LR 60

Chamberlain (Trustee) v Tilbrook [2017] FCA 1586

Cook v Benson (2003) 214 CLR 370

Davidson v Official Receiver (2021) 17 ABC(NS) 610

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

O’Neill v Mann [2000] FCA 1680

R v Parker [2002] FCAFC 133

Radnor Enterprises Pty Ltd v Nicholls (as trustee of the Property of Boniface, a Bankrupt and Trustee of the Property of Ogston, a Bankrupt) (2017) 15 ABC(NS) 336

Sampson (Trustee) v Taboada [2017] FCA 79
Division: Division 1 First Instance
Number of paragraphs: 99
Date of last submission/s: 19 April 2022
Date of hearing: 21, 25 February 2022
Place: Brisbane
The Applicant: Litigant in person
The First Respondent: Litigant in person, by telephone link
Solicitor for the Second Respondent: Stacks Law Firm
The Third Respondent: Did not participate

ORDERS

BRC 8518 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR LAHIRI

Applicant
AND:

MS SAHA

First Respondent

MR FELTOS

Second Respondent

D PTY LTD AS TRUSTEE FOR THE D PTY LTD SUPERANNUTION FUND
Third Respondent

ORDER MADE BY:

JARRETT J

DATE OF ORDER:

27 APRIL 2022

THE COURT ORDERS THAT:

1.The application for an extension of time within which to commence an application pursuant to s 139ZS(1A) of the Bankruptcy Act 1966 (Cth) be dismissed.

2.Paragraphs 1 (where it first appears), 1 (where it secondly appears), 17, 27, 28 and 37 of the application in a case filed by the first respondent on 24 March, 2021 be dismissed.

3.The application in case filed by the second respondent on 11 August, 2021 be dismissed.

4.Pursuant to rule 10.02(2)(b) of the Federal Circuit Court and Family Court of Australia (Family Law) Rules 2021, the applicant is granted leave to file a Notice of Discontinuance to discontinue:

(a)the Amended Initiating Application filed by the Applicant on 24 August, 2020 in part so far as it seeks relief against the Second Respondent, in his own capacity and in his capacity as trustee of the bankrupt estate of the First Respondent, Ms Saha, on the basis that there be no order as…

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AGLC
Lahiri & Saha [2022] FedCFamC1F 271
Case
[2022] FedCFamC1F 271
Decision Date

CaseChat Overview and Summary

The Federal Circuit and Family Court of Australia considered the validity and potential setting aside of a notice issued under s 139ZQ of the Bankruptcy Act 1966 (Cth). The parties involved in the dispute were Mr Lahiri, Ms Saha, Mr Feltos, and D Pty Ltd as trustee for the D Pty Ltd Superannuation Fund. The primary issue was whether the notice issued under s 139ZQ was valid and, if so, whether there was any basis to set it aside. The case revolved around a parcel of real property located at B Street, Suburb C, which was purchased by Ms Saha in 2004 for $585,000. Ms Saha's history of extensive litigation, particularly against the Department of Families, Disabilities and Community Services, was noted, as were several unsuccessful legal actions against other parties. A bankruptcy notice was issued in 2014, leading to a sequestration order against Ms Saha on 30 September 2016.

The court evaluated the validity of the notice issued under s 139ZQ and considered whether there were grounds to set it aside. The court concluded that the notice was valid and dismissed the application for an extension of time within which to commence an application under s 139ZS(1A) of the Bankruptcy Act 1966 (Cth). The court also dismissed several paragraphs of the application filed by Ms Saha and the application filed by Mr Feltos. Pursuant to rule 10.02(2)(b) of the Federal Circuit Court and Family Court of Australia (Family Law) Rules 2021, the court granted Mr Lahiri leave to discontinue specific parts of his application. With the consent of the parties, the court released them from certain undertakings made in previous orders. All outstanding applications and responses were adjourned for a case management hearing.

The court further ordered that D Pty Ltd as trustee for the D Pty Ltd Superannuation Fund would pay Mr Feltos the sum of $853,875 from the net sale proceeds of a property. Upon receipt of this settlement sum, Mr Feltos would release Mr Lahiri and D Pty Ltd from any claims arising from the proceedings. The form of the order was subject to review or variation as per the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.

Orders

Orders of the court

BRC 8518 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR LAHIRI

Applicant

AND:

MS SAHA

First Respondent

MR FELTOS

Second Respondent

D PTY LTD AS TRUSTEE FOR THE D PTY LTD SUPERANNUTION FUND

Third Respondent

ORDER MADE BY:

JARRETT J

DATE OF ORDER:

27 APRIL 2022

THE COURT ORDERS THAT:

1. The application for an extension of time within which to commence an application pursuant to s 139ZS(1A) of the Bankruptcy Act 1966 (Cth) be dismissed.

2. Paragraphs 1 (where it first appears), 1 (where it secondly appears), 17, 27, 28 and 37 of the application in a case filed by the first respondent on 24 March, 2021 be dismissed.

3. The application in case filed by the second respondent on 11 August, 2021 be dismissed.

4. Pursuant to rule 10.02(2)(b) of the Federal Circuit Court and Family Court of Australia (Family Law) Rules 2021, the applicant is granted leave to file a Notice of Discontinuance to discontinue:

(a) the Amended Initiating Application filed by the Applicant on 24 August, 2020 in part so far as it seeks relief against the Second Respondent, in his own capacity and in his capacity as trustee of the bankrupt estate of the First Respondent, Ms Saha, on the basis that there be no order as to costs against the Second Respondent and/or the First Respondent’s estate; and

(b) the Application in a Case filed by the Applicant on 19 August 2021 in whole.

WITH THE CONSENT OF THE APPLICANT AND THE SECOND RESPONDENT THE COURT FURTHER ORDERS THAT:

5. The applicant and second respondent are released from the undertakings particularised in the orders of Justice Baumann made on 7 August, 2020.

THE COURT FURTHER ORDERS THAT:

6. All outstanding applications and responses are adjourned to 2.15pm on 4 May, 2022 for case management hearing in the Federal Circuit and Family Court of Australia (Division 1) at Brisbane.

THE COURT NOTES THAT:

7. The applicant and the second and third respondents have agreed to settle all matters in dispute between them in this proceeding on terms that include the following:

8. The third respondent will pay the second respondent the sum of $853,875 (Settlement Sum).

9. The Settlement Sum will be paid directly from the net sale proceeds of sale of the property owned by the third respondent with folio identifier …, situated at FF Street, Suburb C NSW.

10. Upon receipt of the Settlement Sum, the second respondent will release the applicant and third respondent from any and all claims arising out of this proceeding and the bankrupt estate of the first respondent, including the notice dated 4 June 2020 to the third respondent under section 139ZQ of the Bankruptcy Act 1966 (Cth) and in respect of any costs orders made in favour of the second respondent in this proceeding.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

From the parties’ applications and responses, it is tolerably clear that the ultimate issues for determination are:(a)whether the notice issued pursuant to s 139ZQ of the Bankruptcy Act is valid; and if so(b)whether there is any basis to set it aside. The factual background A number of factual issues arise upon a consideration of the factual matrix revealed by the parties’ material. I will set out that factual matrix now. At the heart of the current issue for determination is a parcel of real property situated B Street, Suburb C. The Suburb C property was purchased in 2004 by the first respondent for $585,000. There is no suggestion that she purchased it for anything other than market value and I find that as at the date of its purchase, it had a market value of $585,000. The title was registered in her name. The evidence shows that following its purchase in 2004 the applicant and the first respondent lived in the Suburb C property with their son during their relationship. The first respondent presently lives there and gave that as her address when she was sworn to give evidence before me. The evidence demonstrates that the first respondent has a proclivity for litigation. She has litigated extensively against the Department of Families, Disabilities and Community Services in relation to her son. The catalogue of litigation is set out at [7] of the applicant’s affidavit filed on 3 July, 2020. The decisions referred to there are matters of public record. There have been subsequent applications by the first respondent to the New South Wales Court of Appeal arising from that litigation. In addition, she has also pursued litigation against the owners of a neighbouring property that the first respondent alleged had maliciously damaged a property owned by her and the applicant. She has also litigated against a tenant of commercial premises owned by her, debt collectors in respect of a credit card debt, the JJ Company for defamation and KK Company for defamation. The details, including the references to the various decisions are set out in the applicant’s affidavit filed on 3 July, 2020 at [8]. They are also traversed in the second respondent’s affidavit filed on 11 August, 2021 at some length. The various litigation was mostly unsuccessful and the first respondent collected a number of costs orders along the way. The costs orders went largely unfulfilled. A bankruptcy notice was issued in 2014 and the first respondent committed an act of bankruptcy because she did not satisfy the bankruptcy notice according to its terms. A sequestration order based upon that act of bankruptcy was subsequently made on 30 September, 2016. The situation was a little complicated because although the first respondent satisfied the claims of the creditor that issued the bankruptcy notice, another creditor successfully applied to be substituted for the original creditor and prosecuted the creditor’s petition to a sequestration order. The bankruptcy proceedings were fraught. I will not detail the intricacies of them other than to record that the detail is contained within a line of cases. There are, sadly, many others and the history of the bankruptcy proceedings is chronicled in the second respondent’s affidavit filed on 18 May, 2021 at [4] – [23]. Suffice to say that it appears that the first respondent ran every argument available to her to appeal the making of the sequestration order or to achieve an annulment of her bankruptcy. Her claims that she was solvent (and so a good or sufficient reason existed not to make a sequestration order against her estate) failed at every level.

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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