Rambaldi v Thake

[2007] FCA 847

FEDERAL COURT OF AUSTRALIA

Rambaldi v Thake [2007] FCA 847

GESS MICHAEL RAMBALDI v GEOFFREY FRANCIS THAKE
VID 204 OF 2007

GORDON J
23 APRIL 2007
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 204 OF 2007

BETWEEN:	GESS MICHAEL RAMBALDI Applicant
AND:	GEOFFREY FRANCIS THAKE Respondent

JUDGE:	GORDON J
DATE OF ORDER:	23 APRIL 2007
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.Pursuant to section 146 of the Bankruptcy Act 1966 (Cth) (“the Act”), the applicant have leave to distribute an interim dividend amongst the creditors who have proved their debts in the bankrupt estate of Geoffrey Francis Thake (“the bankrupt”), namely RACV Finance - $11,341.45, and Credit Corp Services Proprietary Limited - $6070.14, in accordance with Part VI, Division 5 of the Act, as if the bankrupt had filed a statement of affairs and those creditors had been stated to be creditors in it.

2.The applicant shall not be required to publish any further advertisement giving notice of intention to declare the dividend in the bankrupt estate of the bankrupt referred to in paragraph (1) hereof.

3.The costs of and incidental to this application be made out of the estate of the bankrupt.

4.The application filed 14 March 2007 be adjourned to 9.30 am on 29 June 2007 to enable the Deputy Commissioner of Taxation to determine whether he or she is a creditor of the bankrupt estate of the bankrupt.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 204 OF 2007

BETWEEN:	GESS MICHAEL RAMBALDI Applicant
AND:	GEOFFREY FRANCIS THAKE Respondent

JUDGE:	GORDON J
DATE:	23 APRIL 2007
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. This is an application by Gess Michael Rambaldi (‘the trustee’), the trustee of the bankrupt estate of Geoffrey Francis Thake (‘the bankrupt’), pursuant to section 146 of the Bankruptcy Act 1966 (Cth). Section 146 provides:

   Where a bankrupt has failed to file a statement of his or her affairs, as required by this Act, the court may, on the application of the trustee, upon such terms as it thinks fit, order that distribution of dividends amongst the creditors who have proved their debts shall proceed in accordance with this division as if the bankrupt had filed a statement of his or her affairs and those creditors had been stated to be creditors in it.

2. The trustee, Mr Rambaldi, contended that it would be appropriate to proceed with an interim dividend, notwithstanding that the bankrupt had failed to file a statement of affairs.  The application was supported by an affidavit sworn by the trustee on 6 March 2007.  The affidavit evidence was not contradicted by the bankrupt.

   FACTS

3. Mr Thake became a bankrupt on 10 August 2006 pursuant to a sequestration order made in this court on a petition from RACV Finance Limited.  On 13 September 2006, the bankrupt attended at the trustee’s office and was interviewed.  During the course of that interview, the bankrupt informed the trustee’s staff:(1) of certain assets and liabilities: (2) that he had received correspondence from the trustee but that he had not had adequate time to complete the documents (including his statement of affairs) prior to the interview.

4. The bankrupt was asked to complete the documents within seven days of the interview.  He was told that his three year bankruptcy did not commence until he had filed his statement of affairs with the Official Receiver.  The bankrupt also informed the trustee that he had not lodged tax returns for four years.  After the interview, the trustee’s staff contacted the Australian Taxation Office (“ATO”).  The ATO advised that the bankrupt had not lodged a tax return since 1990, some 16 years, and that it would require a further 12 months to properly assess the bankrupt’s tax affairs.

5. The affidavit evidence discloses that other inquiries were made by the trustee, including searches with VicRoads, the Commonwealth Director of Public Prosecutions and the Sheriff’s Office.  The affidavit also states that his investigations did not disclose the existence of any voidable transactions.

6. On 9 October 2006, the trustee circulated a report of his investigation into the examinable affairs of the bankrupt’s creditors.  On 11 October 2006, the trustee advertised his intention to declare a first and final dividend in the administration.  On 19 December 2006, the trustee wrote to the ATO notifying them of his intention to make this application and informing them that if they intended to lodge a proof of debt they should do so by 2 February 2007.  The ATO did not respond to that correspondence.

7. The trustee received two further proofs of debt, one from RACV Finance Limited in the sum of $11,341.45, and one from Credit Corp Services Proprietary Limited in the sum of $6,070.14.  A further search disclosed an additional creditor described only as “Communications Electrical EL” in the sum of $1,139, but attempts to locate that creditor have been unsuccessful. 

8. The trustee has, on numerous occasions, attempted to contact the bankrupt by mail, email, telephone and mobile phone seeking the return of his completed statement of affairs.  Those requests commenced on 21 August 2006.  These facts reveal that the bankrupt has refused to provide a statement of affairs to his trustee which ordinarily would enable a trustee to administer the estate.  This conduct has significantly increased the costs of administering the estate.

   THE APPLICATION

9. The trustee applies, pursuant to section 146 of the Act, to distribute an interim dividend to creditors who have lodged a proof of debt. The application has been served on the bankrupt and the ATO. So far as the evidence reveals, there are only two potential creditors who have not lodged a proof of debt, the ATO and the creditor that the trustee has been unable to locate, Communications Electrical EL in the sum of $1,139. They are the only known creditors who might be prejudiced if I were to accede to the trustee’s application.

10. The position of Communications Electrical EL may be put to one side.  Its debt, if it be a provable debt, is de minimis and all attempts to locate it have been unsuccessful.  The position of the ATO is more difficult.  It does not oppose the application of the trustee to declare an interim dividend in the administration.  It was informed of the bankruptcy of Mr Thake no later than 23 October 2006, some six months ago.  It failed to respond to the trustee’s correspondence of 19 December 2006, and it has filed no affidavit material in response to the present application.

11. On a consideration of the facts that I have earlier set out and having regard to the size of the estate and the creditors who have lodged proofs of debt, it seems plain to me that I ought to make the orders sought by the trustee in the minutes of proposed order that were handed up to me.  Any further delay in the administration of the estate will inevitably result in the estate being further absorbed in administration costs.  In my view, the minutes of proposed order contain sufficient safeguards to protect the ATO which acknowledges that it may be prejudiced as a result of the orders being made. 

12. Subject to any submission that counsel may make about the form of orders, I propose to make orders to the following effect:

    (1)Pursuant to section 146 of the Bankruptcy Act 1966 Commonwealth (“the Act”), the applicant have leave to distribute an interim dividend amongst the creditors who have proved their debts in the bankrupt estate of Geoffrey Francis Thake (“the bankrupt”), namely RACV Finance - $11,341.45, and Credit Corp Services Proprietary Limited - $6,070.14, in accordance with Part VI, Division 5 of the Act, as if the bankrupt had filed a statement of affairs and those creditors had been stated to be creditors in it.

    (2)The applicant shall not be required to publish any further advertisement giving notice of intention to declare the dividend in the bankrupt estate of the bankrupt referred to in paragraph (1) hereof.

    (3)The costs of and incidental to this application be made out of the estate of the bankrupt.

    (4)The application filed 14 March 2007 be adjourned to 9.30 am on 29 June 2007 to enable the Deputy Commissioner of Taxation to determine whether he or she is a creditor of the bankrupt estate of Geoffrey Francis Thake.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon J.

Associate:

Dated:       27 April 2007

Counsel for the Applicant:	Mr R Randall
Solicitor for the Applicant:	B2B Lawyers
Respondent in person
Counsel for the Intervener:	Mr S Gardiner
Solicitor for the Intervener	Australian Taxation Office Legal Services Branch
Date of Hearing:	23 April 2007
Date of Judgment:	23 April 2007