Re Coote - [1993] FCA 949

Re: JOHN COOTE, PETITIONING CREDITOR
REFERENCE BY REGISTRAR IN BANKRUPTCY UNDER SUBSECTION 55(3) OF THE BANKRUPTCY
ACT 1966
No. VP932 of 1993
FED No. 949/93
Number of pages - 10
Bankruptcy
(1993) 120 ALR 134
(1993) 47 FCR 522

COURT

IN THE FEDERAL COURT OF AUSTRALIA

EXERCISING FEDERAL JURISDICTION IN BANKRUPTCY
BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA
NORTHROP J

CATCHWORDS

Bankruptcy - s.55 Bankruptcy Act 1966 - debtor's petition - circumstances in which Registrar may refer petition to Court - sufficient nexus of debtor with Australia

HEARING

MELBOURNE

#DATE 17:12:1993

ORDER

THE COURT DIRECTS:

1. That the Registrar reject the petition.

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

JUDGE1

NORTHROP J Section 55 of the Bankruptcy Act 1966 empowers a debtor to present to the Registrar in Bankruptcy a petition against himself or herself. The petition must be in the prescribed form and must be accompanied by a statement of the debtor's affairs. Under subsection 55(3), if the petition and the statement of affairs so presented appear to the Registrar to comply with subsection 55(2), the Registrar must accept the petition. In any other case, the Registrar may reject the petition or refer it to the Court for a direction to accept it or reject it. Under subsection 55(4), the Registrar must comply with a direction given by the Court on a reference under subsection 55(3). Under subsection 55(4A), where the Registrar accepts a petition under s.55, the debtor who presented the petition becomes a bankrupt. Thereafter, the provisions of the Bankruptcy Act apply to that bankrupt.

On 5 August 1993, John Coote ("the Debtor") presented his petition to the Registrar in Bankruptcy for the Bankruptcy District of the State of Victoria. The petition was signed by the Debtor while in Australia. The petition stated that the Debtor was a consultant and resided at 8205 Santa Monica Bl Los Angeles U.S.A. The accompanying statement of affairs disclosed $1,530,037.29 owing to unsecured creditors and that the Debtor had no assets. In the statement, the Debtor gave the same address as his residence, stated that he was given advice about insolvency by a friend who is a solicitor, gave the name and address of a person in Los Angeles as a contact person and stated that he was not employed in Australia. He stated he was self-employed and was not married and estimated his income for the next 12 months at US $20,000. He stated he was born on 12 June 1949 and that his last tax return lodged in Australia was for the year 1988 which had been prepared by Bongiorno & Co., 312 St Kilda Road, Melbourne. He stated further that he was being sued in the Supreme Court of Victoria by B N Finance in action No. 7682/93.
When presenting his petition, the Debtor left with the Registrar a letter, undated, as follows:-

"I have not lived in Australia for 7 years, while visiting recently I was served…

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 Re Coote

Details

AGLC: Coote, J. Re Reference by Registrar in Bankruptcy nnder subsection 55(3) of the Bankruptcy Act 1966 [1993] FCA 949 ((1993) 120 ALR 134; (1993) 47 FCR 522)
Case: [1993] FCA 949
Decision Date: 17 DECEMBER 1993

CaseChat Overview and Summary

The matter of Re Coote arose from a petition filed by the debtor, Mr. Coote, seeking to be declared bankrupt. The petition was lodged with the Australian Registrar of the Federal Court. The dispute centred around the validity of the petition, specifically whether the Registrar was entitled to refer the petition to the Court under section 55 of the Bankruptcy Act 1966. The central issue was whether Mr. Coote had a sufficient nexus with Australia to warrant the Court's jurisdiction over the matter.

The legal issues before the Court were whether Mr. Coote's actions and circumstances established a sufficient connection with Australia and whether the Registrar had the authority to refer the petition to the Court. The Court needed to determine if the statutory requirements for such a referral were met, particularly in the context of the debtor's international status and activities. The Court also considered the meaning and scope of the term "nexus" as it applied to the debtor's connection with Australia.

In delivering the judgment, the Court found that Mr. Coote did not have a sufficient nexus with Australia to warrant the Court's jurisdiction. The Court held that Mr. Coote's activities and presence in Australia were not substantial or ongoing enough to meet the statutory threshold for a nexus. Consequently, the Court determined that the Registrar was not entitled to refer the petition to the Court under section 55 of the Bankruptcy Act. The Court directed the Registrar to reject the petition based on the lack of a sufficient nexus.

The Court's final orders were straightforward: the Registrar was directed to reject the debtor's petition. The decision underscored the importance of establishing a meaningful connection with Australia for the Court to exercise jurisdiction over bankruptcy petitions, especially in cases involving international elements.

Orders

Orders of the court

THE COURT DIRECTS:

1. That the Registrar reject the petition.

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

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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