Re Ralls, G.B. - [1992] FCA 951

JUDGMENT No. ........ ........ .. ,...,. ?)-I 1 92
IN THE FEDERAL COURT OF AUSTRALIA )

GENE= DIVISION 1
BANKRUPTCY DISTRICT OF THE

1 No WB 164 of 1990
STATE OF WESTERN AUSTRALIA 1
GARY BADEN RALLS

Ex Parte: THE OFFICIAL TRUSTEE

IN RaNKRUPTCY. THE TRUSTEE OF GARRY BADEN RALLS. A EANKRUPT
Applicant

And : GARY W E N RALLS
Respondent

PRINCIPAL

EINFELD J PERTH B h 30 JULY 1992

,
On 20 February 1990 Garry Baden Ralls filed his own petition in bankruptcy which was accepted by the Registrar in Bankruptcy on the same day. As a consequence, Mr Ralls became bankrupt under section 55 of the Bankruptcy Act and the

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Official Trustee became the trustee of his estate.

The relevant facts for this matter are not in dispute. Mr Ralls is a registered proprietor of some real property in New Zealand. The value of the land as at May 1991 was of the

order of $A113,000 - as half owner of the land, Mr Ralls' interest would then have been of the order of $56,500. On the

of the land, its sale value except to his brother or some

other hand, as his brother is the CO-owner as tenant in common

person acceptable to his brother would be limited. Thus the value of Mr Gary Rallsr interest may be regarded as somewhat less than this strictly mathematical calculation.

On 15 January 1992 the Official Trustee in Bankruptcy served on Mr Ralls a notice under section 77 of the Bankruptcy Act requiring him to sign a Memorandum of Transfer to the Official Trustee under the New Zealand Land Transfer ~ c t * 19& 0.f his

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interest in the land. At the time of the bankruptcy, Mr Ralls
. .

lodged a statement of affairs. This showed that ,at,,the 41me
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he had some five debts in total. The biggest one :was a debt #*L,* .,;L
.7. I i.0
to the Taxation Office which, together with interest, amdunted ,.' P to approximately $90,000. The other debts were ik &spect of credit cards or accounts and totalled a little under $6500.
Since that time all the other debts, apart from the taxation debt, have been paid. Whilst I am informed that the Official Trustee has not advertised for creditors to come forward in the estate, the evidence of Mr Ralls in an affidavit of 27 May

was no cross-examination of him and I was therefore asked by 1992 is that he has no other debts in the bankruptcy. There the parties to proceed upon the assumption that the only
proved or provable debt in the estate is the tax debt.

Mr Ralls has failed to comply with the notice under section 77 and has not signed and delivered the transfer requested. Accordingly, the Official Trustee applies to the Court for an order for his commitment to prison for failing to comply with the direction to do so. He asks that the warrant for committal…

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 Ralls, G.B.

Details

AGLC: Re Ralls, G.B. [1992] FCA 951
Case: [1992] FCA 951
Decision Date: 8 Jul 1992

CaseChat Overview and Summary

In this case, the Official Trustee in Bankruptcy sought an order for the commitment of Gary Baden Ralls to prison for failing to comply with a notice under section 77 of the Bankruptcy Act, which required him to sign a Memorandum of Transfer to the Official Trustee of his interest in a property located in New Zealand. The key issue before the court was whether an Australian tax debt could be met by property in a foreign country, specifically in this case, New Zealand. The court found that the Bankruptcy Act did not exclude property located outside Australia from being used to satisfy debts owed in Australia, including tax debts. The court held that the Official Trustee was entitled to require the bankrupt to sign and deliver the relevant transfer of his interest in the New Zealand property to meet the tax debt. The court found that the request did not constitute an indirect attempt to enforce an Australian revenue law through a New Zealand court, as no request was made to the New Zealand court. The court ordered that the respondent bankrupt sign and deliver a transfer of his half share in the New Zealand land to the Official Trustee, and that the costs of the application be borne by the estate.

This case highlights the importance of understanding the scope of the Bankruptcy Act and the role of the Official Trustee in managing a bankrupt's estate, including the realisation of property located outside Australia to meet debts owed in Australia. The court's decision confirms that the Official Trustee has the authority to require a bankrupt to transfer property located outside Australia to meet debts owed in Australia, including tax debts, provided that the request is lawful and does not constitute an indirect attempt to enforce a foreign revenue law. The case also emphasises the need for bankrupts to comply with the requirements of the Bankruptcy Act and the directions of the Official Trustee in managing their estate, including the realisation of property located outside Australia.

Orders