Re Rambert, M C Ex parte Deputy Commissioner of Taxation of the Commonwealth of Australia
[1996] FCA 310
•17 APRIL 1996
CATCHWORDS
BANKRUPTCY - debtor's and creditor's petitions - discretion to reject or accept debtor's petition under s 55(3A) of the Bankruptcy Act 1966 (Cth) - rejection of debtor's petition - whether need to show "purpose foreign to the bankruptcy laws"
Bankruptcy Act 1966 (Cth): ss 52(2)(b) and 55(3A)
Re Hankey; Ex parte Kratzmann (1986) 66 ALR 702
re: Marie-Claire Rambert; Ex Parte Deputy Commissioner of Taxation of the Commonwealth of Australia
(No. VP 139 of 1996)
Judge: Heerey J
Date: 17 April 1996
Place: Melbourne
IN THE FEDERAL COURT OF AUSTRALIA )
)
BANKRUPTCY DIVISION OF THE STATE ) No. VP 139 of 1996
)
OF VICTORIA )
)
GENERAL DIVISION )
RE: MARIE-CLAIRE RAMBERT
Judgment Debtor
EX PARTE: DEPUTY COMMISSIONER OF TAXATION
OF THE COMMONWEALTH OF AUSTRALIA
Judgment Creditor
JUDGE: Heerey J
DATE: 17 April 1996
PLACE: Melbourne
MINUTES OF ORDERS
The Court orders that:
Direct that the Registrar reject the debtor's petition.
Sequestration order against the estate of the debtor. The date of the act of bankruptcy is 30 August 1995.
Order that costs, including reserved costs, be taxed and paid in accordance with the Act.
Direct that a draft of this order be delivered to the Registrar within seven days in accordance with rule 124(2).
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
IN THE FEDERAL COURT OF AUSTRALIA )
)
BANKRUPTCY DIVISION OF THE STATE ) No. VP 139 of 1996
)
OF VICTORIA )
)
GENERAL DIVISION )
RE: MARIE-CLAIRE RAMBERT
Judgment Debtor
EX PARTE: DEPUTY COMMISSIONER OF TAXATION
OF THE COMMONWEALTH OF AUSTRALIA
Judgment Creditor
JUDGE: Heerey J
DATE: 17 April 1996
PLACE: Melbourne
REASONS FOR JUDGMENT
The petitioning creditor seeks a direction to the Registrar under s 55(3A) of the Bankruptcy Act 1966 (Cth) (the Act) that the debtor's petition be rejected. It is not in dispute that if such a direction is given a sequestration order should be made on the creditor's petition.
The sequence of events was as follows. On 2 August 1995 the petitioning creditor obtained the issue of a bankruptcy notice based on a judgment for $6088.87 in the Magistrates' Court at Dandenong on 29 June 1995. The notice was served on the debtor on 16 August and was not complied with. Thus an act of bankruptcy was committed on 30 August. On 2 February 1996 the creditor's petition was presented and it was served on the debtor on 12 February. Two days later, on 14 February, the debtor filed a debtor's petition. The hearing of both petitions was referred
by Registrar Wood to the Court on 2 April.
The debtor filed an affidavit disclosing a number of transactions after what would be the commencement of the relation back period were a sequestration order to be made on the petitioning creditor's petition. Those transactions were: (i) monthly repayments of $137 off a loan to the Commonwealth Bank in the months of September, October, November, December 1995 and January, February, March and April 1996; (ii) payments of approximately $800 off National Australia Bank Master Card debts since June 1995; (iii) payments to the petitioning creditor since June 1995 of $45 per fortnight off current tax liabilities; (iv) on 30 December 1995 the debtor sold her car, which was in poor condition, for $700.
Counsel for the debtor argued that his client should be able to proceed and obtain a sequestration order on her own petition as that was a "matter of honour" and preferable in that regard to a sequestration order obtained on a creditor's petition. He relied on the decision of Burchett J in Re Hankey; Ex parte Kratzmann (1986) 66 ALR 702. However, that was a case decided before the introduction of s 55(3A) into the Act in 1990. In that case after the service of a creditor's petition the debtor had presented his own petition, which, once it was accepted, under the law as it then stood resulted in an automatic bankruptcy. The petitioning creditor then sought an annulment of the bankruptcy on the ground that the debtor's petition ought not to have been presented.
After referring to the decision of the High Court in Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589 his Honour found that in the circumstances there was not in the presentation of the debtor's petition a "purpose foreign to the bankruptcy laws". His Honour said (66 ALR at 703):
There is no evidence here that the debtor, in fact, had any particular purpose, and certainly no evidence that his purpose was to secure an improper advantage in respect to his trustee.
It seems to me that s 55(3A) has now conferred an unfettered discretion on the Court to direct the Registrar to accept or reject a debtor's petition. I should not approach this matter on the basis that the debtor's petition must be accepted unless the petitioning creditor can show some "purpose foreign to the bankruptcy laws".
I think it is a proper case for a direction that the debtor's petition be rejected. I say that for a number of reasons. First, the process initiated by the petitioning creditor has been outstanding for a substantial period of time, the bankruptcy notice having been served on 16 August last year. The debtor only filed her petition shortly after being served with the creditor's petition on 12 February 1996. Secondly, there are some transactions which would fall within the relation back period if a sequestration order were made on the creditor's petition. True it is they are small and, as counsel for the debtor urges, it may be that they are protected transactions under the Act. However, I think in fairness to the petitioning creditor it is not for me to make a determination of those issues at this stage. Thirdly, while I do not challenge the sincerity of what was said from the Bar table on behalf of the debtor as to an order on a creditor's petition being, as a matter of honour, more damaging than one on a debtor's petition, nevertheless, I must say, with respect, it is objectively a little difficult to see the difference. I think counsel for the petitioning creditor was correct in pointing out that by analogy such an assertion would not constitute "other sufficient cause" for declining to make a sequestration order under s 52(2)(b). So for those reasons I will direct that the Registrar reject the debtor's petition.
There will be a sequestration order. The date of the act of bankruptcy is 30 August 1995. I order that the costs, including reserved costs, be taxed and paid in accordance with the statute. I direct that a draft of this order be delivered to the Registrar within seven days in accordance with r 124(2).
I certify that this and the preceding four (4) pages are a true copy of the reasons for judgment of his Honour Justice Heerey.
Dated:
Associate
Appearances
Counsel for the petitioning
creditor: Mr B Netto
Solicitor for the petitioning Australian Government
creditor:Solicitor
Counsel for the petitioning
debtor: Mr R A Fink
Solicitor for the petitioning
debtor: M D Motherwell
Date of hearing: 17 April 1996
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