Thai A.N. v Deputy Commissioner of Taxation

[1994] FCA 1071

1071 J q4

JUDGMENT NO. . ~ ~ ~ m . a e e e m n m mm-

IN THE FEDERAL COURT OF AUSTRALIA )

1 No. NG 396 of 1994

GENERAL DIVISION j

BETWEEN:

A NURUN THAI

Applicant

AND:

IEPUTY COMMISSIONER OF

TAXATION

Respondent

RECEIVED

CORAM :	LCOX J
n w m v

PLACE:	SYL.,
DATE :	28 NOVEMBER 1994 FEDERAL cOURT OF

AUSTRALIA

EXTEMPORE REASONS FOR JUDGMENT

WILCOX J: Thls matter was remitted to a single Judge by an

order of a Full Court made on 26 August 1994 The real issues between the parties were dealt with by the Full Court. The Full Court upheld views expressed by Davles J in determining some preliminary issues and also dealt with an appeal against an order made by Elnfeld J on 16 June, in whlch his Honour dealt wlth a remaining issue and pronounced a sequestration order. It is not necessary for me to summarise what is said in the reasons for judgment of the Full Court, they speak for themselves.

It is evident that the Pull Court were against the submissions put on behalf of the debtor in respect of the operation of ss. 204, 205 and 206 of the Income Tax Assessment Act, these probably being the major issues between the parties. The Full Court also dealt with the question whether

2

there was evidence that the debtor had remained outside

-Australia -during a perlod within six months prior to the

filing of the bankruptcy petition with the Intent to defeat or delay his creditors. The Full Court noted the evidence which, it was argued on behalf of the petitioning creditor, gave rise

to an inference to that effect and the unsatisfactory nature of the evidence put before the Court on behalf of the debtor. It is apparent from the reasons of the Full Court that each member of the Court was of the view that if the evidence stayed the same the inference ought to be drawn. However, the Court was concerned that it appeared that the procedure adopted by Einfeld J on 16 June may have deprived counsel for the debtor of an opportunity of addressing the Court as to reasons why a sequestration order ought not to be made. So the sequestration order was set aside and the matter remitted to a single Judge, for the purpose of hearing any further material and determining whether or not a sequestration order should be made.

When the matter was called on this morning, Mr Munro, solicltor, appeared on behalf of Mr Thal. He stated that his client was still overseas. He had been in telephonic communication with him although, as it turned out, only during the last weekend. Mr Thai was aware of the hearlng today and did not wish Mr Munro to make any application or put any submissions. In these circumstances, Mr McGovern, on behalf of the petitioning creditor, has sought a sequestration order. I have read the various affidavits which were before the Full

3

Court. I respectfully agree with the observations made by the

members of the Full Court as to the strength of the inference	-
that arises from them. In addition to that material, I have read two or three affidavits dated today which bring the matter up to date. They prove service of the amended petltion in April and the fact that the debt is still outstanding. In the circumstances, it appears to me that the proper course is to make a sequestration order. Mr McGovern mentioned one complication, namely, that the petltlon was now more than 12 months old.
Section 52 (4) of the Bankruptcy Act 1966, provides that a creditor's petition lapses at the expiration of a perlod of 12 months commencing on the date of presentation of the petition unless, before the expiration of that tlme, a sequestration order is made on the petition or the petition is dismissed or withdrawn. There is provision for an extension of the l2 months but thls must take place during the period of
12 months. This problem was considered by a Full Court
consisting of Toohey, Jenkinson JJ and myself in DeDUtV Commissioner of Taxation v Clvne (1984) 4 FCR 156. The factual position in that case was very similar to the present. There had been a sequestration order made within the requisite period, then six months. Thls sequestration order was ultimately set aside by the High Court of Australia. When the matter was remitted to the Federal Court the question arose whether the petition had lapsed. The Full Court held that it did not, that the fact that a sequestration order had been

made meant that the lapse provision dld not operate. It did

.-

....

-not matter that the sequestration order had subsequently ben set aside. These are, of course, the exact facts of the present case, with the exceptions that the period is now 12 months and that in this case the sequestration order was set aside by a Full Court of this Court rather than the High Court. Those differences are immaterial. I think that the proper course for me to take is to make a sequestration order as sought by the petitioning creditor.

I am satisfied that, at the date of commission of the act of bankruptcy specified in para. 4 of the amended petition, the debtor was ordinai-ily resident in Australia. I am satisfied that the debtor is lustly and truly indebted to the petitioning creditor in the sum of $636,787.08 for unpaid income tax. I am satisfied that wlthln six months before the

presentation of the petition the debtor committed an act of bankruptcy, namely that he, within the intent to defeat or delay his creditors, remained out of Australia. I make a sequestration order against the estate of the debtor and I order that the debtor pay the petitioning creditor's costs.

I certify that this and the preceding three (3) pages

are a true copy of the Reasons for Judgment

of the Honourable Justice Wilcox.

Associate: c&

Dated: 28 November 1994

APPEARANCES

Solicitor for the Applicant: Mr Munro of Gadens Rldgeway

Counsel for the Respondent:

D B McGovern

-Solicitors for tha .Respondent.

Australian Government

Solicitor

Date of hearing:

28 November 1994