Tsakirakis v Official Receiver

This matter concerned an application by the applicant, Mr. Tsakirakis, seeking a review of the Official Receiver's decision to issue a notice pursuant to section 139ZQ of the *Bankruptcy Act 1966* (Cth). The applicant contended that the issuance of the notice constituted an abuse of process and that the material supporting the underlying claim, which was the basis for the notice, was invalid. The application was heard by Lloyd-Jones J in the Federal Court of Australia.

The primary legal issues before the Court were whether the decision to issue the section 139ZQ notice was an improper exercise of power, specifically an abuse of process, and whether the material relied upon by the Official Receiver to support the notice was sufficient and valid. The Court was required to consider the purpose of a bankruptcy notice and the onus on a trustee to prove the facts that render a transaction void.

Lloyd-Jones J reasoned that the actions of the Trustee in lodging a cross-claim in separate proceedings had introduced the issue of fraudulent behaviour by Mr. Tsakirakis, thereby altering the basis upon which the original section 139ZQ notice was sought. The Court found that this new issue required resolution by the Court in its bankruptcy jurisdiction and was no longer a matter that could be determined by an administrative decision-maker. Crucially, the Court noted that the Official Receiver had not been provided with any updated material regarding the fund of money that was the subject of the earlier notice before deciding to issue the second notice. The Court applied the principle that a trustee bears the onus of proving the facts that make a transaction void, and that the Parliament has clearly provided where this onus should lie.

The Court ordered that the section 139ZQ Notice issued to the Applicant by the First Respondent on 11 October 2012 be set aside.