Tzanis v RAJCANY

[2016] FCCA 1395

FEDERAL CIRCUIT COURT OF AUSTRALIA

TZANIS v RAJCANY [2016] FCCA 1395

Catchwords:
BANKRUPTCY – setting aside a bankruptcy notice – application to set aside doomed to failure – whether order made by the Family Court in respect of this matter was a final order – application dismissed.

COSTS – whether costs reasonable in the circumstances – fixed costs awarded to the respondent.

Legislation:

Bankruptcy Act 1966, s.41

Acts Interpretation Act 1901, s.36(2)

Cases cited:

Nugawela v Deputy Commissioner of Taxation [2016] FCA 578

Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin (1997) 186 CLR 622
Re Wallace; Ex parte Wallace (1992) 28 May 1993 FCA

Licul v Corney (1976) 180 CLR 213
Bienstein v Bienstein (2003) 195 ALR 225

Applicant: WILLIAM PETER TZANIS

Respondent: ANITA RAJCANY

File Number: SYG 717 of 2016

Judgment of: Judge Street

Hearing date: 8 June 2016

Date of Last Submission: 8 June 2016

Delivered at: Sydney

Delivered on: 8 June 2016

REPRESENTATION

Counsel for the Applicant: Mr C Carroll

Solicitors for the Applicant: Holman Webb Lawyers

Counsel for the Respondent: Mr C De Robillard

Solicitors for the Respondent: Associated Legal

ORDERS

1. The application is dismissed.

2. The applicant pay the costs of the respondent fixed in the amount of $10,000.00.

3. No order as to costs in respect of the application in a case.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 717 of 2016

WILLIAM PETER TZANIS

Applicant

And

ANITA RAJCANY

Respondent

REASONS FOR JUDGMENT

1. These proceeding were commenced under the Bankruptcy Act 1966 (Cth) for the setting aside of a bankruptcy notice served pursuant to the making of an order in the Family Court.

   (35) Within two months from the date of these Orders the father shall pay to the mother the sum of $146,950.67 minus any amount owing by the mother to the father under an unpaid award for costs where the quantum of the award has been fixed by the Court, by assessment or by agreement (“the property settlement payment”). The Court noted that allowance for a costs award of $17,000 pursuant to an order of 20 June 2015 is included in the amount of $146,950.67.

   (36) In the event that the property settlement payment is not made within two months of the date of these Orders. the father shall forthwith list the property at 5 Emmaline Street, Ramsgate in the State of NSW (“the Emmaline Street property”) for sale and sell the property as soon as practicable.

   (37) ln the event that the Emmaline Street property is listed for sale pursuant to Order (36) herein, the father shall do all things and sign all documents necessary to sell the property by public auction at the earliest practicable date for the best price reasonably obtainable and after adjustments and costs of sale to disburse the proceeds of sale as follows:

   (a) to discharge the mortgage registered on the title of the property;

   (b) to the mother as she may direct the property settlement payment; and

   (c) the balance to the father.

   (38) ln the event that the Emmaline Street property is not sold within 12 months after the date of these Orders, the father shall forthwith on the expiration of that period, pay Sl0,000 to the mother.

   (39) ln the event that the Emmaline Street property is sold within 12 months after the date of these Orders and 25 percent of the income tax assessed against the father in respect of the capital gain on the sale of the Emmaline Street property is less than $10,000, forthwith upon receipt of the assessment, the father shall pay to the mother, an amount equating to that shortfall.

   (40) Unless otherwise provided above, the mother be otherwise: solely, legally and beneficially entitled to the exclusion of the father, to all other property of whatsoever nature and kind in her ownership, possession and/or control as at the date of these Orders, including but not limited to:

   (a) money deposited in any financial institutions in her name;

   (b) shareholdings;

   (c) insurance policies;

   (d) motor vehicles;

   (e) all household furniture and personal effects; and

   (f) all superannuation interests held in her name.

   (41) Unless otherwise provided herein the father be otherwise solely, legally and beneficially entitled to the exclusion of the mother, to all other property of whatsoever nature and kind in his ownership, possession and/or control as at the date of these Orders, including but not limited to:

   (a) money deposited in any financial institutions in his name;

   (b) shareholdings;

   (t) insurance policies

   (d) motor vehicles;

   (e) all household furniture and personal effects; and

   (f) all superannuation interests held in his name.

   (42) The father shall do all acts and things necessary to indemnify the mother and keep her indemnified from and against any and all of the father's liabilities, whether past, present or future.

   (43) The mother shall do all acts and things necessary to indemnify the father and keep him indemnified from and against any and all of the mother's liabilities, whether past, present or future.

   (44) In the event of default of either or both of the parties doing all such things and executing all such documents as may be required to comply with these Orders, a Registrar of the Family Court of Australia Sydney Registry is authorised pursuant to s106A of the Act to do all such acts and things and execute all such documents on behalf of either or both of the parties, in order to procure compliance with these orders.

2. The material that was provided in support of the application to set aside the bankruptcy notice did not identify a competing cross-claim or set off. The application to set aside the bankruptcy notice was doomed to failure. There was no proper ground under s.41 of the Bankruptcy Act 1966 to oppose the bankruptcy notice that had been served.

3. It was open to the applicant to approach the Family Court to seek orders in relation to the enforcement of the orders made by the Family Court.  No such step was taken by the applicant.  It is the case that the respondent filed a notice of objection to competency that was founded on the misconception that the application was not, in fact, filed on the last permissible day. It is clear from the decision of McKerracher J in Nugawela v Deputy Commissioner of Taxation [2016] FCA 578 at [19], that in calculating the 21 days, if it expires on a weekend, one must take into account the next business day in accordance with s.36(2) of the Acts Interpretation Act 1901.

4. Albeit that the application, accordingly, was valid, there was no affidavit material put on to support a ground to set aside the bankruptcy notice. Rather, the affidavit material went to discretionary considerations that might have been relevant to whether or not the Court might find other sufficient cause in respect of any petition, had a petition been presented.

5. The circumstances, then, that have occurred are that the matter has been before the Court on a large number of occasions, and affidavit evidence has been filed relating to the steps being taken to sell the property that was referred to in order 36.  That sale has taken place and the subject matter of the bankruptcy notice has now been paid. No interest was paid.

6. The substantive proceedings are accordingly now moot. Ordinarily, consistent with what McHugh J said in Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin (1997) 186 CLR 622 at 624 and 625, the Court would not determine the merits of the matter. However, in the present case it is apparent that the substantive outcome is one in which the respondent was entitled to payment and the respondent has effectively succeeded in terms of recovering the full amount.

7. The proposition that the order made was not a final order was said to be supported by the reasoning in Re Wallace; Ex parte Wallace (1992) 28 May 1993 FCA per Whitlam J.  This Court is bound by what was said in the High Court of Australia in Licul v Corney (1976) 180 CLR 213 at 225 and Bienstein v Bienstein (2003) 195 ALR 225 at [25]. The order made by the Family Court of Australia was a final determination on the merits of the property dispute. A final order made in determining the property dispute is not qualified because the Court imposes a regime in consequences of default of that order. The default provisions do not detract from the finality of the order that was made in respect of the obligation to pay.

8. Accordingly, there was a final order and the application to set aside the bankruptcy notice was doomed to failure.  The Court is of the view that the costs sought by the respondent in the amount of $10,000 is reasonable.  The Court was informed that there have been a number of occasions on which counsel has appeared before the Court.  The affidavit material in the court papers makes apparent that there would have been a substantial amount of work involved on a party/party basis and that the amount of $10,000 is in all the circumstances a reasonable estimate for the purpose of identifying the party/party costs that shall be ordered.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 22 June 2016