Weston v Larkey
[2022] FedCFamC2G 1036
Federal Circuit and Family Court of Australia
(DIVISION 2)
Weston v Larkey [2022] FedCFamC2G 1036
File number(s): SYG 1177 of 2022 Judgment of: JUDGE GIVEN Date of judgment: 12 December 2022 Catchwords: BANKRUPTCY - summary judgment application by trustee in bankruptcy for judgment for income contributions assessed as recorded in s 139ZG certificate – default by respondent – failure of respondent to engage with proceedings Legislation: Bankruptcy Act 1966 (Cth) ss 139P, 139Q, 139W, 139ZG, 139ZQ
Bankruptcy Regulations 1996 (Cth) r 6.17
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 13.04, 13.05
Cases cited: Schiffer v Pattison (2005) 215 ALR 505 Division: Division 2 General Federal Law Number of paragraphs: 17 Date of last submission/s: 22 November 2022 Date of hearing: Decided on the papers Place: Sydney Counsel for the Applicant: Mr J O’Connor Solicitor for the Applicant: Keypoint Law The Respondent: No appearance ORDERS
SYG 1177 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: PAUL WESTON
Applicant
AND: GREGORY LARKEY
Respondent
order made by:
JUDGE GIVEN
DATE OF ORDER:
12 December 2022
THE COURT ORDERS THAT:
1.Pursuant to ss 139P(1), 139Q(1) and 139ZQ of the Bankruptcy Act 1966 (Cth) judgment is entered in the sum of $90,110.74 for the applicant.
2.The respondent must pay interest the subject of order 1 above to the applicant for the period 13 September 2021 to 30 November 2022, fixed in the amount of $4,777.47.
3.The respondent must pay the applicant’s costs and disbursements of and incidental to the proceedings.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE GIVEN:
On 3 June 2015, by orders of the Court the estate of the respondent was sequestrated and the applicant was appointed as trustee of the respondent's bankrupt estate.
By an interim application filed with the Court on 21 November 2022 (application) pursuant to a grant of leave, the applicant seeks orders pursuant to ss 139P(1), 139Q(1) and 139ZQ of the Bankruptcy Act 1966 (Cth) (Act) on the basis that on 13 September 2021, the applicant assessed the respondent for income contributions in the amount of $90,110.74 (assessed amount), which remains unpaid.
In support of the application the applicant relies on the following Affidavits:
(a)Paul Gerard Weston sworn 8 August 2022 (Weston Affidavit);
(b)Mark Stephen Tierney sworn 3 November 2022 (first Tierney Affidavit); and
(c)Mark Stephen Tierney sworn 22 November 2022 (second Tierney Affidavit).
The applicant seeks to recover the assessed amount from the respondent as a debt.
Legislative framework
Section 139P(1) of the Act provides that if the income a bankrupt is likely to derive during a relevant period of assessment (as assessed by the trustee) exceeds the threshold amount applicable in relation to the bankrupt when that assessment is made, the bankrupt is liable to pay to the trustee a contribution in respect of that period.
Section 139W(1) of the Act requires the trustee to make an assessment of the income that is likely to be derived, or was derived, by the bankrupt during a contribution assessment period, and the contribution (if any) the bankrupt is liable to pay in respect of that period. The trustee is also required to give to the bankrupt written notice setting out particulars of the assessment.
In summary, s 139ZG of the Act relevantly provides that:
(a)the contribution that a bankrupt is liable to pay is payable at such time as the trustee determines;
(b)total of any contributions that are not paid by the bankrupt is recoverable by the trustee as a debt due to the estate of the bankrupt;
(c)the trustee may, in connection with proceedings to recover the debt, sign a certificate setting out the nature and the amount of the debt, and file the certificate in the Court in which the proceedings have been instituted; and
(d)such proceedings, the certificate is prima facie evidence of the existence of the debt and the amount of the debt.
In summary, r 6.17 of the Bankruptcy Regulations 1996 (Cth) (Regulations) relevantly provides that:
(a)a trustee may give a certificate, signed and dated by the trustee, stating that:
(i)an assessment has been made;
(ii)the amount of the contribution the bankrupt is liable to pay;
(iii)that a notice setting out the particulars of the assessment has been given; and
(iv)the dates of the assessment and notice; and
(b)in proceedings against the bankrupt for recovery of the amount of a contribution, the certificate is evidence that he bankrupt is liable to pay the amount of the contribution stated in the certificate, and may be tendered in evidence without further proof.
In Schiffer v Pattison (2005) 215 ALR 505 at [77] the Federal Court noted that the effect of a certificate issued pursuant to s 139ZG of the Act is to shift the onus of proof from the trustee to the bankrupt in relation to the existence and amount of the debt claimed. The bankrupt can deny the debt and adduce evidence to show why the assessment should not be accepted.
Evidence
The evidence before the Court establishes the following:
(a)on 8 August 2022, the applicant signed a certificate pursuant to s 139ZG of the Act setting out the nature and the amount of the debt, being $90,110.74 (see Annexure “PW-2” to the Weston Affidavit); and
(b)the respondent has not made any payment to the applicant since these proceedings were commenced, or served any evidence demonstrating why the assessment made by the applicant should not be accepted (see second Tierney Affidavit at [2]).
In the foregoing circumstances, the applicant says that the respondent is indebted to him and that the applicant is entitled to judgment against the respondent in the sum of $90,110.74, together with interest and costs.
Interim Application
On 18 November 2022, I made orders inter alia that the application be listed for hearing before me on 1 December 2022, but that said hearing event would vacate and the matter would be decided on the papers in the event that the respondent failed to file a Notice of Address for Service on or by 25 November 2022.
The respondent did not file a Notice of Address for Service in time, or at all.
The failure of the respondent to comply with that order, together with past non-compliances with various orders of the Court, and his failure to attend at any of the hearing fixtures throughout the life of the proceedings constitutes default for the purposes of r 13.04(2)(b)(i),(iii), (iv), (vi), and (vii) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules).
The respondent being in default, the Court is empowered by r 13.05(2)(b) of the Rules to grant leave to the applicant to enter judgment against the respondent for the debt or liquidated damages and, if appropriate, costs.
The applicant has calculated interest on the debt in the sum of $4,777.47. The interest claimed by the applicant on the debt is calculated from 13 September 2021 (the date the income contribution was assessed by the applicant) to 30 November 2022.
In circumstances where the respondent has failed to file or serve any evidence to oppose the relief sought in the application filed 10 August 2022, the applicant submits that the Court ought to grant the relief sought in the application and enter judgment against the respondent in the sum of $94,888.21, including interest. I agree and will so order.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Given. Associate:
Dated: 12 December 2022
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