Weston v McAuley - [2020] FCCA 1135

FEDERAL CIRCUIT COURT OF AUSTRALIA

WESTON v MCAULEY

[2020] FCCA 1135

Catchwords:
BANKRUPTCY – Application by trustee in bankruptcy for judgment for income contributions assessed under s.139W of the Bankruptcy Act 1966 (Cth) (Act) as recorded in a certificate issued under s.139ZG(4) of the Act – whether the bankrupt has adduced any evidence to raise doubt about his liability to pay the amount of the income contribution recorded in the certificate – bankrupt has not discharged evidentiary burden raised by the certificate that he is not liable to pay the amount recorded in the certificate.

Legislation:

Bankruptcy Act 1966 (Cth), ss.139K, 139L(1), 139P, 139Q, 139R, 139S, 139T, 139U(1), 139W, 139ZA, 139ZF, 139ZG(3), 139ZG(4)

Bankruptcy Regulations 1996 (Cth), reg.6.17

Cases cited:

Schiffer v Pattison [2005] FCA 494

Applicant:

PAUL GERARD WESTON

Respondent:

JOHN MCDONALD MCAULEY

File Number:

SYG 3100 of 2019

Judgment of:

Judge Manousaridis

Hearing date:

23 April 2020

Date of Last Submission:

24 April 2020

Delivered at:

Sydney

Delivered on:

13 May 2020

REPRESENTATION

Counsel for the Applicant:

Mr R Marshall SC and Mr E Walker

Solicitors for the Applicant:

Keypoint Law

Respondent in person, by telephone

ORDERS

Subject to order 5, and the matters noted in paragraphs 6 and 7, judgment is entered for the applicant in the sum of $308,229.16, inclusive of interest, up to the date of judgment.
The respondent pay the applicant’s costs.
Subject to order 5, and the matters noted in paragraphs 6 and 7, the applicant’s costs are fixed in the amount of $15,000.
Enforcement of orders 1, 2, and 3 are stayed until 5 pm on 18 June 2020.
The respondent have liberty to apply by 18 June 2020 if he disputes either or both of:
(a)the calculation of the interest component of the amount referred to in order 1; or
(b)the amount for which the applicant’s costs have been fixed under order 3.

THE COURT NOTES THAT

The amount of the judgment referred to in order 1 includes the $302,228.16 income contribution the applicant has assessed the respondent for contribution assessment periods 3, 4, 5, 6, 7, and 8 (CAP3-CAP8) under s.139W of the Bankruptcy Act 1966 (Cth) (Act), being the amount recorded in a certificate the applicant has signed under s.139ZG(4) of the Act (139ZG Certificate).
Subject to paragraph 8, as an indulgence granted to the respondent, the applicant intends to undertake the matters specified in paragraphs (c) and (d), but only if the respondent undertakes the matters specified in paragraph (a):
(a)By 5 pm on 21 May 2020 the respondent provides to the applicant’s lawyer satisfactory evidence of his income and expenses for CAP3-CAP8 and, if he intends to make an application under s.139T of the Act (hardship application), information in relation to such application.
(b)If by 5 pm on 21 May 2020 the respondent does not provide to the applicant’s lawyer satisfactory evidence of his income and expenses for CAP3-CAP8, or if by that time and date the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Weston v McAuley

Details

AGLC: Weston v McAuley [2020] FCCA 1135
Case: [2020] FCCA 1135
Decision Date: 13 May 2020

CaseChat Overview and Summary

In the matter of *Weston v McAuley*, heard before Judge Manousaridis in the Federal Court of Australia, the trustee in bankruptcy sought judgment against the bankrupt for income contributions assessed under section 139W of the *Bankruptcy Act 1966* (Cth). These contributions were formally recorded in a certificate issued pursuant to section 139ZG(4) of the Act. The core of the dispute revolved around whether the bankrupt had presented sufficient evidence to challenge the validity or accuracy of the assessed income contributions.

The primary legal issue before the Court was whether the bankrupt had discharged the evidentiary burden placed upon him by the certificate of assessment. Specifically, the Court had to determine if the bankrupt had adduced any evidence that cast doubt on his liability to pay the income contribution amount as recorded in the certificate issued by the trustee.

Judge Manousaridis reasoned that a certificate issued under section 139ZG(4) of the *Bankruptcy Act* serves as prima facie evidence of the bankrupt's liability to pay the assessed income contributions. Consequently, the onus shifts to the bankrupt to provide evidence that raises a doubt about this liability. In this instance, the Court found that the bankrupt had failed to adduce any such evidence. Therefore, the bankrupt had not discharged the evidentiary burden required to dispute the amount recorded in the trustee's certificate. The Court ordered that judgment be entered in favour of the trustee for the amount of the assessed income contributions.

Orders