Young v Capocchiano

In *Young v Capocchiano*, Emmett J of the Federal Circuit Court of Australia considered bankruptcy petitions based on non-compliance with bankruptcy notices. The notices were issued for a total debt of $203,179.02, which arose from an unpaid costs judgment granted by Kunc J in the Supreme Court of New South Wales. This costs judgment followed a proceeding where the respondents failed to prove they were creditors of Great Wall, and Kunc J ordered them to pay the Liquidator's costs.

The primary legal issue before Emmett J was whether the Court should exercise its discretion to "go behind" the existing costs judgment. The respondents sought to oppose the bankruptcy petitions on grounds that included the Liquidator's alleged duty to distribute a surplus from asset sales, the manner of asset sales, and a claim that the proof of debt proceedings had not determined their status as creditors or debtors. Essentially, the respondents argued that no debt was owed to the Liquidator.

Emmett J accepted that the respondents' grounds of opposition were intended to raise the argument that no debt was owed and that the Court should go behind the judgment. However, based on the evidence presented, his Honour was satisfied that the acts of bankruptcy occurred on 28 April 2015, that the bankruptcy petitions complied with the relevant legislative requirements, and that the petitions and supporting affidavits had been properly served on the respondents. The Court was satisfied that the statutory requirements for the bankruptcy petitions had been met.