Zervos Pty v TSAKISSIRIS
[2004] FMCA 177
•24 March 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ZERVOS PTY v TSAKISSIRIS | [2004] FMCA 177 |
| BANKRUPTCY – Act of bankruptcy – whether debtor absent from residence with intention to defeat creditors – whether necessary consequence of absence is to defeat creditors – whether absence shows intention. |
Bankruptcy Act 1966, s.40(1)(c)(ii)
Re Vassis; ex parte Leung (1986) 64 ALR 407
Ramsbottom v Lewis (1808) 1 Camp 279; 170 ER 957
Ex parte Goater; Re Finney (1874) 30 LT 620
| Applicant: | GIASOUMI PAPASAVAS ZERVOS PTY |
| Respondent: | PAUL TSAKISSIRIS |
| File No: | MZ 289 of 2001 |
| Delivered on: | 24 March 2004 |
| Delivered at: | Melbourne |
| Hearing date: | 30 July 2001 |
| Judgment of: | Phipps FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Gorr |
| Solicitors for the Applicant: | Giasoumi Papasavas Zervos Pty |
| There being no appearance for the Respondent. |
ORDERS
That the application is dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MZ 289 of 2001
| GIASOUMI PAPASAVAS ZERVOS PTY |
Applicant
And
| PAUL TSAKISSIRIS |
Respondent
REASONS FOR JUDGMENT
Section 40(1)(c)(ii) of the Bankruptcy Act 1966 provides:
(1) A debtor commits an act of bankruptcy in each of the following cases:
(c) if, with intent to defeat or delay his or her creditors:
(ii) he or she departs from his or her dwelling-house or usual place of business;
The applicant has applied for a sequestration order against the estate of the respondent. The application, alleges that on four separate occasions the debtor departed from his usual place of residence with intent to defeat or delay his creditors. The evidence relied upon for each occasion is that of a process server who was attempting to serve an earlier bankruptcy application. The process server deposed to knowing the address because he had earlier served a bankruptcy notice on the debtor at that address. Failure to comply with a bankruptcy notice is not relied upon in this application.
On the first occasion at 6:35p.m on a Sunday, he said that a boy apparently over the age of 16 years opened the door. He asked to speak to the debtor. The boy replied that he was the son of the debtor. The boy stated that the debtor was at the boy’s uncle’s residence, he would not specify the time of the debtor’s return. The process server said that he provided the boy with his name and mobile telephone number and requested that he ask the debtor to telephone him. That did not happen.
On the next two occasions, Sunday at 10:00a.m. and Tuesday at 8:00p.m. there was no answer at the door.
The fourth occasion was a Sunday at 11:55p.m. The process server deposes to the door being answered by a woman. He asked to speak to the debtor, the woman advised that she was his wife. She said that the debtor resided at the residence however he was not home. She would not state where the debtor was or when she expected him to return.
The process server refers to a fifth occasion, Monday at 7:30p.m. where there was no answer. This occasion is not relied upon in the application.
An essential matter to be established by the applicant is that the debtor was absent from his residence with intent to defeat or delay his creditors. While the intent to defeat or delay may need not be the only intent of the debtor (Re Vassis; ex parte Leung (1986)64 ALR 407), it is still necessary to establish that intention.
The applicant submitted that the intention is to be deduced from a constant absence from the dwelling. They submitted that this is a circumstance which must necessarily cause delay, and which the debtor must be presumed to have foreseen and intended as a necessary consequence of his own deliberate acts. The submission referred to Ramsbottom v Lewis (1808) 1 Camp 279; 170 ER 957 and Ex parte Goater; Re Finney (1874) 30 LT 620.
In the first of these cases, Ramsbottom v Lewis, the debtor, without the knowledge of his co-partner, had sailed for the continent under an assumed name, with, as the report states, a lady whom he had carried off from her husband. Lord Ellenborogh said that whether we committed an act of bankruptcy by departing from the realm depends upon what are supposed to have been his intentions at the time.
A person may be supposed to intend the necessary consequences of his actions and if the necessary consequence of his going abroad was that his creditors should be delayed then he committed an act of bankruptcy. The second case, Goater, was similar. The debtor broke up his establishment in England and moved to France claiming doctor’s advice. He was about to be called upon to honour a bill of exchange and he had been served with a writ by a bank for a large sum. The court said he must be taken to have known all of this and to have known that the necessary consequence of his going abroad was to delay his creditors.
Both of these cases are significantly different from this application. They are cases where the debtor had gone abroad permanently. They are cases in the 19th century where travel and communication were more difficult than now. The evidence in this case shows no more than that the debtor was often away from home or that he was making it appear that he was away from home. It does not lead to the conclusion that his intention in being away on any one or more of the occasions alleged was to defeat creditors. It cannot be said that if the debtor is absent from his residence without more explanation than that, or leaves his residence to visit his brother, or instructs his wife not to reveal his whereabouts or his intended time of return that he must be taken to have known that the necessary consequence is to delay his creditors. The act of bankruptcy alleged has not been made out and the application must fail.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Phipps FM
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