Application for Amendment Dismissed in Bankruptcy Case

The court dismissed the plaintiff's application for amendment as futile, holding that a bankrupt has no authority to bring a claim in respect of property no longer vested in them but in their trustee in bankruptcy.

New South Wales Supreme Court

CITATION : [NAME] v [NAME] [2000] NSWSC 668 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1415 of 2000 HEARING DATE(S) : 30 June 2000 JUDGMENT DATE : 30 June 2000

[NAME] (Plaintiff) PARTIES : [NAME] (First Defendant) Official Trustee in Bankruptcy as Trustee of the Bankrupt Estate of [NAME] ([NAME] Defendant) JUDGMENT OF : Windeyer J at 1

COUNSEL : [redacted]

Wayne Levick & Associates (Plaintiff) SOLICITORS : [redacted] Australian Government Solicitor (Mr R. [NAME]) ([NAME] Defendant) CATCHWORDS : BANKRUPTCY - standing - whether the plaintiff has standing to bring a claim in respect of property no longer vested in him but in his trustee in bankruptcy - PRACTICE AND PROCEDURE - application for amendment of summons - whether application futile CASES CITED : Deputy Commissioner of Taxation v Levick [1999] FC 1580

DECISION : See paragraph 11

1 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WINDEYER J

FRIDAY 30 JUNE 2000

1415/00 [NAME] v [NAME]

1 HIS HONOUR: In this matter the plaintiff seeks orders by summons dated 18 February 2000 which are or were intended to have the effect of preventing the Registrar General from vesting the property, 1/[ADDRESS], Abbotsford, in the official trustee in bankruptcy, he having sought to have the property vested in his name as a result of a sequestration order made in respect of the property of the plaintiff on 25 June 1998. In the events which have happened the orders sought are really purposeless because the property is now vested in the name of the official trustee in bankruptcy albeit that a new certificate of title has not yet issued. In other words the request for the vesting has been registered and was registered on 5 May 2000. 2 There has been a sequence of litigation proceedings between [NAME] and the Deputy Commissioner of Taxation. While the summons has not been amended an order was made under which the Official Trustee in Bankruptcy was to be added as the [NAME] defendant and I proceed on the basis that has been done, even though the amended summons which the plaintiff would have been required to file, has not been filed. 3 [NAME] appealed to the [ADDRESS] of the Federal Court of Australia against the making of the bankruptcy order. That appeal was dismissed. He sought leave to appeal to the High Court of Australia but because he did not comply with the procedural requirements for such application for specific leave to appeal, the appeal was deemed to be abandoned. 4 When the matter was mentioned before the Chief Justice of the High Court of Australia he did not interfere with this automatic abandonment. [NAME] then made an application to the court for leave to bring his application for leave to appeal out of time. That matter was dealt with by [NAME] on 26 April 2000 when he refused that application. It is, I think, proper to point out that [NAME] said that had he thought that the application had any chance of success he would have allowed it to be made out of time but he thought it had no chance of success and therefore dismissed the application. 5 I have been told from the bar table, without objection, that there is an application presumably to the [ADDRESS] of the High Court of Australia for leave to appeal or to appeal against the decision of [NAME]. Having said that I have been told that the official trustee in bankruptcy, at least so far as he is represented by [NAME] here today, has no knowledge of that appeal. In the light of the conclusion which I have come to that will not make any difference to the position. 6 The arguments of counsel that the plaintiff has a right to relief are first that there is no such entity as the Australian Taxation Office and, as I understand it, for any claim for tax being made. Secondly, as a matter of discretion, the court should order that any action against the subject property be stayed until the appeal from the decision of [NAME] is determined. 7 I should add that as the orders which are sought in the summons, it is agreed, would be purposeless, the plaintiff seeks to amend the summons by a claim for an order that the [NAME] defendant be restrained until further order from dealing with the subject property in any way. 8 So far as the arguments about the existence or non-existence of the Australian Taxation Office are concerned at least at the present time that matter has been determined in accordance with the decision of Hill J in the Federal Court of Australia in Deputy Commissioner of Taxation v Levick, (1999) FCA 1580. The judge in that case pointed out that the existence or non-existence of the office has no bearing whatsoever on the right of the Deputy Commissioner of Taxation to recover tax due to the Commonwealth. That decision was upheld by the [ADDRESS] of the Federal Court of Australia. 9 At the present moment I see no reason to suggest that the contrary is arguable. I should add that as I understand it, this was never an argument that was put forward before Burchett J in the original bankruptcy proceedings. It is highly unlikely it would be allowed to be raised at this juncture in an application for leave to appeal against the decision of [NAME]. 10 The argument in submissions about standing the matter over until the matter is finally determined really must fall on the basis of what I have just said about the first argument but in addition the bankrupt has no authority to bring such a claim in respect of property which is no longer vested in him but vested in his trustee in bankruptcy. 11 The application for amendment being futile, it should not be allowed and I refuse the application for amendment. In those circumstances it is clear that the summons should be dismissed with costs and I propose to make that order. 12 At the conclusion of this judgment [NAME] for the [NAME] defendant stated that the Deputy Commissioner of Taxation has been served with documents relating to the proposed appeal from the decision of [NAME].

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