CATCHWORDS Moneys lent - bankruptcy notice and petition issued - debtor denies debt - credibility of creditor and debtor - contradictory evidence - balance of improbability - sequestration order, Bankruptcy Act Re: GUISEPPE TARTAGLIA and Ex parte: TERESA DEL-PI2ZZ0 No. P 1972 of 1985 FORSTER, d. ADELAIDE 22 AUGUST 1986 (: t [ . | I. | woe ee sore a aa ' ae ee ? Se Taille Solna] IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION No. P 1972 of 1985 OF NEW SOUTH WALES AND THE ) ) ) ) BANKRUPTCY DISTRICT OF THE STATE ) ) ) ) ) AUSTRALIAN CAPITAL TERRITORY Re: GUISEPPE TARTAGLIA Debtor Ex parte: TERESA DEL-PIZZ0 Creditor FORSTER J. JUDGE MAKING ORDER ADELAIDE WHERE MADE: DATE _ OF ORDER - 22 AUGUST 1996 THE COURT ORDERS THAT: 1. Debtor's notice of opposition be dismissed. 2. A sequestration order with respect to the debtor's estate. 3. The costs of the petitioning creditor he taxed and paid in accordance with the Bankruptcy Act. Note: Settlement and entry of order is dealt with in Bankruptcy Rule 124. seer ener gor eg ree re te -7.h. a eel ieee naniare he IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION No. P 1972 of 1985 OF NEW SOUTH WALES AND THE ) ) ) ) BANKRUPTCY DISTRICT OF THE STATE ) ) ) ) ) AUSTRALIAN CAPITAL TERRITORY Re: GUISEPPE TARTAGLIA Debtor Ex parte: TERESA DEL-PIZZ0 Creditor REASONS FOR JUDGMENT FORSTER J. : The petitioning creditor Teresa Del-Pizzo ("the creditor") sued the debtor Guiseppe Tartaglia in the Supreme Court of New South Wales for moneys lent by her to hin and interest thereon. She entered a default judgment against him in this action for $29,632-35 which sum bore interest at 13.5% per annum. The creditor caused a bankruptcy notice to be issued on 10 August 1985 which was served upon the debtor on 8 September 1985. The debtor took no action following the service of the bankruptcy notice and the creditor on 20 December 1985 caused to be issued the bankruptcy petition in this matter. It was set for hearing on 18 March 1986 and on that day the debtor filed a notice of intention to oppose the petition, dated the previous ee te ee ney i een See ree eee y 2. day, in which he denied that he was indebted to the creditor for the amount stated in the petition or for any amount and also denied that he had committed an act of bankruptcy. Directions were given for the filing of affidavits and for discovery and the matter eventually came before me for hearing. Some facts, but not many, are not in dispute. The debtor lived in the accommodation at Five Dock of which the creditor was tenant from some time late in 1979 to early 1984 with three intervals. The creditor says that during this period she lent to the debtor, or advanced on his behalf, in various ways, a large number of sums of money totalling $20,597. The debtor admits that he borrowed some small sums from time to time and that a few sums were paid by the creditor on his behalf, but he says that he paid all these sums back and owes the creditor nothing. The creditor and the debtor both gave evidence and were cross examined on their affidavits. Documents were tendered as exhibits. There was also short evidence from a Miss Qld who proved that the paper on the back of which exhibit 3 was written was portion of a print out from the computer of Manchester Unity, her employer, and that of the creditor. The evidence of the debtor was in fact a contradiction of that of the creditor at almost every point so0 that their relative credibility is of great importance. There were improbabilities about the evidence of each and I remember during the hearing considering and saying to counsel that the case Soe eae 3. looked, to some extent at least, as if it might be decided on the balance of improbability. There are difficulties of belief with respect to both the creditor and the debtor but further consideration has confirmed..the view I took at the time that [I prefer the evidence of the creditor to that of the debtor where they conflict. Making all due allowance for the apparent difficulties he had with the language the debtor frequently contradicted himself and, in my view, was quite prepared to, and aid, fabricate stories to account for evidence, for instance the i.o.u's., the existence of which he could not deny. He also said that he was working for most of the time that he was living with the creditor and that he put in annual income tax returns through a tax agent. I suggested to the debtor's counsel that he would be wise to tender to the court copies of these returns or some evidence of their having been submitted to the Deputy Commissioner of Taxation. I also suggested that if neither copies of returns nor evidence of their preparation was available the debtor would be wise to account if he could for their absence. This discussion with counsel occurred during the morning on the first day of the hearing. The debtor's case was closed during the afternoon subject to his right to reopen to deal with the matter of income tax returns. At the end of the hearing at the luncheon adjournment on the following day counsel for the debtor informed me that he had no more evidence of any sort to call and nothing was said to account for the failure to deal with the matter of the debtor's tax returns. I regard this of significance in assessing the general credibility of the + ore ——F —-— -- 4. debtor and I am unable to believe that he was working as much as he said he was. I prefer to believe the creditor when she says that he worked very little and that as a consequence she had to .*Make hire purchase payments with respect to the Volkswagen car to which I will refer later. The creditor says that the debtor asked for and got money from her for a variety of purposes over the period from late 1979 to March 1984, She was in the habit of keeping a record of payments made to or on behalf of the debtor. Up to 12 October 1981 the total of the amounts lent was $8,885. The raw records to support this total have been destroyed but there is what may be described as an i.o.u. signed by the debtor dated 12 October 1981 promising to pay $8,885 (exhibit 4). The debtor admits that his signature appears at the foot of this document and also at the foot of exhibits Z and 3. Exhibit 2 is a list of payments recorded by the creditor and said to have been made by her to or on behalf of the debtor from 1 April 1982 to 10 September 1982. She says that he signed this list as an acknowledgment that he received the sums set out in the list. Exhibit 3 is an acknowledgment of a debt of $19,000 with interest made, as I have said, on the back of a portion of a print out from the computer of Manchester Unity. The creditor says that the debtor came to her at her work some time towards the end of 1983. He told her that he wanted money to take to the races at Canterbury so that he might back a horse with respect to which he had a tip. The creditor says that she did not have her records 5. with her at work but knew that the debtor owed her approximately $19,000. She lent the debtor some money to go to the races but only after he had signed the acknowledgment, exhibit 3. The debtor accounts for his admitted signature on these three documents by saying that he was in the habit of practising his signature on pieces of paper and on pages of notebooks and writing pads. Exhibits 2 and 4 are quite apparently pages from a notebook. He accounts for his signature on exhibit 3 hy saying that the piece of paper must have been lying about the ereditor's flat and he practised his signature on it. He says that in each case the sheets of paper contained no writing when he signed them and that the creditor must have added the writing later. I disbelieve the debtor as to these three signatures and believe the creditor. This means of course that I believe that the debtor acknowledged to the creditor that she had paid to or for him the sums listed in exhibit 2 that he owed her $8,885 on 12 October 1981 and that he owed her approximately $19,000 towards the end of 1983. Quite a large component of the moneys said to be due by the debtor to the creditor was payments made with respect to a Volkswagen car. The debtor wished to buy a second hand Volkswagen car. It was necessary for him to borrow money for the purpose froma finance company. The debtor was not an acceptable borrower to the finance company so the car was bought and the necessary money borrowed in the name of the creditor. morc os an ' : ro. wero, nae Oni reee _ Dette talemens Lad aatatame tel 6. Two contracts for loan were entered into by her and monthly repayments of a little over $187 were called for. The creditor Says that the debtor made the first two or three payments to the finance company and was able to do so because he was in employment. Thereafter the creditor says that one way or another she made all of the payments whether for repayment of the loan or for insurance or for repairs to the car. The debtor denies this and says that he was working nearly all the time and was making nearly all the payments which he was able to do because he was working. I was disinclined to believe the debtor as to this. Production of copies of the income tax returns or even proof that he had lodged any would have diminished or perhaps overcome this disinclination to believe the debtor on this issue but neither copies nor evidence was forthcoming and -no explanation was given. I should say that in many ways the creditor's story of her relationship both personal and financial with the debtor is somewhat hard to helieve. Even though she was working at two jobs and paying no tax with respect to her wages at one of them she must have had serious difficulty in finding money to lend to the debtor at the rate of over $4,000 per year and pay her rent and buy food for both of them. Examination of the figures however indicates that it was possible for her to have done it and I believe she did. I think that the creditor was a very foolish woman where the debtor was concerned. I think however that she was besotted with him and was as putty in his hands, ' qoec me ww ae - may eet 7. She continued to lend the debtor money even though she must have known that his promises to repay were worthless. I think that she was very much in love with him and it is not unknown in human affairs for people in this condition to behave very foolishly and for a long time. Having considered and reread the evidence and having a good recollection of the impression which both the debtor and the creditor made upon me when giving evidence, I am left with no doubt that the debtor owes the creditor the sum claimed in the bankruptcy petition. The debtor's notice of opposition therefore fails and is dismissed and I make a sequestration order with respect to his estate and order that the costs of the petitioning creditor he taxed and paid in accordance with the Bankruptcy Act. I certify that this and the preceding pages are a true copy of the Reasons for Judgment of Mr Justice Forster. Associate » poRar, uP