JU SOMINY Mo. PA. | Bn I co OF _AU: IA ) ) CIst FED! J ICTIo ) No. B.2614 of 1987 ) BANKRUPTCY ) ej F STATE OF VICTORIA TONY CALABRO A Debtor and ¥_CO. SSTONER OF TAXATION A Creditor COURT: NORTHROP J. DATE : 16 MARCH 1988 PLACE: MELBOURNE EX TEMPORE REASONS FOR JUDGMENT On 10 February 1988 the Deputy Commissioner of Taxation for the Commonwealth of Australia served a bankruptcy notice on the debtor, Tony Calabro. The bankruptcy notice was based upon paragraph 40(1)(g), of the Bankruptcy Act 1966, and it claimed that there was a total amount of $7216.19 owing by the debtor to the Commissioner under a judgment obtained by the Commissioner in the County Court of Victoria on 27 February 1984. The amount claimed is 2. the amount of that judgment debt, together with costs, reduced by way of credits totalling some $4090, together with interest on the judgment debt from 5 December 1984 to 17 November 1987. Any claim for further interest has been waived. The bankruptcy notice was in conformity with the Act and rules and required the debtor to do one of a number of things within 14 days of the date of service of the bankruptcy notice. The debtor was required, within 14 days after service, to either pay the sum as claimed by the judgment creditor or to secure the payment of the sum referred to, to the satisfaction of the Court. The debtor has done neither of those two things. The bankruptcy notice also gave notice, in conformity with the Act and rules, that if within the period set out above - that is the 14 days - the debtor fails either to comply with the requirements of the notice - and I quote:- "or to satisfy the Federal Court of Australia that you have a counter-clain, set-off or cross demand equal to or exceeding the sum specified in paragraph (a), being a counter-claim set-off or cross demand that you could not have set up in the action in which the judgment (or order) was obtained, you will have committed an act of bankruptcy on which bankruptcy proceedings may he taken against you." By affidavit sworn on 17 February 1988, within that period of 14 days, the debtor claimed that he had such a set-off, counter-claim or cross-demand which he could not have brought in those County Court proceedings. As a result 3. of sub-section 41(7) of the Act the effect of filing that affidavit is to prevent the bankruptcy notice taking effect at the expiration of the 14 days after service. The Court is then required to determine whether it 18 satisfied that the debtor has such a counter-claim, set-off or cross-demand as alleged. The affidavit sets out material which is directed to what had occurred in relation to subsequent assessments and discussions which had taken place between the Deputy Commissioner and the debtor in relation to those assessments which have been issued for periods after 1984. It has no regard at all to the judgment debt and in my opinion there was nothing in the affidavit itself or in what has been said by the debtor in Court today to show that at the time of that judgment debt he had a counter-claim, set-off or cross-demand which he could not have brought in the County Court. The judgment debt has been entered and has remained in existence since 1384 - it was entered on 5 December 1984. What has happened subsequently relates to other dealings between the parties and does not affect the existence of that debt or any cross-claim that could have been brought in those proceedings but could not be brought because of other factors: for instance, the nature of a claim in existence at that time, or other like matters. Accordingly, I am not satisfied that the debtor has a counter-claim, set-off or cross-demand that could not have been brought in the County Court proceedings in which judgment has been entered. As a result of that finding Act now operates amd the act of bankruptcy, under Bankruptcy Act, is to be determined in accordance with order made today. I certify that this and the three (3) preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice R M Northrog) Shorow PF ADUIOY Associate Dated: I More 1988 the the the the