Kavich V. v Official Trustee in Bankruptcy & Anor [1995] FCA 446

CATCHWORDS BANKRUPTCY - provable debts - whether additional tax under s207(1) of Income Tax Assessment Act in respect of income tax assessed after bankruptcy and unpaid is a debt provable in the bankruptcy - whether at the date of bankruptcy s207 tax is a "debt or liability present or future, certain or contingent" to which the bankrupt was subject - whether "certain" - whether s207 tax was a debt or liability to which the bankrupt became subject before discharge by reason of an obligation incurred before the date of bankruptcy - whether s207 tax ceased to be payable on bankruptcy - effect of issue of assessment after date of bankruptcy - whether additional tax should be paid out of surplus in the bankrupt estate - whether analogous to interest - discussion of policy objective of Bankruptcy law; s82 Bankruptcy Act; s207(1) Income Tax Assessment Act.

Bankruptcy Act 1966: ss82, 153, 178 Income Tax Assessment Act 1936: ss166-170, 204, 207, 208

Ex parte Llynvi Coal & Iron Co; Re Hide (1871) LR 7 Ch 28; discussed. Re Brealey (1900) 26 VLR 209; referred to. Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR 256; applied. Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455; distinguished. Official Trustee in Bankruptcy v CS & GJ Handby Pty Ltd (1989) 7 ACLC 1070; applied. Re Hyman & Anor; Ex parte Law (1930) 3 ABC 61; discussed. Mackenzie v Rees (1941) 65 CLR 1; discussed. Ellis and Co's Trustee v Dixon-Johnson [1924] 1 Ch 342, aff'd [1924] 2 Ch 451; distinguished.

RE VERA KAVICH v OFFICIAL TRUSTEE IN BANKRUPTCY AND DEPUTY COMMISSIONER OF TAXATION No NB118 of 1978 HILL J SYDNEY 30 JUNE 1995

IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY DISTRICT OF THE ) No. NB118 of 1978 STATE OF NEW SOUTH WALES ) RE: VERA KAVICH Debtor VERA KAVICH Applicant AND: THE OFFICIAL TRUSTEE IN BANKRUPTCY First Respondent DEPUTY COMMISSIONER OF TAXATION Second Respondent CORAM: HILL J PLACE: SYDNEY DATED: 30 JUNE 1995 MINUTES OF ORDER THE COURT DECLARES THAT: (1) The Deputy Commissioner is not entitled to prove in the bankrupt estate of Vera Kavich for additional tax of $239,915.58 sought to be imposed by way of late payment penalties for failure to pay income tax the subject of assessments or amended assessments issued on 27 November 1978. (2) That no part of the said additional tax under s207 which is not admitted as a debt in the applicant's bankrupt estate can be paid out of surplus in that estate. THE COURT ORDERS THAT: (3) The application brought by the Deputy Commissioner of Taxation be dismissed. (4) The Deputy Commissioner of Taxation pay the costs of Mrs Kavich in both applications.