RE Sarroff, John EX PARTE Deputy Commissioner Of Taxation [1996] FCA 999

CATCHWORDS BANKRUPTCY - application to stay operation of bankruptcy notice - motion in Court of Appeal of New South Wales to stay operation of default judgment on which bankruptcy notice is based, pending an appeal to that Court against the default judgment - whether reasonable likelihood of motion being successful. Bankruptcy Act 1966 - s 41(6A), s 41(6C) Taxation Assessment Act - s 177, s 201 Re Sterling; Ex parte Esanda Ltd (1980) 30 ALR 77 Carr v Finance Corporation of Australia Limited (1981) 147 CLR 246 Re JOHN SARROFF; Ex parte DEPUTY COMMISSIONER OF TAXATION No. NN 950 of 1996 CORAM: FOSTER J DATE: 8 OCTOBER 1996 PLACE: SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA) ) NEW SOUTH WALES DISTRICT REGISTRY) No. NN 950 of 1996 ) BANKRUPTCY DIVISION ) RE: JOHN SARROFF Debtor/Applicant

EX PARTE: DEPUTY COMMISSIONER OF TAXATION Creditor/Respondent JUDGE MAKING ORDERS: FOSTER J DATE: 8 OCTOBER 1996 PLACE: SYDNEY MINUTE OF ORDERS THE COURT ORDERS THAT:

1. The application for extension of time be dismissed. 2. The applicant pay the respondent's costs. Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA) ) NEW SOUTH WALES DISTRICT REGISTRY) No. NN 950 of 1996 ) BANKRUPTCY DIVISION ) RE: JOHN SARROFF Debtor/Applicant

EX PARTE: DEPUTY COMMISSIONER OF TAXATION Creditor/Respondent CORAM: FOSTER J DATE: 8 OCTOBER 1996 PLACE: SYDNEY REASONS FOR JUDGMENT (Extempore) HIS HONOUR: This matter comes before the Court today as an application to stay the operation of the bankruptcy notice issued by the Deputy Commissioner of Taxation as judgment creditor against the judgment debtor. Unless stayed, the time for compliance with the bankruptcy notice will expire today, with the result that an act of bankruptcy will be committed. The period of extension that is sought is to a date conveniently close to but after 21 October, that being the day upon which a notice of motion will be heard before the Court of Appeal of the Supreme Court of New South Wales. That notice of motion is in respect of an appeal which has been brought by the judgment debtor from a judgment entered against him in the District Court of New South Wales. The judgment debtor has been unsuccessful in the District Court in obtaining any stay of the operation of that judgment, and, accordingly, application has been made to the Court of Appeal for a stay to be issued by that Court pending the appeal brought to that Court from the District Court judgment. It appears clear that if a stay is granted by the Court of Appeal, the actual hearing of the appeal in that Court will be some two years hence with the result that the stay, if granted, will prevent the Deputy Commissioner from exercising his rights under that judgment for a considerable period of time. The application in this Court to set aside the bankruptcy notice is based simply upon an assertion that the amount claimed in the notice is in excess of any amount that might be owed. There has been a failure to comply with the rules of this Court in connection with the provision of notice relating to the amount of that claimed excess. No prejudice of any specific kind has been alleged on behalf of the judgment creditor should the period of the notice be extended to enable the notice of motion to be heard in the Supreme Court; however, a number of other grounds of opposition to the extension have been put forward and have resulted in fairly extensive argument of the matter before me this morning.