Deputy Commissioner of Taxation v Bayeh, Louis (in the Matter of Louis Bayeh) [1998] FCA 750

FEDERAL COURT OF AUSTRALIA

Bankruptcy - bankruptcy notice based on judgment - whether debtor has committed an act of bankruptcy in the light of restraining order issued under s 43 of the Confiscation of Proceeds of Crime Act 1989 (NSW).

Confiscation of Proceeds of Crime Act 1989 (NSW) - s 43

Boscolo v Botany Council, Jenkinson, O'Loughlin, Sackville JJ, 16 October 1996, unreported - cons. Re Solomon; Ex parte Reid (1986) 10 FCR 423 - dist.

DEPUTY COMMISSIONER OF TAXATION v LOUIS BAYEH (IN THE MATTER OF LOUIS BAYEH)

NG 7974 of 1997 JUDGE: BEAUMONT J. PLACE: SYDNEY DATE: 4 JUNE 1998

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 7974 of 1997

IN THE MATTER OF LOUIS BAYEH BETWEEN: DEPUTY COMMISSIONER OF TAXATION

Applicant

AND: LOUIS BAYEH

Respondent

JUDGE: BEAUMONT J.

DATE OF ORDER: 4 JUNE 1998

WHERE MADE: SYDNEY

ORDERS: That the preliminary question be answered in the affirmative as follows: "Q. Whether, in the light of the restraining order made under s 43 of the Confiscation of Proceeds of Crime Act 1989 (NSW) and notwithstanding that order, the debtor committed an act of bankruptcy by reason of his failure to comply with the requirements of the bankruptcy notice served on him on 30 June 1997?" "A. Yes." Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 7974 of 1997

IN THE MATTER OF LOUIS BAYEH BETWEEN: DEPUTY COMMISSIONER OF TAXATION

Applicant

AND: LOUIS BAYEH

Respondent

JUDGE: BEAUMONT J.

DATE: 4 JUNE 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT BEAUMONT J: Before the Court is a preliminary question, arising before the final hearing of a creditors petition in bankruptcy, as follows: Whether, in the light of the restraining order made under s 43 of the Confiscation of Proceeds of Crime Act 1989 (NSW) and notwithstanding that order, the debtor committed an act of bankruptcy by reason of his failure to comply with the requirements of the bankruptcy notice served on him on 30 June 1997. The bankruptcy notice, which was issued on 21 February 1997, claimed that the debtor owed the Deputy Commissioner of Taxation the sum of $884,061.83, being the balance owing under a judgment obtained by the Deputy Commissioner of Taxation in the sum of $868,753.87, together with interest. The bankruptcy notice required compliance within 21 days after service. At the time of service of the bankruptcy notice there were in force orders made by the Supreme Court of New South Wales pursuant to s 43 of the Confiscation of Proceeds of Crime Act 1989 (NSW) ("the Act"). Under that provision, application may be made to the Supreme Court for restraining orders in the circumstances there specified. By s 43(2)(c), it is provided that the Court may then by order direct that the property or such part of the property of the defendant, as is specified in the order, is not to be disposed of, or otherwise dealt with, by the defendant or by any other person, except in such manner and in such circumstances (if any) as are specified in the order. By s 43(2)(d) the Court may, if the Court considers that the circumstances so require, direct the Public Trustee to take control of the property, or such part of the property of the defendant as is specified in the order. By orders made on 10 October 1996, and in force at the time of service of the bankruptcy notice, the following orders were made: "1. All the property of the defendant not be disposed of or otherwise dealt with by the defendant or by any other person otherwise than in accordance with orders 2 3 4 or 5. 2. The defendant may expend from the property the subject of order 1 (a) the defendant's reasonable living expenses and the reasonable living expenses of his dependants; and (b) the defendant's reasonable expenses in defending a criminal charge. 3. The defendant (a) may forthwith take all reasonable steps to, and proceed to, sell his interests in real property situated outside Australia in accordance with clauses (c) to (f); (b) may, after 5 days notice to the Plaintiff, dispose of any property, or interest in real property in Australia in accordance with clauses (c) to (f); (b1) may forthwith dispose of his interest in taxi licences in Australia in accordance with clauses (c) to (f); (c) for an amount not less than the reasonable market rate agreed to between the defendant, the registered owner if different to the defendant, and the Plaintiff; (d) any charge over the property may be paid out of the proceeds of sale;