Commonwealth Bank of Australia v Oswal

REASONS FOR JUDGMENT 1 On 12 July 2012, in WAD 142 of 2012, the Court made ex parte orders granting the applicant, the Commonwealth Bank of Australia, leave to serve a bankruptcy notice out of Australia on Mr Pankaj Oswal (Commonwealth Bank of Australia v Oswal [2012] FCA 772). The bankruptcy notice was founded upon a judgment for the bank against Mr Oswal for US$4,821,655. 2 On 16 October 2012, the bank filed a creditor's petition in the Federal Magistrates Court seeking a sequestration order against Mr Oswal's estate. The bank relied upon the bankruptcy notice having been lawfully served in accordance with the leave given by the Court on 12 July 2012 and upon the failure by Mr Oswal to comply with the bankruptcy notice, as the act of bankruptcy. 3 On 21 November 2012, Federal Magistrate Lucev granted the bank leave to serve the petition out of Australia and by substituted service. 4 On 5 December 2012, Federal Magistrate Lucev made ex parte orders granting the Deputy Commissioner of Taxation leave to serve its appearance in support of the creditor's petition out of Australia and by substituted service. The Deputy Commissioner of Taxation claimed that Mr Oswal owed an unpaid tax debt of over A$6 million for income tax and excess contributions tax. 5 By an application in a case filed on 11 December 2012 in the Federal Magistrates Court Mr Oswal applied to set aside the ex parte orders made by Federal Magistrate Lucev for service out of Australia and substituted service on 21 November 2012 and on 5 December 2012 respectively. 6 On 14 December 2012, Mr Oswal filed an interlocutory application in the Federal Court seeking to set aside the ex parte orders made by the Court giving the bank leave to serve the bankruptcy notice out of Australia and by substituted service. 7 On 17 December 2012, the Federal Magistrates Court made orders that the creditor's petition and Mr Oswal's application to set aside the two ex parte orders be transferred to this Court. That proceeding, when transferred to the Federal Court was given the number, WAD 401 of 2012. 8 At a directions hearing on 19 December 2012, I ordered that the creditor's petition and Mr Oswal's applications to set aside the ex parte orders made by this Court on 12 July 2012 and the Federal Magistrates Court on 21 November 2012 and 5 December 2012 respectively, be heard at 10.15 am on 1 February 2013. I also made orders for the filing of affidavits and submissions. 9 The Deputy Commissioner of Taxation entered an appearance in support of the petition. The parties duly filed and served affidavits and submissions. In his submissions in reply, Mr Oswal raised, for the first time, as a ground for opposing the petition and setting aside the ex parte orders, that the bankruptcy notice was a nullity because it incorporated a calculation to convert the judgment sum from US dollars to Australian dollars which used an exchange rate from the wrong date. Mr Oswal referred to the decision of Parianos v Lymlind Pty Ltd (1999) 164 ALR 229 which supported his contention. 10 The parties agreed to adjourn the hearing date whilst the bank gave consideration to the matters raised by Mr Oswal's submissions in reply, regarding the validity of the bankruptcy notice. 11 The bank has now sought an order that it have leave to withdraw the petition pursuant to s 47(3) of the Bankruptcy Act 1966 (Cth), and ancillary orders. This is because the bank accepts that there is force in the point raised by Mr Oswal about the conversion date of the judgment debt. 12 The supporting creditor does not oppose the granting of leave to the bank to withdraw the petition. 13 Mr Oswal whilst still maintaining that the Court does not have jurisdiction over him, has, through his solicitor, also said that he does not oppose the making of the orders proposed by the bank. 14 In my view, the application by the bank is an appropriate response to the submissions regarding the arguments made by Mr Oswal. Accordingly, I grant leave to the bank to withdraw the creditor's petition. I will also make the ancillary orders sought by the bank. The withdrawal of the petition will, also, dispense with the need to hear and determine the applications made by Mr Oswal to set aside the orders for service out of Australia made in that proceeding. 15 Further, the bank has proposed orders in respect of the disposition of the application to set aside the ex parte orders for service out of Australia of the bankruptcy notice made by this Court. Neither the Deputy Commissioner of Taxation nor Mr Oswal through his solicitors, opposes the making of the orders. In my view, the orders are also an appropriate response to the withdrawal of the creditor's petition. Accordingly, I will make the orders as sought. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.