FEDERAL COURT OF AUSTRALIA
DATE OF ORDER:
23 July 2020
THE COURT ORDERS THAT:
1. The Affidavit of Peter Ivan Macks filed 3 June 2020 is to remain confidential in the court file in a sealed envelope marked ‘confidential’, such confidential affidavit not to be accessed by any person without order of the Court.
2. Any party affected by these orders is at liberty to apply upon 5 business days’ notice.
3. The applicant’s costs of and incidental to this proceeding be costs in the bankruptcy of the respondent.
4. Certifies the appointment of the applicant as the trustee in bankruptcy of Peter Moltoni and the consequential existence of bankruptcy proceedings for the purposes of Article 15(2) of Schedule 1 to the Cross-Border Insolvency Act 2008 (Cth) (the Model Law).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
1 This is an application that the applicant be certified as the trustee in bankruptcy of Peter Moltoni for the purposes of art 15(2) of Schedule 1 to the Cross-Border Insolvency Act 2008 (Cth) (the Model Law). The application is made to facilitate the recognition of the administration of Peter Moltoni’s estate by the applicant in foreign courts.
2 The application is brought on an ex parte basis. For the reasons that follow, I grant the application.
3 On 21 September 2017, the Australian Taxation Office (ATO) issued amended taxation debt assessments against Peter Moltoni (the bankrupt) in the sum of $33,335,667.23 for the financial year ended 30 June 2007 (the amended assessments).
4 The amended assessments were formulated and issued as a consequence of the ATO’s investigation of legal proceedings in the British Virgin Islands, which in turn related to a payment of $21 million (the payment) from Maruti Holdings Pte Limited (Maruti) to Sinclair Strategies Ltd (Sinclair). Sinclair is registered in the British Virgin Islands.
5 In 2012, Maruti’s director Pankaj Oswal brought proceedings on behalf of Maruti against Sinclair; the bankrupt; and a Michael Cahill, alleging that the payment was extorted by way of blackmail. The applicant subsequently became a director of Sinclair in 2013.
6 The basis of the amended assessments is that Sinclair was in effect the bankrupt’s company, and that the payment was made in return for the provision of consultancy services by the bankrupt in Western Australia, which he directed be paid to Sinclair. The ATO therefore treated the payment as income of the bankrupt, which was taken into account in the amended assessments.
7 On 21 November 2017, the bankrupt was made the subject of a Departure Prohibition Order (DPO) by the ATO.
8 On 11 October 2018, the bankrupt appointed the applicant to act as the trustee of his bankrupt estate (the bankrupt estate) by way of debtor’s petition.
9 Also on 11 October 2018, the Official Receiver provided the applicant with a Certificate of Appointment of Trustee confirming the applicant’s appointment as sole Trustee in Bankruptcy.
10 The applicant in his written submissions outlined litigation in which the bankrupt has been involved, including:
(1) an unsuccessful application for review in the Administrative Appeals Tribunal (AAT) of the ATO’s decision to refuse a request made by the bankrupt to travel under the DPO;
(2) an application for review in the AAT of the amended assessments, which was withdrawn;
(3) an application for review in this Court (South Australian registry) of the applicant’s decision in January 2019 to refuse the bankrupt permission to travel while bankrupt, which was discontinued;
(4) an unsuccessful application for review in the AAT of the ATO’s refusal on 1 July 2019 to revoke the DPO;
(5) an application in this Court to review the applicant’s decision not to give the bankrupt permission to travel (or lack of such decision), which I allowed, subject to the bankrupt making certain undertakings, in Moltoni v Macks as Trustee of the Bankrupt Estate of Moltoni (No 2)  FCA 792; and
(6) an application for review in this Court (Australian Capital Territory registry) of a decision of the AAT affirming the ATO’s decision to refuse the bankrupt’s request to revoke the DPO, which was discontinued.
11 The relevant legal principles are outlined in the applicant’s affidavit filed 3 June 2020 (the applicant affidavit). The relevant definitions are set out in art 2 of the Model Law:
For the purposes of the present Law:
(a) “Foreign proceeding” means a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation;
(d) “Foreign representative” means a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor’s assets or affairs or to act as a representative of the foreign proceeding;
(e) “Foreign court” means a judicial or other authority competent to control or supervise a foreign proceeding.
12 Article 15(2) of the Model Law sets out a requirement that any application for recognition be accompanied by:
(a) A certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or
(b) A certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or
(c) In the absence of evidence referred to in subparagraphs (a) and (b), any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the foreign representative.
13 Article 15(2) of the Model Law sets out a requirement that “an application for recognition shall also be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative.”
14 Article 17(1) of the Model Law provides that “subject to article 6, a foreign proceeding shall be recognised” if the following criteria are satisfied:
(a) The foreign proceeding is a proceeding within the meaning of subparagraph (a) of article 2;
(b) The foreign representative applying for recognition is a person or body within the meaning of subparagraph (d) of article 2;
(c) The application meets the requirements of paragraph 2 of article 15;
(d) The application has been submitted to the court referred to in article 4
15 The applicant intends to seek recognition of the administration of Peter Moltoni’s estate, initially by courts in the United Kingdom. The applicant submitted that, for this recognition to occur, it is necessary that:
Firstly…there be bankruptcy proceedings on-foot in the jurisdiction in which bankruptcy was declared. Secondly … for the Trustee to be equipped with a ‘decision’ or a ‘certificate’, issued by a court of competent jurisdiction, that authenticates the Trustee’s appointment and the existence of the bankruptcy proceedings, this being the documentation mandated by Article 15(2)(a) or (b) of the Model Law when bringing an application for recognition.
16 The applicant seeks a decision or certificate to enable satisfaction of the requirements of art 15(2) of the Model Law.
17 Section 55(4A) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) provides that the “debtor who presented the petition becomes a bankrupt by force of this section and by virtue of the presentation of the petition”. The resulting bankruptcy is made for the purpose of reorganisation or liquidation and is subject to the supervision or control of this Court (s 27(1)). The bankrupt’s debtor’s petition of 11 October 2018, and the Official Receiver’s subsequent endorsement of the applicant as trustee of the bankrupt’s estate under s 55(4) of the Bankruptcy Act, therefore is a foreign proceeding for the purposes of art 2(a) of the Model Law.
18 To fall within the definition of “foreign representative” for the purposes of art 2(d) of the Model Law, the applicant must have been authorised in a foreign proceeding to administer the “reorganisation or the liquidation of the debtor’s assets or affairs or to act as a representative of the foreign proceeding”. The applicant was so authorised when he was appointed trustee of the bankrupt’s estate under s 156 of the Bankruptcy Act.
19 I therefore certify the existence of proceedings in this jurisdiction as one made pursuant to an insolvency law, in which proceeding the assets and affairs of the bankrupt are subject to control or supervision by this Court, for the purpose of reorganisation or liquidation; and affirm that the applicant was authorised in that proceeding to administer the reorganisation or the liquidation of the bankrupt’s assets or affairs. Orders will be made accordingly.
Dated: 23 July 2020