Case: Commissioner of Taxation v Stuart-Jones [2000] FCA 1022 ; (2000) 102 FCR 296
Outcome: cited
Having considered a number of relevant authorities ( Sood at [12]), including Ling v Enrobook Pty Ltd (1997) 74 FCR 19, Re Ousley; Ex parte Commissioner of Taxation (1994) 48 FCR 131 , National Australia Bank Ltd v Pollak (2001) 186 ALR 44 and Commissioner of Taxation v Stuart-Jones [2000] FCA 1022 ; (2000) 102 FCR 296, Gyles J concluded at [13] that the ability of the debtor to seek an order permitting payments of the judgment debt pursuant to s 24 of the Commonwealth Act means that execution is not stayed in the relevant sense. The debtor had submitted, as Mr Ollis does here, that it is unrealistic to think that such an application could be made after service of the bankruptcy notice and prior to the time for compliance. His Honour rejected the submission. As his Honour concluded, where the debtor had the ability to seek an order permitting payment of the judgment debt, the payment is optional for the debtor in a practical sense. His Honour found nothing to indicate that the legislature contemplated that the Commonwealth Act would interfere with the ordinary operation of the bankruptcy law beyond the effect of the sections introduced to deal expressly with that topic. Justice Gyles noted the absence of locus standi of the creditor under the Commonwealth Act to vary the restraining order. However, that factor does not affect the logic of his Honour's reasoning or the debtor's ability to apply to vary the order. 14 In Stuart-Jones Mathews J was considering the Assets Recovery Act. At [26] her Honour expressed the view that it was at least arguable that a restraining order under s 10 will have the effect of preventing the levying of execution against the person's property so that the judgment creditor was not in a position to issue immediate execution on the judgment. Her Honour considered that a restraining order under the Assets Recovery Act bore a closer resemblance to the appointment of a receiver or trustee than to a Mareva injunction. It could then constitute a stay of execution under s 41(3)(b) of the Bankruptcy Act . Mathews J did not, however, consider it necessary to express a concluded view as the restraining order applied to part only of the debtor's property. Her Honour did observe that it might operate as a stay so long as, in a practical and business sense, it prevented the debtor from paying the judgment debt. The onus of proving this matter lies with the debtor which, in Stuart-Jones , was not established (at [27]). 15 In Sood , Gyles J referred to Stuart-Jones and Mathews J's indication that the operation of the restraining order as a stay was at least arguable (at [6]). After reviewing the cases since Stuart-Jones , his Honour came to a conclusion that differed from her Honour's indication. He placed some weight on the factor referred to but not taken into account by Mathews J, the ability of the debtor to make an application. That ability was, in his Honour's view, decisive (at [13]). Further, Gyles J was of the view that the restraining order is akin to a Mareva injunction in its effect, contrary to the view of Mathews J (at [13]).