Forget being a day late and a dollar short, what happens when you are almost two decades late with filing a Statement of Affairs (Statement) in bankruptcy?

The Federal Court case of Talent v Official Receiver [2020] FCA 1294 provides hope for those who fail to file the Statement within 14 days of being notified of the bankruptcy as required by section 54 of the Bankruptcy Act 1966 (Cth) (Act). Timing is important given that once the Statement is filed, the period of bankruptcy ends three years and 1 day from the date of filing.

In this case, the Applicant was notified of their bankruptcy in May 2000 but filed the Statement in 2020. The Applicant initially attempted to file the Statement by providing it to a representative of the Australian Financial Security Authority (AFSA) in 2000 however the Statement was not accepted at this time. The Applicant refused to provide a new SOA upon AFSA’s subsequent requests due to concern that this would reset the duration of their bankruptcy and frustration that the initial SOA had not been accepted.

Over 19 years later, the Applicant made use of section 33A of the Act which states that the Court may order that a Statement is to be treated as filed prior to the actual date of filing if satisfied that the person reasonably believed that the Statement had already been filed. The Applicant sought orders for the Statement to be treated as filed two years and nine months prior to the actual date of filing in order to bring the administration of their bankrupt estate to an end.

This case tested the limits of the Court’s discretion to make an order under section 33A. Numerous factors weighed against the Applicant, including the public interest in promptly filing the Statement so that crucial information is disclosed, the overall purpose of the Act which aims to facilitate the expeditious administration of a bankrupt’s estate, the significant amount of time that passed between notification of bankruptcy and the filing of the Statement, and the Applicant’s knowledge of AFSA’s requests for the Statement to be filed after the initial attempt.

On balance, however, the Court exercised its discretion under section 33A in favour of the Applicant, noting that there was no creditor opposing the relief, no utility in continuing the bankrupt status of the Applicant and no opposition from the Official Receiver. The Court had ‘some misgivings’ but was ultimately satisfied that the requirements of section 33A were met.1

1 Talent v Official Receiver [2020] FCA 1294, 19.

 

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