A recent decision of the Federal Circuit Court has refused a bankrupt’s application to travel overseas after the bankrupt demonstrated total disregard for the obligations arising under his bankruptcy status.
On 28 November 2019, Sher Khan made an application under section 27 of the Bankruptcy Act seeking review of a decision by the trustee which prohibited him from travelling overseas. In doing so, Mr Khan gave evidence that he wished to travel abroad and that he had done so previously.
The trustee submitted that Mr Khan’s application was refused because his conduct had been inconsistent with his obligations as a bankrupt. In this respect, Mr Khan had failed to disclose information pertaining to proceedings that were underway in New Zealand in respect of his assets and in which he had claimed $3 million. Further, Mr Khan had treated a charity as if it were his own funds.
In deciding the case, the court was particularly concerned by the fact that in the New Zealand proceedings, Mr Khan had supplied an affidavit in which he claimed that he was not bankrupt. Accordingly, Judge Street concluded that Mr Khan’s false affidavit demonstrated that he had no understanding of his obligations as a bankrupt.
Ultimately, his Honour held that it was not appropriate to permit a grant of leave to the applicant to travel overseas. This was on account of the concerns expressed by the trustee and Mr Khan’s apparent lack of understanding surrounding his bankruptcy status and his subsequent obligations.
James Conomos is the Managing Director of James Conomos Lawyers where he practices in the areas of insolvency, bankruptcy and commercial litigation. If you or your business needs assistance navigating a legal dispute, please do not hesitate to contact him.
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