Deputy Commissioner of Taxation v Harmouche

HIS HONOUR: This matter comes before me today as Duty Judge. It has been referred by the Registrar for hearing of a notice of motion which was filed by the defendant on 19 November 2025. The defendant seeks orders that the default judgment made on 3 November 2023 be set aside and that enforcement of the default judgment be stayed pending further order of the Court.

Mr Pan, solicitor, appears for the plaintiff, being the Deputy Commissioner of Taxation. Mr Aouad, solicitor, appears for the defendant, being the person who has filed the motion.

At the outset, Mr Aouad indicated to me that he did not understand that he was here to deal with a final hearing of the motion, but was rather seeking directions as to when the motion would be heard and, presumably, the evidence.

Having said that, he has already served an affidavit of the defendant dated 18 November 2025. The plaintiff relies on an affidavit of the solicitor employed for the plaintiff, Mr Pan. I am uncertain what further directions or evidence would be needed to allow the matter to proceed to a final hearing.

There is, on my analysis, a fundamental problem with the application being pursued by the defendant, being that the defendant remains an undischarged bankrupt. That is established by the plaintiff. Unfortunately, Mr Aouad appears to be either unaware of this or unaware of the consequences of this. He has apparently briefed counsel and is awaiting counsel's advice. He thus seeks that the hearing of the matter be adjourned to a different time both on the basis that he was unaware that the hearing would be proceeding today and also to enable him to consider and obtain advice about the point raised by the plaintiff, that is, s 60 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”).

The plaintiff presses for the motion to be dismissed with costs, submitting that there can really be no argument about the effect of s 60, as well as accepting that if the trustee in bankruptcy wanted to pursue such an application that might be possible but that is not what is happening at the moment.

There is certainly merit in the plaintiff's position. I am not aware of any case which would support the proposition that, despite being an undischarged bankrupt, the defendant may pursue an application herself to set aside a judgment previously entered.

I have some sympathy for Mr Aouad's position, in the sense that he has not attended court today to deal with the matter believing the matter was only in for directions and that he wishes to obtain counsel's advice about the matter. Mr Pan submits that an alternative to simply dismissing the motion would be to refuse to accept its filing having regard to r 4.10(4) of the Uniform Civil Procedure Rules 2005 (NSW). Again, I accept that I have the power to do that, but it is at least possible that the defendant might be able to convince the trustee in bankruptcy to become involved and there may be an application to substitute the trustee for the defendant as the applicant on the motion. I am not suggesting that will occur, or even that the Court would make orders permitting that to occur.

On the face of the application, there remain a number of substantial hurdles for the defendant to overcome before she could obtain the order she seeks. Those include the substantial delay in bringing the application and the likelihood that the issues raised by the defendant as a ground for her application may not provide a defence to the claim in any event.

Whilst at this stage I am unable to anticipate the basis on which this application might either go ahead or succeed, it seems to me that I should make orders which would allow the solicitor for the defendant to further consider whether there is any possible basis on which this application could proceed whilst at the same time ensuring that the plaintiff was not put to any further time or cost (in terms of attending a hearing). Those orders would involve the defendant, as the applicant on the motion, having three weeks to further consider her position and writing to the solicitors for the plaintiff either seeking to withdraw the motion or providing a basis in writing for the continuation of the motion. Again, I am not sure what that basis might be, but I accept Mr Aouad's request to have time to do so.

In the circumstances, the orders I make are: