Allen (Trustee), in the matter of Camarda (Bankrupt) v Camarda
[2024] FedCFamC2G 1238
•1 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Allen (Trustee), in the matter of Camarda (Bankrupt) v Camarda [2024] FedCFamC2G 1238
File number(s): PEG 270 of 2024 Judgment of: JUDGE STREET Date of judgment: 1 November 2024 Catchwords: BANKRUPTCY – section 139ZQ notice -statutory requirements made out – charge registered- sale of property - judgment in the sum of the debt under s139ZQ Legislation: Bankruptcy Act 1966 (Cth) Cases cited: Aravanis & Roy (Trustees), in the matter of Destanovic (Bankrupt) v Destanovic [2016] FCA 388
Colin Dixon (as trustee of the bankrupt estate of Peto) v Peto [2021] FCCA 621
Koshcott Lucan (as trustee of the bankrupt estate of Riches) v Riches [2020] FCCA 2762
Michael (trustee in the matter of Dewey (bankrupt)) v Dewey [2023] FedCFAM C2G248
Sarah v Bahiri (No 3) [2023] FedCFAM C1A144
Division: Division 2 General Federal Law Number of paragraphs: 11 Date of hearing: 1 November 2024 Place: Sydney Solicitor for the Applicant: Ms T Parker of KHQ Lawyers Solicitor for the Respondent: The Respondent did not appear ORDERS
PEG 270 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF MARIA CAMARDA, BANKRUPT
BETWEEN: PAUL ANTHONY ALLEN (IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF MARIA CAMARDA
Applicant
AND: FRANCESCA CAMARDA
Respondent
ORDER MADE BY:
JUDGE STREET
DATE OF ORDER:
1 NOVEMBER 2024
THE COURT ORDERS THAT:
1.Pursuant to s 139ZR within 30 days of the date of these orders, the Respondent and any other occupants of the property situated at 26 Michael Street, Beaconsfield WA 6162, being the whole of the land in the folio of the registered described as Lot 31 on Diagram 26049 with volume 262 folio 63A (Property) must:
a. Provide vacant possession of the Property to the Applicant
b. Deliver all keys for any buildings on the Property to the Applicant; and
c. Remove all personal property, being vehicles, rubbish and chattels from the Property which are not vested in the Applicant.
2.A writ of possession be issued forthwith in the event that the Respondent and any other occupants fails to provide vacant possession of the Property in accordance with order 1.a. above.
3.Should the Respondent and any other occupants of the Property fail to comply with order 1.c. above, the Applicant may remove and dispose of any vehicles, rubbish, chattels from the Property as he sees fit, without being required to account to the Respondent, or any other occupants (Personal Property).
4.If the Respondent fails to comply with Order 1.c., the Applicant is empowered to remove and dispose of any Personal Property on the Property as he sees fit, without being required to account to the Respondent.
5.The Property be sold, free of all encumbrances, by the Applicant.
6.The Respondent execute all documents and do all things as are necessary to enable the Applicant to effect the sale of the Property failing which a Registrar of the Court is authorised to do so.
7.The Applicant applies the proceeds of sale of the Property as follows:
a. In payment of amounts properly due to any mortgagee of the Property or for unpaid land tax or other encumbrances on the Property accrued as at the date the sale is completed to the extent that no allowance is made in any contract of sale
b. In satisfaction of the costs and expenses of the sale of the Property, including reasonable remuneration payable to the Applicant in respect of acting on the sale, such remuneration to be calculated at hourly rates and be in an amount approved by a Registrar of this Court;
c. In payment of the amount of the judgment debt (see (7) below), being the amount which the Respondent was required to pay pursuant to the notice dated 12 October 2022 issued pursuant to section 139ZQ of the Act by the Official Receiver (Notice);
d. In satisfaction of the costs order (see (8) below); and
e. The balance, if any, to be paid to the Respondent.
8.Judgment be entered in favour of the Applicant against the Respondent in the sum of $783,200.
9.The Respondent pay the Applicant’s costs of this proceeding as agreed or taxed, including the costs of removal and disposal of any Personal Property by the Applicant pursuant to Order 4, without prejudice to the Applicant’s entitlement to claim all the costs of these proceedings and enforcement as an expense of the bankrupt estate.
10.By 8 November 2024, the Applicant serve the Respondent with a copy of these Orders by way of express post.
11.Liberty to apply.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JUDGE STREET
These are proceedings commenced on 24 July 2024 by the trustee in bankruptcy of Maria Camarda against Francesca Camarda seeking orders for the sale of property under s 139ZR of the Bankruptcy Act 1966 (Cth) (“the Act”) following the issue of a notice under s139ZQ of the Act that was not the subject of any application to set aside and that is within the Court's jurisdiction under s 27 of the Act. The property the subject of the proceeding for which the applicant seeks vacant possession and orders for sale is situated at 26 Michael Street, Beaconsfield, Western Australia, 6162, being the whole land in the folio of the register described as Lot 31 on Diagram 26049 with Volume 262 Folio 63A (“the property”).
BACKGROUND
On 24 October 2016, a sequestration order was made against the Bankrupt by the Federal Circuit Court of Australia.
The background as set out in the affidavit of Paul Anthony Allen is as follows:
6. On 20 July 2017, Kelly Trenfield, and I (both of FTI Consulting, at the time) were appointed joint and several trustees of the bankrupt estate of the Bankrupt pursuant to section 181A(1) of the Bankruptcy Act 1966 (Cth).
7. On 13 March 2020, on my leaving FTI Consulting for my current position with PKF Melbourne, Ms Trenfield resigned as trustee of the bankrupt estate and I remained sole trustee, pursuant to orders of the Federal Circuit Court of Australia.
9. On or about 19 August 1999, pursuant to a survivorship application, the Respondent became the sole registered proprietor of the Property, subject to an existing mortgage in favour of the National Australia Bank (NAB).
10. On or about 28 August 1999, the Respondent transferred the Property to the Bankrupt, subject to an estate for the life of the Respondent. At or around this time, the Respondent granted a mortgage over the Property in favour of NAB.
11. By a transfer of land on or about 19 October 2015, the Bankrupt transferred her interest as registered proprietor of the Property to the Respondent for no monetary consideration (Transfer).
12. Further sums were lent to the respondent by Bankwest in 2016 and the Respondent refinanced the Bankwest mortgage in late December 2015 with a reverse mortgage in favour of Perpetual Trustees Limited, managed by Macquarie Bank Limited.
13.The market value of the Property at the time of the Transfer was $830,000, as assessed by a retrospective desktop valuation provided to the Trustee by Opteon Property Group Pty Ltd (Opteon) dated 17 May 2021
14.Following my appointment to the Bankrupt Estate, I sent correspondence to the Respondent with respect to the transfer and sought information in relation to the Transfer. I note that the Official Trustee also issued letters to the Respondent with respect to the Transfer.
15.On 7 October 2022, I made an application to the Official Receiver to issue a notice to the Respondent pursuant to section 139ZQ of the Act
15.On 12 October 2022, the Official Receiver confirmed that the section 139ZQ notice had been issued to the Respondent under the Act (139ZQ Notice) and the 139ZQ Notice sought payment of $783,200 from the Respondent (Amount Owed).
17. The 139ZQ Notice provides that the Transfer was an undervalued transaction, and therefore voidable pursuant to section 120 of the Act, because
a the Transfer involved the transfer of the Bankrupt’s interest in the property;
b the Transfer took place on or about 19 October 2015, which is a date within five years of the commencement of the bankruptcy on 8 April 2016;
c no consideration was given by the Respondent to te Bankrupt for the Transfer
d it is not an exempt transfer under section 120(2) of the Act; and
e there is no defence available under section 120(3) of the Act in relation to a transfer to a related entity that is made within four years prior to the commencement of the bankruptcy
18 Additionally, the 139ZQ Notice provides that the Transfer is also a transfer to defeat creditors and therefore voidable pursuant to section 121 of the Act, because:
a the Transfer involved the transfer of the Bankrupt’s interest in the property;
b the Respondent became bankrupt on after the transfer occurred;
c the Bankrupt’s interest in the property was her only material asset and would therefore have become part of her Bankrupt estate;
d At the time of the Transfer, the Bankrupt was, or was about to become, insolvent, and it can be inferred that the Bankrupt’s main purpose in making the Transfer is therefore deemed to have been to prevent her interest in the Property from becoming divisible among her creditors or to hinder or delay the process of making these funds available for division among her creditors; and
e there is no defence available to the Respondent
19 On 14 October 2022, the Australian Financial Security Authority (ASFA) confirmed that the 139ZQ Notice was personally served on Francesca Camarda on 13 October 2022
20 The Respondent was required to comply with the 139ZQ Notice or apply to the Court to have the 139ZQ Notice set aside by 12 December 2022
21 the Respondent failed to comply with the 139ZQ Notice by paying the Amount Owed. As at the date of this affidavit, the Respondent has failed to pay any amounts with respect to the 139ZQ Notice
22 Accordingly, noting that the Respondent failed to comply with the 139ZQ Notice, on 2nd May 2022 2023, I made a section 139ZR application with ASFA for a certificate to be issued by the Official Receiver pursuant to section 139ZR of the Act.
23 On 8 May 2023, the Official Receiver issued a certificate pursuant to section 139ZR(4) of the Act to the Western Australian Land Information Authority (139ZR Certificate) certifying that the Property is charged pursuant to section 139ZR(1) of the Act
25 On 11 September 2023, the section 139ZR charge was lodged with Landgate.
26 On 15 February 2024, I received confirmation from my solicitors acting with respect to the registration of the charge that a charge had been registered on the Property pursuant to section 139ZR.
27 As at the date of making this affidavit, the following encumbrances are registered on the title of the Property
a a mortgage (Mortgage) registered to Perpetual Limited (Perpetual) on 5 January 2017;
b a bankruptcy charge registered by me on 11 September 2023; and
c a caveat lodged by Ms Trenfield and me on 22 August 2017 (Caveat), which was lodged following our appointment.
28 From my investigations, I understand that the Mortgage is a reverse mortgage. In a letter dated 16 May 2017 to the Official Receiver from mortgage, Perpetual, it was advised that the balance of the loan as at 15 May 2017 was $321,176.77.
The trustee identified that there were proofs of debts in the amount of $2,144,871.64.
The trustee identified that he obtained an estimted valuation of the property on 3 November 2021, identifying the market value at 41 million. The trustee identified that the trustee applied for a notice under the s 139ZQ of the Act, that the trustee obtained a valuation of the property as being $950,000 and that the market value identified in the notice under s 139ZQ at that time was $950,000. The notice provided an allowance for the respondent's life interest in the property and there was a valuation of the same that was obtained at the time of transfer, being $166,800. The value of the charge under s 139ZQ of the Act was calculated by deducting the value of the respondent's life interest at the time of transfer of the property from the value of the property at the time of transfer.
The Court has been provided with evidence of service of the originating proceedings on the respondent. The respondent has not participated in the proceedings. The respondent has had a nephew purporting to engage on the respondent's behalf, initially suggesting the obtaining of some legal aid assistance, which, on the most recent affidavit, has not been pursued, and is seeking an adjournment because of the respondent's health. No proper application has been made for an adjournment. The Court is not satisfied that the medical conditions of the respondent are a proper basis on which these proceedings should be further delayed.
The Court has adjourned the matter on earlier occasions to permit steps to be taken by the respondent to obtain representation or make some application if it was seen fit to do so in relation to the appointment of a guardian, no such steps have been taken. The Court is not satisfied that any adjournment is warranted in the interest of the administration of justice.
The Court is satisfied that the s139ZQ notice complied with the requirements of the Act. The Court is satisfied that the applicant is entitled to the relief sought under s 139ZR of the Act.
The Court has taken into account the submissions helpfully provided by the applicant trustee in that regard. The Court notes that the orders being sought by the trustee are, in substance, similar terms to the orders made in Koshcott Lucan (as trustee of the bankrupt estate of Riches) v Riches [2020] FCCA 2762, Colin Dixon (as trustee of the bankrupt estate of Peto) v Peto [2021] FCCA 621 and Michael (trustee in the matter of Dewey (bankrupt)) v Dewey [2023] FedCFAM C2G248.
The Court has also taken into account the observations of the learned Farrell J in Aravanis & Roy (Trustees), in the matter of Destanovic (Bankrupt) v Destanovic [2016] FCA 388 [18] (“Aravanis”), and notes that the orders have been further modified, taking into account the orders were made in Aravanis as well as Sarah v Bahiri (No 3) [2023] FedCFAM C1A144. In the circumstances, the Court is satisfied that is appropriate to make orders for the sale of the property in respect of which the charge under s 139ZR of the Act that has been registered, for the obtaining of vacant possession, for the disposal of property if not otherwise removed and for judgment in the sum of the debt consistent with the terms of s 139ZQ of the Act.
It is for these reasons the Court makes the above orders.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge Street. Associate:
Dated: 25 November 2024
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