Aravanis v Daisley - [2015] FCCA 3473

FEDERAL CIRCUIT COURT OF AUSTRALIA

ARAVANIS & ANOR v DAISLEY

[2015] FCCA 3473

Catchwords:
BANKRUPTCY – Orders sought by applicant trustees that respondent bankrupt deliver up vacant possession of property – consideration of issue of service on the respondent by the applicants – consideration of s.77 of the Bankruptcy Act 1966 (Cth) – consideration of delay by the respondent – orders made in accordance with the applicants’ application.

Legislation:

Bankruptcy Act 1966 (Cth), ss.30, 40(1)(g)(i), 58, 77, 77(1)(e)

Bankruptcy Regulations 1966 (Cth), rr.4.02A, 16.01(1)(c)

Official Receiver v Tregaskis & Anor [2006] FMCA 1915
Vince (Trustee) in the matter of Sopikiotis (Bankrupt) v Sopikiotis (No 2) [2012] FCA 1298

Applicants:

ANDREW ARAVANIS & RONIL PRAKASH ROY (AS TRUSTEES OF THE PROPERTY OF SHANE ROBERT DAISLEY)

Respondent:

SHANE ROBERT DAISLEY

File Number:

MLG 1352 of 2015

Judgment of:

Judge Wilson

Hearing dates:

23 & 27 November 2015

Date of Last Submission:

27 November 2015

Delivered at:

Melbourne

Delivered on:

23 December 2015

REPRESENTATION

Counsel for the Applicants:

Ms K Hamill

Solicitors for the Applicants:

Milton Graham Lawyers

Solicitor for the Respondent:

Mr I Hone

Solicitors for the Respondent:

AMC Law & Associates

ORDERS

The respondent deliver up to the applicants vacant possession of the land described in certificate of title volume 8570 folio 013 situate at and known as 9 Eureka Road, Diggers Rest in the State of Victoria (“the property”), by 22 February 2016.
The respondent deliver up the keys for all buildings and improvements on the property to the applicants by 22 February 2016.
A warrant of possession issue in respect of the property referred to in Order 1 above, such warrant to lie in the Registry until the filing by the applicants, not before 23 February 2016, of an affidavit stating that the respondent has not given vacant possession of the property.
The respondent remove from the property all personal property, being vehicles, rubbish and other chattels which does not vest in the applicants (“the personal property”) by 22 February 2016
In the event that the respondent fails to remove the personal property in accordance with Order 4 above, the applicants are empowered to remove and dispose of the personal property as they see fit.
The applicants decide whether the property is to be sold by auction or private treaty, and if by auction, whether to set a reserve price (and if so, what price).
The applicants are empowered to sign any contract of sale, discharge of mortgage authority, transfer of land and any other documents on behalf of the respondent necessary to give effect to the sale and settlement of the property, in the event that the applicant is required to but fails or refuses to sign such documents within such time as required by the applicants’ solicitors.
The respondent do all things as may be reasonably required of the applicants, their selling agent or solicitors for the purpose of achieving a sale of the property, including but not limited to, providing access to buildings on the property for the purpose of valuation and viewing by potential purchasers.
The net proceeds of the sale of the property to be paid in the following priority:
(a)the first mortgagee’s mortgage;
(b)any monies due to any encumbrancer/encumbrancers according to their priorities;
(c)the cost of these proceedings; and then
(d)the remaining monies be paid to the applicants in their capacity as trustees of the respondent’s bankrupt estate.
The applicants’ reasonable costs of these proceedings (including reserved costs), along with all other costs, charges and expenses of the sale of the property, be paid in priority out of the property of the bankrupt estate of the respondent.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1352 of 2015

ANDREW ARAVANIS & RONIL PRAKASH ROY (AS TRUSTEES OF THE PROPERTY OF SHANE ROBERT DAISLEY)

Applicants

And

SHANE ROBERT DAISLEY

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

By application filed 16 June 2015, the applicants as joint and several trustees of the bankrupt estate of Shane Robert Daisley (“the trustees”) sought orders pursuant to ss.30, 58 and 77 of the

Bankruptcy Act 1966
(Cth) (“the Act”) compelling the respondent, SHANE ROBERT DAISLEY (“the respondent”), to deliver up vacant possession of the land described in Certificate of Title

Volume 8570 Folio 013 situated at and known as

9 Eureka Road, Diggers Rest in the State of Victoria (“the property”).
The respondent opposed the application on two main grounds -
(a)first, he contended the circumstances of the case warranted a stay; and
(b)second, he submitted that he had not been personally served with an array of Court documents including the process leading to the entry of the judgment debt on which the petitioning creditor originally proceeded. He also said he had not been served with documents in this proceeding.

SYNOPSIS

For the reasons as set out below, I do not accept the respondent’s contention in his opposition to this proceeding. I make orders in favour of the trustees.

BACKGROUND FACTUAL MATTERS

On 1 September 2014, Move Yourself Trailer Hire Pty Ltd (“MYT”) obtained judgment against the respondent in the sum of $10,739.55 in the Magistrates Court of South Australia.[1] The respondent did not apply to set aside that judgment.
[1] Affidavit of Ashley Margaret Van Rullen sworn 23 November 2015, Annexure “AVR-14” at Annexure - “B”.
MYT issued a bankruptcy notice on to September 2014 for $10,739.55 according to an affidavit of DAYNE STOCKX sworn

22 October 2014.[2] That bankruptcy notice was served on

14 October 2014 by being placed in a sealed envelope addressed to the respondent and left in the letterbox at the property. The bankruptcy notice was validly served according to the

Bankruptcy Regulations 1996
(Cth) (“the Regulations”) rr.4.02A and 16.01(1)(c).
[2] Affidavit of Ashley Margaret Van Rullen sworn 21 October 2015, Annexure “AVR-8” at Annexure - “C”.
The respondent had 21 days from service within which to pay MYT the judgment debt or to make arrangements in respect of the judgment debt to the satisfaction of MYT. The respondent did neither. He thereby committed an act of bankruptcy (see s.40(1)(g)(i) of the Act).
MYT issued a creditor’s petition against the respondent dated

24 November 2014, the facts of which were sworn as being correct by Kelly Fitzhardy (“Ms Fitzhardy”) on 24 November 2014.[3]
[3] Affidavit of Ashley Margaret Van Rullen sworn 21 October 2015, Annexure “AVR-8” at Annexure - “A”.
On 11 December 2014, Allan Tanner (“Mr Tanner”) delivered to the respondent personally, at the property, a collection of documents required by the Regulations to be served upon the respondent, including a signed and sealed copy of the creditor’s petition. Mr Tanner swore an affidavit on 12 December 2014 proving his service the day earlier of the creditor’s petition as well as other documents.[4]
[4] Affidavit of Ashley Margaret Van Rullen sworn 21 October 2015, Annexure “AVR-8”.
On 19 January 2015, upon being satisfied that all relevant documents had been regularly and properly issued and served and that the respondent had not paid the judgment debt or entered into a compromise in respect of it, Registrar Grant made a sequestration order against the estate of the respondent.
The respondent did not, and has not, applied to review the Registrar’s order.
At no stage has the respondent applied to this Court for orders annulling his bankruptcy.
In the passages that follow, I trace the many occasions on which judicial officers of this Court have given the respondent opportunities to obtain assistance to explore ways to challenge his grievances in this litigation, the most often repeated of which was that he was not personally served. The respondent has been offered an extraordinary number of opportunities to apply to this Court for relief based on his assertions that he was not properly served. He has availed himself of none of those opportunities.
Ronil Prakash Roy (“Mr Roy”) swore the main affidavit in support of the trustees’ application.[5] Most of the factual material in this case, aside from service, was uncontested. I narrate it in the passages that follow below.
[5] Affidavit of Ronil Prakash Roy sworn 15 June 2015.
On 16 June 1998, the respondent and Belinda Pittorino (“Ms Pittorino) were registered as joint proprietors of the property. They granted a mortgage in favour of Perpetual Trustees Australia Ltd (“Perpetual”). That mortgage was also registered on 16 June 1998. The respondent and Ms Pittorino as joint proprietors transferred the property into the sole name of the respondent pursuant to orders made in the Family Court of Australia on 9 December 2008. On 16 January 2009, the respondent executed mortgage AG303434D as sole mortgagor in favour of Perpetual.[6] Perpetual transferred its mortgage in favour of Members Equity Bank Pty Ltd (“ME Bank”) for $154,610.64 by instrument AJ617682F dated 20 April 2012.[7] Andrew Aravanis

(“Mr Aravanis”) and Mr Roy the applicants in this litigation, became joint proprietors of the property on 28 April 2015.
[6] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-5”.
[7] Ibid.
On 20 January 2015, the trustees wrote to the respondent requiring him to provide them with -
(a)a statement of affairs as well as copies of all bank statements in his possession for the period 19 January 2014 to

19 January 2015;
(b)copies of all credit facility statements in his possession for the same period;
(c)copies of income tax returns for the three previous years; and
(d)a certified copy of his driver’s licence and passport.[8]
[8] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-8”.
On that day the trustees provided the respondent with a document entitled “Obligations When Bankrupt” as well as with the document entitled “Warning - Some Responsibilities of a Bankrupt”. On the same date the trustees provided the respondent with a detailed questionnaire.[9]
[9] Ibid.
The documents sent to the respondent by the trustees were unable to be delivered to the respondent. On 21 April 2015, Australia Post returned those documents to the trustees on the basis that the respondent declined to accept the envelope or the envelope was not collected from a postal retail outlet. The respondent did not respond to the material sent by the trustees on 20 January 2015.
On 5 February 2015, one of the trustees’ employees attempted to telephone the respondent on two mobile telephone numbers and on one landline telephone number, none of which attempts were successful.
According to Vicky Sarris, another of the trustees’ employees, the documents sent on 20 January 2015 to the respondent were sent to him by ordinary post on 24 February 2015.[10]
[10] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-11”.
Being concerned that the respondent had not returned the correspondence sent on 24 February 2015, and the 14 days mentioned in that correspondence having elapsed, the trustees wrote again to the respondent on 13 March 2015, informing him that his failure to supply a statement of affairs was an offence under the Act.[11] The trustees also informed the respondent that his period of bankruptcy would not commence until the statement of affairs had been filed with the official receiver.[12] The trustees’ letter dated 13 March 2015 did not reach the respondent despite six attempts by Garry Alan Nicholls, a process server, to personally serve the letter on the respondent at the property.[13]
[11] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-12”.
[12] Ibid.
[13] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-13”
On 18 March 2015, ME Bank informed the trustees that its mortgage over the property was $11,644.19 in arrears and that the amount owing as at that date under the mortgage was $160,133.40.
On 23 March 2015, Mr Roy wrote to the respondent informing him that title to the property vested in the trustees and that the respondent would be permitted to remain at the property pending certain investigations being undertaken. The trustees informed the respondent that they were prepared to transfer their interest in the property to a third person for a lump sum of $140,000.00 plus legal costs. The trustees told the respondent they required him to inform them of his intentions with respect to the property within 10 days from

23 March 2015.[14]
[14] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-14”.
The respondent did not respond.
On 9 April 2015, solicitors for the trustees wrote to the respondent at the property informing him that he had not responded to the trustees’ correspondence dated 23 March 2015. The trustees’ solicitors informed the respondent that the trustees were willing to grant him until

23 April 2015 within which he had to state his intentions regarding the property.[15]
[15] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-15”.
The respondent did not respond.
By letter dated 1 May 2015, Mr Roy wrote to Melton City Council (“the Council”) seeking details of rates due and owing in respect of the property. [16]
[16] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-16”.
On 11 May 2015, the Council provided to Mr Roy information about the rates owing on the property as well as additional information. Unpaid rates then stood at $5,074.90. The Council reported that the site value of the property was $163,000.00 and the capital improved value of the property was $269,000.00.[17] Those figures exposed the generous valuation attributed to the property of $140,000.00 in the trustees’ correspondence dated 23 March 2015.
[17] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-17”.
On 23 April 2015, Barry Plant Real Estate undertook a kerbside valuation of the property and reported to range between $290,000.00 and $310,000.00.[18]
[18] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-18”.
That figure was to be contrasted with the valuation provided by

YPA Estate Agents in correspondence dated 28 April 2015, in which the range was between $270,000.00 and $297,000.00.[19] Based on those two valuations, Mr Roy swore that if sold the property would fetch in the vicinity of $270,000.00 and $310,000.00.[20]
[19] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-19”.
[20] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at para.29.
ME Bank informed the trustees at or around that date that ME Bank did not object to the trustees selling the property so long as ME Bank was paid in full the amount owed to it.
ME Bank served a notice of default dated 21 May 2015 on the respondent asserting arrears of $13,036.44 plus legal costs.[21]
[21] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at Annexure “RPR-26”.
The respondent owed the Australian Taxation Office the sum of $45,943.00 as at the date of Mr Roy’s affidavit.[22]
[22] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at para.38(c).
According to the list of creditors prepared by the trustees, debts owed by the respondent were -
(a)ME Bank – $178,072.00;
(b)Australian Taxation Office – $45,943.00;
(c)Melton City Council – $4,732.00; and
(d)MYT – $10,739.00.[23]
[23] Affidavit of Ronil Prakash Roy sown 15 June 2015 at Annexure “RDR-30”
Mr Roy swore that the property was the only known asset of the respondent.[24]
[24] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at para.40.
Mr Roy swore that the trustees wanted to sell the property but needed vacant possession to do so.[25]
[25] Affidavit of Ronil Prakash Roy sworn 15 June 2015 at para.41.

PROCEEDING IN THIS COURT

Mr Tanner served the originating application filed

16 June 2015 together with Mr Roy’s affidavit sworn 15 June 2015 on the respondent. Mr Tanner served the respondent personally on

24 July 2015 at the property.[26]
[26] Affidavit of service of Allan Maxwell Tanner filed 30 July 2015.
Between the date of the filing of the application and service of the originating application along with Mr Roy’s affidavit sworn

15 June 2015, Registrar Caporale adjourned this case to 31 July 2015 by reason of the fact that the respondent had not been personally served.
On 31 July 2015, Registrar Caporale heard the return of the application. On that day the trustees were represented by

Ms Katherine Hamill (“Ms Hamill”) of Counsel. Ms Hamill later appeared before me on 23 November and 27 November 2015. The respondent attended Court on 31 July 2015. Registrar Caporale adjourned the further hearing of this proceeding to 14 August 2015 to enable the respondent to obtain legal assistance. The respondent was offered the services of Justice Connect. He failed to take up the invitation of assistance from Justice Connect. According to notes taken by Ms Hamill on 31 July 2015, during the hearing before

Registrar Caporale the respondent agitated his concern about service. One might readily infer that the respondent would have consulted Justice Connect to specifically ventilate his grievances about issues relating to service. If the respondent’s complaint related to the underlying debt obtained by MYT in South Australia, equally, one might imagine that the respondent would have consulted

Justice Connect to explore ways to set aside that judgment.
On 14 August 2015, the respondent again attended Court, on that occasion before Registrar Luxton. The respondent successfully persuaded Registrar Luxton to grant a further two-week adjournment. The respondent was ordered to file material by 11 September 2015 and the proceeding was adjourned for further hearing before his Honour Judge Burchardt.
The respondent affirmed an affidavit on 22 September 2015. In paragraph 2 of that affidavit the respondent stated -
I was never at any time informed of the proceedings to make me a bankrupt and I was not served with any document and [sic] receive any notice of proceedings or my Bankrupt Estate until around July of 2015, at which time I was in jail and was thus unable to respond to this matter.
Even allowing for the exaggerated nature of those comments, it seems readily apparent that the respondent was asserting that he was not informed of the proceeding commenced against him by MYT. He was also asserting he was not informed of proceeding ADG447 of 2014 in the South Australian Registry of this honourable Court, commenced by MYT’s creditor’s petition and ended by Registrar Grant’s sequestration order made in Adelaide on 19 January 2015. He also seemed to be contending that he was not served with any document or any notice in this proceeding.
I reject the statement made by the respondent in paragraph 2 of his affidavit affirmed 22 September 2015. While the respondent may well have been released from custody on 12 July 2015, no evidence was adduced to prove the date on which his imprisonment commenced.
In addition to that, Mr Tanner in his affidavit sworn 12 December 2014 said that he personally served the respondent with the creditor’s petition along with the affidavit of Ms Fitzhardy and various other documents by delivering those documents to the respondent personally at the property on 12 December 2014. Even if the date of the respondent’s imprisonment commenced on the day he swore he was arrested (13 May 2015),[27] the respondent was not in custody in December 2014 when Mr Tanner swore that he personally served the respondent at the property.
[27] Affidavit of Shane Robert Daisley affirmed 22 September 2015 at para.18.
I do not accept the respondent’s comment “I was never at any time”[28] informed of the matters he asserted. But even if there were merit in that comment, the respondent gave no explanation for his failure to challenge any aspect of the proceeding that led to the making of the sequestration order or any aspect of this proceeding.
[28] Affidavit of Shane Robert Daisley affirmed 22 September 2015 at para.2.

The respondent’s affidavit affirmed 22 September 2015 is littered with criticisms of the trustees. Nowhere did it address a defence to the MYT proceeding in South Australia nor the proceeding that led to the sequestration order nor did it address the merits of the claims by the trustee in this proceeding. Instead, in his affidavit the respondent rolled up a number of submissions the following of which are illustrations -
(a)“… once the Bankruptcy Order is struck out I will also seek an order that the trustees remove themselves from the title of my property and remove any caveat they have lodged over such property; [29]
(b)“I submit the contents of this undelivered mail is irrelevant …”;[30]
(c)“Quite obviously I could not have …”;[31]
(d)“… this point is vague, ambiguous and in my submission hearsay as the trustee is stating something based on something he was told by a third person”;[32]
(e)“While I was in prison my sister located mail about my Bankruptcy, as soon as I got out I began addressing the issue”;[33] and
(f)“[it] was obtained in South Australia contrary to Civil Rules Procedure”.[34]
[29] Affidavit of Shane Robert Daisley affirmed 22 September 2015 at para.7.
[30] Affidavit of Shane Robert Daisley affirmed 22 September 2015 at para.10.
[31] Affidavit of Shane Robert Daisley affirmed 22 September 2015 at para.11.
[32] Affidavit of Shane Robert Daisley affirmed 22 September 2015 at para.15.
[33] Affidavit of Shane Robert Daisley affirmed 22 September 2015 at para.19.
[34] Affidavit of Shane Robert Daisley affirmed 22 September 2015 at para.21.
The respondent affirmed he “will be seeking to have their judgement set aside [sic]”.[35] That was a reference to the MYT judgment. He had not done so when this proceeding was heard by me.
[35] Affidavit of Shane Robert Daisley affirmed 22 September 2015 at para.22(d).
On 15 September 2015, his Honour Judge Burchardt made orders by consent on the papers allowing the respondent until 22 September 2015 to file and serve his affidavit material.
By reason of various other interlocutory orders, the hearing of this application by the trustees was adjourned to me to 23 November 2015

THE HEARING ON MONDAY 23 NOVEMBER 2015

On that day the trustees were represented by Ms Hamill of Counsel. The respondent was represented by Mr Hone who described himself as a solicitor advocate, yet “briefed”[36] by a firm of solicitors. Prior to my coming onto the bench, Ms Hamill filed written submissions containing propositions of fact and law as well as a very useful chronology which I have used in formulating these reasons.[37] Mr Hone did not file written submissions.
[36] Transcript of proceedings of 27 November 2015, p.54 at line 29.
[37] Applicant’s Submissions for 23 November 2015, filed 27 November 2015.
Immediately after appearances were announced, Mr Hone told me his client sought an adjournment. Ms Hamill opposed the application. The basis of Mr Hone’s application to adjourn vacillated. Initially he submitted he needed time as he had “come into this over the weekend”[38] (meaning the weekend prior to Monday, 23 November 2015). Mr Hone then submitted that his instructing solicitor “[had] not received any written notice of this listing whatsoever”.[39] That submission was false as was patently apparent from communications between the Court and the solicitors for the party, something I communicated to Mr Hone.
[38] Transcript of proceeding of 23 November 2015, p.6 at line 12.
[39] Transcript of proceeding of 23 November 2015, p.8 at line 12.
Mr Hone then submitted he sought the adjournment by reason of the unavailability of a member of counsel retained prior to Mr Hone. That was a curious submission as Mr Hone announced that he appeared as solicitor advocate and when I asked him whether he was across all issues, Mr Hone said he was.[40] He then submitted that the respondent had only recently involved lawyers yet admitted that the respondent had been legally represented on 2 November 2015. Notwithstanding a variety of bases on which Mr Hone grounded the adjournment application, he said -
[T]he issue to some extent is that’s something that ought to be addressed by way of an application for annulment and also by way of an application to set aside the underlying judgment … Neither of which has been instituted”.[41]
He contended the “fundamental argument is about service”.[42]
[40] Transcript of proceedings of 23 November 2015, p.6 at lines 29 and 31.
[41] Transcript of proceedings of 23 November 2015, p.13 at lines 39-41 and 45.
[42] Transcript of proceedings of 23 November 2015, p.16 at line 14.
Mr Hone further contended that he challenged the validity of the service of any document forwarded to or left at the property.[43] He sought to cross-examine process servers. Ms Hamill submitted that the bankruptcy notice was left at the property as the rules permitted and that the creditor’s petition had been personally served in accordance with the rules. Ms Hamill submitted that no purpose was served in granting the adjournment because the decision of this Court in

Official Receiver v Tregaskis
[2006] FMCA 1915 and the decision of the Honourable Justice Bromberg in Vince (Trustee) in the matter of Sopikiotis (Bankrupt) v Sopikiotis (No 2) [2012] FCA 1298 (“Vince”) placed insurmountable obstacles in front of the respondent.
[43] Transcript of proceedings of 23 November 2015, p.14 at lines 43-44.
In the end I granted Mr Hone a short adjournment until

27 November 2015 to enable him to challenge service and to investigate whether steps to resolve the proceeding in the overall were likely to be fruitful.

THE HEARING ON FRIDAY 27 NOVEMBER 2015

Through Ms Hamill, the trustees again moved for possession of the property when the case returned before me on 27 November 2015.

Mr Hone again appeared for the respondent. Mr Hone announced that “the crux of Mr Daisley’s position [was] that he was not served with the creditors petition”.[44] Mr Hone announced that he wanted to

cross-examine the person who served the creditor’s petition.
[44] Transcript of proceedings of 27 November 2015, p.46 at lines 28-29.
Ms Hamill again resisted that request. Ms Hamill argued that the respondent had enjoyed three opportunities to pursue remedies, none of which he availed himself, namely -
(a)setting aside the South Australian judgment debt;
(b)applying to review the Registrar’s decision for the making of the sequestration order; and
(c)applying to annul his bankruptcy.
She contended that in any event -
(d)the sequestration order against the respondent’s estate was operative;
(e)it had not been set aside; and
(f)the respondent was and remained a bankrupt as at

27 November 2015.
Ms Hamill relied on Vince.[45]
[45] [2012] FCA 1298.
Insofar as it is necessary so to do, I find that the creditor’s petition was personally served on the respondent by Mr Tanner on

11 December 2014.
I asked Mr Hone how he escaped from the fact that a sequestration order had been made in reliance upon the validity of an affidavit of service that spoke of personal service of the creditor’s petition.

Mr Hone said the Court had power to stay this proceeding to enable his client to set aside the creditor’s petition. I told Mr Hone his client had months to do that and that he had not done so. Mr Hone answered by stating that his client had been short of funds to do so.[46] In the end, I refused the application to cross-examine the process server who served the creditor’s petition. I did so on the basis there was no point in permitting any such cross-examination.[47]
[46] Transcript of proceedings of 27 November 2015, pp.50-51 at lines 39-45 and lines 1-2.
[47] Transcript of proceedings, 27 November 2015, p.53 at line 12.
Mr Hone then applied for leave to call David Nigel Bullmore

(“Mr Bullmore”) to give evidence. Mr Hone assured me that

Mr Bullmore was a relevant witness whose evidence would support an application for the grant of a stay of several weeks so that Mr Bullmore could complete steps (so Mr Hone said) to broker a deal by which the respondent’s creditors could have been satisfied. Ms Hamill objected. It struck me then any debate about relevance or utility of Mr Bullmore’s evidence was likely to take longer than it might take for Mr Bullmore to say whatever he could. I allowed Mr Hone to call Mr Bullmore.
Before Mr Bullmore entered the witness box I asked Mr Hone to tell me in precise terms what evidence he (Mr Hone) wanted to extract from Mr Bullmore.[48] Mr Hone told me that he had not had an opportunity to confer with Mr Bullmore.[49] I told Mr Hone that I found that response extraordinary given that -
(a)he was the respondent’s solicitor advocate;
(b)he had been retained the previous Monday and had told me he was “across all issues”;[50]
(c)the hearing of the case had been adjourned for four days to enable Mr Hone to make enquiries; and
(d)he had not done so.
[48] Transcript of proceedings, 27 November 2015, p.53 at lines 35-37.
[49] Transcript of proceedings, 27 November 2015, p.54 at line 35.
[50] Transcript of proceedings, 23 November 2015, p.6 at lines 29-31.
The bankruptcy jurisdiction of this Court is an essential judicial function as its exercise bears upon the financial and commercial well-being of Australian citizens. The making of a sequestration order against a person’s estate is an extremely serious matter. An application of the sort made in this proceeding is an equally serious matter. The taking of instructions from a prospective witness such as Mr Bullmore in an application such as this one is not to be sloughed off. It is not an adequate response to say that a legal practitioner representing a bankrupt did not have the opportunity to confer with a witness such as Mr Bullmore. I did not accept the notion advanced by Mr Hone that he did not have an opportunity to confer with Mr Bullmore. Plainly, he had.
Mr Bullmore gave evidence to the effect that he had formulated a concept by which the respondent would gain access to $79,000.00 in a self-managed superannuation fund to be applied to pay creditors. He said the respondent would be a trustee of that superannuation fund but in order for him to be a trustee of such a fund the respondent had to be relieved of his bankruptcy and he could only be relieved of his bankruptcy if he paid out creditors. Mr Bullmore said this was a

“Catch 22”
situation.[51]
[51] Transcript of proceedings, 27 November 2015, p.59 at lines 15-44.
In cross-examination, Mr Bullmore admitted he -
(a)was not a licensed financial planner;
(b)had been previously convicted of fraud;
(c)had been previously convicted of theft; and
(d)had previously been declared a bankrupt.[52]
[52] Transcript of proceedings, 27 November 2015, p.64 at lines 1-2 and lines 23-42.
Nothing Mr Bullmore said in his evidence filled me with optimism about the potential of his proposal for the respondent. I took the view that the prospects of any successful outcome for the respondent under Mr Bullmore’s proposal was so low as to be inconsequential. I took the view that no purpose would be served in a stay.

SECTION 77 CONSIDERATIONS

In my judgment, the trustees have shown commendable restraint in their dealings with the respondent. The trustees sought a Statement of Affairs from the respondent. He did not provide it. The trustees sought information about financial matters known only to the respondent. It was not provided. The trustees have provided the respondent with documents after doubts attended the effectiveness of the previous service. To my mind, the trustees have behaved entirely properly since their appointment. If anything, they gave the respondent an abundance of time for him to respond to their requests, especially for information the trustees were required by the Act to seek.
The trustees gave the respondent a direction under s.77(1)(e) of the Act seeking from him a proposal in relation to the property. It will be recalled that the price they put on the property was $140,000.00. Other evidence before me indicated that the property was, at that time, likely to realise up to $310,000.00. The trustees’ proposal was, on one view, less than half of the property’s market value. The respondent did not respond to the trustees’ direction. Ms Hamill submitted that I am entitled to take into account that the trustees have previously invited the respondent to express a proposal in relation to the property.[53] I have taken that into account. I have also taken into account the fact that the respondent has not co-operated with trustees at all.
[53] Transcript of proceedings, 27 November 2015, p.40 at lines 31-43.

INORDINATE DELAY

This case has been punctuated by the respondent’s failure to take up opportunities that, if he had in fact been active, may have produced a different result. Let me catalogue a few -
(a)the respondent took no step to set aside the South Australian judgment;
(b)he took no step in the proceeding that led to the sequestration order;
(c)he took no step to contest the service of the bankruptcy notice or the creditor’s petition; and
(d)he took no step to review the registrar’s order when the sequestration order was made.
Instead, the respondent complained about so-called deficiencies with service but he did nothing about those complaints. His grounds for resisting the trustees’ application in this case have failed.
For those reasons, in my judgment the trustees are entitled to the relief they seek.
I make orders in accordance with the trustees’ originating application.

I certify that the preceding sixty-nine (69) paragraphs are a true copy of the reasons for judgment of Judge Wilson

Associate:

Date: 23 December 2015