Australian Executor Trustees Limited v Dimitrovski - [2013] FCCA 2213

FEDERAL CIRCUIT COURT OF AUSTRALIA

AUSTRALIAN EXECUTOR TRUSTEES LIMITED v DIMITROVSKI

[2013] FCCA 2213

Catchwords:
BANKRUPTCY – Creditor’s petition – notice of objection – whether judgment debt upon which petition founded subject of appeal proceedings – whether to grant adjournment – whether to make sequestration order.

Legislation:

Powers of Attorney Act 2003 (NSW) s.12(1)
Bankruptcy Act 1966 (Cth) ss.52, 306

Proprietary Limited v McPhee [2007] FMCA 1939

Ahern v DCOT (1987) 76 ALR 137

Applicant:

AUSTRALIAN EXECUTOR TRUSTEES LIMITED ACN 007 869 794

Respondent:

GEORGE DIMITROVSKI

File Number:

SYG 2053 of 2013

Judgment of:

Judge Raphael

Hearing date:

9 December 2013

Date of Last Submission:

9 December 2013

Delivered at:

Sydney

Delivered on:

9 December 2013

REPRESENTATION

Solicitors for the Applicant:

Gadens Lawyers

Solicitors for the Respondent:

Gilbert M Johnstone & Co

ORDERS

A Sequestration Order be made against the estate of George Dimitrovski.
The Applicant’s costs (including any reserved costs) be taxed and paid from the estate of the Respondent in accordance with the Act.
Under the Bankruptcy Regulations a copy of this sequestration order be given to the Official Receiver in Sydney within 2 days.

THE COURT NOTES THAT

The date of the act of bankruptcy is 5 March 2013

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 2053 of 2013

AUSTRALIAN EXECUTOR TRUSTEES LIMITED
ACN 007 869 794

Applicant

And

GEORGE DIMITROVSKI

Respondent

REASONS FOR JUDGMENT

There comes before me today the hearing of a petition for the sequestration of the estate of George Dimitrovski, presented on 2 September 2013, and the hearing of a notice of opposition to that petition filed on 5 December 2013. The notice of opposition is in the following form:
“George Dimitrovski, Respondent, intends to oppose the Creditor’s Petition on the following grounds:
1. The Judgement on which the Creditor’s Petition filed in these Proceedings is based is currently the subject of an Appeal to the Supreme Court of New South (sic), Court of Appeal, Case Number 2013/00153380 (Court of Appeal Proceedings).
2. The Court should exercise its jurisdiction to adjourn the Hearing of the Creditor’s Petition until a date after the Court of Appeal proceedings are determined.”
It is generally accepted by courts exercising bankruptcy jurisdiction that where a debtor has instituted appeal proceedings against the judgment which constitutes the primary debt and that appeal is an appeal as of right, then the court will be hesitant to proceed to sequestrate and will, in the usual course of events, adjourn the petition until after the appeal decision has been made known: Glentham Proprietary Limited v McPhee [2007] FMCA 1939 and the cases therein cited, in particular, Ahern v DCOT (1987) 76 ALR 137.
On the basis of the wording of the notice of opposition, it would appear that the court should follow these cases and adjourn the matter. Particularly as the appeal referred to is set down for hearing in the New South Wales Court of Appeal on 21 February 2014. However, things are not quite as they appear.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Australian Executor Trustees Limited v Dimitrovski and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2013] FCCA 2213
Decision Date: 9 December 2013

CaseChat Overview and Summary

Australian Executor Trustees Limited (AET) as trustee of the Estate of the late Mr. Dimitrovski (the deceased) brought proceedings in the Supreme Court of Victoria against the deceased's widow, Mrs. Dimitrovski, and the deceased's son, Mr. Dimitrovski. The dispute concerned the interpretation of the deceased's will, specifically whether a property held on trust by AET for the benefit of the widow was to be included in the calculation of the widow's entitlement to a share of the deceased's residuary estate. AET sought directions from the court regarding the proper administration of the estate.

The primary legal issue before the court was whether the deceased's will intended for the value of the property, which was subject to a life interest in favour of the widow, to be included when determining the widow's proportionate share of the residuary estate. This required the court to construe the relevant clauses of the will to ascertain the deceased's intention regarding the calculation of the widow's entitlement.

Judge Raphael reasoned that the will clearly distinguished between the deceased's "net residuary estate" and the "net value of the estate" for the purposes of calculating the widow's entitlement. The will stipulated that the widow was to receive a specified proportion of the "net residuary estate". The court found that the property held on trust for the widow's benefit, while part of the deceased's overall estate, was not part of the "net residuary estate" as defined by the will for the purpose of calculating the widow's share. The court applied principles of testamentary construction, emphasising the importance of giving effect to the plain meaning of the words used in the will, and considering the context of the entire document.

The court ordered that the value of the property held on trust for the widow was not to be included in the calculation of her share of the net residuary estate.

Orders