Australian Securities and Investments Commission v Oceanic Asset Management Pty Ltd, in the matter of Oceanic Asset Management Pty Ltd
[2019] FCA 1297
•16 August 2019
FEDERAL COURT OF AUSTRALIA
Australian Securities and Investments Commission v Oceanic Asset Management Pty Ltd, in the matter of Oceanic Asset Management Pty Ltd [2019] FCA 1297
File number: WAD 438 of 2015 Judge: MCKERRACHER J Date of judgment: 16 August 2019 Legislation: Bankruptcy Act 1966 (Cth) ss , 83, 102, 102(1), 104, 140
Corporations Act 2001 (Cth) ss 1323(1)(h)
Date of hearing: Determined on the papers Date of last submissions: 26 June 2019 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: No Catchwords Number of paragraphs: 20 Solicitor for the Trustee: Tottle Partners ORDERS
WAD 438 of 2015 IN THE MATTER OF OCEANIC ASSET MANAGEMENT PTY LTD (ACN 110 278 110)
BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS
COMMISSIONFirst Plaintiff
KIMBERLEY STUART WALLMAN AS TRUSTEE OF THE DECEASED ESTATES OF MR DAVID JONES AND MRS JEANETTE JONES
Second Plaintiff
AND: OCEANIC ASSET MANAGEMENT PTY LTD (ACN 110 278 110)
First Defendant
OCEANIC EQUITIES PTY LTD (ACN 122 561 522)
Second Defendant
AUSTRALIAN GLOBAL CAPITAL PTY LTD (ACN 130 826 470) (and others named in the Schedule)
Third Defendant
JUDGE:
MCKERRACHER J
DATE OF ORDER:
16 AUGUST 2019
THE COURT ORDERS THAT:
1.Kimberley Stuart Wallman (Trustee) as trustee of the deceased estates of David Jones and Jeanette Jones specified in the orders made in these proceedings by Justice Barker on 24 August 2015 and 12 November 2015 (Deceased Estates) have, in addition to the powers provided for in order 6 of the orders made in these proceedings on 6 March 2019, the power to administer the Deceased Estates in accordance with the following provisions of Part VI of the Bankruptcy Act 1966 (Cth):
(a)Division 1 of Part VI; and
(b)Sections 108, 109, 143 and 145.
2.The Trustee’s costs of this application be paid from the combined assets of the Deceased Estates.
3.There be general liberty to apply by any party affected by these orders within 14 days.
4.These orders be served on the Australian Taxation Office within 5 days.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MCKERRACHER J:
BACKGROUND
By orders of this Court, the applicant (Mr Kimberley Stuart Wallman) was appointed pursuant to s 1323(1)(h) of the Corporations Act 2001 (Cth) to act as Trustee to the following deceased estates:
(a)the deceased estate of Mr David Jones, without security, of all of the property (as defined in the Corporations Act) of the deceased estate of Mr Jones (by order of Justice Barker dated 24 August 2015); and
(b)the deceased estate of Mrs Jeanette Jones, including but not limited to the interest of Mrs Jones in the property at 65 McDonald Street, Como, Western Australia being Lot 38 on Diagram 88190 (by order of Justice Barker dated 12 November 2015),
(together, the Deceased Estates).
On 31 January 2019, the Trustee filed an interlocutory application for orders:
(a)approving his remuneration, costs and disbursements for the period 18 January 2017 to 19 November 2018 incurred in the performance of his duties and the exercise of his powers as Trustee of the Deceased Estates;
(b)allowing him to declare and distribute dividends amongst the creditors of the Deceased Estates who have proved their debts;
(c)approving future remuneration, costs and disbursements; and
(d)discharging orders previously made by this Court.
On 6 March 2019, I made the orders in terms sought by the Trustee by his interlocutory application (the March Orders), including an order that the Trustee declare and distribute dividends in accordance with s 140 of the Bankruptcy Act 1966 (Cth) amongst the creditors of the Deceased Estates who have proved their debts.
By order 11 of the March Orders, I also granted liberty to any party to apply to the Court on 48 hours’ notice.
The Trustee has applied to the Court for further orders pursuant to order 11 of the March Orders, lodging a minute of proposed orders with the Court in the following terms:
1.Kimberley Stuart Wallman (Trustee) as trustee of the deceased estates of David Jones Jeanette Jones specified in the orders made in these proceedings by the Honourable Justice Barker on 24 August 2015 and 12 November 2015 (Deceased Estates) have, in addition to the powers provided for in order 6 of the orders made in these proceedings on 6 March 2019, the power to administer the Deceased Estates in accordance with the following provisions of Part VI of the [Bankruptcy Act]:
a. Division 1 of Part VI; and
b. Sections 108, 109, 143 and 145.
2.The Trustee’s costs of this application be paid from the combined assets of the Deceased Estates.
THE EVIDENCE
The Trustee relies on two affidavits in support of the relief sought in the minute:
(a)his affidavit, sworn 25 June 2019 (the Trustee’s Affidavit); and
(b)the affidavit of Ms Jessie Ann Earl, his solicitor, sworn 26 June 2019 (the Earl Affidavit).
The Earl Affidavit evidences that the Australian Securities and Investments Commission (ASIC) has been provided with notice of the Trustee’s application to the Court for further orders enabling him to finalise the administration of the Deceased Estates.
The Earl Affidavit annexes correspondence with ASIC which attached a copy of the minute and the Trustee’s Affidavit. The Earl Affidavit deposes that Litigation Counsel at ASIC confirmed receipt of that correspondence.
FURTHER ORDERS SOUGHT
Pursuant to the March Orders, by order 6, the Trustee is able to declare and distribute dividends to those creditors who have proved their debts.
Section 83 of the Bankruptcy Act provides that a creditor shall be taken not to have proved a debt until a proof of debt lodged by him or her in respect of that debt has been admitted.
Section 102 details the process that should be undertaken by a trustee in bankruptcy to adjudicate on a proof of debt. By s 102(1), the Trustee is to either:
(a)admit the proof of debt in whole;
(b)admit it in part and reject it in part;
(c)reject it in whole; or
(d)require further evidence in support of it.
The words ‘creditors of the deceased estates … who have proved their debts’ used in the March Orders require that the Trustee only pay a dividend to those creditors whose proofs of debt have been admitted. Before a proof of debt can be admitted, the Trustee is required to call for proofs of debt from the creditors of the deceased estates and adjudicate on those proofs.
On 29 March 2019, the Trustee wrote to the creditors of the Deceased Estates calling for proofs of debt.
On 7 June 2019, the Trustee received correspondence from the Australian Taxation Office (ATO) asking whether he believed he had the powers of s 102 of the Bankruptcy Act to adjudicate upon proofs of debt. That correspondence was annexed to the Trustee’s Affidavit.
At the date of deposing his affidavit, the Trustee has received ten proofs of debt from creditors of the Deceased Estates. Nine of those proofs of debt were made in respect of the deceased estate of Mr Jones. One of those proofs of debt was made in respect of both of the Deceased Estates. That proof of debt (made in respect of both Deceased Estates) is the only proof of debt that the Trustee has rejected. He has not received notice of any challenge to his decision to reject that proof of debt.
Given that:
(a)the ATO has expressly asked the Trustee to consider whether he had the power to adjudicate the proofs of debt; and
(b)the Trustee has rejected one proof of debt, as at the date of the Trustee’s Affidavit,
the Trustee considered it appropriate to apply for further orders.
CONSIDERATION
The Trustee submits that the implied powers to call for proofs of debt and adjudicate on those proofs is clear from the wording of the March Orders. However, given the importance of a power to adjudicate, the Trustee considered an express power should be sought from this Court.
I consider, given at least one proof of debt has been rejected, it is in the best interests of the creditors of the Deceased Estates to be given a mechanism through which they can appeal a decision of the Trustee in respect of a proof of debt. This mechanism can be found in s 104 of the Bankruptcy Act.
The further orders sought by the Trustee, which are set out in the minute expressly provide for:
(a)powers which will allow the Trustee to call for the proofs of debt and adjudicate on the same;
(b)a mechanism through which creditors can appeal the Trustee’s decision in respect of a proof of debt;
(c)the order of payment of debts; and
(d)the mechanism which should be followed by the Trustee in finalising the administration of the Deceased Estates.
In the circumstances, I consider the orders proposed in the minute should be made. They will clarify the scope of the Trustee’s powers to call for proofs of debt and adjudicate on those proofs. Accordingly, I make those orders.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. Associate:
Dated: 16 August 2019
SCHEDULE OF PARTIES
WAD 438 of 2015 Defendants
Fourth Defendant:
MULATO MANAGEMENT SERVICES PTY LTD (ACN 140 307 526)
Fifth Defendant:
MULATO NOMINEES PTY LTD (ACN 008 980 309)
Sixth Defendant:
RIDGEWAY HOUSE PTY LTD (ACN 125 133 806)
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