Bailey v Boensch - [2020] NSWSC 1391

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Bailey v Boensch [2020] NSWSC 1391
Hearing dates: 25 September 2020
Date of orders: 25 September 2020
Decision date: 25 September 2020
Jurisdiction: Equity
Before: Parker J
Decision:
See at [67]-[68]

Catchwords:
CIVIL PROCEDURE — discontinuance of proceedings — leave of court — claim by bankruptcy trustees against a bankrupt — where real property held on trust by the bankrupt allegedly passed to the bankruptcy trustees by reason of right of indemnity out of assets of trust — bankruptcy trustees’ appointment challenged in unresolved proceedings in Federal Court — defendant self-represented and not entitled to recover costs of work on proceedings — priority costs order already made — application refused

Legislation Cited:
Bankruptcy Act 1966 (Cth), ss 58, 90, 120, 121
Real Property Act 1900 (NSW), ss 74M, 74O, 74P, 90, 122, 123

Cases Cited:
Boensch v Pascoe (2019) 94 ALJR 112
Coshott v Crouch [2018] NSWSC 853
Kyriackou v Shield Mercantile Pty Ltd (No 2) [2004] FCA 1338
Macedonian Orthodox Community Church St PetkaInc v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66
Wickham Hill Investment Pty Ltd v Ding [2019] NSWSC 631

Category: Procedural and other rulings
Parties: Liam Thomas Bailey and Christopher John Palmer as Trustees of the property of Franz Boensch, a bankrupt (Plaintiffs)
Franz Boensch (Defendant)
Representation:
Counsel:
J Treherne (Plaintiffs)

Solicitors:
Daniela Fazio Lawyers (Plaintiffs)
In person:
F Boensch (Defendant)

File Number(s): 2020/87640
Publication restriction: Nil

Judgment

On 25 September I refused an application by the plaintiffs to discontinue these proceedings. I now publish my reasons for doing so.
The defendant, Franz Boensch, is a bankrupt. He was made bankrupt by order of the Federal Circuit Court on 12 December 2019. The plaintiffs, Liam Thomas Bailey and Christopher John Palmer, are his trustees in bankruptcy. I will refer to them as “the Trustees”.
The proceedings arise out of the Trustees’ decision to lodge a caveat over a property at Victoria Road, Rydalmere. Mr Boensch is the registered proprietor of the property. It is subject to a registered mortgage in favour of the Australia & New Zealand Banking Group Limited (“ANZ”). There are also two prior caveats recorded on the title from persons claiming to be secured creditors.
The Trustees claim that, on Mr Boensch’s bankruptcy, his ownership of the Rydalmere property (subject to ANZ’s registered mortgage and any other prior security interests in the property) vested in them pursuant to the Bankruptcy Act 1966 (Cth) (“BA”), s 58. They also contend that they have a statutory entitlement to have the property registered in their names.
The Trustees’ claim is disputed by Mr Boensch. He says that he holds the property as trustee under a trust for the benefit of his family (referred to in the evidence as the “Boensch Trust”).
The trust deed for the Trust is dated March 2004, but purports to confirm an earlier memorandum of trust…

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.

Continue reading Bailey v Boensch

Details

AGLC: Bailey v Boensch [2020] NSWSC 1391
Case: [2020] NSWSC 1391
Decision Date: 25 September 2020

CaseChat Overview and Summary

The matter of Bailey v Boensch involved the bankruptcy trustees of a deceased individual who sought to recover a property from the defendant, Boensch, who had held the property on trust. The trustees claimed that the property had passed to them by right of indemnity from the trust assets. Boensch, who was self-represented in the matter, challenged the trustees' appointment in unresolved proceedings in the Federal Court. The trustees applied for leave to discontinue their proceedings in the Supreme Court, which Boensch opposed. The trustees argued that Boensch was not entitled to recover costs of work on the proceedings as he was self-represented, and a priority costs order had already been made.

The central legal issue before the court was whether the bankruptcy trustees were entitled to discontinue their proceedings without the leave of the court, given that Boensch had not yet been formally served with the claim. The court had to determine whether the application for discontinuance was in the interests of justice and whether Boensch, being self-represented, was entitled to recover costs. Additionally, the court needed to consider the implications of the priority costs order on the recovery of costs by Boensch.

In dismissing the application for leave to discontinue, the court held that it was not in the interests of justice to allow the proceedings to be discontinued without the leave of the court, as Boensch had not yet been formally served. The court also determined that Boensch, being self-represented, was not entitled to recover costs of work on the proceedings. The existence of a priority costs order further precluded Boensch from recovering costs. Consequently, the application for leave to discontinue was refused, and the proceedings continued as they were.

Orders