Barnden (as trustee for the Bankrupt Estate of Cooper) v Dunn

[2016] FCCA 2349

FEDERAL CIRCUIT COURT OF AUSTRALIA

BARNDEN (AS TRUSTEE FOR THE BANKRUPT ESTATE OF COOPER) v DUNN & ANOR [2016] FCCA 2349

Catchwords:
BANKRUPTCY – Sale of real property of the bankrupt’s estate – realisation of the debtor’s property – application allowed.

Legislation:

Bankruptcy Act 1966, ss.27, 30, 77.

Conveyancing Act 1919 (NSW), s.66G.
Duties Act 1997 (NSW).

Cases cited:

Coshott v Prentice (2014) 221 FCR 450

Nguyen v Pascoe [2006] FCA 719

Re Bilen; Ex parte Sistrom [1985] FCA 120

Talacko v Talacko (2010) 183 FCR 311

Applicant: ANDREW JAMES BARNDEN (AS TRUSTEE FOR THE BANKRUPT ESTATE OF AARON JOHN COOPER)

First Respondent: RACHEL LOUISE DUNN

Second Respondent: AARON JOHN COOPER

File Number: SYG 1810 of 2016

Judgment of: Judge Street

Hearing date: 8 September 2016

Date of Last Submission: 8 September 2016

Delivered at: Sydney

Delivered on: 8 September 2016

REPRESENTATION

Solicitors for the Applicant: Ms K Fernandez
Smith Leonard Fahey

No appearance by or on behalf of the Respondents

ORDERS

1. A declaration that pursuant to ss51(1) and 116 of the Bankruptcy Act 1966 (Cth) the interest held by the Second Respondent in the property situated at 18 Peterson Close, Kincumber, New South Wales, being the land more particularly described in Folio Identifier 28/263283, vests in the Applicant.

2. Pursuant to ss.27, 30(1), 31(1)(f) and 77(1) of the Bankruptcy Act 1966 (Cth):

   (a)The First Respondent and the Second Respondent give vacant possession of the property at 18 Peterson Close, Kincumber, to the Applicant for the purpose of sale of the said property;

   (b)Within 30 days of the date of this order:

   (i)The First Respondent and the Second Respondent and any other occupants vacate the said property;

   (ii)The First Respondent and/or the Second Respondent deliver up the Certificate of Title to the said property if in the possession of either;

   (iii)The First Respondent and/or the Second Respondent deliver up all keys for the said property to the Applicant; and

   (iv)The First Respondent and/or the Second Respondent remove from the said property all personal property being vehicles, rubbish, and chattels which are not vested in the Applicant;

   (c)The Applicant:

   (i)Be appointed as the trustee for sale of the said property owned by the First Respondent;

   (ii)Do everything necessary or expedient to execute all documents on behalf of the First Respondent to give effect to these orders as necessary, including the following documents:

   A.     Any agency agreement with a real estate agent for the purposes of sale of the said property;

   B.     Any contract of sale of the said property;

   C.     Any nomination form or similar documents;

   D.    Any transfer of land;

   E.     Any document required under the Duties Act 1997 (NSW)

   F.   Any notice to be issued under a contract of sale; and

   G.    Any other document contemplated or envisaged by, ancillary to or otherwise related to, any of the above documents; and

   (iii)Be authorised to engage agents / third parties to assist in the sale of the said property including but not limited to real estate agents, solicitors, and valuers;

   (d)The property at 18 Peterson Close, Kincumber be sold and upon completion of the sale, including payment of any secured interest in the said property by a mortgagee and the  discharge thereof, the net proceeds of sale be applied as follows:

   (i)To pay the costs, commissions, taxes, rates, and expenses of the transfer and sale of the said property  and of this application;

   (ii)To pay the time costs of the Applicant calculated on the hourly rates charged by the firm of Rodgers Reidy, together with any disbursements directly associated with the costs of the sale of the said property;

   (iii)To apply half of the net proceeds of sale to the Applicant for the benefit of the Second Respondent’s bankrupt estate and the other half be paid to the First Respondent.

3. Any secured creditor holding the certificate of title is directed to cooperate with the Applicant in relation to the sale of 18 Peterson Close, Kincumber, and, upon payment out of the secured interest, deliver the certificate of title and properly-executed discharge of mortgage to the purchaser as directed by the Applicant at the time of and for completion of the sale and receipt of the balance of the purchase price by the Applicant.

4. Costs of the Applicant in respect of this application be paid on a trustee basis out of proceeds of sale of the property before the distribution of the half net proceeds to the bankrupt’s estate and before payment to the First Respondent.

5. Liberty to apply on 2 days’ notice.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1810 of 2016

ANDREW JAMES BARNDEN (AS TRUSTEE FOR THE BANKRUPT ESTATE OF AARON JOHN COOPER)

Applicant

And

RACHEL LOUISE DUNN

First Respondent

AARON JOHN COOPER

Second Respondent

REASONS FOR JUDGMENT

1. This is an application within the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 (Cth) (“the Act”) for the sale of real property jointly owned by the respondents at 18 Peterson Close, Kincumber, New South Wales.

2. Whilst reference was made by the applicant in his submissions to s.66G of the Conveyancing Act 1919 (NSW), that provision has limitations and constraints as referred to by Graham J in Nguyen v Pascoe [2006] FCA 719, which do not sit neatly with the trustee’s obligations, powers, and duties under the Act.

3. It is not necessary in the present case to determine whether there is any inconsistency, although clearly, the Commonwealth provision would prevail. Further, it is not necessary in the present case to determine whether the powers under s.66G of the Conveyancing Act 1919 can or should be treated as falling within the associated jurisdiction of this Court. I am satisfied that the powers under s.30 of the Act are ample to provide for the realisation of the divisible property of the bankrupt, be it real or equitable and whether jointly owned or not, see Coshott v Prentice (2014) 221 FCR 450 at 92-93; Re Bilen; Ex parte Sistrom [1985] FCA 120 at 8; Talacko v Talacko (2010) 183 FCR 311, 321 at 18.

4. Sections 30 and 77 of the Act, when read in conjunction, empower this Court to make orders requiring appropriate steps in furtherance of the administration of the bankrupt estate, to realise the property divisible amongst the creditors. In the present case, the bankrupt’s interest in the real property is the major divisible asset in the bankrupt estate. The whole property has a kerbside valuation conducted in September 2014 of between $470,000 and $520,000.

5. There are two secured creditors in relation to the bankrupt estate with amounts owing of approximately $340,000 in total. There are also two unsecured creditors with amounts owing of approximately $32,000 in total. The ATO is a further unsecured creditor of a currently unknown amount.

6. I am satisfied that it is necessary, for the purpose of carrying out the provisions of the Act, to make the orders sought by the applicant in the present case for the realisation of the property the subject of joint ownership of the bankrupt and the first respondent.

7. I am satisfied that the first respondent was properly notified of these proceedings and was aware of the application made to the Court. The first respondent has failed to appear. The second respondent was also notified of these proceedings and has failed to appear.

8. Given that the realisation of the joint property could have been achieved on a consensual basis, it is appropriate, in the circumstances of the present case, that the applicant’s costs of this application be paid out of the net proceeds of sale on a trustee basis, from the interests of both the first respondent and the bankrupt estate in the said property.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 15 September 2016