Bartrop v Nilant - [2003] FMCA 23

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BARTROP v NILANT & ANOR

[2003] FMCA 23

BANKRUPTCY – Trustees refusal to acknowledge proprietary rights alleged by tenant in common of bankrupt estate – not subject to mortgage – guarantee – whether surety or principal debtor– whether equitable exoneration applies – presumption of advancement – rebuttal by evidence of contrary intention or agreement – declaration of trustee as sole beneficial owner of property – no basis to review trustees decision pursuant to s.178 of the Bankruptcy Act – transfer by deceased declared void pursuant to s.120 of Bankruptcy Act.

Bankruptcy Act 1966, ss.120, 178

Phillip Morris v Adam P Brown Male Fashions Pty Ltd

Marley Ex Parte (1976) 1 WLR 952
Parsons v McBain (2001) 109 FCR 120
Wood v Wood (1956) VLR 478
Conlan v Registrar of Titles (2001) 24 WAR 299
Napier v Public Trustee (1980) 32 ALR 153
Nelson v Nelson (1995) 184 CLR 538
Blinkco v Blinkco (1964) 5 FLR 40

Applicant:

MARIANNE ELIZABETH BARTROP

Respondent:

CHARLES PHILLIPE LOUIS NILANT and OREN ZOHAR

File No:

WZ 103 of 2002

Delivered on:

7 February 2003

Delivered at:

Perth

Hearing Dates:

28, 29 and 31 October 2002

Judgment of:

McInnis FM

REPRESENTATION

Solicitor for the Applicant:

Mr A Atkinson

Solicitors for the Applicant:

Solomon Brothers

Counsel for the Respondent:

Mr A Aristei

Solicitors for the Respondent:

Carles Solicitors

ORDERS

The Application filed on 21 May 2002 is dismissed.
That the land at 1A Alston Avenue, Como, being the land comprised in certificate of title volume 2104 folio 833, (the land) be sold by private treaty or, alternatively, by public auction free from the encumbrances if any of such of the encumbrances as shall consent to the sale and subject to the encumbrances of them as shall not consent.
The land be sold subject to the Law Society of Western Australia's General Conditions for the sale of land.
The reserve price for any sale or auction of the land be set at a price to be fixed by the real estate agent or auctioneer appointed by the respondents.
The respondents shall have the conduct of the sale and be authorised to instruct a real estate and/or auctioneer for that purpose.
The remuneration of any auctioneer or real estate agent be fixed in accordance with the scale of charges of the Real Estate Institute of Western Australia Incorporated.
The applicant has liberty to make an offer and/or bid at the sale or auction of the land.
The applicant shall use her best endeavours to assist the respondents to conduct the sale or auction of the land in a timely and efficient manner for a reasonable price.
The applicant shall deliver up possession of the land to the respondents or their servants or agents no less than 14 days prior to the settlement of the sale of the land.
The net proceeds of sale or auction after payment of what shall be due to any encumbrance or encumbrances according to their priorities and of…

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.

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Details

Case: [2003] FMCA 23
Decision Date: 7 February 2003

CaseChat Overview and Summary

The case of Bartrop v Nilant involves a dispute over the ownership and sale of a property located at 1A Alston Avenue, Como, with the parties being the trustee of a bankrupt estate, Nilant, and the applicant, Bartrop. The crux of the dispute lies in the validity of a transfer of a half-interest in the property from the bankrupt, Anthony William Bartrop, to Bartrop, which Nilant claims is void under the Bankruptcy Act 1966. The matter was heard in the Federal Court of Australia.

The primary legal issues addressed by the court included the validity of the property transfer, the determination of the rightful ownership of the property, and the appropriate manner in which the property should be sold. The court was tasked with deciding whether the transfer of the property interest was valid and, if not, what the implications were for the sale of the property. Additionally, the court had to address the issue of costs associated with the proceedings and the potential for indemnity costs.

In its reasoning, the court found that the transfer of the property interest was void against the trustee of the bankrupt estate under section 120 of the Bankruptcy Act 1966, as it was made during the period of bankruptcy and without the consent of the trustee. Consequently, the court declared that Nilant, as the trustee, is the sole beneficial owner of the property. The court also outlined detailed instructions for the sale of the property, including the method of sale, the reserve price, and the distribution of the proceeds. The court ordered that the property be sold by private treaty or auction, subject to certain conditions, and that the net proceeds, after costs, be paid to Nilant. Furthermore, the court addressed the issue of costs, directing that they be taxed in default of agreement and specifying a timeline for any applications for indemnity costs.

The court issued several orders, including the dismissal of Bartrop's application, the declaration of Nilant's sole beneficial ownership of the property, detailed instructions for the sale of the property, and provisions for the distribution of sale proceeds and costs. The court also set out a timeline for the submission of indemnity cost applications and directed that certain costs be paid by Bartrop.

Orders

Orders of the court

The Application filed on 21 May 2002 is dismissed.

That the land at 1A Alston Avenue, Como, being the land comprised in certificate of title volume 2104 folio 833, (the land) be sold by private treaty or, alternatively, by public auction free from the encumbrances if any of such of the encumbrances as shall consent to the sale and subject to the encumbrances of them as shall not consent.

The land be sold subject to the Law Society of Western Australia's General Conditions for the sale of land.

The reserve price for any sale or auction of the land be set at a price to be fixed by the real estate agent or auctioneer appointed by the respondents.

The respondents shall have the conduct of the sale and be authorised to instruct a real estate and/or auctioneer for that purpose.

The remuneration of any auctioneer or real estate agent be fixed in accordance with the scale of charges of the Real Estate Institute of Western Australia Incorporated.

The applicant has liberty to make an offer and/or bid at the sale or auction of the land.

The applicant shall use her best endeavours to assist the respondents to conduct the sale or auction of the land in a timely and efficient manner for a reasonable price.

The applicant shall deliver up possession of the land to the respondents or their servants or agents no less than 14 days prior to the settlement of the sale of the land.

10.

The net proceeds of sale or auction after payment of what shall be due to any encumbrance or encumbrances according to their priorities and of all other proper costs, charges and expenses of the sale or auction be paid to the respondents.

11.

At the time of payment of the net proceeds of sale or auction an affidavit by the auctioneer or real estate agent be filed annexing a statement certifying the result of the sale and the expenses incurred in connection therewith.

12.

It is declared that the transaction whereby the late Anthony William Bartrop, the bankrupt, transferred the land to the applicant by way of a one-half interest in the land registered in the name of the applicant on 17 November, 1998 is void against the respondents as trustee of the bankrupt estate of the bankrupt pursuant to section 120 of the Bankruptcy Act 1966 in the Act.

13.

It is further declared that the respondents are the sole beneficial owners of the land by reason of the bankrupt having advanced all of the money used for the purchase of the land.

14.

The respondent's costs, including any reserved costs of the application filed 21 May 2002 and the cross-application filed 2 July 2002 and notice of motion filed 5 December 2002 be taxed in default of agreement pursuant to order 62 of the Federal Court Rules upon the Federal Court scale with such costs to be paid on a party-party basis.

15.

The amount of $750 payable by the respondents to the National Australia Bank be part of the costs payable by the applicant to the respondents as ordered herein.

16.

The parties have liberty to apply and specifically liberty to apply is granted to the respondents in relation to the issue of indemnity costs to be sought on and from 30 August 2002.

17.

I direct that the respondent shall file and serve any submissions and affidavits in support of an application for indemnity costs on or before 14 February 2003.

18.

The applicant shall file and serve any submissions in reply and/or affidavits in response on or before 21 February 2003.

19.

Unless otherwise ordered the issue of indemnity costs shall be determined upon the written submissions and affidavits without the requirement for further oral hearing.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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