Brown v CBA

[2005] FMCA 1470

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BROWN & ANOR v CBA [2005] FMCA 1470

BANKRUPTCY – Application to set aside sequestration order – bankrupt solvent – recoupment of Trustee’s costs for administration of bankrupt’s estate – sequestration order to be set aside.

Bankruptcy Act 1966 (Cth), ss.153B, 154
Federal Magistrates Court Act 1999 (Cth), s.103(1)
Federal Magistrates Court Rules 2001 (Cth), rr.20.00A(1)(c), 20.01(1)(a), 20.01(2)(a), 20.03(a)

Capsalis v Ozdemir [2005] FMCA 1163 (19 August 2005)
Ivanhoe Grammar School v Raschilla [2003] FMCA 30
Kyriackou v Shield Mercantile Pty Ltd (No 2)[2004] FCA 1338

Applicants: JEFFREY CHARLES BROWN & LOUISE ANNE ROBBINS

Respondent: COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

File Number: MLG 897 of 2005

Judgment of: Connolly FM

Hearing date: 3 October 2005

Date of Last Submission: 3 October 2005

Delivered at: Melbourne

Delivered on: 7 October 2005

REPRESENTATION

Counsel for the Applicant: Self represented

Solicitors for the Applicant: Not applicable

Counsel for the Respondent: Mr Fijalski

Solicitors for the Respondent: White Cleland Pty

Counsel for the Trustee Ms Hensman

Solicitors for the Trustee Pointon Partners

ORDERS

1. That the Sequestration Order made on the 6 September 2005 be set aside.

2. That otherwise all extant applications be dismissed.

.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 897 of 2005

JEFFREY CHARLES BROWN & LOUISE ANNE ROBBINS

Applicants

And

COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

Respondent

REASONS FOR JUDGMENT

The proceedings

1. Pursuant to the Application for Review dated 22 September 2005 the Applicant sought an order that the Sequestration Order made on

   
   

   6 September 2005 be set aside.  When the matter came on before me on 3 October 2005, the Respondent indicated that it was prepared to consent to an order to that effect.  The Trustee in Bankruptcy indicated at the hearing that he neither opposed nor consented to an order setting aside the Sequestration Order but sought an order for the payment of his costs of administration.

2. The application was supported by affidavits sworn by both applicants.  There was no material from the Respondent and the Trustee filed a short affidavit detailing the costs of administration when the matter came before me on the 3 October.

The law

1. If, on the re-hearing of a petition in which a Registrar has made a sequestration order, the sequestration order is set aside, without a further order annulling the bankruptcy, the Trustee has no means of recovering his costs and expenses (see Ivanhoe Grammar School v Raschilla [2003] FMCA 30). If, on the other hand, an order is made annulling the bankruptcy under section 153B of the Bankruptcy Act, section 154 of the Bankruptcy Act permits the Trustee to apply the property of the bankrupt in payment of the costs and expenses of the administration of the bankruptcy including the remuneration and expenses of the Trustee. The question is then raised as to when should the Court set aside the sequestration order and when should it annul the bankruptcy.

2. Section 103(1) of the Federal Magistrates Court Act 1999