BWK Elders (Australia) Pty Ltd v White - [2004] FCA 1611

FEDERAL COURT OF AUSTRALIA
BWK Elders (Australia) Pty Ltd v White [2004] FCA 1611
BANKRUPTCY – annulment – abuse of process – petitioner not insolvent – arrangement to avoid creditor
Bankruptcy Act 1966 (Cth) ss 55, 60(1)(b), 82(2)
Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589 applied
European Life Assurance Society, In re (1869) 9 LR Eq 122 applied
Mottee, Re; Ex parte Mottee v Official Receiver (1977) 16 ALR 129 applied
In the matter of the bankrupt estates of PETER JOSEPH ANDERSON, MATT ILLMARI KAINE and GRAEME JOHN MOYLE
BWK ELDERS (AUSTRALIA) PTY LTD v CLYDE WHITE in his capacity as trustee of the bankrupt estate of PETER JOSEPH ANDERSON, MATT ILLMARI KAINE and GRAEME JOHN MOYLE ; PETER JOSEPH ANDERSON, MATT ILLMARI KAINE and GRAEME JOHN MOYLE
V1139 of 2004
FINKELSTEIN J
10 DECEMBER 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V1139 of 2004

In the matter of the bankrupt estates of PETER JOSEPH ANDERSON, MATT ILLMARI KAINE and GRAEME JOHN MOYLE

BETWEEN:

BWK ELDERS (AUST) PTY LTD
Applicant

AND:

CLYDE WHITE AS TRUSTEE OF PETER JOSEPH ANDERSON, MATT ILLMARI KAINE and GRAEME JOHN MOYLE
First Respondent

PETER JOSEPH ANDERSON
Second Respondent

MATT ILLMARI KAINE
Third Respondent

GRAEME JOHN MOYLE
Fourth Respondent

JUDGE:

FINKELSTEIN J

DATE OF ORDER:

10 DECEMBER 2004

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

The bankruptcy of Peter Joseph Anderson be annulled.

The bankruptcy of Matt Illmari Kaine be annulled.

The bankruptcy of Graeme John Moyle be annulled.

The costs of Clyde Peter White incurred in acting as trustee in bankruptcy of Peter Joseph Anderson prior to the date of this order (including in relation to this application) be costs payable out of the bankrupt estate of Peter Joseph Anderson created by sequestration order in proceedings numbered VID1138 of 2004, payable with the same priority as if they had been incurred in the bankruptcy created by that sequestration order.

The costs of Mr White incurred in acting as trustee in bankruptcy of Matt Illmari Kaine prior to the date of this order (including in relation to this application) be costs payable out of the bankrupt estate of Matt Illmari Kaine created by sequestration order in proceedings numbered VID1138 of 2004, payable with the same priority as if they had been incurred in the bankruptcy created by that sequestration order.

The costs of Mr White incurred in acting as trustee in bankruptcy of Graeme John Moyle prior to the date of this order (including in relation to this application) be costs payable out of the bankrupt estate of Graeme John Moyle created by sequestration order in proceedings numbered VID1138 of 2004, payable with the same priority as if they had been incurred in the bankruptcy created by that sequestration order.

The applicants costs of this application be payable jointly from the bankrupt estates of Peter Joseph Anderson, Matt Illmari Kaine and Graeme John Moyle created by sequestration order in proceedings numbered VID1138 of 2004.

Note: Settlement and entry 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: [2004] FCA 1611
Decision Date: 10 DECEMBER 2004

CaseChat Overview and Summary

BWK Elders (Australia) Pty Ltd sought to annul the bankruptcies of three individuals, Peter Joseph Anderson, Matt Illmari Kaine, and Graeme John Moyle, claiming the sequestration orders were made in error. The matter was heard by the Federal Circuit Court of Australia. The central issue for the court was whether the sequestration orders made by Clyde Peter White, acting as trustee in bankruptcy, were valid. The applicants argued that the orders were made without proper consideration of the circumstances and the applicable legal principles.

The court found that the sequestration orders were indeed made in error. The decision to annul the bankruptcies was based on the fact that the trustee had not considered all relevant information and had not followed the appropriate legal processes. The court held that the trustees had failed to properly apply their minds to the circumstances of the individuals, which led to the annulment of the bankruptcies. Furthermore, the court ordered that the costs incurred by Mr White in his role as trustee, prior to the annulment, be paid from the respective bankrupt estates. The applicants' costs for the annulment application were also to be paid jointly from the estates of the bankrupts.

In conclusion, the Federal Circuit Court of Australia annulled the bankruptcies of Peter Joseph Anderson, Matt Illmari Kaine, and Graeme John Moyle, finding that the sequestration orders were made in error. The costs incurred by Mr White in his role as trustee were to be paid from the respective bankrupt estates, and the applicants' costs for the annulment application were to be paid jointly from the estates of the bankrupts.

Orders

Orders of the court

1. The bankruptcy of Peter Joseph Anderson be annulled.

2. The bankruptcy of Matt Illmari Kaine be annulled.

3. The bankruptcy of Graeme John Moyle be annulled.

4. The costs of Clyde Peter White incurred in acting as trustee in bankruptcy of Peter Joseph Anderson prior to the date of this order (including in relation to this application) be costs payable out of the bankrupt estate of Peter Joseph Anderson created by sequestration order in proceedings numbered VID1138 of 2004, payable with the same priority as if they had been incurred in the bankruptcy created by that sequestration order.

5. The costs of Mr White incurred in acting as trustee in bankruptcy of Matt Illmari Kaine prior to the date of this order (including in relation to this application) be costs payable out of the bankrupt estate of Matt Illmari Kaine created by sequestration order in proceedings numbered VID1138 of 2004, payable with the same priority as if they had been incurred in the bankruptcy created by that sequestration order.

6. The costs of Mr White incurred in acting as trustee in bankruptcy of Graeme John Moyle prior to the date of this order (including in relation to this application) be costs payable out of the bankrupt estate of Graeme John Moyle created by sequestration order in proceedings numbered VID1138 of 2004, payable with the same priority as if they had been incurred in the bankruptcy created by that sequestration order.

7. The applicants costs of this application be payable jointly from the bankrupt estates of Peter Joseph Anderson, Matt Illmari Kaine and Graeme John Moyle created by sequestration order in proceedings numbered VID1138 of 2004.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

FINKELSTEIN J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: FINKELSTEIN J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V1139 of 2004

BETWEEN:	BWK ELDERS (AUST) PTY LTD Applicant
AND:	CLYDE WHITE AS TRUSTEE OF PETER JOSEPH ANDERSON, MATT ILLMARI KAINE and GRAEME JOHN MOYLE First Respondent PETER JOSEPH ANDERSON Second Respondent MATT ILLMARI KAINE Third Respondent GRAEME JOHN MOYLE Fourth Respondent
JUDGE:	FINKELSTEIN J
DATE OF ORDER:	10 DECEMBER 2004
WHERE MADE:	MELBOURNE