Cant (Trustee), in the matter of Zienedin (Bankrupt) v Zienedin
[2025] FedCFamC2G 76
•24 January 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Cant (Trustee), in the matter of Zienedin (Bankrupt) v Zienedin [2025] FedCFamC2G 76
File number(s): MLG 435 of 2024 Judgment of: JUDGE J YOUNG Date of judgment: 24 January 2025 Catchwords: BANKRUPTCY – application for possession of property – applicant is trustee of the bankrupt estate of the respondent – applicant seeks vacant possession of the property – application proceeded on an undefended basis – orders for the respondent bankrupt to vacate the property – warrant of possession of property issued. Legislation: Bankruptcy Act 1966 (Cth) ss 30, 58, 77(1), 116, 134(1)(k)
Bankruptcy Regulations 2021(Cth) reg 102(1)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 6.14(1), 6.14(2), 13.06(1)(e)
Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 53.08
Cases cited: Allesch v Maunz (2000) 203 CLR 172
Coshott v Prentice (2014) 221 FCR 450
Horne (as trustee of the bankrupt estate of Sekulovksi) v Sekulovski [2009] FCA 1164
Ruhe (Trustee) v Australian Securities and Investments Commission [2022] FCA 354
Division: Division 2 General Federal Law Number of paragraphs: 45 Date of hearing: 23 January 2025 Place: Melbourne Counsel for the Applicant: Ms Umbers Solicitor for the Applicant: White Cleland Solicitor for the Respondent: Did not participate ORDERS
MLG 435 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF FOUIZIEH ZIENEDIN, BANKRUPT
BETWEEN: ANTHONY ROBERT CANT AS TRUSTEE OF THE BANKRUPT ESTATE OF FOUIZIEH ZIENEDIN
Applicant
AND: FOUIZIEH ZIENEDIN
Respondent
ORDER MADE BY:
JUDGE J YOUNG
DATE OF ORDER:
23 JANUARY 2025
THE COURT DECLARES THAT:
1.The Applicant, in his capacity as Trustee of the Bankrupt Estate of the Respondent, is the beneficial owner of the whole of that piece of property comprised in Certificate of Title Volume X Folio X, being the land described in Lot 1 on Plan of Subdivision X and known as Unit X, XX S Road, F Locality, in the State of Victoria XX (the Property).
THE COURT ORDERS THAT:
2.The Respondent and the Occupier of the Property must by 31 March 2025:
(a)vacate the Property; and
(b)provide vacant possession of the Property to the Applicant.
3.The Respondent and the Occupier of the Property must by 31 March 2025:
(a)deliver all keys for all buildings and improvements on the Property to the Applicant’s solicitor; and
(b)remove from the Property all vehicles, chattels, personal property and rubbish which has not vested in the Applicant (Personal Property).
4.In the event the Respondent and the Occupier of the Property fail to comply with order 3, the Applicant is empowered to remove and dispose of the Personal Property on the Property as he sees fit.
5.The costs of removal and disposal of any Personal Property by the Applicant pursuant to order 4 be paid from the bankrupt estate of the Respondent.
6.A warrant of possession be issued forthwith substantially in the form of Annexure A to this order, such warrant to lie in the Registry and not to be acted upon unless the Applicant files an affidavit after 31 March 2025 deposing that:
(a)the Respondent and the Occupier have not complied with all of Order 2; and
(b)the Applicant does not have possession of the Property.
7.The affidavit referred to in order 6 may be made by the Applicant’s solicitors.
8.On the Applicant or the Sheriff taking possession of the Property, the Respondent and the Occupier of the Property (as well as any of their servants and agents) be restrained from:
(a)entering or remaining on the Property;
(b)going within 30 metres of the Property; and
(c)hindering the sale of the Property by the Applicant.
9.The Applicant have the sole conduct of the sale of the Property and be authorised to:
(a)instruct an agent and/or auctioneer for that purpose;
(b)decide whether the Property is to be sold by public auction or by private treaty; and
(c)decide whether or not to set a reserve price for any auction of the Property, and if set, at what price.
10.The Respondent do all things and sign all documents as may be necessary (if any) to effect a sale of the Property within such time as is nominated by the Applicant, such documents to be provided and/or prepared by the Applicant’s lawyer and/or the lawyer for the purchaser(s), as the case requires.
11.Pursuant to s 134(1)(k) of the Bankruptcy Act 1966 (Cth), in default of compliance with order 10 herein, should the Respondent not do all things or sign such documents within such time as may be reasonably required by the Applicant, upon expiry of the period so nominated, the Applicant is authorised and empowered forthwith to do all things and sign all documents on behalf of the Respondent required to effect a sale of the Property.
12.Pursuant to r 6.14(1) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Rules), personal service of this order be dispensed with.
13.Pursuant to r 6.14(2) of the Rules and reg 102(1) of the Bankruptcy Regulations 2021, the Applicant forthwith serve a sealed copy of these Orders, together with a copy of r 17.05 of the Rules, by:
(a)delivering in envelopes addressed to “Fouizieh Zienedin” and “The Occupier” to the Property and leaving such envelopes at the Property; and
(b)delivering in an envelope addressed to “Fouizieh Zienedin” at XX Y Court, F Locality, Victoria.
14.Pursuant to r 6.14(3) of the Rules, service of this order is taken to have been effected by delivery of a sealed copy in the manner provided by order 13 herein.
15.The net proceeds of sale of the Property, after payment of what shall be due to any encumbrancer or encumbrances according to their priorities and of all other proper costs, charges and expenses of the sale, be paid to the Applicant.
16.The Applicant’s costs of this application are proper costs of the bankrupt estate of Fouizieh Zienedin and be paid in priority in accordance with s 109 of the Bankruptcy Act 1966 (Cth) from the Property of the bankrupt estate of the Respondent.
17.Liberty to apply on three (3) days’ notice.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
ANNEXURE A
Warrant of Possession
No. MLG 435 of 2024
Federal Circuit and Family Court of Australia (Division 2)
Registry: Melbourne (General Federal Law)
Rule 53.08 Supreme Court (General Civil Procedure) Rules 2015 (Vic)
Form 53BIN THE MATTER OF THE BANKRUPT ESTATE OF FOUIZIEH ZIENEDIN
ANTHONY ROBERT CANT (AS TRUSTEE OF THE BANKRUPT OF FOUIZIEH ZIENEDIN)
ApplicantFOUIZIEH ZIENEDIN
RespondentTO THE SHERIFF:
In respect of the order dated 23 January 2025 by which it was adjudged that the Applicant recover possession of the land described in the schedule, enter the land and cause the Applicant to have possession of it, and indorse on the warrant immediately after you have performed all your obligations under it a statement of the date, time and place at which you have executed or attempted to execute the warrant and the results of the execution and send a copy of the statement to the Applicant.
SCHEDULE
Unit X, XX S Road, F Locality, Victoria XX being the whole of the property contained in certificate of title Volume XX Folio XX.
Issued: 23 January 2025
By the Court
REGISTRAR
Issued at the request of the Applicant.
The last known address of the Respondent is Unit X, XX S Road, F Locality, Victoria XX.REASONS FOR JUDGMENT
JUDGE J YOUNG
INTRODUCTION
Before the Court is an Application by the trustee of the bankrupt estate of Fouizieh Zienedin (Bankrupt Estate) pursuant to ss 30(5) and 77(1) of the Bankruptcy Act 1966 (Cth) (Act) filed on 28 February 2024. The trustee, Mr Anthony Robert Cant (Trustee), seeks final orders declaring that the Trustee of the Bankrupt Estate is the beneficial owner of the whole of the piece of property known as Unit X, XX S Road, F Locality, VIC (Property).
The Trustee further seeks final orders requiring that the respondent, Ms Fouizieh Zienedin (Ms Zienedin) deliver vacant possession of the Property and that it be subsequently sold. The Trustee seeks complementary orders which give the Trustee sole conduct of the sale and authorisation to instruct an agent or auctioneer in addition to empowering the Trustee to sign all documents and do all things on behalf of Ms Zienedin to give effect to sale.
RELEVANT BACKGROUND
On 26 May 2015, Registrar Burns pronounced an order for sequestration against the estate of Ms Zienedin following Ms Zienedin’s failure to satisfy a judgment debt owed to the petitioning creditor, White Cleland Pty Ltd (Creditor). On that same date, the Trustee was appointed trustee of the Bankrupt Estate pursuant to s 58 of the Act.
The judgment debt, the subject of the Bankruptcy Notice which prompted the bankruptcy proceedings, arose as a result of the Creditor acting on behalf of Ms Zienedin between April 2009 and January 2012 in relation to the lodgement of a caveat on the Property of which Ms Zienedin was the registered proprietor.
Attempts to communicate with the Bankrupt prior to the filing of the Application
On 28 May 2015, the Trustee sent correspondence, which included a blank Bankruptcy Form (Statement of Affairs) for completion, addressed to Ms Zienedin to the Property by registered post which notified her of the bankruptcy. This correspondence was returned and marked with “Return to Sender” on 17 June 2015.
In or around December 2015, Perpetual Trustees Victoria Ltd, the mortgagee of the Property (the Mortgagee), advised the Trustee that it had commenced proceedings for possession of the Property, of which the Trustee informed he had no objection to.
In or around March 2016, the Mortgagee and the Creditor had difficulties effecting service of the Writ of possession on Ms Zienedin.
On 1 June 2016, as a result of a transmission application, the Trustee became a registered proprietor of the Property.
In or around August 2016, the Trustee began making his own enquiries as to potential addresses of Ms Zienedin.
In or around July 2016, the son of Ms Zienedin, Mr Richard Seagal (Mr Seagal) contacted the Trustee. Between July 2017 and June 2020, the Trustee’s office corresponded with Mr Seagal regarding a potential annulment to Ms Zienedin’s bankruptcy. No application for annulment was provided by Ms Zienedin or Mr Seagal.
Between 2017 and 2024 the Trustee has made a number of written requests to Ms Zienedin and the Occupier of the Property, requesting either co-operation in the sale of the Property or that they provide vacant possession of the Property, to which the Trustee has received no response. These letters were sent to the Property and addressed to Ms Zienedin on the following dates:
(1)letter from Romanis Cant to Ms Zienedin at the Property dated 12 April 2017;
(2)letter from Romanis Cant to Ms Zienedin dated 17 September 2018; and
(3)letter from Romanis Cant to Ms Zienedin dated 17 June 2020.
In or around 3 April 2020, in response to the pandemic, the Trustee received a direction from the Inspector General which encouraged trustees to “avoid evicting parties from properties”.
In 2023, the Trustee resumed his enquiries, including attempting to locate alternative addresses and sending letters to the Property addressed to “The Occupier”, seeking their co-operation. The Trustee did not receive a response to these letters.
Through the Trustee’s enquiries, it was determined that Ms Zienedin may be contactable at an alternative address. On 29 January 2024, by sworn statement, process server, Ms Helen Steele, deposed to attempting service at that alternative address on 26 January 2024. There she interviewed an adult female of Anglo-Saxon descent who stated that she had been living at the property for ten years and that Ms Zienedin was the previous occupant.
The Property
On 2 June 2015, the Trustee instructed White Cleland Pty Ltd to lodge a further caveat over the Property which is encumbered by a mortgage registered in favour of Perpetual Trustees Victoria Ltd (Mortgage). The most recent statement received in respect of the Mortgage details that as at 4 January 2024 the amount outstanding is $155,894.94.
The Trustee obtained a valuation of the Property dated 1 October 2015 which estimates the value of the Property at that date as between $295,000 to $335,000. The Trustee further obtained a kerbside valuation of the Property as at 29 January 2024 which estimates the value of the Property at that date as between $500,000 to $550,000. As a result, the Trustee contends that Ms Zienedin’s interest in the Property is between $344,105.06 and $394,105.06 less the costs of sale or transfer of the Property.
APPLICATION AND EVIDENCE BEFORE THE COURT
Procedural history
The Trustee filed the Application on 28 February 2024 seeking orders pursuant to ss 30(5) and 77(1) of the Act. The Application was accompanied by a Genuine Steps Statement and a number of affidavits of the Trustee.
On 15 July 2024, the Court ordered that the Trustee serve a copy of the Application, the Genuine Steps Statement, the supporting affidavit of the Trustee, the affidavit of Ms Danielle McCredden all filed on the 28 February 2024, together with a sealed copy of the orders on Ms Zienedin (July Orders). The July Orders required the Trustee to effect service by sending the abovementioned documents by pre-paid post to Ms Zienedin at the Property and by handing the documents to any person apparently over the age of sixteen years or, if this was not possible, by leaving the documents in the letterbox or affixing them to the front door in a sealed envelope and addressed to Ms Zienedin at the Property.
There are a number of affidavits of service that have been provided to the Court evidencing that service has been effected pursuant to the July Orders.
On 22 August 2024, the Court made orders requiring Ms Zienedin to file a Notice of Appearance, Response and an affidavit by 19 September 2024. In those same orders, the Trustee was ordered to serve a sealed copy of the orders on Ms Zienedin forthwith (August Orders).
The August Orders provided a notation that stipulated if Ms Zienedin did not comply and did not appear at the final hearing, the Court may determine and grant the relief sought in the absence of Ms Zienedin.
The evidence before the Court is that service was effected in accordance with the August Orders. Ms Zienedin did not file any material in accordance with the August Orders.
Attempts to communicate with the Bankrupt following the filing of the Application
On 23 April 2024, the office of the Trustee wrote to Australian Federal Police (AFP) requesting records that pertained to Ms Zienedin’s exiting and entering Australia in the last five years. As a result the AFP imposed a border alert preventing Ms Zienedin from leaving Australia which would expire on 29 October 2024.
On 10 October 2024, Mr Michael Augustine, of the office of the Trustee (Mr Augustine) was contacted by the AFP via telephone with a notification that Ms Zienedin had a flight scheduled to leave Australia at 10.00pm that evening. Mr Augustine informed the AFP that Ms Zienedin was not permitted to travel overseas and conveyed that Ms Zienedin was required to speak with his office in relation to the matter. The Trustee did not hear from Ms Zienedin or anyone else on her behalf.
On 25 October 2024, the Trustee wrote to Ms Zienedin at the Property inviting her to call the office of the Trustee and to complete and return the Statement of Affairs which was enclosed. There was no response.
On 28 October 2024, Ms Jessica Vu, of the office of the Trustee (Ms Vu), attempted to telephone Mr Seagal, however Mr Seagal did not answer. Ms Vu left a message requesting that he contact the Trustee urgently.
On 7 November 2024, Ms Vu received a telephone call from Mr Nedal Alyousef (Mr Alyousef), who identified himself as another son of Ms Zienedin and conveyed that he had been present with Ms Zienedin at the time she was prevented from departing Australia on 10 October 2024. Mr Alyousef agreed to attend the office of the Trustee to engage in a meeting with Ms Vu and Mr Manuel Hanna (Mr Hanna), a Chartered Accountant and Registered Trustee in Bankruptcy to discuss the bankruptcy administration.
On 8 November 2024, prior to the scheduled meeting, Ms Vu sent an email to Mr Alyousef attaching copies of all letters sent to Ms Zienedin since May of 2015. Mr Alyousef attended the meeting with Ms Vu and Mr Hanna where he was informed of the history of the matter and he conveyed that he was Ms Zienedin’s Power of Attorney. During the meeting, Mr Alyousef was encouraged to seek legal advice as to Ms Zienedin’s rights and obligations given the Application presently before the Court and the impending hearing listed for 12 December 2024 (as was listed at that time).
On 10 November 2024, Ms Vu received an email from Mr Alyousef on behalf of Ms Zienedin which attached a completed Statement of Affairs in addition to a copy of the Power of Attorney. The Statement of Affairs disclosed Ms Zienedin’s residential address as being XX Y Court, F Locality, Victoria (Residential Address).
On 20 November 2024, the Trustee’s solicitor forwarded correspondence to the newly obtained Residential Address and copied Mr Alyousef by email to <[email protected]> (Mr Alyousef’s email address). The correspondence included historical background relating to the proceedings, copies of Court documentation and confirmed the matter was listed for hearing.
On 25 November 2024, Mr Alyousef contacted Ms Vu via telephone and advised that he had spoken with his solicitor and was agreeable to arranging a meeting with Ms Zienedin and an interpreter. On 26 November 2024, Ms Vu had a telephone conversation with Mr Alyousef confirming that the meeting would be held on 28 November 2024.
On 28 November 2024, a meeting was held at the Residential Address with Mr Hanna, Ms Zienedin, Mr Alyousef and an Arabic interpreter. During this meeting both Mr Alyousef and Ms Zienedin indicated that they were prepared to consent to the orders being sought and a draft copy was provided to Ms Zienedin.
On the following occasions, the Trustee attempted to contact Mr Alyousef and Ms Zienedin to confirm that the matter had been listed for hearing on 23 January 2025:
(1)on 5 December 2024, the Trustee’s solicitor forwarded the Court’s notice of listing to the Residential Address and copied in Mr Alyousef’s email address;
(2)on 5 December 2024, the Trustee’s solicitor forwarded correspondence to the Occupier of the Property, this correspondence included the orders sought and noted that the Occupier should seek legal advice; and
(3)on 19 December2024, the Trustee sent further correspondence to Mr Alyousef’s email address and Ms Zienedin advising of the hearing and confirming that the Trustee would be seeking vacant possession of the Property, enclosing a further copy of the proposed orders that would be sought.
The Hearing
The Application came before me for hearing on 23 January 2025, with Ms Umbers of Counsel appearing on behalf of the Trustee and there being no appearance by or on behalf of Ms Zienedin.
The Trustee relied on the following:
(a)affidavit of the Trustee, Anthony Robert Cant filed 28 February 2024 (First Cant Affidavit);
(b)affidavit of Danielle McCredden filed 28 February 2024 (McCredden Affidavit);
(c)affidavit of the Trustee, Anthony Robert Cant filed 11 July 2024 (Second Cant Affidavit);
(d)affidavit of the Trustee, Anthony Robert Cant filed 10 January 2025 (Third Cant Affidavit); and
(e)outline of submissions filed 23 October 2024
The Respondent’s non-participation and proceeding in her absence
As noted, Ms Zienedin did not file a Response to the Application nor has she filed any other material and did not attend the hearing before me on 23 January 2025.
The matter proceeded in Ms Zienedin’s absence in default of her appearance: r 13.06(1)(e) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules). With reference to the substantial service and other material before the Court, I am satisfied that Ms Zienedin was on notice of the Application and the hearing, including the relisted hearing date of 23 January 2025 and has been afforded an opportunity to be heard. A court cannot force a party to take advantage of that opportunity: Allesch v Maunz (2000) 203 CLR 172, [38]-[40].
LEGAL PRINCIPLES
The Trustee relies upon two different provisions of the Act, namely, ss 30(5) and 77(1) as the sources of the Court’s power to make an order that the respondent vacate the Property and give possession of the Property to the Trustee. Those provisions of the Act are as follows:
30 General powers of Courts in bankruptcy
(1) The Court:
(a)has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and
(b)may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.
77 Duties of bankrupt as to discovery etc. of property
(1)A bankrupt shall, unless excused by the trustee or prevented by illness or other sufficient cause:
(a) forthwith after becoming a bankrupt, give to the trustee:
(i)all books (including books of an associated entity of the bankrupt) that are in the possession of the bankrupt and relate to any of his or her examinable affairs; and
(ii)any passport or document issued for the purposes of travel held by the bankrupt; and
(b) attend the trustee whenever the trustee reasonably requires; and
(ba)give such information about any of the bankrupt’s conduct and examinable affairs as the trustee requires; and
(bb) as soon as practicable after the later of the following times:
(i)the time the bankrupt’s statement of affairs was accepted under subsection 57B(1);
(ii) the time the bankrupt became bankrupt;
advise the trustee of any material change that occurred between the time the statement was filed and the later of the times mentioned in subparagraph (i) or (ii); and
(c) attend a meeting of creditors whenever the trustee requires; and
(d)at each meeting of creditors at which the bankrupt is present, give such information about any of the bankrupt’s conduct and examinable affairs as the meeting requires; and
(e)execute such instruments and generally do all such acts and things in relation to his or her property and its realization as are required by this Act or by the trustee or as are ordered by the Court upon the application of the trustee; and
(f)disclose to the trustee, as soon as practicable, property that is acquired by him or her, or devolves on him or her, before his or her property and its realization as are required by the Act or by the trustee or as are ordered by the Court upon the application of the trustee; and
(g)aid to the utmost of his or her power in the administration of his or her estate.
In Coshott v Prentice (2014) 221 FCR 450 at [94] (Coshott) the Court held that s. 30 of the Act:
provide[s] sufficient power to make orders against a bankrupt for the vacation of property, issuing a warrant of possession and for the sale of property in circumstances where the bankrupt is not complying with his or her obligations under the Act
In Ruhe (Trustee) v Australian Securities and Investments Commission [2022] FCA 354 (Ruhe) O’Callaghan J held at [12]–[14]
Section 30(5)(a) provides that where a bankrupt “has failed to comply with an order or direction of a Registrar, or with a direction or requirement of … [a] trustee, under this Act” the court may “order the person who has failed to comply with the order, direction, requirement or request … to comply with it …”
The cases make it clear that the power to make orders under s 30(1)(b) of the Act must be exercised for the purposes of carrying out or giving effect to the Act in the particular case. Those purposes are to provide for the appropriation and equitable distribution of the assets of the insolvent debtor.
Further, the cases make clear that the provision is not to be construed narrowly. On the contrary, it is a facultative provision giving the court full power (within obvious limits of jurisdiction) to make such orders as it considers should be made to carry out and give effect to the Act. Accordingly, the section has been held to provide sufficient power to make orders against a bankrupt for the vacation of property, issuing a warrant of possession and for the sale of property in circumstances where the bankrupt does not comply with their obligations under the Act.
In Horne (as trustee of the bankrupt estate of Sekulovksi) v Sekulovski [2009] FCA 1164 at [8] (Horne) Tracey J held:
It is plainly necessary that the Applicant be in a position to provide any purchaser of the property with vacant possession in order to facilitate a sale, and it is also necessary, in order to achieve that end, that the property be placed in such a condition that it may be attractive to a potential purchaser. The Respondents, despite having been given the opportunity to do so, have prevaricated and have not responded to requests that they vacate the premises. Accordingly, in my view, it is appropriate that the orders sought in the application should be made.
CONSIDERATION
I am satisfied that the Court has power to make the orders sought: ss 30(5) and 77(1); Coshott, Ruhe; Horne. Further, I am satisfied that, in all the circumstances, it is appropriate to make the orders sought. Ms Zienedin has, over a significant period of time, failed to comply with her obligations under the Act. In addition, there is no evidence before the Court which suggests that the Trustee has excused Ms Zienedin or that Ms Zienedin has other sufficient cause as provided for in s 77 of the Act.
The Trustee seeks certain ancillary orders which I also consider are appropriate to make.
The Trustee also seeks a declaration that pursuant to s 58(1)(a) and s 116 of the Act, that he, in his capacity as Trustee of the Bankrupt Estate of Ms Zienedin, is the beneficial owner of the Property. I consider such relief to be appropriate and propose to make the declaration sought.
CONCLUSION
Accordingly, I make the declaration and orders set out at the commencement of this judgment.
I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of Judge J Young. Associate:
Dated: 24 January 2025
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