Carrafa v Saxton
[2020] FCCA 218
•29 January 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CARRAFA & ANOR v SAXTON | [2020] FCCA 218 |
| Catchwords: BANKRUPTCY – Application for vacant possession of property – property vested in trustee – property occupied by the bankrupt – application granted – no matters of principle. |
| Legislation: Bankruptcy Act 1966 (Cth) Commonwealth of Australia Constitution, s.80 Charter of Human Rights and Responsibilities Act 2006 (Vic) |
| Cases cited: Red Energy Pty Limited v Saxton [2019] FCCA 86 |
| First Applicant: | MICHAEL CARRAFA |
| Second Applicant: | FABIAN KANE MICHELETTO |
| Respondent: | IVAN SAXTON |
| File Number: | MLG 2972 of 2019 |
| Judgment of: | Judge Riethmuller |
| Hearing date: | 29 January 2020 |
| Date of Last Submission: | 29 January 2020 |
| Delivered at: | Melbourne |
| Delivered on: | 29 January 2020 |
REPRESENTATION
| Solicitors for the Applicants: | SLF Lawyers |
| The Respondent appeared In Person. |
ORDERS
The respondent deliver up vacant possession of the property located at 321 Stuhrs Road, Darnum, in the State of Victoria, described in Volume 09044 Folio 730 (‘the property’) to the applicants within 90 days.
The respondent deliver up all keys and documents for all buildings and improvements on the property to the applicants within 90 days.
The respondent must remove from the property all vehicles, rubbish and chattels which have not vested in the applicants (the personal property) within 90 days.
In the event that the respondent fails to deliver up vacant possession of the property in accordance with Orders 1 to 3, a Writ of Possession shall issue forthwith.
In the event that the respondent fails to comply with Order 4, the applicants are empowered to remove and dispose of the personal property on the property, as they see fit, after the expiry of 90 days from the date of this Order.
The applicants are appointed as joint and several trustees for the sale of the property.
The applicants are empowered to do everything necessary or expedient to execute all documents on behalf of the respondent to give effect to these Orders as necessary, including the following documents:
(a)Any contract of sale;
(b)Any nomination form or similar document;
(c)Any transfer of land;
(d)Any notice to be issued under a contract of sale; and
(e)Any other document contemplated or envisaged by, ancillary to or otherwise related to, any of the above documents.
The net proceeds of sale of the property, after payment of what shall be due to any encumbrance according to their priorities, and of all other proper costs, charges and expenses of the sale, be paid to the applicants.
The applicants’ costs be paid out of the bankrupt estate of the respondent.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 2972 of 2019
| MICHAEL CARRAFA |
First Applicant
| FABIAN KANE MICHELETTO |
Second Applicant
And
| IVAN SAXTON |
Respondent
REASONS FOR JUDGMENT
(Delivered Ex Tempore)
This is an application by the trustees in bankruptcy for vacant possession of a property at 321 Stuhrs Road, Darnum in the State of Victoria, described in Volume 090444 Folio 730 (‘the property’).
The property is the property of the bankrupt, Mr Saxton. He lives there with his sons. The bankrupt is a man of mature years and he cares for one son who is under some degree of disability. The case has had a sad history. There was a dispute between the bankrupt and his electricity company which resulted in an account somewhere in the order of $14,000 owing by the bankrupt to the electricity company, at least on their version.
The bankrupt did not pay that account and judgment was obtained against him. The judgment founded a Bankruptcy Notice which was served upon him. The bankrupt did not take steps to pay the amount due. The bankrupt thereby effectively committed an act of bankruptcy as it is defined under the Bankruptcy Act 1996 (Cth). The bankrupt was made bankrupt by an order of the Registrar, however, this was reviewed and the case reheard before Judge Wilson of this Court. His Honour gave reasons for judgment that have been published dealing with the various arguments raised by the bankrupt at that time: see Red Energy Pty Limited v Saxton [2019] FCCA 86. His Honour was not persuaded that the bankrupt had established an arguable case that the debt was not due and owing and was not persuaded by any of the various other arguments that the bankrupt put forward relating to the technical issues surrounding the debt, the operation of the legislation and so forth. His Honour therefore dismissed the review application and ordered the bankrupt to pay the costs of Red Energy Proprietary Limited.
The trustees now seek to sell the property in order to pay the creditors and to meet the costs of the various proceedings in the actions to obtain judgment on the primary debt, the bankruptcy proceedings and the costs of administering the estate (which it seems are in the order of $150,000 plus interest).
The bankrupt has raised numerous technical arguments which are difficult to follow and I will touch upon them shortly. No doubt this and other interactions during the course of the proceedings have added greatly to the costs that have been incurred.
Given the circumstances of the bankrupt when the matter first came before me, I did not proceed to hear and determine it immediately but adjourned it over to today to allow the bankrupt the opportunity to put on some material. I did this because at core he appeared to be saying that he believed he had paid his electricity bill and that there really was not a debt due and owing.
Whilst the time is long past for the bankrupt to challenge the underlying debt, it seemed nonetheless appropriate to at least allow him to put on some material as if he had a very clear defence there may have been some potential remedy for him and it would have been important for me to take into account in determining whether or not he should deliver up possession of his property and the timeframe for that and whether or not he would have time to have an opportunity to pursue such claims.
I made directions that the bankrupt provide copies of the last electricity bill he had before Red Energy became his provider and the first electricity bill he had thereafter, in the thought that they would demonstrate the difference in meter readings over the whole of the period which might at least be able to be roughly compared to the charges that he was said to have incurred.
No documents of that nature have been provided for today and nor any other documents directly related to the primary debt. The arguments before me today were far more esoteric.
Issue One
The bankrupt raised questions about the right to legal practice or the right to appear of various lawyers who had been involved in the case on behalf of Red Energy. The bankrupt annexed a transcript from an older decision of the Supreme Court concerning whether or not to injunct a person who was not a lawyer from attempting to give legal advice or providing legal advice to others. In that transcript there is reference to a much older case which speaks of section 88 of the Imperial Acts Application Act 1922 (Vic). It had relevance to the right to legal practice at the time of the much older authority. The bankrupt argues that this provision still applies and governs legal practice. It seems to me that it does not and there is nothing before me to indicate that the lawyers who have been acting for Red Energy are not in fact duly admitted as they claim to be.
In any event it seems to me that even if the lawyers acting for Red Energy were not admitted it would not change the fact that Red Energy has obtained various judgments in the Court to vindicate its rights. It may have some relevance on the question of taxing of costs but that can be taken up with the person who deals with assessing the costs in the State courts to the extent its costs related to this matter.
In substance, I see no arguable case with respect to this point.
Issue Two
The second issue that the bankrupt raised was that the proceedings before me (whereby the trustees seek vacant possession of the property that has vested in them pursuant to the Bankruptcy Act, as a result of the sequestration of the bankrupt), is not a trial with a jury. Indeed, no matters in this Court are heard with a jury as this Court is established to hear matters by judge alone. The bankrupt points to section 80 of the Commonwealth of Australia Constitution which provides for trials on indictment to be heard by a judge and jury.
This is not a matter brought by way of indictment. ‘Indictment’ is the term that describes the form by which criminal proceedings can be brought for serious criminal offences. An indictment is presented to the Court and the Court hears and determines the case as alleged in the indictment. It has no relevance to proceedings before me under the Bankruptcy Act or the type that I am dealing with today, nor does it seem to me to have had any relevance to any of the other proceedings that have concerned the bankrupt and his electricity bill leading up to the bankruptcy.
Issue Three
The third matter that the bankrupt raised is that he claims that there are breaches of his human rights and that it may fall within the Charter of Human Rights and Responsibilities Act 2006 (Vic). This seems to be based upon the proposition that if he is put out of his property that will interfere with his human rights or his right to life. I do not see that proceedings to put him out of his property (so that the trustee can liquidate it for the purpose of paying the creditors, the trustee and the balance to be returned to him) in any way interferes with his human rights.
It is the usual process that follows when a person does not meet their debts. There are hundreds of thousands of people in Australia who have not been fortunate enough to come to own real property. They are not without human rights. Their human rights have not been destroyed by them not owning property. I do not see that there is any arguable point with respect to the Charter of Human Rights and Responsibilities Act.
Issue Four
The next point that the bankrupt raised was a claim that in some ways this could be characterised as a genocide within the meaning of the Criminal Code Act 1995 (Cth), relying upon the provision at Div.268.5.
I am not in any way persuaded that the trustee seeking to recover the bankrupt’s property in accordance with the Bankruptcy Act can in any sense be considered to be within the ambit of the concept of a war crime, nor within the ambit of any concept of genocide. This point seems to me to be completely irrelevant to the case before me.
Issue Five
The bankrupt in his written material raised the Code of Conduct for Marketing Retail Energy in Victoria, Essential Services Commission, January 2009. A copy of an extract from that Code was provided to me today during the oral argument which provides for (at paragraph 3.5 of the short extract I have been given), an obligation upon the retailer to give the consumer a copy of the contract or other document evidencing the contract which sets out the tariff and terms and conditions of the contract which seems to relate to the supply of electricity.
Whether this Code of Conduct as in force in 2009 had the effect that if that particular obligation under the code was breached that there would be no moneys due and owing for the supply of electricity or not, is not clear to me. Even if it did have that effect it is simply an extract from the code that I have been provided with. The respondent did not include in his affidavit or provide today documents showing the interactions that he had with the electricity provider at the relevant time in order to even establish an arguable or prima facie case that there was some basis that had not been accepted or argued before the other courts that have dealt with this matter that may lead to showing that the provider was not able to recover against him on its claim for electricity provided.
Similarly, the bankrupt raised arguments that many of the electricity bills were based upon estimates because of difficulties in the meter reader traversing the property through the locked front gate to the meter box. Again, no documents have been provided to me to show the nature of the case that was put against him, nor any of the electricity bills provided as I had requested in my earlier Orders thinking that the question of whether or not the electricity was in fact provided was the true core issue in the case. In the absence of any of these materials it is not possible for me to conclude that the respondent has a prima facie or arguable case in this regard.
Issue Six
The most complex part of the respondent’s argument concerns a claim of what he says is ‘fictitious conveyance of language’.
The bankrupt embarks upon an examination of documents coding different words by what are said to be parts of speech, with a key that he provides in his documentary material. I have read that and attempted to understand what the gist of it actually is, and am completely unable to do so. It makes no sense to me and it was not able to be explained to me in a way that I could understand. It seems to me that there is no arguable case that arises out of these claims.
Issue Seven
The bankrupt attended today with the support and assistance of his sons and a number of friends, one of whom has sat beside him at the bar table and provided him with some prompting for matters that he may have forgotten or overlooked and another alerting him to an authority that he sought to rely upon. The authority that was referred to was Ozdil v Vrsecky (Trustee) [2016] FCA 881. It was a decision in August 2016 by Jessup J of the Federal Court of Australia.
The issue in that case was whether or not a debt had been properly assigned according to law to Baycorp Collections, as Baycorp Collections were the applicants who were obtaining the Orders. His Honour concluded that there had not been an assignment of the debt from the original creditor to Baycorp that met the requirements of section 134 of the Property Law Act 1958 (Vic), and therefore Baycorp were not in a position to obtain the orders. His Honour therefore annulled the bankruptcy of the applicant.
The authority is not of great assistance in this case because it is not suggested that the electricity authority here assigned their debt to another who then pursued the bankrupt in this matter. There being no assignment in this case, there is no relevance of the provisions concerning the assignment of debts, and therefore the authority does not deal with issues that arise in this particular case.
Issue Eight
The bankrupt also argued that a person who claims to be involved with the International Criminal Court in The Hague has taken some interest in the matter and will pursue the matter. I have no knowledge of the role of this person or how this has any interaction with the functioning of this Court or the bankruptcy provisions under Australian law. Various references were made to the idea of international treaties, it seems to me overlooking the law of Australia that international treaties are not binding in Australia, even if the Australian Government is a signatory, until they are enacted into local law. These loose arguments do not seem to me to take the matter anywhere, and nor do they create any prima facie claim.
Issue Nine
The bankrupt also provided a document that was headed up as a ‘Certificate of Acknowledgement’ (Exhibit 1), where he sought to be acknowledged as an official in some way for the purpose of bringing proceedings under the Crimes Act 1914 (Cth). Again, I do not see what relevance that this has to the question before me today. If the bankrupt says that there has been a crime committed under the Crimes Act, no doubt he can provide the evidence of it to the Australian Federal Police who will consider if and whether or not they would take action and if they choose not to do so he has his ordinary rights as a citizen.
Issue Ten
The bankrupt also made requests that the Court or the state or the creditor, provide him with legal assistance or funding for a lawyer. In civil proceedings of this nature there is no obligation upon the other party to provide the bankrupt with funding for a lawyer or to provide them with a lawyer, nor is there any obligation upon the state or the Court. It is not the type of matter where it would be inappropriate to allow it to proceed without the bankrupt being represented. On the rare occasion that the courts have considered such courses of action it has been cases that ordinarily involve the most serious criminal allegations, not bankruptcy proceedings.
Other Issues
I therefore have the view that the respondent has not provided material to me to show that he has an arguable case for some remedy to be able to seek to annul or set aside the bankruptcy, or in some other way go behind the debt that is currently said to be owing, and the subject of a judgment in the bankruptcy sequestration order. These matters therefore do not provide a consideration relevant to extending the time, either by way of adjourning the application or extending the time within which he should vacate the property if I make orders for him to deliver up vacant possession.
I indicated to the bankrupt on the last occasion, and specifically asked him on this occasion, if there is the opportunity to find financial accommodation and if he were able to do so whether he could effectively pay out his creditors, the costs of the bankruptcy proceedings and the trustee in order to bring the bankruptcy to an end, which is one option for retaining his property. Unfortunately the way in which the matter has proceeded to date has resulted in very large costs being incurred and, as I indicated earlier in the judgment, it seems around $150,000 would be needed to obtain a discharge of the bankruptcy.
It appears from what the bankrupt has said to me, that he has no realistic options for obtaining financial accommodation of this order of magnitude and therefore he is not going to be able to pay his way out of his bankruptcy other than the trustee obtaining possession of the property and selling it. Whilst not addressed in his material, I also sought from him some submissions about how long, if any, he would need to reasonably leave the premises in an orderly fashion. The bankrupt suggested to me that in reality it would take three years, but he sought 12 months in which to leave the premises.
I raised with him in argument that commonly people leave premises within 60 days in real estate contracts when people buy and sell homes. The bankrupt maintained the importance of having time, nearing in mind that he has been at the property for a very long time and would no doubt have many items there and that it will no doubt be a particularly sad occasion for him to have to leave is property.
The Application
I now turn to the application itself. There is no question that the bankrupt has been made bankrupt and that the applicants are the trustees of the estate.
There are debts of the estate. The real property has a significant value, probably in the order of more than $600,000 based upon the material that has been put before me. There is no dispute that the bankrupt is the title holder of the property. In these circumstances the property has vested in the trustee and the trustee is entitled to obtain orders for the vacant possession of the property, and for the purpose of selling the property in order to apply the funds to the estate. It is appropriate therefore that they obtain an order for vacant possession and for the bankrupt to deliver up the keys and documents relating to the property, and all buildings and improvements that are attached to the land to them.
The trustee seeks Orders that the respondent remove property such as vehicles, rubbish and chattels that have not vested in the trustee within 14 days. They also seek Orders that if vacant possession is not delivered up that possession shall issue forthwith, and various other consequential Orders.
Conclusion
I am persuaded that I ought to make an Order for the property to be delivered up to the trustee, together with the keys and any fixtures attached to it, and that the bankrupt should remove any vehicles, rubbish or other chattels that have not vested in the trustee from the property.
I am not persuaded that 14 days as sought is a reasonable timeframe in the circumstances of this particular case. The property is the long-term home of the bankrupt, where he resides with his sons, one of whom has special needs. It seems to me that he has, however, been on notice of the application and the orders being sought for some time.
I bear in mind the submissions the bankrupt makes about the timeframe that he seeks, and I also bear in mind the obligations upon the trustee to wind up the estate and the entitlements for creditors to be paid in due course. It seems to me that, taking all of these matters into account, that it is reasonable to allow him 90 days to vacate the property.
I make orders accordingly.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge Riethmuller
Associate:
Date: 5 February 2020
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