Constantine v The Official Trustee in Bankruptcy, in the matter of the Bankrupt Estate of Basil Charles Sanders

[2007] FCA 564

FEDERAL COURT OF AUSTRALIA

Constantine v The Official Trustee in Bankruptcy, in the matter of the Bankrupt Estate of Basil Charles Sanders [2007] FCA 564

IN THE MATTER OF THE BANKRUPT ESTATE OF BASIL CHARLES SANDERS

MARY CONSTANTINE v THE OFFICIAL TRUSTEE IN BANKRUPTCY AND BASIL CHARLES SANDERS

NSD 579 OF 2007

LINDGREN J
5 APRIL 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 579 OF 2007

IN THE MATTER OF THE BANKRUPT ESTATE OF BASIL CHARLES SANDERS

BETWEEN:

MARY CONSTANTINE
Applicant

AND:

THE OFFICIAL TRUSTEE IN BANKRUPTCY
First Respondent

BASIL CHARLES SANDERS
Second Respondent

JUDGE:	LINDGREN J
DATE OF ORDER:	5 APRIL 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The applicant have leave to file in Court the Form of Application and supporting affidavit of Timothy Fulton Edwards sworn 4 April 2007, upon Mr Edwards’ undertaking to pay the appropriate filing fee.

2.The Application be returnable instanter.

3.To the extent that it may be necessary, the applicant have leave under s 58(3)(b) of the Bankruptcy Act 1966 (Cth) nunc pro tunc to commence Supreme Court Possession List Proceedings No. 13727 of 2006,  and also to take fresh steps necessary or appropriate  to prosecute that proceeding.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 579 OF 2007

IN THE MATTER OF THE BANKRUPT ESTATE OF BASIL CHARLES SANDERS

BETWEEN:

MARY CONSTANTINE
Applicant

AND:

THE OFFICIAL TRUSTEE IN BANKRUPTCY
First Respondent

BASIL CHARLES SANDERS
Second Respondent

JUDGE:	LINDGREN J
DATE:	5 APRIL 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. There has come before me as Duty Judge an application by Mary Constantine (‘Ms Constantine’) under s 58(3)(b) of the Bankruptcy Act 1966 (Cth) (‘the Act’) for leave to continue Supreme Court Possession List Proceeding No 13727 of 2006 against the second respondent, Basil Charles Sanders (‘Mr Sanders’).

2. The hearing has come on urgently as the proceeding in the Supreme Court of New South Wales is before Studdert J today, 5 April 2007.  The reason for the urgency is that it has only very recently come to the notice of Ms Constantine’s legal advisers that the second respondent, Mr Sanders, is a bankrupt.

3. Mr Phillip Madden, Senior Assistant Official Receiver, appears for the first respondent, the Official Trustee in Bankruptcy, who is the trustee of the estate in bankruptcy of Mr Sanders.  He neither consents to nor opposes the granting of leave.

4. In the Supreme Court proceeding, Ms Constantine sues for rent and, relevantly for present purposes, for the recovery of possession of premises that are or were the subject of a lease from her to Mr Sanders.  On 23 March 2007, the Supreme Court granted Mr Sanders relief against forfeiture subject to certain conditions. One of the conditions was that he pay to Ms Constantine's solicitors by 30 March 2007 the sum of $16,568.90 for unpaid rent and interest calculated up to 19 March 2007.  According to the affidavit evidence before me, that amount has not been paid.

5. On 2 April 2007, the solicitor for Ms Constantine wrote to the Associate to Studdert J requesting that his client's notice of motion be relisted for hearing.  It was listed for 10 am this morning.  The solicitor for Ms Constantine wrote to Mr Sanders advising him of the listing.  Subsequently, on 3 April 2007, as a result of a title search, it was discovered that a caveat had been lodged by the Official Trustee in Bankruptcy over the title to a property given by Mr Sanders as his mailing address.  This led the solicitor to conduct a bankruptcy search which revealed that a sequestration order had been made against the estate of Mr Sanders on 15 September 2006.

6. Before me today Mr Sanders has emphasised that he was not aware that he had been made a bankrupt and that he will commence a proceeding seeking an annulment of the bankruptcy.  He recounted a number of facts which support a complaint by him in relation to the conduct of the previous trustee in bankruptcy, Mr McDonald.  In addition, he emphasised that he has only been aware of the relisting of the matter in the Supreme Court for a very short period, and has been aware of the present application for leave only within the last hour or two.

7. The nub of the complaint by Mr Sanders is that he should not be a bankrupt at all, that a sequestration order ought not to have been made, and that it should be annulled under s 153B of the Act.  In substance his contention is, therefore, that Ms Constantine’s application for leave ought not to be necessary and that it should have been open to Ms Constantine to sue him in the Supreme Court as she would have been entitled to do if he had not been bankrupt.  For these reasons it seems that no prejudice is suffered by Mr Sanders if I make an order granting leave to continue the Supreme Court proceeding to the extent that leave may be necessary.

8. Whether the hearing of the Supreme Court proceeding should not proceed today but should be adjourned, and various other matters mentioned by Mr Sanders before me as to the undesirability of an order for possession being made, are matters for Studdert J to consider.  I do not think that the present application for leave should be adjourned or that the necessity for leave to be obtained should be used as an occasion to halt the Supreme Court proceeding.

9. Against the possibility that the bankruptcy is annulled and that there is to be a contention advanced on behalf of Mr Sanders that the annulment has a retrospective effect, I will commence the order granting leave with the words “To the extent that it may be necessary”.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated:        19 April 2007

Counsel for the Applicant:	Mr B C Kasep
Solicitor for the Applicant:	Truman Hoyle Lawyers
The First Respondent appeared through its officer, Senior Assistant Official Receiver, Mr P Madden
The Second Respondent appeared in person
Date of Hearing:	5 April 2007
Date of Judgment:	5 April 2007