Cook v Schwarcz - [2005] FMCA 1598

FEDERAL MAGISTRATES COURT OF AUSTRALIA

COOK & ANOR v SCHWARCZ

[2005] FMCA 1598

BANKRUPTCY – Application for order to vacate premises – non–appearance by respondent – whether applicant served with notification of re–listing.

Bankruptcy Act 1966, ss.30, 58, 77(1)(g) & 78
Federal Court Rules 1979, Order 37 Rule 7

Cook v Tagamilitsky [2001] FMCA 117
White (as trustee of the bankrupt estate of Lyn) v Lyn [1999] FCA 841

Applicant:

PAUL JOHN COOK & ANOR

Respondent:

ANDY ITSHAK SCHWARCZ

File Number:

SYG 2030 of 2005

Judgment of:

Barnes FM

Hearing date:

25 October 2005

Delivered at:

Sydney

Delivered on:

25 October 2005

REPRESENTATION

Counsel for the Applicant:

Mr P. Newton

Solicitors for the Applicant:

Kemp Strang

Respondent:

No Appearance

ORDERS

That the respondent vacate the property contained in Certificate of Title Folio Identifier 21/SP7663 known as 21/11-13 Ethel Street, Eastwood, New South Wales 2222 within eight (8) days of today’s date.
In the event that the respondent fails to give vacant possession of the property in accordance with Order 1 a writ of possession may issue forthwith.
That the applicants’ costs of the proceedings be paid in priority out of the property of the bankrupt estate of the respondent bankrupt.
That service of these orders be effected by serving a copy of the orders by letter sent by prepaid post to the last notified mail address of the respondent and by notification by forwarding a copy of these orders by email to the last known email address of the respondent and by placing same in a sealed envelope and placing it under the door of unit 21 referred to above on or before 12 midday on 26 October 2005 and by placing a copy of these orders on the door utilising an adhesive to prevent the order from being torn off the door.
Liberty to apply on three (3) days notice.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2030 of 2005

PAUL JOHN COOK & ANOR

Applicant

And

ANDY ITSHAK SCHWARCZ

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

This is an application filed on 23 August 2005 by John Paul Cook and Brett Richard Geoffrey Harrison trustees of the bankrupt estate of Itshak Schwarcz seeking orders from the Court pursuant to ss.30, 58, 77(1)(g) and 78 of the Bankruptcy Act 1966 and Order 37 Rule 7 of the Federal Magistrates Court Rules (which I take to be intended to be a reference to Order 37 Rule 7 of the Federal Court Rules) requiring the respondent to vacate property at unit 21, 11-13 Ethel Street, Eastwood NSW within seven days of the Court's order and, in the event that the respondent and other occupants fail to give vacant possession of the property an order that a writ of possession be issued forthwith. Also sought in the application, but not pursued today, is an alternative order that in default a warrant for the arrest of the bankrupt issue. The applicants also seek an order that their costs of the proceedings be paid in priority from the property of the bankrupt estate and also an order for liberty to apply on three days notice.
This matter has been before the Court on prior occasions. On

23 August orders were made by consent by a registrar for the filing of affidavits. The matter was stood over until 13 September 2005. It was noted that the respondent had been served with the application dated

2 August 2005 and also with a supporting affidavit of the solicitor with carriage of the matter for the applicants, Mr Pignone, sworn 2 August 2005. An order was made for the method of service of documents on the respondent: by placing them under the front door of the address referred to above and by sending copies to a post office box address.
On 13 September 2005 orders were made in the presence of the respondent for the filing and service by facsimile of further documents. The matter was adjourned by consent until 19 September 2005 before a Federal Magistrate. On 19 September 2005 the matter came before Federal Magistrate Driver. Counsel for the applicants appeared and the respondent was present. On that day the respondent gave a number of undertakings to the Court which the Court noted. It was ordered that the trustee have liberty to apply for further orders on three days notice if the undertakings made by the bankrupt to the Court were not complied with.
Included in those undertakings were undertakings by the respondent to complete and send a statement of affairs to the Trustees in bankruptcy a on or before 14 October 2005, to give the trustees a duplicate key to the front door of the property referred to above, to disarm the security alarm and to provide the trustees and their nominated agent unrestricted and unfettered access to the property subject to the Trustees or their nominated agents given the respondent notice by email to a specified address of such access. There was also an undertaking by the respondent to lodge outstanding income tax returns and BAS statements with the ATO.
Subsequently the applicants sought to exercise the liberty to apply and brought the matter back before the Court today. When the matter came before the Court today the respondent was not present. He has been called and has not appeared. There is, however, evidence before the Court in the form of a number of affidavits filed in Court today of notification by the applicants to the respondent of these proceedings and of other relevant matters.
Turning first to notification of these proceedings. It is apparent from the affidavit of 25 October 2005 of Mr King, solicitor for the applicants, that an email was sent to the email address for the respondent provided for in the undertakings given by the respondent on 19 September 2005 of the trustees’ intention to re-list these proceedings because of his failure to comply with the undertakings and of their intention to apply for the orders sought in the application filed on 2 August 2005. The annexed copy of such email includes specification of the date, time and place at which the matter was re-listed before the Court. There is also an affidavit from Robert McCarthy, the mail room clerk for the solicitors for the applicants, as to sending a letter with similar notification to the postal address of the applicant and an affidavit of service as to delivery of a letter to similar effect by leaving it under the front door of the property referred to above.
I am satisfied that the applicants have served the respondent with notification of the proceedings today pursuant to the liberty that they were granted on the last occasion (see the orders of 23 August 2005 as to methods of service) and have also advised him by that notification of their intention to seek the orders in the application of 2 August 2005.
The affidavit of Mr King also attests to the fact, which I accept, that the respondent bankrupt has not complied with the undertakings given to the Court on 19 September 2005 to complete and send a statement of affairs to the trustees, despite the fact that a prescribed form the statement of affairs was handed to the bankrupt and to give the trustees a duplicate key to the front door of the property. There is also evidence that the trustees have not be able to access the property in Eastwood because they do not have a key to the property.
In these circumstances then it is sought that, despite the absence of the respondent, orders should be made that the respondent bankrupt and all other occupants vacate the property at Eastwood within seven days of the Court's order and that, in the alternative, if the bankrupt and the occupants fail to give vacant possession of the property in accordance with order 1 a writ of possession be issued forthwith.
Reliance is placed on a number of provisions of the Bankruptcy Act 1966 in particular s.30, the general power to make orders, (subs.(1)(a) and (b), 5(a) and (c)) in conjunction with s.77(1)(g) of the Bankruptcy Act. The power of the Court to make such orders has been considered by Federal Magistrate Raphael in Cook v Tagamilitsky [2001] FMCA 117 at [7]–[10]. His Honour noted in that case at [9] that:
… although recovery of the assets of a debtor frequently involves the sale of the debtor's property and therefore the necessity to require a debtor to vacate possession of that property, there is no specific section in the Bankruptcy Act dealing with this matter in a codified form. Reference has to be made to a number of sections of the Act. However, it is obvious from cases such as Dixon v Ly Ty Tran Cao & Ors, a decision of Beazley J as she then was, unreported 23 June 1995 in the Federal Court and White (as trustee of the bankrupt estate of Lyn) v Lyn [1999] FCA 841 a decision of Finkelstein J, that the Court has power to make such orders and indeed to stay those orders on terms.
His Honour was of the view that a combination of s.77(g) and s.30 of the Bankruptcy Act was sufficient to ground the jurisdiction of the orders he proposed to make. I agree that such provisions are sufficient to ground the jurisdiction for the orders sought. I am also satisfied on the evidence before me that it is appropriate to make the orders sought despite the absence of the respondent in light of service on him of notification of today’s proceedings, the history of this matter and all the circumstances as outlined above (also see Cook v Tagamilitsky at [10] in which such orders were also made in the absence of the respondent).

RECORDED : NOT TRANSCRIBED

I will also make the order for costs sought and order that service of this order be effected by serving a copy of the orders by letter sent by pre-paid post to the last notified mail address for the respondent and by forwarding a copy of the orders by email to the last known email address for the respondent and by placing the same in a sealed envelope and putting it under the door of unit 21 referred to above on or before 12 midday on 26 October 2005 and by placing a copy of this order on the door of unit 21 utilising an adhesive to prevent the order from being torn off the door.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Barnes FM

Associate:

Date: