Cranstoun v Savage
[2001] FMCA 99
•29 August 2001 Reasons delivered 12 October 2001
FEDERAL MAGISTRATES COURT OF AUSTRALIA
CRANSTOUN v SAVAGE [2001] FMCA 99
BANKRUPTCY – consistent with purpose of Bankruptcy Act and public policy for Trustee to be given leave to sell property bankrupt held as joint tenant – no argument as to legal impediment to exercising s 134 power or why sale unnecessary – failure of respondent to reply to letter from Trustee asking whether respondent consented to selling properties – orders sought by Trustee made.
Bankruptcy Act 1966 (Cth) s134(4)
| Applicant: | DAVID JOHN CRANSTOUN AS TRUSTEE FOR THE ESTATE OF DONNA JEAN SAVAGE, A BANKRUPT |
| Respondent: | GORDON ALFRED SAVAGE |
| File No: | BZ191 of 2001 |
| Delivered on: | 29 August 2001 Reasons delivered 12 October 2001 |
| Delivered at: | Brisbane |
| Hearing Date: | 29 August 2001 |
| Judgment of: | Raphael FM |
REPRESENTATION
| Solicitors for the Applicant: | Paul Hudson |
| For the Respondent: | Joy Savage |
ORDERS
That lands of the respondent namely Lot 1 on Building Unit Plan 7275 County of Mackenzie, Parish of Gayndah, Title Reference 16879195 and Lot 62 on Registered Plan 181950 County of Lennox, Parish of Widgee, Title Reference 16345034 held by the respondent as tenant in common with the applicant be sold by the applicant and the proceeds thereof after payment of all expenses of and incidental to such sale be divided equally between the applicant and respondent and that prior to the distribution of the respondent’s share by the applicant there be deducted from such share the costs set out in order 2 below and the balance then be paid by the applicant to the respondent.
The respondent pay applicant’s costs of and incidental to the application pursuant to the rules of the Federal Magistrates Court.
FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE
BZ 191 of 2001
DAVID JOHN CRANSTOUN AS TRUSTEE
FOR THE ESTATE OF DONNA JEAN SAVAGE
Applicant
And
GORDON ALFRED SAVAGE
Respondent
REASONS FOR JUDGMENT (Ex Tempore)
This matter came before me for hearing on 29 August 2001. It was an application by David John Cranstoun as Trustee for the estate of Donna Jean Savage, a bankrupt, for the sale of a property which the bankrupt held as joint tenant with her husband, Gordon Alfred Savage. The application was made pursuant to s 134(4) of the Bankruptcy Act.
At the time I did not provide any detailed reasons for my decision. I have since been requested to provide those reasons and do so now.
In support of the application I read an affidavit of David John Cranstoun dated 24 April 2001 and I noted that there had been considerable difficulty in serving Mr Savage including the necessity for an application for substituted service. On 3 July an order for substituted service was made and the orders were complied with in their terms on 6 July 2001. I noted the affidavit of Colin Anthony Nicholas, process server, of 10 July.
Although orders were made by Registrar Baldwin on 20 July 2001 that the respondent file and serve a Notice of Appearance, Notice of Intention to Oppose and any Affidavits intended to be relied on by 4.00p.m. on 30 July 2001 the only actual response that was made was a letter from the bankrupt to which she attached some thirty-seven pages of information. Much of this information was to do with a dispute with one Lynette White which appears to have been the trigger for the orders in respect of which the debt was incurred. There was no information that was directly relevant to the application being made by the Trustee.
The documents did contain advice from Legal Aid Queensland that Mr Savage had been declined legal aid in respect of these proceedings.
When the matter came to be heard the respondent did not appear. Instead his daughter appeared by telephone. She did not raise in her comments any legal impediment to the Trustee exercising his power under s 134 nor did she provide any evidence of why such a sale might not be necessary. The Trustee had filed an outline of case on 21 August which indicated that the respondent owned two properties jointly with the bankrupt. It also indicated that the respondent had not responded to a letter of 16 February 2001 written by the Trustee, the terms of which are set out below:
“I refer to my letter dated 9 November 2000 and to your telephone conversation on 20 November with Mr Tony Castley of this office.
In your telephone discussion with Mr Castley you indicated that you were seeking legal advice in relation to your wife’s bankruptcy. As mentioned in the conversation the trustee would take no further action with respect to the realisation of your wife’s share of the properties without first notifying you. Please note that I, as the trustee of the bankrupt estate of Donna Savage have had my interest noted on the title for the properties at Widgee and Gayndah. Therefore I now to realise her share of those properties.
As outlined in my previous correspondence, when realising the bankrupt’s interest in these properties I believe the simplest approach would be for you to purchase the bankrupt’s share of the properties. This could be achieved by obtaining a valuation of the properties and then agreeing to a figure being equal to half of those values. Should this not be possible, then the properties will have to be sold either with your consent or by obtaining the necessary court order.
To date you have not advised me as to whether or not you are interested in acquiring your wife’s interest in the properties. If you are not interested in purchasing your wife’s share could you then advise whether or not you would consent to placing the properties on the market for sale.
Should I not receive a response by the close of business on Monday, 5 March 2001, I will assume that you do not agree with either of these courses of action and an application will then be made to the Court for an order to sell the properties.
If you have any queries please contact Mr Tony Castley of this office.
Yours faithfully
DAVID J CRANSTOUN
Trustee”
I took the view that it was consistent with the purpose of the Bankruptcy Act and with public policy for the Trustee to be given leave to sell this property. It is important that the administration of the bankrupt estate of Donna Jean Savage be concluded as soon as possible and it would appear that the only available assets to allow the Trustee to do this are the properties, one of which he has requested permission to sell. This does not take the respondent by surprise as the letter clearly shows. The Trustee has acted reasonably in my view both prior to and in regard to the application. I heard no evidence from the respondent himself and the submissions which were made by his daughter, articulate and eloquent as they were, did not provide me with any reason in law or in the particular circumstances of this case, to decline to make the orders sought by the Trustee. I say this notwithstanding the suggestion that to sell would deprive the respondent and his daughter of their home. This is an event which frequently occurs when people get into financial difficulties. At least in this instance one half of the proceeds will be available for the rent or purchase of another property.
I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 12 October 2001
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