Cull (Trustee), in the matter of Occhiuto (Bankrupt) v Occhiuto
[2025] FedCFamC2G 538
•15 April 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Cull (Trustee), in the matter of Occhiuto (Bankrupt) v Occhiuto [2025] FedCFamC2G 538
File number(s): SYG 3066 of 2024 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 15 April 2025 Catchwords: BANKRUPTCY– application by trustee in bankruptcy for an order under s 66G(1) of the Conveyancing Act 1919 (NSW) for the appointment of trustees for sale of property of which the bankrupt is the registered proprietor as joint tenant – orders made. Legislation: Bankruptcy Act 1966 (Cth) s 58(1)
Conveyancing Act 1919 (NSW) ss 66F, 66G
Judiciary Act 1903 (Cth) s 79(1)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 22.02(1), (2)
Federal Court Rules 2011 (Cth) Part 40
Uniform Civil Procedure Rules 2005 (NSW)
Cases cited: Coshott v Prentice [2014] FCAFC 88
Pascoe v Dyason [2011] NSWSC 1217
Scott, the Trustee of the Property of Hurst, a Bankrupt v Hurst [2021] FCCA 1749
Scott, the Trustee of the Property of Hurst, a Bankrupt v Hurst (No 3) [2021] FedCFamC2G 299
Division: General Number of paragraphs: 13 Date of hearing: 9 April 2025 Place: Sydney Counsel for the Applicant: Ms R McCarthy Solicitor for the Applicant: Macpherson Kelley Solicitor for the First and Second Respondents: Mr R Baker, DTL Legal ORDERS
SYG 3066 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF DOMENICO OCCHIUTO, BANKRUPT
BETWEEN: INNIS ANTHONY CULL IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF DOMENICO OCCHIUTO
Applicant
AND: DOMENICO OCCHIUTO
First Respondent
RACHAEL HEATHER OCCHIUTO
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
15 APRIL 2025
THE COURT ORDERS THAT:
Appointment of statutory trustees
1.Pursuant to s 66G(1) of the Conveyancing Act 1919 (NSW) (Conveyancing Act) the applicant and Mr Paul Allen (Statutory Trustees) are appointed joint and several statutory trustees for the sale of the land described in Folio Identifier B/337172, being the property known as 6 Francis Street, Richmond, in the State of New South Wales (Property).
2.The Property vests in the Statutory Trustees subject to any incumbrances affecting the entirety of the Property, but free from incumbrances (if any) affecting any undivided share or shares in the Property, to be held by the Statutory Trustees upon statutory trust for sale under Division 6 of Part 4 of the Conveyancing Act.
3.The Statutory Trustees are empowered to offer the Property for sale and to sell the Property by public auction with power to fix a reserve price, or alternatively, to sell the Property by private treaty.
4.The Statutory Trustees have the sole conduct of the sale of the Property and are authorised to appoint a licensed real estate agent and, if necessary, a licensed auctioneer or both for the purpose of the conduct of the sale.
5.The Statutory Trustees be reimbursed their costs and be paid remuneration in connection with the discharge of their duties as the Statutory Trustees at the same rate and on the same basis as the remuneration of the applicant in his capacity as trustee of the Bankrupt Estate of Domenico Occhiuto.
6.Following the sale of the Property, the Statutory Trustees are empowered to deduct from the proceeds of sale of the Property:
(a)commission and other expenses of any real estate agent, and auctioneer, retained by the Statutory Trustees for the sale of the Property;
(b)insurance, repairs, and any other reasonable expenses for the protection and maintenance of the Property;
(c)all necessary adjustments and/or payment of any council rates, water rates, water usage and any other utility or statutory imposts in respect of the Property;
(d)all legal costs and disbursements associated with the sale and transfer of the Property;
(e)remuneration and expenses of the Statutory Trustees in relation to the sale of the Property;
(f)the applicant’s legal costs of this proceeding as determined pursuant to orders 11 and 12 below;
(g)the costs of disposal (if any) of any personal property remaining at the Property after the time has expired by which the respondents are required to deliver up vacant possession of the Property in accordance with these orders; and
(h)the storage fees (if any) of any personal property remaining at the Property after the time has expired by which the respondents are required to deliver up vacant possession of the Property in accordance with these orders.
7.The Statutory Trustees shall hold the net proceeds of the sale of the Property, after the deductions identified in order 6, on trust:
(a)as to one half of the balance, for the applicant as trustee of the Bankrupt Estate of Domenico Occhiuto, payable to the applicant as trustee of the Bankrupt Estate of Domenico Occhiuto; and
(b)as to one half of the balance, for the second respondent as co-owner of the Property.
Possession of Property
8.Within 42 days after the date on which these orders are pronounced the respondents:
(a)vacate and deliver up to the Statutory Trustees possession of the whole of the Property;
(b)deliver up to the Statutory Trustees or either of them the keys for all buildings and improvements on the Property; and
(c)remove from the Property all vehicles, rubbish, and any other chattels or personal property which have not vested in the applicant as the first respondent’s trustee in bankruptcy under section 58(1) of the Bankruptcy Act 1966 (Cth).
9.If the respondents fail to comply with order 8(a), or orders 8(a) and 8(c), the Statutory Trustees:
(a)may apply for a writ of possession of the Property, such application to be made by the Statutory Trustees submitting to the Associate of Judge Manousaridis, or another Judge of the Court, a draft form of writ together with an affidavit verifying that the respondents have not complied with order 8(a); and
(b)are empowered to remove and dispose of any and all personal property on the Property as the Statutory Trustees see fit.
Costs and remuneration
10.The Statutory Trustees are authorised to charge remuneration for work done at the rates the applicant disclosed in relation to his work in the circular to creditors dated 20 September 2024 and tendered at the hearing on 9 April 2025, such rate not to exceed $800 per hour excluding GST.
11.The applicant may apply pursuant to r 22.02(1) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules) for an order pursuant to r 22.02(2)(a) of the Rules that the Court set an amount for the applicant’s costs of this proceeding, such application to be made by the applicant filing and serving, by no later than 30 April 2025, an affidavit on which the applicant relies for such order.
12.If by 13 May 2025 the respondents do not file any affidavit in relation to costs in response to any affidavit the applicant may file pursuant to order 11, Judge Manousaridis shall be at liberty to set the applicant’s costs pursuant to r 22.02(2)(a) of the Rules, or in the alternative make an order under r 22.02(2)(c) of the Rules referring the costs for taxation under Part 40 of the Federal Court Rules 2011 (Cth).
Liberty to apply
13.The parties have liberty to apply on such notice as the circumstances warrant in relation to any question that may arise in connection with the interpretation, implementation, or variation of these orders.
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).
REASONS FOR JUDGMENT
INTRODUCTION
The applicant (Trustee), who is the trustee in bankruptcy of the estate of the first respondent, Mr Domenico Occhiuto, applies for an order for vacant possession of a property (Property) of which the Trustee and the second respondent, Ms Rachel Heather Occhiuto, are the registered proprietors as tenants in common, and for an order for the appointment of trustees for sale of the property pursuant to s 66G(1) of the Conveyancing Act 1919 (NSW) (Conveyancing Act).
BACKGROUND
On 24 October 2023 a Registrar of this Court made a sequestration order against the estate of Mr Occhiuto, and the Trustee was appointed joint and several trustee in bankruptcy of Mr Occhiuto’s estate together with another trustee. On 6 September 2024 the Federal Court of Australia confirmed the resignation of the other trustee, with the consequence that the Trustee is the sole trustee in bankruptcy of Mr Occhiuto’s estate.
At the time the sequestration order was made, Mr and Ms Occhiuto lived in the Property; and they both continue to do so. Mr and Ms Occhiuto became registered proprietors of the Property on 25 June 2012. The Property is subject to a mortgage Mr and Ms Occhiuto granted to Westpac Banking Corporation on 25 June 2012 to secure a loan it may reasonably be inferred was granted to assist in the purchase of the Property. As at 21 August 2024 the balance of that loan was $349,834.98.
Commencing on 31 October 2023 the Trustee corresponded with Mr Occhiuto in relation to his bankruptcy; and from 31 January 2024 the Trustee was communicating with Mr Baker, the solicitor for Mr Occhiuto, requesting Mr Occhiuto provide a statement of affairs. This correspondence continued until around 26 April 2024; but Mr Occhiuto has not provided a statement of affairs.
In the meantime, on about 13 March 2024, the Trustee sent a letter to Ms Occhiuto in which he described the effect of Mr Occhiuto’s bankruptcy, and the options available to Ms Occhiuto in relation to the Property, namely, that Ms Occhiuto purchase the Trustee’s interest in the Property, or that Ms Occhiuto join the Trustee to sell the Property. The Trustee noted, however, that if Ms Occhiuto elected to adopt neither of these options, he may be required to apply to the Court for orders forcing the sale of the Property. Ms Occhiuto did not provide a substantive response to the Trustee’s proposals; and it is in these circumstances that the Trustee has commenced this proceeding.
PROCEDURAL HISTORY
The Trustee commenced the proceeding on 26 November 2024; and on 7 February 2025 Mr and Ms Occhiuto entered an appearance through their lawyer, Mr Baker. Because of an administrative error, the proceeding was not docketed to a judge until 2 April 2025; and the matter was set down for hearing before me on 9 April 2025. At the hearing the Trustee appeared by his counsel, Ms McCarthy, and the respondents appeared by Mr Baker.
Mr Baker informed me that he was instructed to seek an adjournment for the purpose of providing the respondents time to seek finance to enable Ms Occhiuto to purchase the Trustee’s interest in the Property. Mr Baker did not submit, and in any event there was no evidence on the basis of which I could be satisfied, that Ms Occhiuto has some prospects of securing finance. I informed Mr Baker that I proposed to hear the application but, if the Trustee were otherwise to succeed on his application, I would give the respondents 42 days by which they would be required to vacate the Property. That would give Ms Occhiuto a reasonable opportunity to explore whether there is a real possibility of her obtaining finance to purchase the Trustee’s interest in the Property. I then proceeded to hear the application.
TRUSTEE’S CLAIMS
The principal relief the Trustee claims is an order under s 66G(1) of the Conveyancing Act, which provides:
Where any property (other than chattels) is held in co-ownership the court may, on the application of any one or more of the co-owners, appoint trustees of the property and vest the same in such trustees, subject to incumbrances affecting the entirety, but free from incumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition.
For reasons I have given elsewhere,[1] this Court, in the exercise of its jurisdiction in bankruptcy, has power under s 79(1) of the Judiciary Act 1903 (Cth) to treat s 66G of the Conveyancing Act as a law of the Commonwealth, and to consider itself as “the court” referred to in s 66G of that Act.
[1] Scott, the Trustee of the Property of Hurst, a Bankrupt v Hurst [2021] FCCA 1749, at [18]-[19]
The expression “co-ownership” is defined in s 66F(1) of the Conveyancing Act to mean “ownership whether at law or in equity in possession by two or more persons as joint tenants or as tenants in common”; and the expression held upon the “statutory trust for sale”” in relation to property is defined in s 66F(2) to mean a “trust to sell the same and to stand possessed of the net proceeds of sale, after payment of costs and expenses, and of the net income until sale after payment of costs, expenses, and outgoings, and in the case of land of rates, taxes, costs of insurance, repairs properly payable out of income, and other outgoings upon such trusts, and subject to such powers and provisions as may be requisite for giving effect to the rights of the co-owners”. Also relevant is s 66G(3) of the Conveyancing Act which, in effect, provides that, unless the trustee that is to be appointed is a “trustee corporation”, at least two individuals must be appointed as trustees.[2]
[2] Coshott v Prentice [2014] FCAFC 88, at [20]: “[W]e consider that the appellants correctly contended that s 66G requires that, where a corporation is not appointed trustee for sale, there must be at least two trustees. It follows that the appeal against the orders for sale must be allowed in part.”
The principles that govern the exercise of the power conferred by s 66G of the Conveyancing Act have been conveniently stated by Black J in Pascoe v Dyason:[3]
[3] Pascoe v Dyason [2011] NSWSC 1217, [5]-[8]
The purpose of this section is “to provide a mechanism for terminating the co-ownership [of property] where the co-owners themselves cannot agree on how the co-ownership should be determined” . . . . In Callahan v O'Neill [2002] NSWSC 877, Young CJ in Eq observed:
“It is fairly clear that, as a general rule, any co-owner holding at least 50% of a parcel of real property is entitled almost as of right to an order for partition or sale under s 66G of the Conveyancing Act. It is only in situations where it would, under settled principles, be inequitable to permit such an application, including cases where there has been a contract not to make an application that the order may be refused. This appears from cases such as Ngatoa v Ford (1990) 19 NSWLR 72 and Williams v Legg (1993) 29 NSWLR 687.”
Although the Court has a discretion whether or not to make an order under this section, the grounds on which the Court will ordinarily refuse to make it are limited. For example, if it is inconsistent with a proprietary right or a contractual or fiduciary obligation, and there is no general jurisdiction to refuse to grant such an order on the basis of hardship or unfairness . . . . In Hogan v Baseden (1997) 8 BPR 15,723 at 15,723, Mason P observed that it “would not be a proper exercise of discretion of the power to decline relief under s 66G ... to refuse an application on grounds of hardship or general unfairness.” His Honour also noted that:
“[I]n the unhappy event that the parties are unable to settle their differences then the making of an order appointing trustees for sale seems inevitable unless the respondent could establish a legally binding agreement not to put her out of occupation of her home, or circumstances that would ground some estoppel to similar effect” (at [59]).
In Chalhoub v Chalhoub [2005] NSWSC 572 at [17]-[18], McLaughlin AsJ observed that, where a plaintiff and defendant are registered as tenants in common in equal shares, then prima facie the plaintiff is entitled to relief by way of an order under s 66G of the Conveyancing Act for sale of the relevant property and for the division of the net proceeds of such sale between the plaintiff and the defendant in equal shares. It was for the defendant, who denied the plaintiff's entitlement to such relief, to establish that the legal rights of the parties consequent upon their status as registered proprietors as tenants in common in equal shares were in some way altered by the invocation of equitable rights recognised by a Court of Equity or that there was some other reason why the Court should, in the exercise of the limited discretion reposed in it by s 66G of the Conveyancing Act, decline to make an appointment of statutory trustees or sale of the subject property.
In Cain v Cain [2007] NSWSC 623 at [9]-[10], Young CJ in Eq noted that the Court will usually consider it appropriate to make an order under s 66G of the Conveyancing Act unless persuaded by cogent arguments from those who oppose. His Honour then noted Counsel's summary of the categories of cases in which the Court has declined to grant such an order as including: where the legal title is held by trustees and the trust instrument contains its own procedure for sale; where the plaintiff's conduct rates as an estoppel against the sale; and where an order would be incompatible with a contractual or equitable duty binding the applicant. In Tory v Tory [2007] NSWSC 1078 at [42], White J noted that an order under s 66G of the Conveyancing Act “is almost as of right unless on settled principles it would be inequitable to allow the application”, and observed that an application would be refused if making the order would be inconsistent with a proprietary right or contractual or fiduciary obligation or on the basis of conventional estoppel or equitable estoppel. In Spathis v Nanos [2008] NSWSC 418 at [19]-[20], Jagot AJ observed that the discretion was not at large and is not to be exercised by reference to personal views about hardship or unfairness. The Court of Appeal also noted that the discretion to refuse relief under s 66G of the Conveyancing Act was a “limited one” in Ross v Ross [2010] NSWCA 301 at [36]; see also National Australia Bank Ltd v Pasupati [2011] NSWSC 540 at [20].
DETERMINATION AND ORDERS
Although Mr Occhiuto has not provided a statement of affairs, the Trustee has adduced evidence of Mr Occhiuto’s secured and unsecured creditors, as well as evidence of unsubstantiated claims from persons who claim to be creditors of Mr Occhiuto. The Trustee has also adduced evidence of estimates of the value of the Property. I am satisfied that if an order is made pursuant to s 66G(1) of the Conveyancing Act, a not insubstantial amount of money will become available, not only to recoup the Trustee’s costs and remuneration, but also to provide a dividend to Mr Occhiuto’s unsecured creditors. I therefore propose to make orders under s 66G(1) of the Conveyancing Act.
The Trustee has formulated proposed orders that largely reflect the orders I made in Scott, the Trustee of the Property of Hurst, a Bankrupt v Hurst.[4] I am satisfied that it is appropriate to make orders substantially to the effect of the orders the Trustee proposes; and I will make such orders, save for the following:
[4] Scott, the Trustee of the Property of Hurst, a Bankrupt v Hurst [2021] FCCA 1749
(a)I propose to order that the respondents give possession of the Property to the statutory trustees, not to the Trustee alone. That follows from the fact that an order under s 66G(1) of the Conveyancing Act will vest the legal title in the statutory trustees; and the order for possession will be ancillary to the vesting of the legal title in the statutory trustees.
(b)I do not propose to order that a writ of possession issue forthwith. Instead I propose to order that the statutory trustees may apply for such writ if the respondents do not give vacant possession of the Property to the statutory trustees within 42 days after I pronounce orders; and the statutory trustees may apply for such writ by forwarding to my Associate’s inbox a draft form of writ of possession together with an affidavit verifying that the respondents have not vacated the Property. It will be sufficient if the form of the writ of possession adapts Form 60 of the approved forms made for the purposes of the Uniform Civil Procedure Rules 2005 (NSW), and that the writ be addressed to:[5]
[5] See Scott, the Trustee of the Property of Hurst, a Bankrupt v Hurst (No 3) [2021] FedCFamC2G 299
[T]he Sheriff of the Federal Circuit and Family Court of Australia (Division 2), the Deputy Sheriffs of the Federal Circuit and Family Court of Australia (Division 2), and such person or persons whom the Sheriff of the Federal Circuit and Family Court of Australia (Division 2), or the Deputy Sheriffs of the Federal Circuit and Family Court of Australia (Division 2), may authorise to assist them in the execution of the writ of possession.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis.
Associate:
Dated: 15 April 2025
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