Daevys v Official Trustee - [2010] FMCA 906

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DAEVYS v OFFICIAL TRUSTEE

[2010] FMCA 906

BANKRUPTCY – Application for annulment – whether the debtor’s petition presented by the applicant should have been accepted considered.

Bankruptcy Act 1966 (Cth), ss.55, 153B

Re Gada Abbas; ex parte Official Trustee in Bankruptcy [1995] FCA 1263

Applicant:

STUART DAEVYS

Respondent:

OFFICIAL TRUSTEE

File Number:

SYG 2096 of 2010

Judgment of:

Driver FM

Hearing date:

18 November 2010

Delivered at:

Sydney

Delivered on:

18 November 2010

REPRESENTATION

The Applicant appeared in person

Solicitors for the Respondent:

Ms S Nash
Sally Nash & Co

ORDERS

The Court directs that the name of the respondent be changed to the Official Trustee.
The annulment application is dismissed.
The respondent trustee’s costs of the annulment application be costs in the administration of the estate.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 2096 of 2010

STUART DAEVYS

Applicant

And

OFFICIAL TRUSTEE

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

I have before me an application under s.153B of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) for the annulment of the bankruptcy of Stuart Daevys. The application is supported by two affidavits by Mr Daevys, the first filed on 24 September 2010 and the second filed on 15 November 2010 which is responsive to an affidavit by Alan Ma filed on 29 October 2010. The application is opposed by the respondent, the Official Trustee. That opposition is supported by the affidavit of Mr Ma, which has annexed to it a bundle of documents concerning the administration of the bankrupt estate.
Mr Daevys presented a debtor’s petition on 2 March 2004 which as accepted. On 23 February 2006 Thelma Laurie Pritchard died. There were funds passing to Mr Daevys from that deceased estate which were not provided to the Official Trustee for the purposes of the administration of the bankruptcy. Mr Daevys was discharged from bankruptcy on 2 March 2007. On 23 November 2009 Mr Daevys instituted proceedings in the Family Court against his spouse seeking to adjust property interests in real estate at Mt White. That interest had not been disclosed to the trustee and Mr Daevys gave a different residential address to the trustee. The interest became the subject of concern to the trustee who instituted other proceedings. On 24 September 2010 the present annulment application was made. Mr Daevys was cross‑examined on his affidavit and both parties made submissions.
A few things are clear. The first is that Mr Daevys made a calculated decision to seek the protection of bankruptcy in view of litigation commenced against him and a company with which he was associated, which, so he judged, had potentially very serious consequences. In the event leave was given in those proceedings for the proceedings to be continued and Mr Daevys pursued the proceedings on his own behalf. He was initially successful, but unsuccessful on appeal and the proceedings were ultimately settled without any benefit flowing to either party. Mr Daevys is concerned about the administration of the bankrupt…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] FMCA 906
Decision Date

CaseChat Overview and Summary

Stuart Daevys filed an application for annulment of his bankruptcy under section 153B of the Bankruptcy Act 1966 (Cth). The application sought to set aside the bankruptcy that was initiated by a debtor's petition presented by Daevys himself on 2 March 2004, which was subsequently accepted by the Official Receiver. Daevys argued that the petition should not have been presented or accepted, and that the bankruptcy should be annulled. The Official Trustee opposed the application, asserting that the petition was properly presented and accepted and that annulment was not warranted. The court was required to determine whether the debtor’s petition should have been presented or accepted by the Official Receiver, and if not, whether the court should exercise its discretion to annul the bankruptcy.

The court examined the circumstances surrounding the presentation and acceptance of the debtor’s petition. It noted that the petition was in proper form and was presented by Daevys who was personally present and had lodged a statement of affairs. The court also considered Daevys's assertion of mental disability at the time, but found that he was able to pursue litigation successfully, and the medical evidence provided was too general to be persuasive. The court further noted that Daevys intentionally failed to disclose an interest in property at Mt White, which was later revealed in proceedings in the Family Court. The court found that the Official Receiver was entitled to accept the petition under section 55 of the Bankruptcy Act, and that Daevys had not demonstrated that the petition should not have been presented or accepted. The court also considered the solvency of Daevys at the time of the bankruptcy, the conduct of Daevys during the bankruptcy, and the availability of assets to meet creditor claims and trustee costs.

The court concluded that the debtor’s petition was properly accepted, and that the annulment application should be dismissed. The court found that Daevys had not shown that the petition should not have been presented or accepted, and that the Official Trustee was not at fault in accepting the petition. The court also noted that the only asset available to meet creditor claims and trustee costs was the property at Mt White, which Daevys sought to prevent from being realised. The court ordered that the annulment application be dismissed and that the Official Trustee’s costs of the annulment application be costs in the administration of the estate. The court further directed that the name of the respondent be changed to the Official Trustee.

Orders