David Henry Sampson as trustee of the Bankrupt Estate of Andrew Ian Sim v Andrew Ian Sim

[2015] FCCA 2931

FEDERAL CIRCUIT COURT OF AUSTRALIA

DAVID HENRY SAMPSON AS TRUSTEE OF THE BANKRUPT ESTATE OF ANDREW IAN SIM v ANDREW IAN SIM [2015] FCCA 2931

Catchwords:
BANKRUPTCY – Application for vacant possession of property for trustee to recover costs under s.30 Bankruptcy Act 1966 (Cth) – whether the Court has the power to make orders sought – application granted – vacant possession ordered.

Legislation:

Bankruptcy Act 1966, ss.30, 77(1)(g)

Prentice v Fortune [2014] FCCA 2199

Applicant: DAVID HENRY SAMPSON AS TRUSTEE OF THE BANKRUPT ESTATE OF ANDREW IAN SIM

Respondent: ANDREW IAN SIM

File Number: SYG 936 of 2015

Judgment of: Judge Smith

Hearing date: 31 July 2015

Date of Last Submission: 31 July 2015

Delivered at: Sydney

Delivered on: 31 July 2015

REPRESENTATION

Counsel for the Applicant: Mr N. Dale

Solicitors for the Applicant: Gillis Delaney Lawyers

No appearance by or for the Respondent.

ORDERS

1. The respondent vacate and surrender possession of the whole of the land in Folio 7028/260932, namely, the property known as 44 Valley View Crescent Werrington in the State of New South Wales (“Property”) within 21 days.

2. The respondent remove from the Property all vehicles, rubbish, chattels and pets (being all items of personal property including furniture and personal effects but excluding fixtures) within 21 days.

3. The respondent deliver up all keys for buildings and improvements on the Property to the applicant or his agent within 21 days.

4. In default of compliance with order 1, a Writ of Possession be issued forthwith.

5. A sealed copy of these orders be served on the respondent personally within three days or, if that is not possible, by:

   (a)affixing to the front door of the Property an envelope addressed to the respondent containing a sealed copy of these orders; and

   (b)placing in the letterbox at the Property an envelope addressed to the respondent containing a sealed copy of these orders.

6. Liberty to apply on such notice as the circumstances warrant in relation to the implementation of these orders.

7. The applicant’s costs of the proceedings be payable out of the bankrupt estate of the respondent

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 936 of 2015

DAVID HENRY SAMPSON AS TRUSTEE OF THE BANKRUPT ESTATE OF ANDREW IAN SIM

Applicant

And

ANDREW IAN SIM

Respondent

REASONS FOR JUDGMENT

(Delivered Ex Tempore & Revised)

Background

1. The applicant is the trustee in bankruptcy of the estate of the respondent, Andrew Ian Sim. On 12 December 2014 a sequestration order was made in this Court against the estate of Mr Sim and on the same day the applicant was appointed trustee. A search of the Land and Property Information New South Wales reveals that, at that time, Mr Sim was the registered proprietor of the property contained in lot 7028 in deposited plan 260932, being in the suburb of Werrington in Sydney.

2. Mr Sim’s interest was in the property was subject to a mortgage to Perpetual Trustees Victoria Limited. That interest passed to the applicant pursuant to the Bankruptcy Act 1966 (Cth) and the applicant became the registered proprietor of the property in February 2015. In those circumstances, the applicant now seeks an order that the respondent give vacant possession of the premises. This Court has power to make such orders by virtue of a combination of s.30 and sub-s.77(1)(g) of the Act.

3. Section 30 of the Bankruptcy Act provides:

   (1)The Court:

   …

   (b)may make such orders … as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.

   …

4. Section 77 provides that:

   (1)A bankrupt shall, unless excused by the trustee or prevented by illness or other sufficient cause :

   …

   (g)aid to the utmost of his or her power in the administration of his or her estate.

   …

5. There is ample authority for the proposition that this Court has the power to make the orders sought: see, for example, Prentice v Fortune [2014] FCCA 2199, together with the authorities referred to at [11] of that judgment.

Consideration

1. The evidence shows that the property in question has an estimated value of $440,000. When the amount of the mortgage and various rates and electricity charges are deducted from that value, there remains an estimated equity of $145,263.50.

2. The applicant estimates that the unsecured creditors in the estate are in the vicinity of $64,900. This means that if the property were realised there is a likelihood that not only all the unsecured creditors would be paid out but that there might be some amount left over for the respondent and that the bankruptcy might be annulled. This is taking into account the evidence before me that the costs of the trustee applicant, to date are in the vicinity of $30,000. I note that that estimate was given in early May 2015 and that it will certainly have increased by today.

3. Nevertheless, there is a very real possibility that the sale of the property will meet all the unsecured debts, together with the outstanding fees of the applicant and leave some amount to Mr Sim. Mr Sim appears to have evaded his responsibility under the Bankruptcy Act by making it very difficult for the trustee to communicate with him, not answering telephone calls and not responding to other correspondence. On the occasion that he has spoken to a representative of the trustee, he has indicated, in somewhat forceful terms, that he will not vacate the premises voluntarily.

4. Mr Sim said in one conversation on 5 February 2015 with Ms Greentree (a Manager at BPS Recovery firm) that no one would be taking his house and that he was waiting for a letter from the firm outlining the amount required to annul the bankruptcy. That, together with the conduct of these proceedings by the respondent indicates to me that he is unlikely in the short term, if at all, ever to cooperate with the applicant. The applicant says that there is some urgency in seeking the orders that the respondent vacate the premises. In particular, the applicant states that the mortgage is currently in arrears and that he fears that if possession of the property is not obtained promptly, then the mortgagee will apply a default rate of interest. That would certainly be against the interests of all the parties to the proceedings, as well as the interests of the unsecured creditors. 

Conclusion

1. In my view, it is plainly necessary that, in order to exercise his power of sale as a registered proprietor of the property and to realise the equity that remains in the property, it is necessary that vacant possession be given. Vacant possession will facilitate the sale and, in particular will enable the property to be prepared for inspection that, ordinarily, precedes any such sale.  In light of that, and together with the fact that the respondent has been of no assistance at all to the trustee in the exercise of the trustee’s duties under the Bankruptcy Act, it is appropriate that the orders sought be made.

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Judge Smith

Associate: 

Date: 12 November 2015