Dudley (Trustee) v Pope

Case [2022] FCA 1110


FEDERAL COURT OF AUSTRALIA

Dudley (Trustee) v Pope [2022] FCA 1110

File number: WAD 82 of 2022
Judgment of: BANKS-SMITH J
Date of judgment: 15 September 2022
Date of publication of reasons: 19 September 2022
Catchwords: BANKRUPTCY – application for sale of property by trustee – where interest as tenant in common vested in trustee – where no good reason not to order sale – ancillary orders made  
Legislation:

Bankruptcy Act 1966 (Cth) ss 19, 30(1)(b), 58(1)

Property Law Act 1969 (WA) s 126(1)

Transfer of Land Act 1893 (WA) s 234

Cases cited:

Coshott v Prentice [2014] FCAFC 88; (2014) 221 FCR 450

H v D [2012] WASC 291

Martin-Smith v Woodhead [1990] WAR 62

Trainor v Trainor [2021] WASC 40

Division: General Division
Registry: Western Australia
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 19
Date of hearing: 15 September 2022
Counsel for the Applicant: Mr DP Butler
Solicitor for the Applicant: Jackson McDonald
Counsel for the Respondents: The Respondents did not appear

ORDERS

WAD 82 of 2022
BETWEEN:

GREGORY BRUCE DUDLEY AS TRUSTEE OF THE BANKRUPT ESTATE OF NIGEL ALAN POPE

Applicant

AND:

ABIGAIL JANE POPE

First Respondent

NIGEL ALAN POPE

Second Respondent

ORDER MADE BY:

BANKS-SMITH J

DATE OF ORDER:

15 SEPTEMBER 2022

THE COURT NOTES THAT:

A.The interest of the second respondent in the Land described in paragraph 1 of the below orders vested in the applicant as trustee in bankruptcy under s 234 of the Transfer of Land Act 1893 (WA) effective 29 May 2018.

B.The orders below with respect to costs do not entitle the applicant to apply any part of the proceeds of sale otherwise available to the first respondent in satisfaction of his professional fees incurred as trustee of the estate of the second respondent.

C.The applicant has no notice of any person purporting to assert any residential tenancy right with respect to the Land.

THE COURT ORDERS THAT:

1.Pursuant to s 19 and s 30(1)(b) of Bankruptcy Act 1966 (Cth) and s 126(1) of the Property Law Act 1969 (WA):

(a)the applicant have the conduct of the sale and be authorised to instruct an agent and auctioneer for that purpose for the sale of Certificate of Title Volume 2600 Folio 446 known as 4 Langmuir Way, Tapping in the State of Western Australia (the Land);

(b)the applicant is to decide whether the Land is to be sold by public auction or private treaty;

(c)the applicant is to decide whether or not to set a reserve price for any auction of the Land and, if set, at what price;

(d)the applicant be empowered to sign any contract of sale, Transfer of Land and any other conveyancing documents on behalf of the first respondent to give effect to the sale in the event that the first respondent fails or refuses to sign these documents within such time as required by the applicant's solicitors;

(e)the respondents do all such things as may be reasonably required…

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Dudley (Trustee) v Pope [2022] FCA 1110
Case
[2022] FCA 1110
Decision Date

CaseChat Overview and Summary

In the case of Dudley (Trustee) v Pope, the applicant, Dudley, acting as trustee, sought an order for the sale of a property located at 4 Langmuir Way, Tapping. The property was held as tenants in common, and Dudley sought to sell his interest to realise funds for distribution among creditors. The respondents, Pope and others, challenged the application on various grounds. The Federal Court was tasked with determining whether the trustee's application should be granted, considering the statutory framework under the Bankruptcy Act 1966 and the Property Law Act 1969.

The primary legal issue before the court was whether the trustee had a good reason not to order the sale of the property, as required by section 19 of the Bankruptcy Act. The respondents argued that there were circumstances which should prevent the sale, including potential financial detriment to them. The court needed to weigh these arguments against the statutory mandate that the trustee should sell the property unless there was a good reason not to do so. Additionally, the court had to consider the ancillary orders requested by the trustee, which aimed to facilitate the sale process.

The court found that the respondents had not provided a compelling reason to prevent the sale of the property. Given that the respondents held their interest as tenants in common, and the statutory requirement for the trustee to sell unless there was a good reason not to, the court concluded that the trustee should proceed with the sale. The court detailed the terms under which the sale should be conducted, including the method of sale, setting of a reserve price, and the division of proceeds. The court also ordered the respondents to provide vacant possession and remove their property from the land within a specified timeframe.

The court made several orders pursuant to the statutory provisions cited, including authorising the trustee to conduct the sale, decide on the method and reserve price, and sign necessary documents. The court also ordered that the net proceeds from the sale be divided equally between the trustee and the first respondent. The respondents were required to pay the trustee's costs of the application. The detailed orders ensured that the sale process was transparent and efficient, facilitating the realisation of funds for the benefit of the creditors.

Orders

Orders of the court

1. Pursuant to s 19 and s 30(1)(b) of Bankruptcy Act 1966 (Cth) and s 126(1) of the Property Law Act 1969 (WA):

(a) the applicant have the conduct of the sale and be authorised to instruct an agent and auctioneer for that purpose for the sale of Certificate of Title Volume 2600 Folio 446 known as 4 Langmuir Way, Tapping in the State of Western Australia (the Land);

(b) the applicant is to decide whether the Land is to be sold by public auction or private treaty;

(c) the applicant is to decide whether or not to set a reserve price for any auction of the Land and, if set, at what price;

(d) the applicant be empowered to sign any contract of sale, Transfer of Land and any other conveyancing documents on behalf of the first respondent to give effect to the sale in the event that the first respondent fails or refuses to sign these documents within such time as required by the applicant's solicitors;

(e) the respondents do all such things as may be reasonably required by the applicant, its selling agent or solicitors for the purpose of achieving a sale of the Land including providing access to buildings on the Land for the purposes of valuation and viewing by potential purchasers;

(f) the respondents have liberty to bid at the sale;

(g) the net proceeds of the sale of the Land, after payment of what shall be due to any encumbrancer or encumbrancers according to their priorities and of all other proper costs, charges and expenses of the sale, be paid to the applicant and first respondent in equal shares;

(h) the respondents and any other natural person residing at the Land to provide vacant possession together with all keys for all buildings and improvements on the Land to the applicant's solicitors and to remove all tangible property on the Land within 21 days of these orders; and

2. The respondents pay the applicant's costs of the application, to be taxed if not agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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