East v Repatriation Commission

Case [1987] FCA 242

Re: THE BANKRUPT ESTATE OF ROSS DANIEL HODBY
THE OFFICIAL RECEIVER FOR AND ON BEHALF OF THE OFFICIAL TRUSTEE IN BANKRUPTCY
And: COLIN LEO KLAU; GLENYS KAY KLAU; GLENCOL PTY. LTD.; R.S.C. RYMILL PTY.
LTD.; PATRICIA JANE RYMILL; KRAKAT PTY. LTD.; MICHAEL BERNARD HART; MAUREEN
HART; DONALD PATRICK PLUNKETT; JOYCE SUSANNA SMART and PAUL KERTESZ
Ex parte: STEPHENSON NOMINEES PTY. LTD. and A.F. & M.M. ROBERTS
No. 910/3 of 1986
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA


SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Fisher J.
CATCHWORDS

Bankruptcy - tracing moneys through accounts of bankrupt land and finance broker - accounts in confusion - registered mortgagee and Official Receiver contesting moneys paid into Court by mortgagor - indefeasibility of registered mortgagee's title under REAL PROPERTY ACT (1886) S.A. - whether registered mortgagee had taken title for "valuable consideration" - registered mortgagee holds mortgage as constructive or resulting trustee for bankrupt estate.

Real Property Act (1886) S.A. ss.57,71,249 considered.

Bankruptcy - jurisdiction of Courts of Bankruptcy - not limited by s.30(1) of Act - jurisdiction where issue concerns "the extent of the assets which form part of the bankrupt's estate" - assets form part of estate even when "subject to enquities" - Section 116(2)(a) of Act not applicable when pool of mixed funds subject to tracing.

Bankruptcy Act 1966 s.30(1), 116(2)(a) considered.

HEARING

ADELAIDE

#DATE 16:4:1987

ORDER

The Official Receiver is entitled to the sum of $81,187.50 standing in Court to the credit of an account entitled "Estate of Ross Daniel Hodby - Stephenson Nominees Pty. Ltd. - Roberts" together with accrued interest thereon for the benefit of the estate of the bankrupt Ross Daniel Hodby, subject to any application which may be made by any party other than Stephenson Nominees Pty. Ltd. to trace his own money into the said sum of $81,187.50.

The question whether the said sum should be held by the Official Receiver for the benefit of the unsecured creditors of the bankrupt who prove in his bankruptcy or of the unsecured creditors who contributed to the monies in the control of the bankrupt from which the advance was made to the mortgagors which is secured by memorandum of mortgage No. 6259622 be adjourned for further consideration.

The cross-claim of Stephenson Nominees Pty. Ltd. be dismissed.

The question of any consequential directions under sub.s.134(4) of the Bankruptcy Act be adjourned for further consideration.

The question whether the costs of the parties before the Court on this application or any portion of those costs should be paid out of the bankrupt estate be reserved.

Liberty be granted to the parties to speak to the Minutes of this Order in Chambers at 2.15 p.m. this day, upon any party intending so to speak giving notice to the other party.

Note: Settlement and entry of orders is dealt with in Bankruptcy Rule 124.

JUDGE1

This is a further application by the Officer Receiver, for and on behalf of the Official Trustee in Bankruptcy ("the Official Receiver") as trustee of the…

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Details
AGLC
The Official Receiver for and on behalf of the Official Trustee in Bankruptcy v. Klau, C. & Ors [1987] FCA 242
Case
[1987] FCA 242
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, the matter of East versus Repatriation Commission involved a complex dispute over the ownership of moneys held in a bank account. The account in question was linked to a bankrupt land and finance broker, Ross Daniel Hodby, and Stephenson Nominees Pty. Ltd. The Official Receiver and the registered mortgagee contested the moneys paid into the court by the mortgagor. The central issue was whether the registered mortgagee had taken title for "valuable consideration" and thus held the mortgage as a constructive or resulting trustee for the bankrupt estate.

The court was tasked with determining whether the registered mortgagee's title was indefeasible under the Real Property Act (1886) S.A., and whether the mortgagee had obtained the title for valuable consideration. The Official Receiver argued that the registered mortgagee held the mortgage as a constructive or resulting trustee for the bankrupt estate. The court needed to consider the principles of tracing in equity, the nature of the mortgagee's interest, and the applicability of the indefeasibility provisions under the Act. The court concluded that the registered mortgagee held the mortgage as a constructive or resulting trustee for the bankrupt estate, as the mortgagee had not provided valuable consideration for the mortgage. The court found that the moneys in the account should be returned to the Official Receiver for the benefit of the bankrupt estate.

The court's decision was that the Official Receiver was entitled to the sum of $81,187.50 held in the court's credit account, together with accrued interest, for the benefit of the estate of the bankrupt Ross Daniel Hodby. The court reserved the question of whether the sum should be held for the benefit of the unsecured creditors of the bankrupt or those who contributed to the monies in the control of the bankrupt from which the advance was made to the mortgagors. The cross-claim of Stephenson Nominees Pty. Ltd. was dismissed, and the matter of any consequential directions under sub.s.134(4) of the Bankruptcy Act was adjourned for further consideration. The question of costs was reserved, and the parties were granted liberty to speak to the minutes of the order in chambers.

Orders

Orders of the court

The Official Receiver is entitled to the sum of $81,187.50 standing in Court to the credit of an account entitled "Estate of Ross Daniel Hodby - Stephenson Nominees Pty. Ltd. - Roberts" together with accrued interest thereon for the benefit of the estate of the bankrupt Ross Daniel Hodby, subject to any application which may be made by any party other than Stephenson Nominees Pty. Ltd. to trace his own money into the said sum of $81,187.50.

The question whether the said sum should be held by the Official Receiver for the benefit of the unsecured creditors of the bankrupt who prove in his bankruptcy or of the unsecured creditors who contributed to the monies in the control of the bankrupt from which the advance was made to the mortgagors which is secured by memorandum of mortgage No. 6259622 be adjourned for further consideration.

The cross-claim of Stephenson Nominees Pty. Ltd. be dismissed.

The question of any consequential directions under sub.s.134(4) of the Bankruptcy Act be adjourned for further consideration.

The question whether the costs of the parties before the Court on this application or any portion of those costs should be paid out of the bankrupt estate be reserved.

Liberty be granted to the parties to speak to the Minutes of this Order in Chambers at 2.15 p.m. this day, upon any party intending so to speak giving notice to the other party.

Note: Settlement and entry of orders is dealt with in Bankruptcy Rule 124.

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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