Efstathiou v Fenwick
[2007] FMCA 1450
•14 August 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| EFSTATHIOU & ANOR v FENWICK | [2007] FMCA 1450 |
| BANKRUPTCY – Application for Trustee to take control of property – where debtor appears to have been disposing of assets – where application made ex parte. |
| Bankruptcy Act 1966, s.50 |
| Applicants: | SIMON EFSTATHIOU AND SASHA MASON |
| Respondent: | KEVIN WILLIAM FENWICK |
| File number: | SYG2488 of 2007 |
| Judgment of: | Raphael FM |
| Hearing date: | 14 August 2007 |
| Date of last submission: | 14 August 2007 |
| Delivered at: | Sydney |
| Delivered on: | 14 August 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Johnson |
| Solicitors for the Applicant: | Macedone Christie Willis |
ORDERS
Scott Darren Pascoe be directed to take control of the property of Kevin William Fenwick pursuant to s.50 of the Bankruptcy Act 1966 from the making of this order until 5.00p.m. on 20 August 2007 or further order.
The application be restored for hearing at 10.15a.m. on 20 August 2007.
That service of this order upon the debtor be made:
(1) Personally.
(2)By leaving a copy addressed to the debtors at 2/29 Jacaranda St, Caringbah, NSW, 2229.
(3)By sending a copy by facsimile to Mr Peter Williams solicitor at 02 9525 0799 with a letter requesting him to advise his client of the return date of the application.
(4) Costs reserved.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2488 of 2007
| SIMON EFSTATHIOU and SACHA MASON |
Applicants
And
| KEVIN WILLIAM FENWICK |
Respondent
REASONS FOR JUDGMENT
There comes before me an application by petitioning creditors for the court to exercise its powers under s.50 the Bankruptcy Act 1966 (the Act”) to appoint a registered trustee to take control of a debtor’s property. Section 50 relevantly states:
“(1) At any time after a bankruptcy notice is issued, or a creditor’s petition is presented, in relation to a debtor, but before the debtor becomes a bankrupt, the Court may:
(a) direct the Official Trustee or a specified registered Trustee to take control of the debtor’s property ; and
(b) make any other orders in relation to the property.
(1A) The Court may give a direction or make an order only if:
(a) a creditor has applied for the Court to make a direction; and
(b) the Court is satisfied that it is in the interests of the creditors to do so; and
(c) the debtor has not complied with the bankruptcy notice.
(1B) If the Court directs a trustee to take control of the debtor's property, the Court must specify when the control is to end.”
The application which is made to me today is made as an interim application and ex parte. It is supported by an affidavit of Murray Roderick Godfrey and another affidavit of Jonathon Craig Prowse. Mr Prowse’s affidavit confirms that the money due under the bankruptcy notice, in respect of which a petition was issued today 14 August 2007, has not been paid and thus sub.s.50(1A)(c) has been enlivened.
The affidavit of Mr Godfrey indicates that he is the liquidator of a company known as Fenwick Financial Management Solutions Pty Limited of which the respondent debtor was the sole director and secretary. Mr Godfrey deposes to the concerns he has about the manner in which the company was run and suggests that it was insolvent from at least June 2002. He states:
“During that period the company has incurred debt in the sum of $331,105.59. My investigations are continuing, but it is likely that an action will be commenced against the respondent to recover from him those debts incurred by the company whilst it was insolvent.
I believe the respondent is in the process of, or has already disposed of interests in assets to defeat the claims of creditors.”
The proof of the latter statement is provided by an annexure to the affidavit being a facsimile dated 24 February 2006 in which Mr Fenwick writes to a company known as CSC Homeloans requesting an assignment of a commission payable to Fenwick Financial Management Solutions Pty Limited to himself.
Mr Godfrey also deposes to the fact that a property believed to belong to Mr Fenwick has been listed for sale. I note that the listing took place in or around July 2007. There is no further evidence in relation to the property. In Mr Godfrey’s affidavit there is an indication that a caveat was lodged by him as liquidator of the company but that caveat lapsed upon the receipt of a lapsing notice in December 2006.
The making of an order under s.50 is a serious matter. It provides an opportunity for a concerned creditor to ensure that the property is preserved. Because this application is made ex parte I must be satisfied that there is sufficient ground for the order to be made and that it is in the interests of justice so to do. I am satisfied that Mr Godfrey has been able to show at least a prime facie case of serious concern and I am satisfied that it would be in the interests of justice to make an order as requested to protect the position for a short period of time whilst the bankrupt has an opportunity to bring the matter back to the court for a more sophisticated argument. I have received a consent to act as trustee from Scott Darren Pascoe of Sims Partners, Level 5, 55 Hunter Street, Sydney who is a registered trustee.
I am also required to be satisfied that the making of this order is in the interest of creditors. Whilst the creditor’s petition is for a reasonably small amount of money, namely $7,000, the claim that Mr Godfrey has indicated is large. It is unknown what other creditors may exist. It is clearly in the interest of those creditors that the proceeds of sale of the property should not be diminished in any way and I am satisfied that the making of this order would be in the interests of all creditors.
I make orders as follows. Scott Darren Pascoe be directed to take control of the property of William Fenwick pursuant to s.50 of the Act from the making of this order until 5.00pm on 20 August 2007 or further order. The application be restored for hearing at 10.15a.m. on 20 August 2007. That service of this order upon the debtor be made:
(1) Personally.
(2)By leaving a copy addressed to the debtors at 2/29 Jacaranda St, Caringbah, NSW, 2229.
(3)By sending a copy by facsimile to Mr Peter Williams solicitor at 02 9525 0799 with a letter requesting him to advise his client of the return date of the application.
(4) Costs reserved.
I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date:
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