Field (Trustee), in the matter of Mellor (Bankrupt) v Mellor (No 2)
[2024] FedCFamC2G 996
•4 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Field (Trustee), in the matter of Mellor (Bankrupt) v Mellor (No 2) [2024] FedCFamC2G 996
File number(s): PEG 107 of 2024 Judgment of: JUDGE STREET Date of judgment: 4 October 2024 Catchwords: BANKRUPTCY – interest vested in trustee – delay in registration – trustee entitled to realise the property Legislation: Bankruptcy Act 1966 (Cth)
Transfer of Land Act 1893 (WA)
Division: Division 2 General Federal Law Number of paragraphs: 7 Date of hearing: 4 October 2024 Place: Sydney Solicitor for the Applicant: Mr W MacDonald of Roe Legal Services For the Respondents: The Respondents did not appear ORDERS
PEG 107 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF DEBBIE MARIE MELLOR, BANKRUPT
BETWEEN: MALCOM FIELD AS TRUSTEE OF THE PROPERTY OF DEBBIE MARIE MELLOR (A BANKRUPT)
Applicant
AND: DEBBIE MARIE MELLOR
First Respondent
ANTONY MELLOR
Second Respondent
ORDER MADE BY:
JUDGE STREET
DATE OF ORDER:
4 OCTOBER 2024
THE COURT ORDERS THAT:
1.A declaration that the Applicant of the one part and the Second Respondent of the other part are the beneficial owners as tenants-in-common in equal shares of the property known as 16 Doddington Way, Quinns Rocks, being Lot 428 on Deposited Plan 27516, comprised in Certificate of Title Volume 2215 Folio 136 (Property).
2.A declaration that the Applicant of one half and the Second Respondent of the other half are the beneficial owners of the funds credited to the Westpac Banking Corporation account bank account with BSB XXXXX X and account number XXXXX X, being an account held in the joint names of the First and Second Respondents (Westpac Account).
3.Within 30 days from the date of these orders, the First and Second Respondents must:
a.deliver up vacant possession of the Property to the Applicant;
b.deliver up to the Applicant all keys and security codes for all buildings and improvements on the Property, and.
c.remove from the Property all vehicles, rubbish and chattels which have not vested in the Applicant.
4.A Property (Seizure and Delivery) Order pursuant to the Civil Judgments Enforcement Act 2004 (WA) (PSDO) issue in respect of the Property in favour of the Applicant, such PSDO to lie in the Registry until the filing by the Applicant, not before 30 days from the date of these orders, of an affidavit stating that the First and Second Respondents have not given vacant possession of the Property, upon which the PSDO be issued forthwith to the Applicant.
5.The Property be sold by private treaty for an initial period of 90 days and thereafter by public auction or, if not sold at public auction, then by private treaty or public tender.
6.The Applicant is to set a reserve price for the auction of the Property having regard to any advice received from a licensed valuer.
7.The Applicant has the sole conduct and control of the sale of the Property and is authorised to make all decisions with regard to the sale, including appointing a real estate agent and appointing solicitors or settlement agents to undertake necessary conveyancing work, with any such appointments to be at reasonable commercial rates.
8.The Applicant is authorised and empowered to sign on behalf of the Second Respondent any contract of sale, discharge of mortgage authority, transfer of land or any other documents required to effect a sale of the Property, if the Second Respondent refuses, fails or neglects to sign such documents within such time as required by the Applicant's solicitors
9.The Applicant is authorised to sign on behalf of the First and Second Respondents any application to Landgate for the issue of a caveat lapsing notice under section 138B of the Transfer of Land Act 1893 (WA) in respect of the Property.
10.The Second Respondent have liberty to bid at any auction sale of the Property, or to submit an offer to purchase the Property.
11.The proceeds of the sale of the Property be applied as follows:
a.first, in payment of all selling costs including agent commissions, advertising and marketing expenses, conveyancing and legal costs associated with the sale, and in discharging any encumbrances against the title to the Property;
b.secondly, half of the then available proceeds to be paid to the Second Respondent, less the costs of this proceeding payable by the Second Respondent to the Applicant; and
c.thirdly, all remaining proceeds to be paid to the Applicant as trustee of the bankrupt estate of Debbie Marie Mellor.
12.An order that the First and Second Respondent do, within 14 days of the date of these orders, cause one half of the funds held in the Westpac Account to be paid to the Applicant.
13.The Second Respondent pay the Applicant's costs of this proceeding insofar as they relate to the Property, such costs to be taxed if not agreed.
14.There be liberty to apply on 48 hours' written notice to the other parties.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JUDGE STREET
These proceedings were commenced on 27 March 2024 by the trustee of the estate of Debbie Marie Mellor in which the trustee is seeking declarations as to the ownership of proceeds in a joint bank account, a declaration relating to the property at 16 Doddington Way, Quinns Rocks being a lot 428, Deposited Plan 27516 comprised in Certificate of Title Volume 2215 Folio 136, and orders for the delivery up of a vacant possession. If necessary, the trustee is also seeking property seizure, a delivery order, and for the sale of the property by private auction as well as for other machinery provisions to affect the sale and for the proceeds to be paid to the mortgagee with the remaining balance to be divided equally between the trustee and the second respondent.
The Court is satisfied that this matter is within the Court’s jurisdiction under s 27 of the Bankruptcy Act 1966 (Cth). Affidavits of service as well as affidavits in respect of the substantive foundation for the orders being sought have been read. The Court is satisfied on the evidence before it that the respondents are aware of these proceedings that were fixed for a final hearing today. The Court is satisfied that this is an appropriate matter in which to make an order that the hearing proceed notwithstanding the failure of the respondents to appear. The affidavit evidence identifies that the first respondent was made bankrupt on 1 October 2019.
The applicant is a registered trustee appointed in respect of that sequestration of the first respondent, and the second respondent is the husband of the bankrupt. The evidence identifies the title of the property to which the Court has referred, being in the names of the respondents. It is apparent on the evidence, on the making of the sequestration order, the first respondent’s interest vested in the trustee. The trustee is entitled to and indeed bound to take steps to realise the vested property for distribution to the creditors. The Court has the benefit of a title search showing a mortgage and the Court received evidence in relation to the potential value of the property.
The Court also had evidence in relation to restrictive covenants and special conditions that were the subject of a caveat but do not identify any outstanding debt. The Court has evidence of the amounts outstanding to creditors and the steps taken to try and get the second respondent to engage in relation to the steps needed to sell the property. The Court also received evidence as to the existence of a particular bank account with Westpac, which has a balance and is in the joint names of the bankrupt and the second respondent and half the proceeds are vested in the applicant trustee upon the making of the sequestration order.
The Court requested the trustee take steps to be recorded on the register, given the provisions of s 234 of the Transfer of Land Act 1893 (WA) (“the Act”). There appears to be a delay in terms of the execution of that entitlement to be registered, which has been identified by the registry to be between 35 and 115 business days. That delay is entirely unacceptable, however there is no proper basis upon which, on the evidence before the Court, it could be said that the trustee is not entitled to the automatic registration in accordance with s 234 of the Act. In these circumstances, given the evidence, as to the lodgement of the documents to facilitate that transfer, the Court is satisfied that it is appropriate to make all the orders now being sought by the trustee to facilitate the trustee obtaining the benefit of the property that is vested in the trustee for distribution to the creditors.
The Court has preserved liberty to apply on the basis that if the respondents fail to take steps in respect of the transfer of the funds in the bank account, the trustee can apply to the Court for an order for a registrar to execute the appropriate document that will bind the bank and the parties for transfer of those funds.
The Court is satisfied it is appropriate to make the orders sought. It is for these reasons the Court makes the above orders.
I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Street. Associate:
Dated: 10 October 2024
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