Field (Trustee) v Spencer

Case [2025] FCA 122


FEDERAL COURT OF AUSTRALIA

Field (Trustee) v Spencer [2025] FCA 122

File number: WAD 267 of 2024
Judgment of: COLVIN J
Date of judgment: 26 February 2025
Catchwords: BANKRUPTCY - application by trustee for order for possession of bankrupt's home - whether any basis to oppose order - consideration of source of power to grant orders - consideration of appropriate form of orders - considerable delay by trustee in administration of estate - whether orders should be made in exercise of Court's supervisory jurisdiction - orders for possession - show cause orders made as to ongoing conduct of administration
Legislation:

Bankruptcy Act 1966 (Cth) s 27, Schedule 2 (Insolvency Practice Schedule (Bankruptcy)) ss 90‑10, 90-15

Judiciary Act 1903 (Cth) s 79

Conveyancing Act 1919 (NSW) s 66G

Civil Judgments Enforcement Act 2004 (WA)

Cases cited:

Adsett v Berlouis (1992) 37 FCR 201

CFB18 v Reader Lawyers & Mediators [2018] FCA 611

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

Lo Pilato (Trustee), in the matter of Ghougassian (Bankrupt) v Ghougassian (No 3) [2022] FCA 1532

Michell (Trustee) v Sinnott, in the matter of Sinnott [2023] FCA 464

Petrie, Trustee of the Property of Aitken (Bankrupt) v Aitken [2019] FCCA 1708

Scott as Trustee of the Bankrupt Estate of Williams v State of New South Wales [2022] FedCFamC2G 569

Shaw v The Official Trustee in Bankruptcy of the Australian Financial Security Authority (No 3) [2021] FCA 1569

Division: General Division
Registry: Western Australia
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 31
Date of hearing: 20 February 2025
Counsel for the Applicant: Mr WB Macdonald
Solicitor for the Applicant: Roe Legal Services
Counsel for the Respondents: The respondents did not appear

ORDERS

WAD 267 of 2024
BETWEEN:

MALCOLM FIELD AS TRUSTEE OF THE PROPERTY OF DOBY DARREL SPENCER (A BANKRUPT)

Applicant

AND:

DOBY DARREL SPENCER

First Respondent

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ACN 005 357 522)

Second Respondent

GNANGARA DEVELOPMENTS PTY LTD

Third Respondent

ORDER MADE BY:

COLVIN J

DATE OF ORDER:

26 FEBRUARY 2025

THE COURT ORDERS THAT:

1.On or before 30 April 2025, the first respondent must deliver up vacant possession of the property known as 11 Lord Street Bassendean being Lot 11 on deposited plan 41343 in certificate of title volume 2596 folio 299 (Property).

2.On or before 30 April 2025, the first respondent must deliver up all keys and security codes for all buildings and improvements on the Property.

3.On or before 30 April 2025, the first respondent must remove from the Property all vehicles, rubbish and chattels which have not vested in the applicant by operation of the Bankruptcy Act 1966 (Cth).

4.A warrant of possession issue upon the applicant filing an affidavit deposing to a failure by the first respondent to comply with order 1.

5.Pursuant to s 134(1)(a) of the Bankruptcy Act, the applicant exercise a power of sale of the Property.

6.Subject to these orders, the applicant…

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Field (Trustee) v Spencer [2025] FCA 122
Case
[2025] FCA 122
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CaseChat Overview and Summary

The case of Field (Trustee) v Spencer involved an application by a trustee for an order of possession of the bankrupt's home. The trustee, Field, sought an order for possession of the property located at 11 Lord Street, Bassendean, as well as various other orders related to the sale and administration of the property. The first respondent, Spencer, was the bankrupt and was required to vacate the property and deliver up all keys and security codes. Field also sought the removal of any vehicles, rubbish, and chattels that had not vested in the applicant. The court had to consider the legal basis for granting these orders and the appropriate form of orders to be made.

The primary legal issues before the court included the source of power to grant orders for possession, the exercise of the court's supervisory jurisdiction, and the appropriate form of orders to facilitate the orderly sale of the property. The court examined whether there was any basis for the respondent to oppose the orders for possession and whether the considerable delay by the trustee in administering the estate warranted the exercise of the court's supervisory jurisdiction. Additionally, the court needed to determine the appropriate form of orders to ensure an orderly sale of the property, including the method of sale, the setting of a reserve price, and the application of the proceeds of the sale.

The court found that there was no basis for the respondent to oppose the orders for possession, and it had the power to grant such orders under section 134 of the Bankruptcy Act 1966 (Cth). The court also considered it appropriate to exercise its supervisory jurisdiction over the administration of the estate due to the considerable delay by the trustee. The court then outlined detailed orders for the possession of the property, the sale of the property, and the application of the proceeds of the sale. These included orders for the property to be sold by private treaty and, if unsold, by public auction and then public tender. The court also required the trustee to provide regular reports on the progress of the administration and disbursements incurred, with no remuneration to be paid unless approved by the court.

The final orders included specific directions for the respondent to vacate the property and deliver up all keys and security codes, as well as orders for the sale of the property and the application of the proceeds. The court also set a date for a further case management hearing to monitor the progress of the administration of the estate. The respondent was ordered to pay the trustee's costs of the proceedings, which were to be taxed on a confined basis.

Orders

Orders of the court

1. On or before 30 April 2025, the first respondent must deliver up vacant possession of the property known as 11 Lord Street Bassendean being Lot 11 on deposited plan 41343 in certificate of title volume 2596 folio 299 (Property).

2. On or before 30 April 2025, the first respondent must deliver up all keys and security codes for all buildings and improvements on the Property.

3. On or before 30 April 2025, the first respondent must remove from the Property all vehicles, rubbish and chattels which have not vested in the applicant by operation of the Bankruptcy Act 1966 (Cth).

4. A warrant of possession issue upon the applicant filing an affidavit deposing to a failure by the first respondent to comply with order 1.

5. Pursuant to s 134(1)(a) of the Bankruptcy Act, the applicant exercise a power of sale of the Property.

6. Subject to these orders, 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.

7. The property be sold by private treaty for an initial period of 90 days and thereafter by public auction and, if not sold at public auction, then by public tender, provided that the property may be sold by private treaty before the close of any public tender.

8. The applicant is to set a reasonable reserve price for the auction of the property.

9. The applicant is authorised to sign on behalf of the first respondent any application to Landgate for the issue of a caveat lapsing notice under s 138B of the Transfer of Land Act 1893 (WA) in respect of the Property.

10. The proceeds of sale of the Property be applied as follows:

(a) first, in payment of all selling costs, including agents' commissions, advertising and marketing expenses, conveyancing and legal costs associated with the sale;

(b) second, in payment of amounts secured by registered mortgage over the Property; and

(c) third, all remaining proceeds to be paid to the applicant as trustee of the bankrupt estate of the first respondent.

11. There be liberty to apply to vary or supplement orders 1 to 10 on the basis that orders to such effect are reasonable and necessary for the orderly sale of the Property.

12. On or before 31 March 2025, the applicant show cause by affidavit and submissions as to why orders to the following effect should not be made:

(a) on or before 31 May 2025 and thereafter at three monthly intervals, the applicant do provide, at his own cost, brief reports of no more than 3 pages verified by affidavit filed in these proceedings and served on the first respondent as to the progress of the administration of the estate and as to all disbursements incurred in the administration with copies of the report to be provided to known claiming creditors of the estate; and

(b) no remuneration shall be paid to the applicant in respect of the administration of the estate unless and until approval has been obtained from the Court by application in these proceedings, provided that reasonable disbursements may be incurred and reimbursed without approval first being obtained.

13. The first respondent pay the applicant's costs of these proceedings to the date of these orders without prejudice of the right of the applicant to claim those costs as a cost of administration of the bankrupt estate of the first respondent, such costs to be taxed on the basis that they are confined to the costs of and incidental to the bringing of the application and the hearing on 20 February 2025.

14. The proceedings be listed for a further case management hearing at 9.15 am AWST on 9 April 2025.

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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