FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Gazi & Strobel [2021] FedCFamC1F 223
File number(s): SYC 4715 of 2020 Judgment of: MCGUIRE J Date of judgment: 26 November 2021 Catchwords: FAMILY LAW – PROPERTY – INJUNCTION – de facto relationship – application for an injunction to preserve property pending final hearing – application refused – orders made allowing the trustee in bankruptcy to pay the secured creditor a sum of $40,798.09 Legislation: Family Law Act 1975 (Cth) ss 79 and 90SM
Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth)
Civil Procedure Act 2005 (NSW) s 101
Cases cited: Allan & Allan and Ors [2009] FamCA 553
Austin & Hong [2015] FamCA 1119
Ascot Investments Pty Ltd v Harper and Harper (1981) FLC 91–000
Biltoft & Biltoft (1995) FLC 92–614
Combis, Trustee of the property of Peter Jensen (Bankrupt) v Jensen [2009] FCA 778
Lemnos & Lemnos [2007] FamCA 1058
Lemnos and Anor (2009) FLC 93–394
S & M and Ors [2003] FamCA 1387
Sieling & Sieling (1973) FLC 90-627
Stanford & Stanford (2012) 247 CLR 108
Trustee of the Property of G Lemnos a Bankrupt and
Division: Division 1 First Instance Number of paragraphs: 40 Date of hearing: 11 November 2021 Place: Launceston Counsel for the Applicant: In person Counsel for the Respondents: Mr Ridley Solicitor for the Respondents: Matthews Folbigg Pty Ltd Counsel for the Respondents: Mr Ramsey Solicitor for the Respondents: A R Conolly And Company Lawyers ORDERS
SYC 4715 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GAZI
Applicant
AND: MR SHELLBACK AS TRUSTEE FOR THE BANKRUPT ESTATE OF STROBEL
First Respondent
C PTY LTD
Second Respondent
ORDER MADE BY:
MCGUIRE J
DATE OF ORDER:
26 NOVEMBER 2021
THE COURT ORDERS THAT:
1.The application for injunctive orders by the applicant Mr Gazi is dismissed.
2.The first respondent trustee pay to the second respondent the sum of $40,798.09 from funds held in trust for the bankrupt estate of Ms Strobel.
3.That the matter be listed for trial in the Federal Circuit and Family Court of Australia at Sydney with an estimated hearing time of 2 days before Justice McGuire commencing on 30 May 2022 at 10.00am.
4.That the parties make, file and serve their trial affidavits and updated sworn financial statements not later than 28 days prior to the trial date.
5.That the parties make, file and serve case summary documents not later than 7 days prior to the trial date.
6.That the applicant, Mr Gazi, pay the hearing fee in accordance with the Regulations of this Court.
These proceedings be listed for mention and compliance before His Honour Justice McGuire on 16 May 2022 at 9.30am by telephone by dialling … then enter passcode …44#.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of…
Continue reading Gazi & Strobel
Sign in free to access the full text
- AGLC
- Gazi & Strobel [2021] FedCFamC1F 223
- Case
- [2021] FedCFamC1F 223
- Decision Date
CaseChat Overview and Summary
The legal issues revolved around the proper identification and valuation of the property pool and the treatment of the second respondent's secured creditor claim. The applicant contended that the property pool was limited to the $105,000 held in trust by the second respondent, while the respondents argued that there were additional assets that should be considered. Additionally, the court had to address whether the second respondent's secured creditor claim should be satisfied before any distribution to the applicant.
The court found that the applicant had not provided sufficient evidence to substantiate his claim of entitlement to 100 per cent of the property pool. The court also considered the prejudice to the second respondent, who was a small businessperson with an outstanding debt of $40,798.09 plus interest. The court noted that while the prejudice was real and actual, it could be mitigated by setting an early trial date. Ultimately, the court ordered that the matter proceed to a final hearing to determine the net property pool and its distribution among the parties.
The court made no final orders in this decision but directed the matter to proceed to a final hearing to address the unresolved issues.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
The second significant aspect of s 114(4) is that it does not distinguish between the bankrupt’s secured and unsecured creditors. CONSIDERATION Long established process for the Court in altering parties’ property interests pursuant to s 79 or s 90SM obliges the Court to firstly determine the parties’ interests in their property or the property of either of them. The creditors of the parties or either of them are relevant in establishing the net property pool and its value.[5] The applicant here claims that the pool is confined to an amount of $105,000E held in trust by the second respondent being the balance proceeds of sale of real property previously registered solely in the name of the primary respondent, Ms Strobel. The respondents argue, firstly, that the pool is of far greater substance and that the applicant is in possession or control of assets, or has been, such that should and will be taken into account at the final hearing. The implication of that argument is that the claim of the second respondent creditor could be satisfied therefore leaving a property pool to satisfy the applicant’s legitimate claim and his entitlement.[5] Biltoft & Biltoft (1995) FLC 92–614. The applicant in his application seeks an order for 100 per cent of what he says is the property pool. The respondents say that this is an ambit claim or not a bona fide claim and where experience suggests, on the bare facts provided, that an award of 100 per cent of the property pool to one or other of the parties is unlikely. The applicant de facto husband particularises his argument only on oral submission to me of negative contributions by the first respondent de facto wife and in circumstances where the remaining property pool is of minimal value. It seems, therefore, that the competing issues here are:(i)The retention of a property pool to secure the applicant’s entitlement but where that entitlement should not be vague, uncertain, or unrealistic. Relevantly here the applicant de facto husband has provided no evidence to support his bald submission as to his claimed entitlement. To the contrary, the respondent trustee gives some evidence albeit untested to support a more substantial property pool for consideration under s 90SM of the Act. (ii)The status of the second respondent creditor’s claim being, as it is, secured as opposed to any unsecured claims against the bankrupt’s estate. The prejudice to the second respondent is, in my view, a real one where that respondent is a small business person with an outstanding liability of $40,798.09 plus interest. However, that prejudice whilst real and actual, may be mitigated by the allocation of an early trial date where each of the parties express their commitment to an early hearing. In Lemnos & Lemnos[6] Le Poer Trench J noted the effect of the BFLLA to:… require me to consider this case in the usual manner adopted for consideration of Part VIII property applications with (sic) exception that I am to treat all of the former property of the husband, now vested in the Trustee, as available for distribution to the wife if that be an appropriate result. [6] [2007] FamCA 1058 at [62].