Gomez v Carrafa (Trustee) (No 2)

Case [2019] FCA 1750

FEDERAL COURT OF AUSTRALIA

Gomez v Carrafa (Trustee) (No 2) [2019] FCA 1750

File number: VID 399 of 2019
Judge: ANASTASSIOU J
Date of judgment: 22 August 2019
Date of publication of reasons 24 October 2019
Legislation: Bankruptcy Act 1966 (Cth)
Cases cited:

Carrafa v Gomez [2019] FCCA 1188

Carrafa v Gomez & Anor (No 3) [2016] FCCA 3139

Gomez v Carrafa (Trustee) [2018] FCA 201

Gomez v Carrafa & Anor [2018] HCASL 225

Date of hearing: 22 August 2019
Date of last submissions: 22 August 2019
Registry: Victoria
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: No catchwords
Number of paragraphs: 14
Counsel for the Appellant: The appellant appeared in person by Ms Selvi Gomez with leave
Solicitor for the Respondent: Zervos Lawyers

ORDERS

VID 399 of 2019
BETWEEN:

IRWIN GOMEZ

Appellant
AND:

MICHAEL CARRAFA AS THE TRUSTEE IN BANKRUPTCY FOR THE BANKRUPT ESTATE OF KALAISELVI

Respondent

JUDGE:

ANASTASSIOU J

DATE OF ORDER:

22 AUGUST 2019

THE COURT ORDERS THAT:

1.The time by which the appellant was to comply with Order 3 of the Orders dated 9 August 2019 be extended to 20 August 2019.

2.The time by which the respondent was to comply with Order 4 of the Orders dated 9 August 2019 be extended to 21 August 2019.

3.The application for leave to amend the notice of appeal is dismissed.

4.The appellant pay the respondent’s costs of and incidental to the application for leave to amend the notice of appeal in an amount to be taxed if not agreed.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT
(revised from transcript)

Anastassiou J:

  1. Before the court is an application by Mr Irwin Gomez to amend his notice of appeal against orders of the Federal Circuit Court referred to below. Mr Gomez is the husband of Ms Selvi Gomez, the bankrupt.  I granted Ms Gomez leave to appear on Mr Gomez’s behalf. 

  2. On 21 August 2014 a sequestration order was made against Ms Gomez’s estate.  The bankruptcy notice was served on Ms Gomez on 10 June 2014 and came into effect due to her non-compliance on 2 July 2014.  Shortly before 2 July 2014 Ms Gomez transferred her interests in two pieces of real estate and a sum of money to Mr Gomez.

  3. The Trustee applied to the Federal Circuit Court for declarations and consequential orders under the Bankruptcy Act 1966 (Cth) to set aside these and other transactions. The application was allowed. See Carrafa v Gomez & Anor (No 3) [2016] FCCA 3139 (the Primary Judgment). 

  4. Mr Gomez appealed.  The appeal was dismissed by Justice Moshinsky in Gomez v Carrafa (Trustee) [2018] FCA 201 (the First Appeal). 

  5. Mr Gomez sought special leave in the High Court.  Special leave was refused on 15 August 2018: Gomez v Carrafa & Anor [2018] HCASL 225.

  6. On 23 October 2018, following the unsuccessful special leave application in respect of the…

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Details
AGLC
Gomez v Carrafa (Trustee) (No 2) [2019] FCA 1750
Case
[2019] FCA 1750
Decision Date

CaseChat Overview and Summary

The case of Gomez v Carrafa (Trustee) (No 2) involves the bankrupt, Mr. Gomez, and his trustee, Mr. Carrafa, who sought orders to sell certain properties in question. After a failed special leave application in the First Appeal, the Trustee applied to the Federal Circuit Court for orders concerning the sale of the properties. The Circuit Court subsequently made orders concerning the sale (the Enforcement Judgment), which Mr. Gomez appealed. On 17 June 2019, Mr. Gomez sought to amend his notice of appeal to include a further ground of appeal, arguing that the Court lacked authority to make certain orders.

The legal issues before the court were whether Mr. Gomez could amend his notice of appeal to include a further ground of appeal, and whether the orders in question were beyond the power of the Court or constituted a legal error. Specifically, the Court needed to decide whether the Court had authority to make orders concerning the sale of the properties, the reserve price, and the allocation of net proceeds and costs.

In dismissing the application to amend the notice of appeal, the Court found that Mr. Gomez had not identified any reason why the orders were beyond power, nor any legal error in the exercise of the discretion by the Primary Judge. The Court noted that the trustee, as an officer of the Court, had the authority to realise and get in the property of the bankrupt estate, including the costs incurred in selling the property. The Court also found that the applicant had not identified any legal error in the conferring upon the trustee of the sole conduct of the sale of the properties, or the determination by the trustee of the reserve price for the sale of the properties. The Court held that an appeal on the proposed further grounds was hopeless and bound to fail.

The Court ordered that the time by which Mr. Gomez was to comply with Order 3 of the Orders dated 9 August 2019 be extended to 20 August 2019, and that the time by which Mr. Carrafa was to comply with Order 4 of the Orders dated 9 August 2019 be extended to 21 August 2019. The Court also dismissed the application for leave to amend the notice of appeal and ordered Mr. Gomez to pay Mr. Carrafa's costs of and incidental to the application for leave to amend the notice of appeal in an amount to be taxed if not agreed.

Orders

Orders of the court

1. The time by which the appellant was to comply with Order 3 of the Orders dated 9 August 2019 be extended to 20 August 2019.

2. The time by which the respondent was to comply with Order 4 of the Orders dated 9 August 2019 be extended to 21 August 2019.

3. The application for leave to amend the notice of appeal is dismissed.

4. The appellant pay the respondent’s costs of and incidental to the application for leave to amend the notice of appeal in an amount to be taxed if not agreed.

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

On 23 October 2018, following the unsuccessful special leave application in respect of the First Appeal, the Trustee applied to the Federal Circuit Court for orders concerning the sale and realisation of the bankrupt’s interest in certain properties. On 5 April 2019 in Carrafa v Gomez [2019] FCCA 1188 the Circuit Court made orders concerning the sale of the properties (the Enforcement Judgment). On 23 April 2019 Mr Gomez filed a notice of appeal against the Enforcement Judgment. On 17 June 2019 Mr Gomez emailed the Trustee and my Chambers a proposed amended notice of appeal, being the amendments for which leave is currently being sought. The amended notice of appeal sought to add a further ground of appeal as follows: Further grounds of appeal1. The appellant disagrees that the court had authority to make orders 9 and 12 as these orders are not in accordance with the Law. Orders 9 and 12 of the Enforcement Judgment are as follows:9.The applicant is to determine the reserve price for the sale of each property and whether the properties or either of them be sold by auction or private treaty.…12.The net proceeds of sale of the properties and any rental income received prior to sale after payment of any encumbrance or encumbrances according to their priorities and of all other proper costs, charges and expenses of the sale be paid to the applicant and respondent in equal shares subject to any costs order to be met out of the respondent’s share. The application to amend is refused. The applicant has not identified any reason why the orders were beyond power, nor any legal error in the exercise of the discretion by the Primary Judge. In relation to order 12, the appellant’s submissions indicate a misconception of the position of the trustee. The trustee is an officer of the Court acting in accordance with the obligations upon him to realise and get in the property of the bankrupt estate. There is no legal basis for suggesting that the Court does not have power to make an order concerning the costs and the recovery of the trustee’s costs in connection with getting in the property of the bankrupt. This includes the costs incurred by the trustee in selling the property. The applicant’s submissions disclosed a misconception that the trustee is an unsecured creditor in relation to costs incurred in connection with the sale of the bankrupt’s property. In relation to order 9, the applicant has not identified any legal error in the conferring upon the trustee of the sole conduct of the sale of the properties, or the determination by the trustee of the reserve price for the sale of the properties. For the above reasons an appeal on the proposed further grounds is hopeless and bound to fail. I order that the applicant pay the costs of, and incidental to, the application for leave to amend the notice to appeal, to be agreed, and in default of agreement, to be taxed.

Ratio Decidendi

Legal Principle Established

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