Gundersen and Gundersen and Anor

[2010] FamCA 901

FAMILY COURT OF AUSTRALIA

GUNDERSEN & GUNDERSEN AND ANOR [2010] FamCA 901

FAMILY LAW – PROPERTY – Set aside property orders

Family Law Act 1975 (Cth) s79A

APPLICANT: Ms Gundersen

1st RESPONDENT: Y Pty Limited

2nd RESPONDENT: Mr Gundersen

FILE NUMBER: SYC 115 of 2009

DATE DELIVERED: 26 August 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 26 August 2010

REPRESENTATION

FOR THE APPLICANT: Ms Gundersen in person

COUNSEL FOR THE 1ST RESPONDENT: Mr Serisier

SOLICITOR FOR THE 1ST RESPONDENT: Grover Law

FOR THE 2ND RESPONDENT: Mr Gundersen in person

Orders

1. That the return date of 7 October 2010 for the wife’s Contravention Applications both filed on 18 August 2010 is vacated.

2. That orders are made in accordance with the hand-written Minute of Orders filed in Court today and signed by Justice Johnston and placed with the Court papers as set out hereunder:-

   1.        Set aside the orders made 29 September 2010 other than order 3.1.

   2.Direct that the husband, within 7 days of the date of these orders, make an application to the Trustee in Bankruptcy for leave to intervene as a party in these proceedings in the event that the husband seeks leave to continue as a party to these proceedings.

   3.Stand these proceedings over to 10am on 1 October 2010 for mention before Johnston J and for further directions.

   4.Direct that within 7 days that the solicitor for the intervener write to the Trustee in Bankruptcy advising that the matter is before the Court on 1 October 2010 to determine whether the Trustee now seeks to become a party to the proceedings and to hear any application of the Trustee to become a party to the proceedings.

   5.Direct that the solicitor for the intervener forward a copy of such letter to the wife.

   6.Continue until 6pm on 1 October 2010 order 3 made 23 August 2010.

   7.Direct that within 7 days that the wife write to the solicitor for the intervener advising the current location of the van and the items of personal property referred to in order 3.2.2 f the orders of 29 September 2009 and that the wife further advise whether the van or the items of personal property are insured and if so with whom the items are insured and that pending further order such information is not to be disclosed to any other person without an order of the Court.

   8.Costs reserved.

3. That the wife file and serve any new Initiating Application together with all affidavits in support not later than 24 September 2010.

4. That in the event that the Bankruptcy Trustee wishes to intervene the Court would give leave for such application to be made orally.

5. That the Court notes there remains in existence property in respect of which it might be arguable ought to have formed part of the bankrupt husband’s estate.

IT IS NOTED that publication of this judgment under the pseudonym Gundersen & Gundersen is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 115  of 2009

MS GUNDERSEN

Applicant

And

Y PTY LTD

1^st Respondent

And

MR GUNDERSEN

2^nd Respondent

REASONS FOR JUDGMENT

1. The parties in this litigation are the company Y Pty Limited, Ms Gundersen and Mr Gundersen.  I shall refer to them as “the company”, “the wife”, and “the husband” respectively.

2. On 29 September 2009 in proceedings which were then between the husband and the wife, I made final property orders pursuant to section 79 of the Family Law Act 1975 (“the Act”).  The effect of these orders was, at least in broad terms, to require the husband to deliver to the wife certain nominated items of property.  Those items included the Iveco Daily 50C15 van and/or equipment to the purchase price of approximately $200,000.  There would be no surprise to the husband about the identity of those items of property. 

3. Those proceedings came before me in circumstances where the wife was represented by her solicitor.  There was no appearance on behalf of the husband.  In those circumstances, and in the circumstances where I was satisfied that appropriate notification had been given to the husband, I gave the wife leave for what was her amended application for final orders filed 28 August 2009 to be heard as an undefended proceedings.

4. Subsequently, the wife came to Court in circumstances where she had filed a contravention application alleging that the husband had not fulfilled his obligations under the orders.  But it subsequently came to my attention that there was another claimant in the proceedings. That claimant was a corporation, the company Y Pty Limited.  The sole director of that company is the husband’s father.  I think he is also the sole shareholder in that corporation.

5. In any event, it was claimed by or on behalf of Y Pty Ltd that, in fact, Y Pty Ltd was the owner of the Iveco van and it all of the equipment.

6. Things have become even more complicated than that.  The wife informed me that she had given the van and the equipment to her mother because her mother and father were major creditors in proceedings in which the husband had become bankrupt.  The husband’s bankruptcy is an undisputed fact.

7. In those circumstances, I made some directions, the effect of which was to make an order that Y Pty Limited have leave to file an application pursuant to section 79A of the Act seeking orders to set aside the above orders, and all affidavits in support. Then I listed the matter again for what was actually yesterday. But those proceedings have been returnable today. Y Pty Limited has filed such an application and an affidavit in support.

8. What emerges are a number of matters.  Firstly, the husband and wife had conducted a business in which they provided services on a commercial basis to persons who were producing and making films and advertisements.  They had a corporation registered in August 1999 called E Pty Limited.  The shareholders and the directors were the husband and wife.  In June 2006, the wife transferred her shares to the husband, so that the husband then became the sole shareholder of the company E Pty Limited.

9. In April 2009, the husband became bankrupt on his own petition.  The material in these proceedings before me has included some of the relevant bankruptcy documents.  It is clear that the husband went into bankruptcy in circumstances where he indicated that he owed creditors an amount in excess of $800,000.  Major creditors in that $800,000 were the wife and her parents.

10. It seems to me that at the time that the husband became bankrupt, being the sole owner of the company E Pty Limited, there was property which, one would have thought, would have found its way into the bankrupt’s estate.  But it seems for some reason that is not clear to me, that the bankruptcy trustee has not proceeded to recover property which one would have thought might have been available.  I am not at all clear what the explanation for that might be.

11. In any event, that property must have a value, because both the wife and the husband’s father, who is the sole owner of the company Y Pty Limited, are anxious to have circumstances come about in which each of them would be declared the owner of those assets.

12. I understand that Y Pty Ltd’s case is that within a week or so of the bankruptcy, Y Pty Ltd purchased the van and the equipment from E Pty Limited.  But the circumstances of that are not clear to me at the moment.  They will probably be matters which will be raked over in some detail on some future occasion.

13. So one would have thought that the husband’s trustee in bankruptcy would have been interested in the outcome of these proceedings, at least in considering the appropriate course and obligations to various creditors in the estate.  But that has not been the case to date.  I suppose one can understand why that would be in circumstances where this Court heard the wife’s application as an undefended proceeding. 

14. The bottom line in the matter is that this Court has made orders in respect of an item of property, which at least on its face, was property of the company Y Pty Limited.  That is because the Iveco van was registered in the name of Y Pty Limited as at the time those orders were made on 29 September 2009, requiring the husband to give the wife that vehicle.

15. It is the case that Y Pty Limited was not on notice about the proceedings, let alone the return date of 29 September 2009.  At least on the face of things, as they are appearing at the present time, Y Pty Ltd was an entity affected by the Court’s orders.  It was not afforded procedural fairness and the net consequence is that orders have been made about its property in the absence of it having any opportunity to be before the Court, to address the Court and to put evidence before the Court in respect of the application concerning that motor vehicle.

16. What the position is in relation to the equipment property is less clear to me as a matter of evidence. But in my view, this is a case where, clearly, the Court’s orders should be set aside, because it was not proper for them to have been made in all the circumstances. And I propose to do so pursuant to provisions of section 79A(1) of the Act.

17. Where that takes things to is that matters go back to square one as though the orders had never been made.  What the ultimate fate of these items of property might be is anybody’s guess at the present time.  But what will need to happen is that all interested parties will have to be given an opportunity to make applications for orders.  The wife has indicated that her parents, as creditors and persons to whom she has actually given the property, are clearly interested parties and presumably they would want to consider whether they wish to make an application in the proceedings. 

18. Y Pty Limited no doubt will want to make some application.  I would have thought that it would be appropriate to invite the trustee in bankruptcy to consider whether they have an interest in these proceedings and might also seek to become a party to proceedings. 

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 26 August 2010.

Associate:     

Date:              7 October 2010