Harrison (Trustee), in the matter of Amidiong-Otyaluk (Bankrupt) v Amidiong-Otyaluk
[2023] FedCFamC2G 475
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Harrison (Trustee), in the matter of Amidiong-Otyaluk (Bankrupt) v Amidiong-Otyaluk [2023] FedCFamC2G 475
File number(s): SYG 986 of 2022 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 6 June 2023 Catchwords: BANKRUPTCY – application by trustee in bankruptcy for order granting vacant possession of property occupied by bankrupt – whether evidence reveals there is a serious question whether bankrupt is aware that an application for possession had been made and if so whether she is aware of the nature of such application – no serious question – order for possession made together with ancillary orders. Legislation: Bankruptcy Act 1966 (Cth) ss 30, 77(1)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 17.05
Cases cited: Cook v Tagamilitsky [2001] FMCA 117
Coshott v Prentice [2014] FCAFC 88
Horne (as trustee of the Bankrupt Estate of Sekulovski) v Sekulovski [2009] FCA 1164
Vince (Trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis (No 2) [2012] FCA 1298
Division: General Number of paragraphs: 43 Date of hearing: 5 June 2023 Place: Sydney Counsel for the Applicant: Ms M Castle Solicitor for the Applicant: SLF Lawyers The Respondent: No appearance by, or on behalf of, the respondent ORDERS
SYG 986 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF GRACE AMIDIONG-OTYALUK (BANKRUPT)
BETWEEN: BRETT RICHARD GEOFFREY HARRISON IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF GRACE AMIDIONG-OTYALUK
Applicant
AND: GRACE AMIDIONG-OTYALUK
Respondent
order made by:
JUDGE MANOUSARIDIS
DATE OF ORDER:
6 june 2023
THE COURT ORDERS THAT:
1.Pursuant to ss 27, 30 and 58 of the Bankruptcy Act 1966 (Cth), the applicant is granted possession of and is at liberty to sell the real property of the respondent located 6/1 Goldner Circuit, Melba in the Australian Capital Territory 2615 being more particularly described as Section 78 Block 1 on Deposited Plan 8205 (Property).
2.Pursuant to ss 27, 30 and 58 of the Bankruptcy Act 1966 (Cth), the respondent is to:
(a)Deliver up vacant possession of the Property to the applicant by 4.00pm on 17 July 2023.
(b)Deliver up all keys and documents for all buildings and improvements on the Property to the applicant by 4.00pm on 17 July 2023.
(c)Remove from the Property all vehicles, rubbish and chattel which have not vested in the applicant (Personal Property) by 4.00pm on 17 July 2023.
3.Pursuant to ss 27, 30 and 58 of the Bankruptcy Act 1966 (Cth), the applicant is at liberty to apply to the court for a Writ of Possession for the Property in the event the respondent does not deliver up vacant possession of the Property pursuant to order (2).
4.Pursuant to ss 27, 30 and 58 of the Bankruptcy Act 1966 (Cth), the applicant is at liberty to remove and dispose of the Personal Property on the Property, as the applicant sees fit, in the event the respondent fails to comply with order (2)(c).
5.The costs of this application be costs in the administration of the bankrupt estate of the respondent.
6.The applicant is to cause a sealed copy of these orders together with a copy of r 17.05 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) to be served on the respondent by sending those documents to the respondent’s address for service.
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).
REASONS FOR JUDGMENT
INTRODUCTION
At 10:15 am on 5 June 2023 I heard an application by the trustee (Trustee) of the bankrupt estate of Ms Grace Amidiong-Otyaluk for an order for possession of a property at 6/1 Goldner Circuit in the Australian Capital Territory (Property) of which Ms Amidiong-Otyaluk is the sole registered proprietor. I heard the application in the absence of Ms Amidiong-Otyaluk.
At the conclusion of the hearing, save for one reservation, I was satisfied the Trustee was entitled to an order for possession of the Property, and to orders ancillary to such order. My reservation arose out of evidence concerning Ms Amidiong-Otyaluk’s mental capacity. I reserved my judgment until 2:15 pm on 6 June 2023 to consider whether that evidence raises a real question whether Ms Amidiong-Otyaluk is not aware of the proceeding or does not understand the nature of the proceeding and, if so, whether that would or ought prevent me from making an order for possession.
At 2:15 pm on 6 June 2023 I pronounced orders substantially to the effect of the orders the Trustee claimed, noting that I would publish my reasons later. These are my reasons; and they are arranged as follows. First, I set out in narrative form the facts as revealed by the evidence. Second, I consider whether Ms Amidiong-Otyaluk is aware of the proceeding and, if so, whether there is a real question whether Ms Amidiong-Otyaluk understands the nature of the proceeding. Finally, I consider whether I should make the orders the Trustee seeks.
BACKGROUND
7 December 2021 – bankruptcy notice issued
Ms Amidiong-Otyaluk was made bankrupt pursuant to a sequestration order made on 3 March 2022. The act of bankruptcy on the basis of which the sequestration order was made was Ms Amidiong-Otyaluk’s failure to comply with the requirements of a bankruptcy notice (Bankruptcy Notice) that was issued on 7 December 2021 on the application of The Owners – Units Plan no 877 (Owners Corporation).
The Bankruptcy Notice demanded payment of $12,126.01. That is the sum of two orders the Australian Capital Territory Civil and Administrative Tribunal (CAT) made against Ms Amidiong-Otyaluk, and which were registered with the Magistrates Court of the Australian Capital Territory. The first of the two orders the CAT made was that Ms Amidiong-Otyaluk pay the Owners Corporation $9,242, being the sum of unpaid levies of $1,688, legal costs of $7,381, and interest of $173. The CAT made the second order on 10 September 2021, and it required Ms Amidiong-Otyaluk pay $2,884.01 to the Owners Corporation.
21 December 2021 – Bankruptcy Notice served
The Bankruptcy Notice was served on Ms Amidiong-Otyaluk on 21 December 2021 in the circumstances set out in an affidavit made by Mr Arnolda, a process server (errors in original):[1]
[1] Affidavit of Mr Arnolda filed on 25.01.2022 in proceeding no LNG3/2022. Counsel for the Trustee said the Trustee did not have any objection to my reading the documents filed in proceeding LNG3/2022.
On Tuesday the twenty-first day of December 2021, at 06:20 PM I served Grace Amidiong-[O]tyaluk with the Bankruptcy Notice herein by delivering one true copy thereof to her personally at 6/1 Goldner Circuit, Melba, ACT, 2615
Peter Evans, who is the owner of 5/1 Goldner Circuit, Melba and a member of the Executive Committee, and I had been in contact with each other by telephone and personally in order to facilitate personal service as the Respondent was keeping house and not making herself available to accept service of the Bankruptcy Notice when I had knocked on the front door of the property on previous days.
Peter had advised me that day that that the Respondent had left her property and would return at about 6.30pm.
At the time of service, as I approached the Respondent in her vehicle and Peter Evans indicated to me that the driver was the Respondent.
I said “Are you GRACE AMIDIONG-OTYALUK?”
She said “What do you want?”
I said “I have a Bankruptcy Notice for you.” She would not open her window any further to take the documents from me so I affixed them to her windscreen as she was slowly driving into her garage by placing them under the windscreen wipers.
I said “I am leaving the Bankruptcy Notice on the windscreen as you are aware of what the document is and I have identified that you are the Respondent, you are served”. She respondent in an agitated manner and at that point I left the garage and the door closed behind me.
After I left the premises I received a telephone call from Peter Evans. He told me he had seen the Respondent bring the Bankruptcy Notice out of the house and place it in the drive way. Shortly after she reemerged, picked up the Bankruptcy Notice and took it back inside.
8 February 2022 – Creditor’s petition served
According to Mr Arnolda, he served the creditor’s petition on Ms Amidiong-Otyaluk on 8 February 2022 in the following circumstances:[2]
At the time of service I said “Are you GRACE AMIDIONG-OTYALUK?”
She said “Yes.”
I said “I have a Creditor’s Petition for you” and handed the Creditor’s Petition to her.
She said “Ok Thank you” and accepted the Creditor’s Petition.
[2] Affidavit of Mr Arnolda filed on 02.03.2022 in proceeding no LNG3/2022.
3 March 2022 – sequestration order is made
On 3 March 2022 a sequestration order was made against the estate of Ms Amidiong-Otyaluk, and the Trustee was appointed trustee of her estate. The sequestration order was made in the absence of Ms Amidiong-Otyaluk.
At the time the sequestration order was made, Ms Amidiong-Otyaluk was the sole registered proprietor of the Property; and she continues to be the sole registered proprietor of the Property. On about 27 May 2022 the Trustee lodged with the ACT Land Titles Office a caveat over the title to the Property; and on about 9 June 2022 the Trustee lodged a transmission application for bankruptcy.[3]
[3] Affidavit B R G Harrison 08.07.2022, [15], [18]
Events from 3 March to 11 July 2022
On about 4 March 2022 the Trustee arranged to send to Ms Amidiong-Otyaluk, among other things, a sealed copy of the sequestration order, the certificate of appointment of the Trustee as Ms Amidiong-Otyaluk’s trustee in bankruptcy, a form of statement of affairs to be completed by Ms Amidiong-Otyaluk, and other documents.[4] These documents were sent by post to the address of the Property, and to Ms Amidiong-Otyaluk’s email address. The Trustee also arranged for these documents to be served personally on Ms Amidiong-Otyaluk on 22 March 2022 at the Property. According to Mr Arnolda, he served the documents as follows:[5]
On 22nd March 2022, at 6:06 PM, I served Grace Amidiong-Otyaluk with the Notification of Bankruptcy, and a copy of the Sequestration Order at Unit 6/1 Goldner Circuit, Melba ACT 2615 being the Bankrupt’s last known address (see Annexure A).
As I previously served her personally with both the original Bankruptcy Notice and the Creditors Petition, she is known to me by sight.
I greeted her with the words “Good evening, Grace” as she wheeled her garbage bin through the complex towards the road.
I added, “This documentation for you is from the Trustee of your Estate, as you have now been declared a Bankrupt. You need to urgently get in contact with them or see a Solicitor about these”.
She accepted the documentation without a word.
I then witnessed her flipping through the pages, after she placed the rubbish bin by the kerb and before she returned to her unit.
[4] Affidavit B R G Harrison 08.07.2022, [9]
[5] Affidavit B R G Harrison 08.07.2022, [10]; Exhibit LT-1, pages 89-167
On 6 April 2022 the Trustee’s lawyers (SLF) arranged to send by registered post to Ms Amidiong-Otyaluk a letter dated 6 April 2022 in which the Trustee stated, among other things, that “despite correspondence from the trustee, you have not complied with your obligations to complete a Statement of Affairs”.[6] On 21 April 2022 the Trustee’s lawyers sent to Ms Amidiong-Otyaluk by express post a letter dated 21 April 2022 noting that Ms Amidiong-Otyaluk had not collected the letter dated 6 April 2022 from her local post office. The letter requested that Ms Amidiong-Otyaluk vacate the Property within 14 days of the date of the letter.[7]
[6] Affidavit B R G Harrison 08.07.2022, [11] Exhibit LT-1, pages 168-169
[7] Affidavit B R G Harrison 08.07.2022, [12] Exhibit LT-1, pages 170-173
11 July 2022 – filing of application for possession
Ms Amidiong-Otyaluk did not respond to the correspondence of 4 March, 6 April, or 21 April 2022. On 11 July 2022 the Trustee filed an application for orders for possession; and it was listed for a first court date at 10:15 am on 5 August 2022 before Judge Obradovic.
Mr Arnolda served the application for possession, together with the affidavit of the Trustee made on 8 July 2022, on Ms Amidiong-Otyaluk on 19 July 2022 in the following circumstances (errors in original):[8]
[8] Affidavit Mr Arnolda 01.08.2022
I arrived at The Property of Grace Amidiong-Otyaluk (‘the Respondent’) at 2:49pm on Tuesday, 19 July and parked in the visitors spot opposite Unit 9 of [t]he Property, out of sight from Unit 6 of [t]he Property. I made a telephone call to Peter Evans, who lives in Unit 5 of [t]he Property, which is directly opposite Unit 6, where the Respondent resides. We had a telephone conversation to the following effect:
I said: Have I missed Grace, or is she still in her Unit?
Peter said: I’m not sure but will let you know you if I notice anything.
At 3:16pm Peter Evans called me and we had a conversation to the following effect:
Peter said: “Grace has come out of the Unit 6 garage; she has her bin but has gone back inside.
At about 4:00pm I saw the Respondent emerge from the Unit 6 of The Property garage with her bin. I waited until she was in the process of collecting her mail before I alighted my car. I exited my vehicle at which time I saw the Respondent look in my direction and then disappear from sight as she walked towards the letterboxes. I believe she may have recognised me and was trying to stay out of sight.
I have previously served the respondent personally with both the original Bankruptcy Notice, the Creditors Petition and subsequent documentation, so she is known to me by sight, as I must be to her.
I walked towards the direction I saw the Respondent walking and saw her standing behind the bank of letterboxes. I approached the Respondent with my arm outstretched to hand the Documents to her. At this point, I had a conversation with the Respondent to the following effect:
I said: I have these documents for you.
The Respondent said: I’m not taking those from you, you have been stalking me.
I said: These are legal documents that are nominating a date for attendance at Court.
The Respondent said: I’m not taking them.
I dropped the Application at the respondent’s feet and said: You have been legally served.
I returned to my car and saw the Respondent re-enter her garage, leaving the documents where they had fallen, near the edge of the main road. I collected them and then placed them at the entrance to her unit. A photo of this is attached as Annexure “B”.
I made a telephone call to Peter Evans and we had a conversation to the following effect:
I said: Hi Peter, I have left the documents at the door of Grace’s unit. Can you please let me know when they are moved or collected and taken inside?
Peter: Yes; no problem.
I left [t]he Property at around 4:20pm.
On 1 August 2022 Ms Ricketts, a lawyer employed by SLF, sent an email to Ms Amidiong-Otyaluk in which she said that SLF acted for the Trustee, and that the application the Trustee filed on 11 July 2022 was listed for a directions hearing before Judge Obradovic at 10:15 am on 5 August 2022, and that the directions hearing would proceed by telephone.[9]
[9] Affidavit H L Ricketts 24.02.2023, [26]; exhibit HR-1, pages 294-295
August 2022 – the CAT makes guardianship order
On 2 August 2022 Mr Peter Kolya sent an email to the associate to Judge Obradovic and to other recipients, including Ms Ricketts. Mr Kolya holds an enduring power of attorney pursuant to a document so titled apparently signed by Ms Amidiong-Otyaluk on 31 December 2018.[10] Mr Kolya appears to offer services under the name of “Mandela Advocacy Project”.[11] In his email Mr Kolya stated as follows (errors in original):[12]
Dear . . .
Please refer to the enclosed for your information and guidance on the matter.
BRETT RICHARD GEOFFREY HARRISON might turned out to have no standing at all . . .
[10] Affidavit B R G Harrison 24.02.2023, [18]; annexure “F”
[11] See, for example, the invoice at affidavit H L Ricketts 24.02.2023, [26]; exhibit HR-1, page 22
[12] Affidavit H L Ricketts 24.02.2023, [7]; exhibit HR-1, pages 17-29
The “enclosed” to which the email referred included two orders made by the CAT.
(a)The first order is dated 21 June 2022.[13] It related to a matter headed “In respect of Grace Amidiong-Otyaluk”, and provided that the matter is adjourned to Tuesday 13 September 2022. The order noted that Mr Kolya had informed the CAT that a medical report “regarding Grace Amidiong-Otyaluk’s decision-making ability” had been prepared, but will not be provided until payment of $4,000 is made for it. The order further noted that neither Mr Kolya nor Ms Amidiong-Otyaluk has the report, but the report was provided to the Administrative Appeals Tribunal (AAT) under summons. The order finally noted that Mr Kolya could apply to have the matter listed earlier “if the necessary documentation in support of the application (in particular a medical report that addresses Grace’s decision making ability) is provided at an earlier date”.
(b)The second order is dated 4 July 2022.[14] The CAT ordered that the matter had been listed for hearing at 2:00 pm on 2 August 2022.
[13] Affidavit H L Ricketts 24.02.2023, [7]; exhibit HR-1, page 19
[14] Affidavit H L Ricketts 24.02.2023, [7]; exhibit HR-1, page 28
At 10:31 am on 2 August 2022 Ms Ricketts sent an email to the CAT in which she noted that SLF understood Mr Kolya had applied for orders of guardianship in relation to Ms Amidiong-Otyaluk, and noted that the Trustee was available if the CAT required the Trustee be heard in relation to the matter.
On 2 August 2022 the CAT made an order appointing the Public Trustee and Guardian (PTG) as guardian of Ms Amidiong-Otyaluk (Guardianship Orders) with powers that included the following:[15]
(a)to give any consent required for a medical procedure or other treatment, including treatment to support the protected person’s mental health; and
(b)to bring or continue legal proceedings for or in the name of “the protected person”, that is, Ms Amidiong-Otyaluk.
[15] Affidavit H L Ricketts 24.02.2023, [12]; exhibit HR-1, page 31
The Guardianship Orders were made on the basis of a statement of reasons in which the CAT made findings that included the following:[16]
(a)Ms Amidiong-Otyaluk has a major depressive disorder which she attributes to a workplace injury she suffered in around September 2018.
(b)Ms Amidiong-Otyaluk’s mental health has deteriorated due to continuing stressors that include proceedings she has instituted in the AAT, “financial issues that resulted in her being made bankrupt on 3 March 2022, possession proceedings brought against her by” the Trustee, and “her consequent fear of eviction”.
(c)Ms Amidiong-Otyaluk has a high imminent risk of completed suicide.
(d)Ms Amidiong-Otyaluk should be taken urgently to an emergency department for review of both suicidality and confusion with delirium.
(e)Ms Amidiong-Otyaluk is not capable of instructing a lawyer and does not appear able to give evidence or be cross-examined.
(f)Given the above, there is a need for a person to be appointed as Ms Amidiong-Otyaluk’s guardian “to make decisions in the short-term relating to her mental health and welfare”.
[16] Affidavit H L Ricketts 24.02.2023, [12]; exhibit HR-1, page 33
The CAT made these findings on the basis of a psychiatrist report dated 3 May 2022 (Spear Report).
In addition to making these findings, the CAT noted the following:
(a)Mr Kolya’s application to be appointed as Ms Amidiong-Otyaluk’s guardian and financial manager was precipitated by orders the AAT made that by 11 February 2022 Ms Amidiong-Otyaluk provide a medical report providing an expert opinion on her ability to proceed with her application before the AAT “with specific reference to her fitness to instruct a representative or advocate and to give evidence at a hearing and be cross-examined”.
(b)There was no evidence that Mr Kolya, who had described himself as Ms Amidiong-Otyaluk’s “domestic partner and carer”, has taken any steps to action the recommendations in the Spear Report after he received the Spear Report, although “Mr Kolya echoed at the hearing Dr Spears’ [sic] fear that the protected person may attempt suicide”.
(c)At the hearing, after Ms Angela Smith, a lawyer employed by SLF, informed the CAT that the Trustee had brought proceedings in this Court for possession of the Property, and that the Trustee was not in a position to determine the extent of Ms Amidiong-Otyaluk’s assets and liabilities because she had not provided a statement of affairs, Mr Kolya asserted he had a 50% interest in the Property, and advised he intended to dispute the Trustee’s rights to take possession of and sell the Property.
Events up to revocation of Guardianship Orders on 17 January 2023
On 5 August 2022 Judge Obradovic ordered that the proceeding be adjourned to 2 September 2022 for mention. On 2 September 2022 Judge Obradovic ordered that the proceeding be set down for hearing at 10:15 am on 1 February 2023. Ms Amidiong-Otyaluk did not appear at these hearings.
In the meantime, Ms Ricketts entered into extensive communications with Ms Toy, a manager in the Financial Management Services team of PTG.[17] On 13 September 2022 Ms Toy sent an email to Ms Smith in which she said PTG, as Ms Amidiong-Otyaluk’s guardian and manager, had concerns about Ms Amidiong-Otyaluk’s whereabouts; and she requested the Trustee’s consent to the police accessing the Property “in order to verify her welfare”.[18] Ms Ricketts responded by email sent on 14 September 2022 by which she conveyed the Trustee’s consent to the police accessing the Property.[19] By email sent on 23 September 2022 Ms Danae Lacey, an assistant director within PTG’s Financial Management Services team, informed Ms Ricketts that the police welfare check had been conducted on 14 September 2022; the police were able to speak with Ms Amidiong-Otyaluk at that time; and no forced entry was required.[20] Ms Lacey confirmed in her email that “our office has been able to contact Ms Amidiong-Otyaluk and a further meeting is scheduled with her next Friday”.
[17] Affidavit H L Ricketts 24.02.2023, [13]-[18]
[18] Affidavit H L Ricketts 24.02.2023, [20]; exhibit HR-1, page 285
[19] Affidavit H L Ricketts 24.02.2023, [21]; exhibit HR-1, pages 290-291
[20] Affidavit H L Ricketts 24.02.2023, [22]; exhibit HR-1, pages 288-290
On 12 October 2022 Ms Lacey sent an email to Ms Ricketts in which she reported on a meeting that occurred on 30 September 2022 at the offices of the Australian Human Rights Commission (AHRC) with Ms Amidiong-Otyaluk, “her support person Mr Peter Koyla [sic]”, and a representative of the AHRC.[21] Ms Lacey said PTG had referred the matter to the AHRC “for their consideration of an investigation of possible financial abuse and exploitation”. Ms Lacey reported the following:
(a)Ms Amidiong-Otyaluk strongly opposed PTG’s appointment, and “made it clear she did not wish for PTG to continue as her guardian and financial manager”.
(b)PTG and the AHRC representative “had no trouble in understanding” Ms Amidiong-Otyaluk’s “views and wishes, and despite her seeming somewhat low, she did not appear to have any impairment to her decision making”.
(c)Ms Amidiong-Otyaluk wanted Mr Kolya to be her representative “in all legal matters and wishes to undertake all health, accommodation, financial and other personal decisions herself”.
(d)Due to Ms Amidiong-Otyaluk’s “strong will and preference to manage her own affairs PTG is unable to give effect to the” Guardianship Orders. To that end PTG was preparing an application for revocation of the Guardianship Orders.
[21] Affidavit H L Ricketts 24.02.2023, [23]; exhibit HR-1, page 287
By email sent on 31 October 2022 Ms Lacey informed Ms Ricketts that PTG had applied to the CAT for an order revoking the Guardianship Orders.[22] By email sent on 18 January 2023 Ms Lacey informed Ms Ricketts that on 17 January 2023 the CAT had revoked the Guardianship Orders.
[22] Affidavit H L Ricketts 24.02.2023, [24]; exhibit HR-1, page 286
Events from 1 February 2023
The proceeding came before Judge Obradovic on 1 February 2023. Ms Amidiong-Otyaluk did not appear. Her Honour vacated the hearing of the Trustee’s application for possession, and listed that application for hearing at 10:15 am on 5 June 2023.
After these orders were made, the Trustee and his lawyers continued to attempt to contact Ms Amidiong-Otyaluk. The evidence, which is identified in the Trustee’s counsel’s written submissions,[23] includes the following:
[23] Outline of Argument on Behalf of the Applicant, [18(f)-(s)]
(a)On 3 February 2023 Ms Ricketts sent the following email to Ms Amidiong-Otyaluk:[24]
[24] Affidavit H L Ricketts 24.02.2023, [33]; exhibit HR-1, page 313
We refer to the above matter and note the matter was listed for Hearing on Wednesday 1 February 2023.
We note you did not appear and Her Honour vacated the Hearing.
By way of notification, Her Honour made the attached orders. Please be aware of the importance of your appearance in these proceedings and ensure you appear at the next listing date on 5 June 2023.
Both our office, and the Trustee of your Bankrupt Estate . . . , have been attempting to contact you on your mobile. The mobile number we have on record for you is . . . . If this number is incorrect, or there is another number we may contact you on, please advise. Otherwise, we ask that you please return our calls to discuss the proceedings on foot.
(b)On 3 February 2023 Ms Ricketts telephoned a mobile number Ms Ricketts believed to belong to Ms Amidiong-Otyaluk, and left a telephone message that Ms Amidiong-Otyaluk call Ms Ricketts. Later in the day Mr Kolya telephoned Ms Ricketts. Ms Ricketts asked that she speak with Ms Amidiong-Otyaluk . Mr Kolya said he was a lawyer; he has authority to represent Ms Amidiong-Otyaluk; he had access to Ms Amidiong-Otyaluk’s emails; and if Ms Ricketts wished to have a conversation or meet with Ms Amidiong-Otyaluk Ms Ricketts had to email Mr Kolya first. Mr Kolya said Ms Amidiong-Otyaluk “does not understand anything related to the proceedings and you must go through me to speak with her”.[25] Mr Kolya’s name is not registered as a lawyer in the ACT.[26]
[25] Affidavit H L Ricketts 24.02.2023, [30], [31]
[26] Affidavit H L Ricketts 24.02.2023, [32]
(c)On around 14 February 2023 Mr Kolya informed Ms Smith that he had spoken to Ms Amidiong-Otyaluk , and “[she] may contact” Ms Amidiong-Otyaluk on a telephone number Mr Kolya provided.[27]
[27] Affidavit H L Ricketts 24.02.2023, [37]
(d)On around 14 February 2023 Ms Ricketts received a telephone call from Ms Amidiong-Otyaluk, and they had a conversation to the following effect:[28]
[28] Affidavit H L Ricketts 24.02.2023, [39]
She said: “I received a call from you”
I said: “My name is Hannah Ricketts, I’m from SLF Lawyers and we act on behalf of Brett Richard Geoffrey Harrison, the trustee of your bankrupt estate”.
I said: “We have been trying to get in contact with you by telephone, email, and letter but we haven't received any response from you. We’d like to discuss with you the proceedings the trustee brought against you in the Federal Circuit and Family Court of Australia”.
I said: “Do you recall a man coming to your home and serving you with documents about your bankruptcy and the proceedings on 19 July 2022?”.
She said: “Are you finished speaking?”
I said: “I am waiting for a reply to the question I just asked, do you remember being served with documents?”
She said: “Are you finished speaking as I would like to speak without being interrupted so if you have not finished speaking, then I will not speak”.
I said: “You may speak Grace”.
She said: “Who told you I was bankrupt?”
I said: “You become bankrupt on-”.
She interrupted me and said: “I do not want an answer, I am only asking the question”.
She said: “I do not know anything about you or your organisation. I am not bankrupt, and I am being taken advantage of. You must speak to [Mr Kolya] only and this is the last time you will speak to me. Goodbye'”.
The call was terminated by the Respondent.
HEARING OF 5 JUNE 2023
The Trustee’s application was due to be heard by Judge Obradovic on 5 June 2023. Her Honour, however, became unavailable to hear the application; and on 2 June 2023 the parties were informed that I would hear the Trustee’s application.
At 7:25 am on 5 June 2023 Mr Kolya sent an email to a number of persons, including my associate, and the associate to Judge Obradovic. The email contained a number of attachments, and also a chain of emails. Mr Kolya’s email stated as follows (errors in original):[29]
To WHOM IT MAY CONCERN. OTHER DOCUMENTS WILL BE SUBMITTED A LATER DATE HOWEVER PLEASE KEEP YOUR HANDS OF MY FAMILY AND MY CHILDREN’S PROPERTY. NO CHILD OF MINE WILL BE DISPOSSESSED NOR DISINHERITED UNFAIRLY BY ECOB AND HARRISON.
[29] I marked the chain of emails “MFI1”.
Among the chain of emails are the following:
(a)An email Mr Kolya sent to a number of persons at 3:31 pm on 1 June 2023. Mr Kolya requests that he be allowed to “furnish these 4-5 documents to demonstrate why I would not be holding any brief for the Applicant in her AAT matters any longer”. The email states Ms Amidiong-Otyaluk “is nearing retirement age, she is growing weaker everyday due to bombardments of emails”, and she is “literally off email communications at the present time and on a leave of absence as recommended by Dr . . . for her own mental health care”.
(b)An email Mr Kolya sent to a number of recipients at 11:28 pm on 30 May 2023 in which he states that Ms Amidiong-Otyaluk had spoken to Mr Kolya on 29 May 2023 by telephone and requested that Mr Kolya advise the AAT to proceed to make a decision “in accordance with its own published information”.
(c)An email purportedly from Ms Amidiong-Otyaluk to the AAT sent at 9:14 am on 21 April 2023. The email comprises a detailed statement setting out the nature of the claims she brought before the AAT and complaints about the AAT.
Mr Kolya’s email attached what I find to be the Spear Report,[30] and a determination by Comcare dated 4 December 2018 attaching a number of documents, including a psychiatrist’s report dated 20 November 2018.[31] Mr Kolya also attached an email purportedly sent by Ms Amidiong-Otyaluk from her email address to Ms Victoria Terrace.[32] Ms Amidiong-Otyaluk stated that “Prince Peter Kolya is my Partner, my Proxy and is my enduring Power of attorney”, and that she had asked Mr Kolya “to write to you”. Mr Kolya attached other documents to his email, but it is not necessary to refer to them.[33]
[30] MFI2
[31] MFI3
[32] MFI4
[33] I marked “MFI5” the balance of the documents attached to Mr Kolya’s email.
The hearing of the Trustee’s application commenced at 10:15 am on 5 June 2023. There was no appearance by or on behalf of Ms Amidiong-Otyaluk. The Trustee appeared by counsel who proceeded to move on the application for an order for possession, and read the following affidavits:
(a)the affidavits made by the Trustee on 8 July 2022, and 24 February and 31 May 2023;
(b)the affidavits made by Ms Ricketts on 24 February and 31 May 2023; and
(c)the affidavit of service of Mr Arnolda made on 1 August 2022.
I brought to counsel’s attention the email Mr Kolya sent at 7:25 am on 5 June 2023 and heard submissions on the email and the attached documents. I marked for identification the email and the documents attached to the email.
IS MS AMIDIONG-OTYALUK AWARE OF THE PROCEEDING AND ITS NATURE?
There can be no doubt on the evidence I have set out and to which I have otherwise referred that the Bankruptcy Notice, the sequestration order, the need to complete a statement of affairs, the Trustee’s application for possession, and the listing of that application for hearing has been brought to the notice of Ms Amidiong-Otyaluk. The question that arises is whether the evidence gives rise to a serious question that Ms Amidiong-Otyaluk does not understand that a sequestration order has been made against her, or that in this proceeding the Trustee is seeking an order for possession.
The starting point is the Spear Report, which is dated 3 May 2022. It expresses the opinion that at the time the psychiatrist examined her, Ms Amidiong-Otyaluk was not aware of how to instruct a lawyer or the implications of her instructions, and that she did not appear able to give evidence or to be cross-examined. This evidence, however, must be assessed against the following matters:
(a)First, the Spear Report records that Ms Amidiong-Otyaluk said that her mental health had deteriorated since she had left work in 2018; and that she attributed this to not working, as well as to financial issues with the “threat of bankruptcy”. The Spear Report also noted that Ms Amidiong-Otyaluk reported, among other things, a “fear of eviction”. That, at the very least, suggests Ms Amidiong-Otyaluk is aware that she is at risk of being evicted from her home.
(b)Second, as the CAT noted in its reasons for making the Guardianship Orders, although the Spear Report had been prepared on 3 May 2022 there was nothing to suggest that Ms Amidiong-Otyaluk had taken any of the actions recommended by the Spear Report. That is a basis for inferring that the conditions Ms Amidiong-Otyaluk reported to the psychiatrist had been ameliorated.
(c)Third, despite the Trustee and his lawyers making extensive efforts to establish contact with Ms Amidiong-Otyaluk, she has not responded to these efforts, save for the telephone conversation Ms Ricketts had with Ms Amidiong-Otyaluk on 14 February 2022. Specifically, Ms Amidiong-Otyaluk has not communicated information to the Trustee about the current state of her mental health, or about whether her current mental state has prevented her from understanding, or has impaired her ability to understand, that she has been made bankrupt. Ms Amidiong-Otyaluk’s failure to respond to the many efforts that were made to communicate with her cannot reasonably be explained by any of the opinions or conditions contained in the Spear Report. A more natural inference is that Ms Amidiong-Otyaluk decided she would not communicate with the Trustee or with the Trustee’s lawyers.
(d)Fourth, there is the evidence of service of the Bankruptcy Notice, the creditor’s petition, and of the sequestration order. That evidence does not suggest Ms Amidiong-Otyaluk lacked capacity to understand that she had been served with the documents with which she had been served. On the contrary, the evidence is capable of supporting an inference that, in relation to all of the documents that were served on her, except the creditor’s petition, Ms Amidiong-Otyaluk actively avoided being served; which in turn is a basis for inferring that Ms Amidiong-Otyaluk had an understanding of the nature of the documents that were sought to be served on her.
(e)Fifth, there is Ms Lacey’s email of 12 October 2022 in which she reported on Ms Amidiong-Otyaluk’s meeting on 30 September 2022 with representatives of PTG and the AHRC in which Ms Amidiong-Otyaluk manifested a strong willingness and preference to manage her own affairs relating to health, accommodation, and financial matters, but entrust Mr Kolya to represent her in all legal matters. Ms Lacey reported that PTG and the AHRC representative “had no trouble in understanding” Ms Amidiong-Otyaluk’s “views and wishes, and despite her seeming somewhat low, she did not appear to have any impairment to her decision making”.
(f)Sixth, there is the CAT discharging the Guardianship Orders on PTG’s application.
In the light of these matters, notwithstanding the opinions expressed in the Spear Report, I am not satisfied there is any real question that Ms Amidiong-Otyaluk does not understand she has been made bankrupt, and that the Trustee, her trustee in bankruptcy, has commenced this proceeding for an order that Ms Amidiong-Otyaluk be evicted from the Property, and that the application had been set down for hearing at 10:15 am on 5 June 2023. On the contrary, I am satisfied that the evidence establishes the following:
(a)Ms Amidiong-Otyaluk is aware she has been made bankrupt, that the Trustee has commenced this proceeding for an order for possession, and that the hearing of the Trustee’s application had been set down for hearing at 10:15 am on 5 June 2023;
(b)Ms Amidiong-Otyaluk has entrusted, and she understands that she has entrusted, Mr Kolya to advise and represent her in connection with legal matters, including matters relating to the Trustee’s application for possession; and
(c)Ms Amidiong-Otyaluk has decided, and she understands she has decided, not to enter into any discussions with the Trustee in relation to this proceeding, and do nothing in this proceeding.
I am therefore satisfied that the evidence relating to Ms Amidiong-Otyaluk’s mental health does not afford any obstacle to the Trustee obtaining an order for possession, assuming the Trustee has otherwise shown he is entitled to such order.
WHETHER ORDER FOR POSSESSION SHOULD BE MADE
The Bankruptcy Act 1966 (Cth) (Bankruptcy Act) confers jurisdiction on this Court to order a bankrupt to vacate real property that forms part of the bankrupt’s estate. The source of the Court’s power to order possession has been held to lie in the combined operation of s 77(1)(g) and s 30 of the Bankruptcy Act.[34] Paragraph (g) of s 77(1) of the Bankruptcy Act provides, among other things that, unless excused by the trustee or prevented by illness or other sufficient cause, the bankrupt must “aid to the utmost of his or her power in the administration of his or her estate”. Paragraph (b) of s 30(1) of the Bankruptcy Act provides that the Court may make such orders as the Court considers necessary for the purposes of carrying out or giving effect to the Bankruptcy Act.
[34] See, for example, Horne (as trustee of the Bankrupt Estate of Sekulovski) v Sekulovski [2009] FCA 1164 (Tracey J); Cook v Tagamilitsky [2001] FMCA 117 (Raphael FM); Vince (Trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis (No 2) [2012] FCA 1298 (Bromberg J); Coshott v Prentice [2014] FCAFC 88, at [92]-[94]
The question, then, is whether I should exercise the power to order possession. In my view I should. Ms Amidiong-Otyaluk has not completed a statement of affairs, even though on 22 March 2022 she was personally served with the form of statement of affairs. That means that the only information the Trustee has of Ms Amidiong-Otyaluk’s assets and liabilities is information the Trustee has been able to obtain through his own enquiries. That information reveals the following:
(a)Ms Amidiong-Otyaluk has no substantial assets other than the Property;[35]
(b)the Property is subject to a mortgage in favour of the Commonwealth Bank of Australia (CBA) which, as at 31 January 2023, secured a debt of $484,538.49;[36]
(c)Ms Amidiong-Otyaluk has been in default of her mortgage to the CBA, and as at 22 February 2023 CBA, through its lawyers, indicated it intended to commence possession proceedings against Ms Amidiong-Otyaluk;[37]
(d)as at 24 February 2023 Ms Amidiong-Otyaluk owes $33,982.60 for strata levies;[38] and
(e)on 26 April 2022 the Trustee was provided with an appraisal of the value of the Property of between $740,000 and $760,000.[39]
[35] Affidavit B R G Harrison 08.07.2022, [8]
[36] Affidavit B R G Harrison 24.02.2023, [15]
[37] Affidavit B R G Harrison 24.02.2023, [14]
[38] Affidavit B R G Harrison 24.02.2023, [15]
[39] Affidavit B R G Harrison 08.07.2022, [14]; Exhibit LT-1, page 174
By failing to complete a statement of affairs, and by deciding not to communicate with the Trustee, Ms Amidiong-Otyaluk has not given aid to the Trustee to the utmost of her power in relation to the administration of her estate. For that reason, it is appropriate to order that Ms Amidiong-Otyaluk give the Trustee possession of the Property. My not making such order now will have the consequence of delaying the due administration of Ms Amidiong-Otyaluk’s estate, and thus reduce or even eliminate any surplus that might otherwise be available to Ms Amidiong-Otyaluk herself after the costs of the administration of her bankruptcy, and all her creditors are paid.
The Trustee’s proposed orders provided for Ms Amidiong-Otyaluk to vacate the Property by 3 July 2023. I considered it appropriate to require Ms Amidiong-Otyaluk to vacate the Property by 17 July 2023. That is not a very long period; but I am satisfied it is a reasonable period because Ms Amidiong-Otyaluk has had notice of the Trustee’s application for an order for possession since 19 July 2022 when she was served with the Trustee’s application for possession.
In addition to making the orders the Trustee seeks, I considered it appropriate, given I heard the application in the absence of Ms Amidiong-Otyaluk, that I order the Trustee to serve on Ms Amidiong-Otyaluk a copy of r 17.05 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
CONCLUSION
It was for these reasons that I pronounced my orders at 2:15 pm on 6 June 2023.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 13 June 2023
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