Harrison v Gangell
[2013] FCCA 554
•17 June 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HARRISON v GANGELL | [2013] FCCA 554 |
| Catchwords: BANKRUPTCY – Failure to file a statement of affairs – distribution of dividend amongst creditors – prejudice to creditors caused by failure to file statement of affairs. |
| Legislation: Bankruptcy Act 1966 (Cth) ss.54, 77 and146, Part VI, Division 5 |
| Official Trustee in Bankruptcy v Thor [2006] FMCA 1637 Official Trustee in Bankruptcy v Raeffael [2003] FCA 328 Rees (Trustee) in the matter of Stubberfield v Stubberfield (Bankrupt) [1999] FCA 1862 Sturt; Ex parte Official Trustee in Bankruptcy [2001] 117 FCR 1; [2001] FCA 1649 |
| Applicant: | BRETT RICHARD GEOFFREY HARRISON AS TRUSTEE OF THE BANKRUPT ESTATE OF ROBERT JOHN GANGELL |
| Respondent: | ROBERT JOHN GANGELL |
| File Number: | PEG 92 of 2013 |
| Judgment of: | Judge Lucev |
| Hearing date: | 17 June 2013 |
| Date of Last Submission: | 17 June 2013 |
| Delivered at: | Perth |
| Delivered on: | 17 June 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr A F Carles |
| Solicitors for the Applicant: | Carles Solicitors |
| The Respondent: | No Appearance |
ORDERS
The costs, charges and expenses of the administration of the bankruptcy of the Respondent and a distribution of dividends amongst creditors who have proved their debts in the estate shall proceed in accordance with Part VI Division 5 of the Bankruptcy Act 1966 (Cth) as if the Respondent had filed a Statement of Affairs and those creditors had been stated to be creditors in it.
The Respondent not be entitled to any surplus funds remaining after payment of the dividends to creditors until he has lodged his duly completed Statement of Affairs in the required form in the office of the Official Receiver and the Applicant has dealt with the claims of any further creditors disclosed in the Statement of Affairs.
The costs of and incidental, inclusive of GST and disbursements, to this Application be paid out the bankrupt estate of the Respondent in the sum of $4570.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 92 of 2013
| BRETT RICHARD GEOFFREY HARRISON AS TRUSTEE OF THE BANKRUPT ESTATE OF ROBERT JOHN GANGELL |
Applicant
And
| ROBERT JOHN GANGELL |
Respondent
REASONS FOR JUDGMENT
The applicant seeks an order pursuant to s.146 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) that a distribution of dividends be made to those creditors of the bankrupt estate of the respondent who prove their debts in accordance with pt VI, div 5 of the Bankruptcy Act.
The applicant relies on the affidavit of service of Naomi Cheri Boyce (“Ms Boyce”), sworn 12 June 2013 and the affidavits of the current trustee, Brett Richard Geoffrey Harrison (“Mr Harrison”), sworn 15 April 2013 and 7 June 2013.
The Court notes that s.54 of the Bankruptcy Act provides that where a sequestration order is made, the person against whose estate it is made must file a statement of affairs within 14 days of being notified of the bankruptcy. Section 146 of the Bankruptcy Act provides that where a bankrupt fails to file a statement of affairs, the Court may order a distribution of dividends among creditors who have proved their debts as if the bankrupt had filed a statement of their affairs and those creditors have been named in it.
The Court is satisfied on the basis of Ms Boyce’s affidavit that service was effected on the respondent of the application and Mr Harrison’s April affidavit on or about 5 June 2013. The Court notes that the respondent does not appear today.
The Court is also satisfied that the known creditors of the bankrupt estate have been notified of today’s hearing by the current trustee and that the current trustee has received no response to those notifications. The Court also notes that no notice of opposition has been filed by any creditor and there is no appearance by any creditor today.
In relation to the application and the requirements of s.146 of the Bankruptcy Act, Mr Harrison’s April affidavit provides evidence of the respondent’s bankruptcy, the appointment of the Official Trustee as the bankruptcy trustee originally, and subsequently the appointment of the current trustee as the trustee of the bankrupt estate, and that is detailed in paragraphs 2-6 of Mr Harrison’s April affidavit.
There is also evidence of the Official Trustee’s attempts to obtain a statement of affairs from the respondent and the respondent’s failure to respond by filing that statement, notwithstanding some contact between he and the trustee. Ultimately the endeavours of both the current trustee and the former trustee to have the respondent file a statement of affairs have come to naught, and the Court refers to Mr Harrison’s April affidavit at paragraphs 8-20, 15, 37 and 39.
There have also been attempts to identify the creditors of the bankrupt estate. Those details are set out, including the obtaining of a creditor report from a credit agency and advertising in the local Western Australian newspaper in order to ascertain further creditors in addition to those that were advised by the respondent himself. The Court refers to paragraphs 15, 22 and 29 of Mr Harrison’s April affidavit.
The details of the known assets of the bankrupt estate have been set out at paragraphs 31-36 of Mr Harrison’s April affidavit, and Mr Harrison, in that same affidavit at paragraphs 38 and 39, attests to the fact that the administration of the bankruptcy is complete, as far as possible without the filing of a statement of affairs, save for the payment of a dividend to creditors. And at paragraph 40 he asserts, and the Court has no reason to dispute, that there is, in the circumstances, prejudice to the creditors by reason of the ongoing failure to file a statement of affairs and the creditors thus being deprived of any dividend to which they might be entitled.
In Re Sturt; Ex parte Official Trustee in Bankruptcy [2001] 117 FCR 1 at page 5; [2001] FCA 1649 at paragraph 19, (“Sturt”) the Federal Court set out requirements in relation to the level of satisfaction required in relation to an application under s.146 of the Bankruptcy Act. Those requirements were effectively mirrored by this court in Official Trustee in Bankruptcy v Thor [2006] FMCA 1637 (“Thor”) to which reference has been made by the applicant in their outline of submissions.
In the circumstances, the Court is satisfied that the applicant has advised all known creditors of the hearing and has taken appropriate steps to identify any further creditors of the bankrupt estate. The Court is of the view that the respondent is fully aware of his bankruptcy and of his obligations under the Bankruptcy Act, and it is reasonable to conclude, in the circumstances, that his conduct probably contravenes ss.54 and 77 of the Bankruptcy Act.
The Court notes that the respondent bankrupt evinced an intention, or evinced what could be inferred to be an intention, not to cooperate with the trustee in the hearing of the matter, having regard to what he said at paragraph 5 of Ms Boyce’s affidavit in response to the service of documents by Ms Boyce when he told her, “go fuck yourself”, and, colloquially, gave her what is effectively known as the rude finger before telling her that he was, “going to send the documents back.”
The Court is satisfied that it has jurisdiction to make the orders sought by the applicant under s.146 of the Bankruptcy Act. Even if it does not accept that the respondent’s failure to file his statement of affairs is deliberate and refers to Sturt at page 4 and Thor at paragraph 14.
The Court is also satisfied that the failure by the bankrupt to file his statement of affairs has prejudiced his creditors and will incur, or has incurred, further costs to, and will delay, the administration of the bankrupt estate and it refers to Rees (Trustee) in the matter of Stubberfield v Stubberfield (Bankrupt) [1999] FCA 1862 and Thor at paragraph 15. It is evident that any further attempts to compel the respondent to file a statement of affairs or notify him of the orders sought pursuant to this application would also incur further costs and delay and result in further disadvantage to the bankrupt’s creditors.
The Court notes the absence of the respondent in these proceedings and notwithstanding some indication from the applicant this morning that there might have been some intention by the respondent to appear, he has not done so, and that perhaps is hardly surprising in view of the attitude evinced in response to service of the documents by Ms Boyce. The matter has been called outside today, and the respondent is not in attendance in these proceedings.
The Court adopts, in the circumstances, the rationale outlined in the Official Trustee in Bankruptcy v Raeffael [2003] FCA 328 at paragraph 7 and applies that rationale to the circumstances of this case and finds that there is no necessity to make any orders conditional upon further attempts to notify the bankrupt or to state the effect of these orders.
In those circumstances, there will be orders pursuant to s.146 of the Bankruptcy Act in the terms of the applicant’s minute of proposed order.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judge Lucev.
Date: 25 June 2013.
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