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Hycenko v Badge

Hycenko v Badge

Case [2023] VSC 19 2 February 2023

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2022 00331

NICHOLAS HYCENKO (In his capacity as executor and trustee of the estate of the late GEORGE HRYCENKO, deceased)	Plaintiff
v
MICHAEL BADGE (In his capacity as trustee in bankruptcy of the bankrupt estate of VICTOR HRYCENKO) & Ors according to the attached Schedule	Defendants

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JUDGE:	NIALL JA
WHERE HELD:	Melbourne
DATE OF HEARING:	16 December 2022
DATE OF JUDGMENT:	2 February 2023
CASE MAY BE CITED AS:	Hycenko v Badge & Ors
MEDIUM NEUTRAL CITATION:	[2023] VSC 19

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PROPERTY LAW – Order for judicial sale made in absence of previous registered proprietor due to bankruptcy – Where bankruptcy of previous registered proprietor later set aside on basis of an absence of jurisdiction to make the order – Inherent power to set aside order for denial of procedural fairness – Judicial sale order set aside – Right of redemption and proceeding to remove executor do not preclude making new judicial sale order – Judicial sale order necessary to satisfy judgment debt – Judicial sale order made.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr IR Jones KC with Mr TL Bevan	Kennedy Guy Lawyers
For the Sixth Defendant	Mr P Fary SC	NOH Legal

HIS HONOUR:

On 17 May 2022, Associate Justice Mathews made an order for the sale of 231 Old Cape Schanck Road, Boneo (‘the property’) in aid of enforcement of a judgment debt obtained by the late George Hrycenko against his son, the sixth defendant, Victor Hrycenko (‘the 17 May 2022 order’). Victor was the registered proprietor of the property. On 12 August 2022, Associate Justice Mathews made further orders to facilitate the sale (‘the 12 August 2022 order’).

Before 17 May 2022, two events of significance had occurred.

First, on 6 June 2020 George died. His son Nicholas Hycenko is the executor and trustee of the estate of his late father, having been granted probate on 8 September 2020.

Second, on 28 October 2021, Judge Burchardt of the Federal Circuit and Family Court of Australia (Division 2) made a sequestration order against Victor on the basis of a creditor’s petition and subsequent bankruptcy notice that had been served by George (‘the sequestration order’). The first defendant, Michael Badge was appointed as the trustee in bankruptcy. The order was stayed for a short time to allow Victor to appeal and later came into force in around the middle of November 2021. On 17 November Victor commenced an appeal in the Federal Court from the sequestration order and, on 7 December 2021, Bromberg J stayed ‘all proceedings under the sequestration order’ until the determination of the appeal.

By reason of the sequestration order, Victor was not heard on the application for the sale of the property. Mr Badge advised the Court that, in light of the order of Bromberg J staying any proceeding under the sequestration order, he would not participate in the proceeding.

As will appear in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hycenko v Badge

Details

AGLC: Hycenko v Badge [2023] VSC 19
Case: [2023] VSC 19
Decision Date: 2 February 2023

CaseChat Overview and Summary

The matter of Hycenko v Badge concerned a dispute over the ownership and sale of a property, which was before the court. The case arose from a situation where a judicial sale of the property had been ordered in the absence of the previous registered proprietor, who was subsequently declared bankrupt. The subsequent set aside of the bankruptcy order due to the absence of jurisdiction raised questions about the validity of the initial judicial sale. The primary legal issues for the court to resolve were whether the inherent power of the court could be exercised to set aside the judicial sale order on the grounds of procedural unfairness, and whether the rights of the parties, including the right of redemption and the right to remove the executor, could prevent the making of a new judicial sale order.

The court considered the inherent power to rectify procedural unfairness in judicial processes, emphasising that a fair judicial sale is fundamental to the integrity of the court's proceedings. Given the circumstances, the court found that the original judicial sale order had been made without the previous registered proprietor being present or represented, which constituted a significant procedural defect. Consequently, the court set aside the original judicial sale order. However, the court also acknowledged that the judicial sale was necessary to satisfy the judgment debt. After weighing the rights of the parties, including the right of redemption and the right to remove the executor, the court determined that these rights did not preclude the making of a new judicial sale order. The court concluded that a judicial sale was essential to discharge the judgment debt, and thus made a new order for the sale of the property.

In light of the reasoning and findings, the court made an order for the judicial sale of the property to proceed, ensuring the satisfaction of the judgment debt. The court's decision balanced the procedural fairness concerns with the necessity to uphold the judgment and satisfy the debt owed. This decision underscored the court's commitment to both procedural justice and the enforcement of judgments.

Orders