Johnson (Trustee) v Snellgrove - [2019] FCCA 3521

FEDERAL CIRCUIT COURT OF AUSTRALIA

JOHNSON (TRUSTEE) v SNELLGROVE

[2019] FCCA 3521

Catchwords:
BANKRUPTCY – Application by trustee for order to finalise bankrupt estate – where respondent has made threats to sue trustee in bankruptcy – costs.

Legislation:

Bankruptcy Act 1966 (Cth), ss.90-15 and 90-20.

Cases cited:

Pattison v Cook [2006] FMCA 1713

Bellin v Pattison (Trustee) [1999] FCA 51
Watson v Healey [1996] 64 FCR 301

Applicant:

GREGG ROBERTSON JOHNSON AS TRUSTEE OF THE BANKRUPT ESTATE OF SHANE SNELLGROVE

Respondent:

SHANE SNELLGROVE

File Number:

ADG 150 of 2019

Judgment of:

Judge Heffernan

Hearing date:

15 November 2019

Date of Last Submission:

15 November 2019

Delivered at:

Adelaide

Delivered on:

5 December 2019

REPRESENTATION

Counsel for the Applicant:

Mr Gretsas

Solicitors for the Applicant:

Gretsas & Associates Lawyers

The Respondent:

In person

ORDERS

Pursuant to s.90 – 15 and s.90 – 20 of the Schedule to the Bankruptcy Act 1966 (Cth) (the Act’), that in the absence of the respondent filing and serving any form of proceedings in any court of competent jurisdiction in any State of Australia or in the Commonwealth of Australia and/or complaints against the applicant, his servants or agents in either his or their personal capacity or in his capacity as trustee of the bankrupt estate of the respondent (‘the proceedings’) within 45 days of today, the applicant is directed by this Honourable Court to finalise the bankrupt estate of the respondent including but not limited to paying all fees, disbursements, any remaining applicable realisation charge pursuant to the Bankruptcy (Estate Charges) Act 1997 (Cth) and any dividends to creditors who have lodged proofs of debt in the bankrupt estate pursuant to the provisions of the Act and the Bankruptcy Regulations 1996 (Cth).
In the event that the respondent fails to commence the proceedings pursuant to paragraph 1 of these orders, the respondent be and is hereby restrained from issuing the proceedings without further leave of this Court.
The respondent pay the costs of the applicant on a party basis.
Liberty to the applicant to apply for any ancillary orders.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADG 150 of 2019

GREGG ROBERTSON JOHNSON AS TRUSTEE OF THE BANKRUPT ESTATE OF SHANE SNELLGROVE

Applicant

And

SHANE SNELLGROVE

Respondent

REASONS FOR JUDGMENT

This is an application by the trustee in bankruptcy against the respondent, a discharged bankrupt.
The applicant seeks orders as follows:
“1.Pursuant to s.90 – 15 and s.90 – 20 of the Schedule to the Bankruptcy Act 1966 (Cth) (the Act’), that in the absence of the respondent filing and serving any form of proceedings in any court of competent jurisdiction in any State of Australia or in the Commonwealth of Australia and/or complaints against the applicant, his servants or agents in either his or their personal capacity or in his capacity as trustee of the bankrupt estate of the respondent (‘the proceedings’) within 45 days of today, that the applicant be directed by this Honourable Court to finalise the bankrupt estate of the…

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 Johnson (Trustee) v Snellgrove

Details

AGLC: Johnson (Trustee) v Snellgrove [2019] FCCA 3521
Case: [2019] FCCA 3521
Decision Date: 5 December 2019

CaseChat Overview and Summary

In the matter of *Johnson (Trustee) v Snellgrove*, heard before Judge Heffernan in the Federal Court of Australia, the trustee in bankruptcy sought an order to finalise the bankrupt estate. The respondent, the bankrupt, had made threats to sue the trustee.

The central legal issue before the court was whether the trustee should be granted an order to finalise the bankrupt estate, notwithstanding the respondent's threats to commence legal proceedings against the trustee. The court was also required to consider the implications of these threats on the trustee's application and the question of costs.

Judge Heffernan reasoned that the respondent's threats to sue the trustee were vexatious and an attempt to obstruct the proper administration of the bankrupt estate. The court found that such threats did not constitute a genuine dispute or a valid reason to prevent the finalisation of the estate. The principles of bankruptcy law require the trustee to administer and finalise estates efficiently, and the court would not permit a bankrupt to frustrate this process through unsubstantiated threats of litigation. The court ordered that the bankrupt estate be finalised and awarded costs to the trustee.

Orders