Juratowitch v Iannotti - [2009] FMCA 1133

FEDERAL MAGISTRATES COURT OF AUSTRALIA

JURATOWITCH v IANNOTTI

[2009] FMCA 1133

BANKRUPTCY – Bankrupt trustee of family trust – trustee’s right of indemnity and associated lien – vesting of indemnity in trustee in bankruptcy – trustee in bankruptcy selling trust property – unopposed application for directions.

Bankruptcy Act 1966, ss.30, 116(2)(a), 181A
Trustee Act 1936 (SA), s.15
Bankruptcy (Estate Charges) Act 1997

Octavo Investments Pty Ltd v Knight 144 CLR 360
In Re Suco Gold Pty Ltd (in liq) (1983) 33 SASR 99
Agusta Pty Ltd as trustees for Cavallino Unit Trust v Official Trustee in Bankruptcy as trustee of bankruptcy Estates of Ferella [2008] NSWSC 685
13 Coromandel Place Pty Ltd v CL Custodians Pty Ltd (in liq) (1999) 30 ACSR 377
Re; Ex parte Worrell v Matheson (1994) 49 FCR 454
McDonald v Sanders [2007] FMCA 649

Applicant:

DANIEL PETER JURATOWITCH
(AS TRUSTEE OF THE BANKRUPT ESTATES OF ANTHONY IANNOTTI AND JOSIE IANNOTTI)

Respondent:

ANTHONY IANNOTTI (AS TRUSTEE OF THE IANNOTTI FAMILY TRUST)

File Number:

MLG 644 of 2009

Judgment of:

Burchardt FM

Hearing dates:

18 September & 26 October 2009

Date of Last Submission:

26 October 2009

Delivered at:

Melbourne

Delivered on:

27 November 2009

REPRESENTATION

Counsel for the Applicant:

Mr P. Fary

Solicitors for the Applicant:

B2B Solicitors

The Respondent:

No Appearance

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 644 of 2009

DANIEL PETER JURATOWITCH (AS TRUSTEE OF THE BANKRUPT ESTATES OF ANTHONY IANNOTTI AND JOSIE IANNOTTI

Applicant

And

ANTHONY IANNOTTI (AS TRUSTEE OF THE IANNOTTI FAMILY TRUST)

Respondent

REASONS FOR JUDGMENT

Introductory

The applicant trustee in bankruptcy of Mr and Mrs Iannotti seeks various declarations and orders and has proposed to give certain undertakings in aid of those declarations and orders sought.
It is not possible to set out in any summary way either the issues in this case or the Court’s ultimate disposition. That is simply too complicated.
It is fair to say, nonetheless, that the primary overarching issue arises out of the fact that, before he went bankrupt, Mr Iannotti was the sole trustee as well as a beneficiary of the Iannotti Family Trust. That trust owned a property in Melbourne Street, Adelaide, and that property has been sold.
In large part, the case concerns the propriety or otherwise of that sale and what should happen to the funds engendered thereby.
For the reasons that follow, I think the way in which the property was dealt with was wrong, but I think that it is not practicable at this stage to do anything much about it.

Introductory Facts

It is clear from the materials filed, most particularly the annexures to the affidavit of Mr Juratowitch filed on 29 May 2009, that on

19 November 1986, the Tony Iannotti Family Trust was created with Ianton Pty Ltd as the original trustee.
It is clear that Mr and Mrs Iannotti were beneficiaries of the trust (exhibit DPJ4 schedule E).
On 12 August 1993, Mr and Mrs Iannotti became trustees of the trust…

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 Juratowitch v Iannotti

Details

AGLC: Juratowitch v Iannotti [2009] FMCA 1133
Case: [2009] FMCA 1133
Decision Date: 27 November 2009

CaseChat Overview and Summary

The case of Juratowitch v Iannotti involved a dispute concerning the bankruptcy of Mr and Mrs Iannotti, and the subsequent sale of a property owned by the Iannotti Family Trust. The applicant trustee in bankruptcy, Daniel Peter Juratowitch, sought various declarations and orders related to the trust and the property sale. The primary issue was whether the trustee in bankruptcy had the right to sell the property and, if so, how the proceeds should be distributed. The Court found that the trustee had a right of indemnity out of the trust assets but that the sale of the property was conducted improperly. The Court concluded that the right of indemnity vested in the trustee of the bankrupt estate of Mr Iannotti and that the trustee was entitled to payment of their reasonable remuneration and expenses for their work related to the trust.

The Court ordered further submissions on several issues, including the distribution of funds, the charge under the Bankruptcy (Estate Charges) Act 1997, and the costs and expenses of the application. The Court noted that while the trustee's actions were improper, the case was complex, and it was not possible to reach concluded views on all matters at that stage. Further reasons for judgment would be provided after hearing from counsel on the outstanding issues.

Orders