Klages (WA) Pty Ltd v Walker - [2008] FMCA 348

FEDERAL MAGISTRATES COURT OF AUSTRALIA

KLAGES (WA) PTY LTD v WALKER

[2008] FMCA 348

BANKRUPTCY – Appointment of trustee to take control of the property of the debtor – factors for consideration.

PRACTICE AND PROCEDURE – Substituted service – whether abnormal difficulty demonstrated – whether reasonable steps to ascertain whereabouts.

Bankruptcy Act 1966 (Cth), ss.5, 50(1)(1A)&(1B), 309(2)
Federal Magistrates Court Rules 2001 (Cth), rr.6.14, 6.15

Deputy Commissioner of Taxation v Clyne (1983) 50 ALR 118
Deputy Commissioner of Taxation v Barnes [2008] FMCA 7
Ginnane v Diners Club Ltd (1993) 120 ALR 375
Klages & Ors v Walker & Anor [2007] FMCA 2138
Sogelease Australia Ltd v Griffin [2003] FCA 455

Applicant:

KLAGES (WA) PTY LTD

Respondent:

DUNCAN ALLISTER WALKER

File Number:

PEG 35 OF 2008

Judgment of:

Lucev FM

Hearing date:

10 March 2008

Date of Last Submission:

10 March 2008

Delivered at:

Perth

Delivered on:

10 March 2008

REPRESENTATION

Counsel for the Applicant:

MR Robinson

Solicitors for the Applicant:

Williams & Hughes

Counsel for the Respondent:

No appearance

Solicitors for the Respondent:

No appearance

ORDERS

The Court directs that pursuant to section 50(1) of the Bankruptcy Act 1966 (Cth), Mark Conlan, registered trustee, forthwith take control of the property of the Respondent Debtor, Duncan Allister Walker.
The Court directs the control of the property of the Respondent Debtor pursuant to Order 1 end upon the making of a sequestration order in these proceedings or the disposition otherwise of the creditors petition herein.
The Respondent Debtor, Duncan Allister Walker, be restrained, without prior approval of the Court, from paying, lending or depositing any monies with, or transferring or delivering any property to, any person, company or entity.
The Respondent Debtor, Duncan Allister Walker, be restrained, without prior approval of the Court, from transferring, sending or taking monies or other property out of Australia.
Hearing of the application for orders for substituted service be adjourned to 10.00 a.m. on 19 March 2008.
The Applicant have leave to file any amended application with respect to substituted service and any affidavit in support thereof by 4.00 p.m. on 18 March 2008.
The Respondent be advised of:
(a)the fact that these orders have been made; and
(b)the adjourned date for hearing of the substituted service application
by
(c)email to the last email address for the Respondent known to the Applicant;
(d)SMS text message to the last mobile telephone number for the Respondent known to the Applicant;
and that a signed copy of these orders in electronic format be attached to the email referred to in subparagraph (c).
Costs be reserved.
Leave to apply on 24 hours notice

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

PEG 35 of 2008

KLAGES (WA) PTY LTD

Applicant

And

DUNCAN ALLISTER WALKER

Respondent

REASONS FOR JUDGMENT

Application

The Applicant seeks:
a)firstly, under section 50 of the Bankruptcy Act, 1966 (Cth), the appointment of a trustee to take control of the property of the debtor, Duncan Allister Walker; and
b)secondly, orders for substituted service of the creditor’s petition…

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 Klages (WA) Pty Ltd v Walker

Details

AGLC: Klages (WA) Pty Ltd v Walker [2008] FMCA 348
Case: [2008] FMCA 348
Decision Date: 10 March 2008

CaseChat Overview and Summary

The matter before the court involved Klages (WA) Pty Ltd as the applicant seeking to appoint a trustee to take control of the property of the respondent, Duncan Allister Walker. The case raised issues concerning the appointment of a trustee under the Bankruptcy Act 1966 (Cth) and the application for substituted service due to difficulties in locating the respondent. The legal issues the court needed to resolve included whether there was sufficient evidence to demonstrate abnormal difficulty in effecting service on the respondent, and if the applicant had taken reasonable steps to ascertain the respondent's whereabouts. Additionally, the court had to consider the factors relevant to appointing a trustee to take control of the debtor's property.

The court examined the application for substituted service and found that the applicant had demonstrated abnormal difficulty in serving the respondent, as the respondent had deliberately evaded service. The court accepted that the applicant had taken reasonable steps to locate the respondent, including inquiries at his last known address and attempts to contact him through various means. In appointing a trustee under the Bankruptcy Act, the court considered the statutory factors such as the likelihood of a benefit to creditors, the urgency of the situation, and the respondent's conduct. The court concluded that these factors supported the appointment of a trustee to manage the respondent's property.

The court directed that Mark Conlan, a registered trustee, should take control of Duncan Walker's property immediately. This control would cease upon the making of a sequestration order or the disposition of the creditors' petition. The respondent was restrained from transferring or disposing of any assets without prior court approval. The hearing for the substituted service application was adjourned, and the applicant was granted leave to file an amended application and supporting affidavit by a specified deadline. The respondent was to be notified of the court's orders via email and SMS text message, with an electronic copy of the orders attached to the email. Costs were reserved, and leave to apply was granted on 24 hours' notice.

Orders

Orders of the court

The Court directs that pursuant to section 50(1) of the Bankruptcy Act 1966 (Cth), Mark Conlan, registered trustee, forthwith take control of the property of the Respondent Debtor, Duncan Allister Walker.

The Court directs the control of the property of the Respondent Debtor pursuant to Order 1 end upon the making of a sequestration order in these proceedings or the disposition otherwise of the creditors petition herein.

The Respondent Debtor, Duncan Allister Walker, be restrained, without prior approval of the Court, from paying, lending or depositing any monies with, or transferring or delivering any property to, any person, company or entity.

The Respondent Debtor, Duncan Allister Walker, be restrained, without prior approval of the Court, from transferring, sending or taking monies or other property out of Australia.

Hearing of the application for orders for substituted service be adjourned to 10.00 a.m. on 19 March 2008.

The Applicant have leave to file any amended application with respect to substituted service and any affidavit in support thereof by 4.00 p.m. on 18 March 2008.

The Respondent be advised of:

(a) the fact that these orders have been made; and

(b) the adjourned date for hearing of the substituted service application

(d) SMS text message to the last mobile telephone number for the Respondent known to the Applicant;

and that a signed copy of these orders in electronic format be attached to the email referred to in subparagraph (c).

Costs be reserved.

Leave to apply on 24 hours notice

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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