KLEWER v Official Trustee in Bankruptcy

[2015] FCCA 196

FEDERAL CIRCUIT COURT OF AUSTRALIA

KLEWER v OFFICIAL TRUSTEE IN BANKRUPTCY [2015] FCCA 196

Catchwords:
BANRUPTCY – Injunction – stay of writ of possession – application dismissed.

Legislation:  
Bankruptcy Act 1966

Ex parte James; In re Condon (1874) LR 9 Ch App 609
Fode v Stirling Lindsay Horne [2015] FCCA 70
Hypec  Electronics Pty Limited (in liq) v Mead & Ors [2003] NSWSCA 934
Young, In the Matter of Macryannis [2011] FCA 1272

Applicant: LUCY KLEWER

Respondent: OFFICIAL TRUSTEE IN BANKRUPTCY

File Number: SYG 186 of 2015

Judgment of: Judge Street

Hearing date: 29 January 2015

Date of Last Submission: 29 January 2015

Delivered at: Sydney

Delivered on: 29 January 2015

REPRESENTATION

Counsel for the Applicant: In person via telephone link

Solicitors for the Applicant: N/A

Counsel for the Respondent: Mr K Metlej

Solicitors for the Respondent: Craddock Murray Neumann

ORDERS

1. The application be dismissed.

2. The applicant pay the respondent’s costs.

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT SYDNEY

SYG 186 of 2015

LUCY KLEWER

Applicant

And

OFFICIAL TRUSTEE IN BANKRUPTCY

Respondent

REASONS FOR JUDGMENT

1. In this application, pursuant to this Court’s jurisdiction under s.27 of the Bankruptcy Ac 1966, the applicant sought an order against the respondent, being a trustee in bankruptcy, as follows: 

   1. A review against the respondent’s decision pursuant to s-178 of the Bankruptcy Act.

   2. Any other order the Court deems fit. 

2. An interim order was sought to the effect that the respondent’s writ of possession on the applicant’s Korora home be stayed until further order. It was the step by way of enforcement of the writ that was the subject of the application for review. Section 178 does apply to a discharged bankrupt, Ferella v Official Trustee in Bankruptcy (2010) FCA 766. The applicant gave sworn evidence by telephone as to the events that had occurred. There was tendered before the Court the writ of possession as exhibit A. It was issued on 18 November 2014 and it makes apparent that the trustee is the registered owner of the relevant property at Korora, New South Wales.

3. This Court has had opportunity in the decision of Fode v Stirling Lindsay Horne [2015] FCCA 70 at [17] identify the nature of the duties and powers of the trustee, and the importance of those duties and powers, as explained in the decision of Stone J in Young, In the Matter of Macryannis [2011] FCA 1272.

4. The Court also identified in the Fode, and it’s equally applicable here, the importance of the duties under s.19 that the trustee has in taking steps in accordance with the Bankruptcy Act and the powers that are conferred, including relevantly the power to sell all or any part of the property of the bankrupt under s.134.

5. The trustee, when the applicant was declared bankrupt, had the relevant property vested in him pursuant to s.58.  The trustee has taken steps to have that property registered in his name.  The trustee under the Act has a right of priority for under s.109 (1) (a) for the costs charges and expenses that have been incurred in relation to the estate, notwithstanding that the applicant has now been discharged from bankruptcy.  The property remains the property of the trustee to be dealt with in accordance with the Act. 

6. There is nothing in the evidence before me that would identify any ground upon which this Court would review, under s.178, the decision of the trustee to execute the writ of possession in the circumstances of this case where he has obtained judgment for possession in respect of property vested in the trustee.  It is not the case that the property remains in the name of the applicant.  It is not the applicant’s property.  It is the property of trustee to be dealt with under the Bankruptcy Act 1966, and the trustee is entitled to take possession. There is no material before me that suggests that there was any unconscionable conduct, or unreasonable conduct, or inequitable conduct in the decision taken to seek to obtain possession of the property by the trustee.  In this case it is both proper and reasonable where there are outstanding costs, charges and expenses that have not been met for the trustee to obtain possession and sell the property.  The trustee is entitled, in those circumstances, to take steps that he is seeking to take.

7. I have taken into account the principles in Ex parte James; In re Condon (1874) LR 9 Ch App 609 that have been discussed in some detail in the decision of Campbell J in Hypec Electronics Pty Limited (in liq) v Mead & Ors [2003] NSWSCA 934.  In my opinion, the trustee is not acting unconscionably, or inequitably, or in a way in which this case should prevent recourse to legal rights of the trustee, in the steps to obtain possession of the property that is vested in the trustee and registered in the trustee’s name, for which the trustee has obtained judgment for possession and given the outstanding costs, charges and expenses due to the trustee. It is not in these circumstances just or equitable to make any order under s.178 that would prevent enforcement.

8. For the above reasons, the application for interim relief is refused.  For the same reason as identified above, the application to appeal against the decision of the trustee under s.178 to enforce the writ is one in respect of which there is no merit in the application, and the Court declines to exercise any power under s.178 in relation to this case, and the application is dismissed with costs. 

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate:  KM

Date:  2 February 2015