Lee (Trustee), in the Matter of the Bankrupt Estate of Breakwell v Breakwell
[2021] FCCA 530
•18 March 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Lee (Trustee), in the Matter of the Bankrupt Estate of Breakwell v Breakwell [2021] FCCA 530
File number(s): BRG 18 of 2021 Judgment of: JUDGE EGAN Date of judgment: 18 March 2021 Catchwords: BANKRUPTCY – whether the Court has power to order that a warrant for possession of real property be issued, and if so, whether it should issue prior to the expiration of the time within which a person is required to vacate such property – order made for vacation of property – no order made for issue of warrant for possession. Legislation: Bankruptcy Act 1966 (Cth), ss 30, 77, 78(1)(f), (2).
Federal Circuit Court Rules 2001 (Cth), r 29.11.
Cases cited: Dixon v Ly Ty Tran Cao & Ors (unreported NSWSC of 23 June 1995)
White v Lyn [1999] FCA 841.
Number of paragraphs: 13 Date of last submission/s: 11 March 2021 Date of hearing: 11 March 2021 Place: Brisbane Solicitor for the Applicant: Mr Minter of CLH Lawyers Solicitor for the Respondent: There being no appearance by or on behalf of the Respondent ORDERS
BRG 18 of 2021 IN THE MATTER OF THE BANKRUPT ESTATE OF CHRISTINE BREAKWELL
BETWEEN: LEE AS TRUSTEE OF THE BANKRUPT ESTATE OF CHRISTINE BREAKWELL ALSO ANOWN AS CHRISTINE ROBYNE BREAKWELL
Applicant
AND: CHRISTINE BREAKWELL ALSO KNOWN AS CHRISTINE ROBYNE BREAKWELL
Respondent
ORDER MADE BY:
JUDGE EGAN
DATE OF ORDER:
18 MARCH 2021
IT IS DECLARED THAT Leon Lee, as Trustee of the Bankrupt Estate of Christine Breakwell (also known as Christine Robyne Breakwell), is, as at the date of the making of this Order, entitled to take possession of all that real property situated at [address omitted] described as [description omitted].
AND IT IS ORDERED THAT:
1.The respondent Christine Breakwell (also known as Christine Robyne Breakwell), by herself, her servants and agents, vacate the real property situated at [address omitted] described as [description omitted] by 4:00 pm on 9 April 2021 for the purpose of the applicant, by himself, his servants or agents, taking possession of such real property.
2.The applicant shall forthwith cause a sealed copy Order of this Court Order to be:
(a)Emailed to the email address of the respondent’s daughter, being [email address omitted]; and
(b)Sent by registered post to [address omitted].
3.The applicant shall forthwith cause an affidavit of service to be filed and thereafter;
(a)Emailed to the email address of the respondent’s daughter, being [email address omitted]; and
(b)Sent by registered post to [address omitted].
4.Service shall be deemed to have been effected by 4:00 pm on 25 March 2021.
5.The applicant’s costs of and incidental to this application be paid from the bankrupt estate of the respondent.
REASONS FOR JUDGMENT
JUDGE EGAN:
By an Originating Application filed by the Applicant on 20 January 2021, the following orders were sought:
“1. Pursuant to sections 30 and 77(1)(g) of the Bankruptcy Act 1966 (Cth), the Respondent vacate the property known as [address omitted], more particularly described as [description omitted] (“the Property”) within twenty one (21) days of the date of this Order.
2. In the event that the Respondent fails to deliver vacant possession of the Property in accordance with Order 1, a Writ of Possession issue forthwith in favour of the Applicant.
3.The Respondent remove from the Property all vehicles, rubbish, chattels which have not vested in the Applicant (“the Personal Property”) within 21 days of the date of this Order.
4.In the event the Respondent fails to comply with Order 3, the Applicant may remove and dispose of any and all Personal Property on the Property as the Applicant sees fit.
5.The Applicant’s costs of this application be paid from the Bankrupt Estate of the Respondent.”
(Residential addresses omitted)
Sections 30 and 77 and of the Bankruptcy Act 1966 (Cth) (‘the Act’) respectively provided as follows:
“Section 30 – General powers of Courts in bankruptcy
(1)The Court:
(a) has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and
(b) may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.
(2) The Court may direct such inquiries to be made and accounts to be taken for the purposes of any proceeding before the Court as the Court considers necessary and may, when directing an account to be taken, or subsequently, give special directions as to the manner in which the account is to be taken or vouched.
(3) If in a proceeding before the Federal Court under this Act a question of fact arises that a party desires to have tried before a jury, the Federal Court may, if it thinks fit, direct the trial of that question to be had before a jury, and the trial may be had accordingly in the same manner as if it were the trial of an issue of fact in an action.
(5) Where:
(a) a bankrupt, a debtor or any other person has failed to comply with an order or direction of a Registrar, or with a direction or requirement of an Official Receiver or trustee, under this Act; or
(b) a trustee has failed to comply with an order, direction or requirement of a Registrar, or with a requirement or request of the Inspector‑General, under this Act;
the Court may, on the application of the Registrar, Official Receiver, trustee or Inspector‑General, as the case requires:
(c) order the person who has failed to comply with the order, direction, requirement or request, as the case may be, to comply with it; or
(d) if it thinks fit, make an immediate order for the committal to prison of that person.
(6) The power conferred on the Court by subsection (5) is in addition to, and not in substitution for, any other right or remedy in respect of the failure to comply with the order, direction, requirement or request, as the case may be.”
…
Section 77 – Duties of bankrupt as to discovery etc. of property
(1)A bankrupt shall, unless excused by the trustee or prevented by illness or other sufficient cause:
(a) forthwith after becoming a bankrupt, give to the trustee:
(i) all books (including books of an associated entity of the bankrupt) that are in the possession of the bankrupt and relate to any of his or her examinable affairs; and
(ii) any passport or document issued for the purposes of travel held by the bankrupt; and
(b) attend the trustee whenever the trustee reasonably requires; and
(ba) give such information about any of the bankrupt’s conduct and examinable affairs as the trustee requires; and
(bb) as soon as practicable after becoming a bankrupt, advise the trustee of any material change that occurred between the time the bankrupt lodged his or her statement of affairs and the time the bankrupt became a bankrupt; and
(bc) if a material change occurred later, advise the trustee of that change as soon as practicable after the change occurs; and
(c) attend a meeting of creditors whenever the trustee requires; and
(d) at each meeting of creditors at which the bankrupt is present, give such information about any of the bankrupt’s conduct and examinable affairs as the meeting requires; and
(e) execute such instruments and generally do all such acts and things in relation to his or her property and its realization as are required by this Act or by the trustee or as are ordered by the Court upon the application of the trustee; and
(f) disclose to the trustee, as soon as practicable, property that is acquired by him or her, or devolves on him or her, before his or her discharge, being property divisible amongst his or her creditors; and
(g) aid to the utmost of his or her power in the administration of his or her estate.”
Sections 78(1)(f) and (2) of the Act are also of relevance. Such sections relevantly provided as follows:
“Section 78 Arrest of debtor or bankrupt
(1) Where it is made to appear to the Court:
(a) …
(b) …
(f) that a bankrupt has, without good cause shown, neglected or failed to comply with an order of the Court or with any other obligation under this Act.
the Court may issue a warrant for the arrest of the debtor or bankrupt, as the case may be, and his or her committal to such gaol as the Court appoints until the Court otherwise orders and may, by the same warrant, order that any property and books in the possession of the debtor or bankrupt be seized and delivered into the custody of such person as the Court appoints.
(2) Any property and books delivered into the custody of a person in pursuance of an order under subsection (1) shall be retained by him or her until the Court makes an order as to their disposal.”
In support of the orders sought in paragraph 2 of the Originating Application, the applicant placed further reliance upon the provisions of r. 29.11 of the Federal Circuit Court Rules 2001 (Cth) (‘the Rules’). Such rule relevantly provided as follows:
“Rule 29.11 – Execution Generally
(1) A party may apply to the Court to issue a writ, order or any other means of enforcement of a judgment or order that can be issued or taken in the Supreme Court of the State or Territory in which the judgment or order has been made, as if it were a judgment or order of that Supreme Court.
(2) An order made under sub-rule (1) authorises the Sheriff, when executing the orders of the Court, to act in the same manner as a similar officer of the Supreme Court of the State or Territory in which the order is being executed is entitled to act.
(3) A party who wants to enforce an order in more than one State or Territory may adopt the procedures and forms of process of the Supreme Court of the State or Territory in which the judgment or order has been made.”
The following matters are not in dispute:
(a)On 31 January 2019, a sequestration order was made in respect of the estate of the respondent.
(b)On 1 February 2019, one Leon Lee, in his capacity as the Trustee of the bankrupt estate of the respondent, communicated with the respondent. Paragraphs [7] – [21] inclusive of the Affidavit of Mr Lee filed on 20 January 2021 relevantly provided as follows:
“B. APPOINTMENT DETAILS
7. On 31 January 2019:
(a) this Honourable Court made a Sequestration Order against the Bankrupt; and
(b) I was appointed Trustee of the property of the Bankrupt, jointly with Ms Patricia Talty.
8. On 24 January 2020, Patricia Talty passed away, leaving me as the sole Trustee in Bankruptcy of the Bankrupt's Estate.
At pages 1 and 2 of the Bundle are copies of the initial Certificate of Appointment as issued by the Australian Financial Security Authority ("AFSA"), confirming my joint appointment with Ms Talty and the subsequent Certificate of Appointment issued to reflect my sole appointment since Ms Talty's death.
C. THE PROPERTY
8. Upon my appointment I ascertained that the Bankrupt held an interest as the sole registered proprietor of the real property situated at 4 Knott Court, Camillo, in the State of Western Australia, more particularly described as Lot 452 on Diagram 55011, being the whole of the land contained in the Certificate of Title Volume 1511 Folio 740 ("the Property").
At page 3 of the Bundle is a copy of the Duplicate Certificate of Title for the Property, received from the Titles Office subsequent to me entering bankruptcy transmission of the Property.
D. UNENCUMBERED VALUE OF THE PROPERTY
9. On 18 November 2020, my office obtained a desktop appraisal of the Property which indicated that similar properties in the area had sold for between $200,000.00 and $235,000.00.
At pages 4 to 13 of the Bundle is a copy of this appraisal.
10. There is no registered mortgage securing the Property.
12. From this information I have reason to believe that the Property could sell for approximately $200,000.000 to $235,000.00, meaning that amount will become attributable to me, subject to selling costs.
13. Given the above estimated sale amount, I expect that it will be of benefit to the Bankrupt's estate and creditors for the estate's interest in the Property to be realised.
E. BANKRUPT'S FAILURE TO VACATE THE PROPERTY
14. On or about 1 February 2019, I caused a letter and enclosures to be sent to the Bankrupt via registered mail, providing the Bankrupt with, among other things:
(a) Notice of her being made bankrupt on 31 January 2019 pursuant to a Sequestration Order;
(b) Notice of my appointment as Trustee of the property of her bankrupt estate;
(c) A blank Statement of Affairs for her to complete and return to me; and
(d) The usual notification and information details provided to people by their trustees upon being made bankrupt.
At pages 14 to 15 of the Bundle is a copy of that letter, without the voluminous enclosures.
15. Between 8 February 2019 and 18 February 2019 I corresponded with the Bankrupt via text message during which exchange:-
a. The Bankrupt was made aware of my appointment; and
b. The Bankrupt provided her daughter's email address for me to forward further correspondence to.
At pages 16 to 17 of the Bundle are screenshots of the text messages referred to above.
16. On 18 February 2019 I sent a further letter to the Bankrupt via post and email to the Bankrupt's daughter, which letter referred to my initial letter of 1 February 2019 and again requested the Bankrupt to complete and return the Statement of Affairs.
At pages 18 to 19 of the Bundle is a copy of the email and letter referred to above.
17. On 18 February 2019 I received a return email from the Bankrupt's daughter indicating that she was in receipt of my email enclosing previous correspondence issued to the Bankrupt.
At page 20 of the Bundle is a copy of the email exchange with the Bankrupt's daughter referred to above.
18. On 29 March 2019 I sent a further letter to the Bankrupt via post and email which letter advised that the Bankrupt had been referred to AFSA due to her non-compliance and again requested the Bankrupt complete and return the Statement of Affairs.
At pages 21 to 22 of the Bundle is a copy of the email and letter referred to above.
19. On 20 May 2019 I sent a further letter via email to the Bankrupt which letter noted that the
Bankrupt had failed to return a completed Statement of Affairs and advised that I intended to evict the Bankrupt from the Property so that it could be sold.
At pages 23 to 24 of the Bundle is a copy of the letter referred to above.
20. As at the time of swearing this affidavit, I have not received from the Bankrupt:
(a) Payment to me in such sum which represents my interest in the Property; or
(b) Confirmation that the Property has been vacated.
21. My investigations have revealed that my interest in the Property is the only asset of the estate capable of providing a return to creditors of the estate.”
The applicant seeks that the Court order that a warrant for possession be issued in respect of the land situated at [address omitted] currently registered in the name of the bankrupt. The applicant seeks that such warrant be entitled ‘ENFORCEMENT WARRANT – POSSESION OF LAND’, the form of which was annexed as the last document to the applicant’s submissions filed on 10 March 2021. This Court is not prepared to do so.
Nothing in either ss. 30 or 77 of the Act empowers the Federal Circuit Court of Australia to issue a Writ for Possession of land in the State of Western Australia or any other State before an order for vacation of any such property is made. Section 78(1)(f) of the Act makes that clear.
Rule 29.11(1) of the Rules contemplates that a party may apply to the Court for the issue of ‘a Writ or any other means of enforcement of a judgment or order that can be issued or taken in the Supreme Court of the State or Territory in which the judgment or order has been made, as if it were a judgment or order of that Supreme Court.’ Such Rule contemplates that any such application is made for enforcement of an order. There must first be an order before any such application can be made.
The Court is not prepared to order that any warrant be issued. Rather, the Court is satisfied that the material filed on behalf of the applicant demonstrated that the bankrupt respondent is still in occupation of property, and that the administration of the bankrupt estate is being delayed by such occupation notwithstanding that the applicant has sought vacant possession. It is appropriate that an order be made for the respondent to vacate the property registered in her name, and it is so ordered that the respondent, by herself, her servants and agents, vacate such property on or before 4:00 pm on 9 April 2021.
Should the respondent fail to vacate the said property, the applicant is at liberty to bring such other application in a case, seeking enforcement of the Court’s order, as it is so advised.
A copy of this order should be served upon the respondent forthwith by a sealed copy of the Court’s order being both emailed to the email address of the respondent’s daughter, as well as by the sending of a sealed copy of the Court’s order by express post to [address omitted].
The applicant should cause an affidavit of service to be filed and served forthwith. Service of such affidavit should be effected in the same manner as ordered to be effected in respect of the sealed order of this Court made today.
The Court has had regard to the judgments of Beasley J in Dixon v Ly Ty Tran Cao & Ors (unreported NSWSC of 23 June 1995) and Finkelstein J in White v Lyn [1999] FCA 841 relied upon by the applicant in support of its claim that the Court ought to make an order for the issue of a warrant for possession. Respectfully, the above judgments were made by judges of the Federal Court of Australia in circumstances which were distinguishable from those in the present matter. As such, this Court respectfully does not consider that it is bound by such judgments.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Egan. Associate:
Dated: 19 March 2021
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