FEDERAL COURT OF AUSTRALIA
Levy v Reddy [2009] FCA 63
BANKRUPTCY AND INSOLVENCY – Bankruptcy Act 1966 (Cth) section 29 – ex parte interlocutory application by trustee in bankruptcy appointed in United Kingdom – application to restrain bankrupt from disposing of or dealing with his divisible property in Australia – request from Registrar of High Court of Justice of England and Wales – assets only partially owned by bankrupt – appointment of receiver in Australia
Held: Interim orders granted on ex parte basis.
Bankruptcy Act 1966 (Cth) s 29
Cross Border Insolvency Act 2008 (Cth) s 436
Federal Court Rules O 25A
Insolvency Act 1986 (UK) s 306(1)Australian Mutual Provident Society v Gregory (1908) 5 CLR 615 applied
Ayres v Evans (1981) 56 FLR 235 cited
Dick as Trustee in Bankruptcy v McIntosh [2001] FCA 1008 cited
Radich v Bank of New Zealand (1993) 45 FCR 101 applied
Re Ayres; Ex parte Evans (1981) 51 FLR 395 citedPETER MAURICE LEVY v MARK REDDY (A BANKRUPT)
QUD 25 of 2009
COLLIER J
6 FEBRUARY 2009
BRISBANE
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD 25 of 2009
BETWEEN: PETER MAURICE LEVY
ApplicantAND: MARK REDDY (A BANKRUPT)
Respondent
JUDGE:
COLLIER J
DATE OF ORDER:
6 FEBRUARY 2009
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.The hearing in respect of these Interim Orders sought be heard ex parte.
2.The Respondent, Mark Reddy, by himself and, where applicable, his employees, agents or otherwise, be restrained until such time as any further or other order is made by this Court from disposing of or dealing with in any way his divisible property (within the meaning of section 116 of the Bankruptcy Act 1966 (Cth) and ascertained by reference to the commencement of his bankruptcy in the United Kingdom on 25 July 2008), as would be prohibited if the Respondent was bankrupt under the Bankruptcy Act 1966 (Cth), other than for the following purposes:
(a)to enable him to pay and to continue to pay reasonable legal expenses of defending or responding to these proceedings;
(b)to pay ordinary and proper business expenses bona fide incurred by him;
(c)to pay ordinary and proper living expenses bona fide incurred by him;
(d)to meet his taxation liabilities;
(e)to comply with any statutory requirements to which he is subject;
(f)to meet any mortgage or other loan commitment entered into prior to the date of this order.
3.Jason Walter Bettles (of Worrells Solvency and Forensic Accountants, Level 6, 50 Cavill Avenue, Surfers Paradise in the State of Queensland) be appointed Receiver without security of that divisible property pending further or other order of this Honourable Court.
4.In particular, Jason Walter Bettles is appointed Receiver without security of the Respondent’s interest in land described as Lot 22 on SP 106487, County of Ward, Parish of Gilston, Title Reference 50262349 (46 Peach Drive, Robina in the State of Queensland) and Lot 21 on SP 406487, County of Ward, Parish of Gilston, Title Reference 50262348 (48 Peach Drive,…
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- Levy v Reddy [2009] FCA 63
- Case
- [2009] FCA 63
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CaseChat Overview and Summary
The court found that Mark Reddy was indeed a bankrupt pursuant to an order from the High Court of Justice of the United Kingdom. It was further determined that the High Court of Justice is a court of a prescribed country under Section 29 of the Bankruptcy Act. The court was satisfied that the respondent's estate, as defined by the Insolvency Act 1986, vested in the applicant immediately upon the appointment of bankruptcy, and that the respondent's property, including real property in Australia, fell within the statutory definition of the bankrupt's property. Consequently, the court found that it had jurisdiction to grant the interim orders sought by the applicant.
The court issued the following interim orders: restraining the respondent from disposing of his divisible property, appointing Jason Walter Bettles as the receiver of the respondent's divisible property, and requiring the respondent to deliver a statement of affairs to the receiver within 14 days of service of the orders. The court also directed the applicant's solicitors to deliver a letter to the District Registrar, Queensland Registry, Federal Court of Australia, and scheduled a further hearing in the matter for 6 March 2009.
Orders
Orders of the court
1. The hearing in respect of these Interim Orders sought be heard ex parte.
2. The Respondent, Mark Reddy, by himself and, where applicable, his employees, agents or otherwise, be restrained until such time as any further or other order is made by this Court from disposing of or dealing with in any way his divisible property (within the meaning of section 116 of the Bankruptcy Act 1966 (Cth) and ascertained by reference to the commencement of his bankruptcy in the United Kingdom on 25 July 2008), as would be prohibited if the Respondent was bankrupt under the Bankruptcy Act 1966 (Cth), other than for the following purposes:
(a) to enable him to pay and to continue to pay reasonable legal expenses of defending or responding to these proceedings;
(b) to pay ordinary and proper business expenses bona fide incurred by him;
(c) to pay ordinary and proper living expenses bona fide incurred by him;
(d) to meet his taxation liabilities;
(e) to comply with any statutory requirements to which he is subject;
(f) to meet any mortgage or other loan commitment entered into prior to the date of this order.
3. Jason Walter Bettles (of Worrells Solvency and Forensic Accountants, Level 6, 50 Cavill Avenue, Surfers Paradise in the State of Queensland) be appointed Receiver without security of that divisible property pending further or other order of this Honourable Court.
4. In particular, Jason Walter Bettles is appointed Receiver without security of the Respondent’s interest in land described as Lot 22 on SP 106487, County of Ward, Parish of Gilston, Title Reference 50262349 (46 Peach Drive, Robina in the State of Queensland) and Lot 21 on SP 406487, County of Ward, Parish of Gilston, Title Reference 50262348 (48 Peach Drive, Robina in the State of Queensland) (the “Respondent’s Land”) and the Receiver is entitled to lodge caveats with the Registrar of Titles over the titles of the Respondent’s Land to protect and note the Receiver’s interest in the Respondent’s Land.
5. There be served on the Respondent a sealed copy of these Interim Orders along with a copy of the Application and the Supporting Affidavits as soon as possible hereafter.
6. Within 14 days of service of these Interim Orders (along with a copy of the Application and the Supporting Affidavits) and of notification to the Respondent by the Receiver of his appointment, the Respondent is to deliver to the Receiver a Statement of Affairs in respect of the Respondent’s divisible property.
7. The Respondent and any third party affected by this Order shall have liberty to apply on notice to the Applicant to discharge or vary this Order, or to seek directions hereunder.
8. The Applicant’s costs of and incidental to obtaining this Order be the Applicant’s reserved costs.
9. The solicitors for the applicant to make arrangements for the original of the letter, a certified copy of which is marked as Annexure “PML-9” and referred to in the Affidavit of Peter Maurice Levy sworn 12 January 2009, to be delivered to the District Registrar, Queensland Registry, Federal Court of Australia, by 4.00 pm on 5 March 2009.
10. Further hearing in this matter be set down at 9.30 am on 6 March 2009.
Note:
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
Established by: COLLIER J
Three additional affidavits have been filed supporting the application. They are:·two affidavits sworn by Michael Anthony Coates, the solicitor of the applicant, on 21 January 2009 and 6 February 2009. Mr Coates has deposed, inter alia, that he has received instructions from the applicant (subsequent to the execution of the applicant’s affidavit) seeking orders that Jason Walter Bettles of Worrells Solvency and Forensic Accountants, a registered trustee in Australia, be appointed interim receiver of the divisible property of the respondent situated in Australia; and·an affidavit sworn by Jason Walter Bettles consenting to being appointed as a receiver of the divisible property of the respondent situated in Australia.CONSIDERATION This matter came before me this morning on an ex parte basis. At the hearing it became clear that orders sought by the applicant were pursuant to s 29 Bankruptcy Act 1966 (Cth). Section 29 provides as follows:(1) All Courts having jurisdiction under this Act, the Judges of those Courts and the officers of or under the control of those Courts shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.(2) In all matters of bankruptcy, the Court:(a) shall act in aid of and be auxiliary to the courts of the external Territories, and of prescribed countries, that have jurisdiction in bankruptcy; and(b) may act in aid of and be auxiliary to the courts of other countries that have jurisdiction in bankruptcy.(3) Where a letter of request from a court of an external Territory, or of a country other than Australia, requesting aid in a matter of bankruptcy is filed in the Court, the Court may exercise such powers with respect to the matter as it could exercise if the matter had arisen within its own jurisdiction.(4) The Court may request a court of an external Territory, or of a country other than Australia, that has jurisdiction in bankruptcy to act in aid of and be auxiliary to it in any matter of bankruptcy.(5) In this section, prescribed country means:(a) the United Kingdom, Canada and New Zealand;(b) a country prescribed by the regulations for the purposes of this subsection; and (c) a colony, overseas territory or protectorate of a country specified in paragraph (a) or of a country so prescribed. On the evidence before me a number of issues are clear. First, the respondent is a bankrupt in the United Kingdom pursuant to an order of the High Court of Justice of the United Kingdom. Second, the High Court of Justice is a court of a prescribed country for the purposes of s 29 Bankruptcy Act. Third, upon the commencement of the respondent’s bankruptcy, the bankrupt’s estate as defined in the Insolvency Act 1986 Act (UK) vested in the applicant immediately upon the appointment taking effect: s 306(1) Insolvency Act 1986 Act (UK). The bankrupt’s property as defined by the Insolvency Act 1986 Act (UK) includes money, goods, things in action, land and every description of property wherever situated: s 436 Insolvency Act 1986 Act (UK). Real property of the respondent situated in Australia as described in the applicant’s affidavit falls within this statutory definition and is potentially subject to the bankruptcy administration by the applicant.