Lucan as trustee of the Bankrupt Estate of Riches v Riches

[2020] FCCA 2762

FEDERAL CIRCUIT COURT OF AUSTRALIA

LUCAN AS TRUSTEE OF THE BANKRUPT ESTATE OF RICHES v RICHES [2020] FCCA 2762

Catchwords:
BANKRUPTCY – Application by trustee in bankruptcy for an order granting vacant possession of property occupied by bankrupt and also for consequential orders – orders granted.

Legislation:

Bankruptcy Act 1966 (Cth), ss.58, 109, 116

Transfer of Land Act 1958 (VIC)

Cases cited:

Prentice v Fortune & Anor [2014] FCCA 2199

Applicant: AARON KEVIN LUCAN IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF PAUL DAMIEN RICHES

Respondent: PAUL DAMIEN RICHES

File Number: SYG 2108 of 2020

Judgment of: Judge Manousaridis

Hearing date: 29 September 2020

Date of Last Submission: 29 September 2020

Delivered at: Sydney

Delivered on: 29 September 2020

REPRESENTATION

Solicitors for the Applicant: Mr D Vosnakis of Roser Lawyers, by telephone

No appearance by, or on behalf of, the Respondent

THE COURT DECLARES THAT:

1. The beneficial ownership of the property at 17 Lawrence Street, Camperdown VIC 3260 also known as Certificate of Title Volume 07556 Folio 008 (Property) vested in the Applicant upon the Applicant’s appointment as trustee of the Respondent’s bankrupt estate on 27 March 2015, under Bankruptcy Act 1966 (Cth) (Bankruptcy Act) ss 58 and 116.

THE COURT ORDERS THAT:

1. Within 30 days of the date of this order, the Respondent deliver up vacant possession of the Property to the Applicant.

2. If the Respondent fails to comply with order 2 above, a Writ of Possession or Warrant for Possession as the case may be shall issue in the Applicant’s favour forthwith.

3. Within 30 days of the date of this order:

   (a)the Respondent and any occupiers of the Property:

   (i)vacate the Property;

   (ii)remove any goods, garbage, chattels and/or belongings from the Property that have not vested in the Applicant;

   (b)the Respondent must give the Applicant:

   (i)the certificate of title of the Property;

   (ii)the keys to the Property;

   (iii)any alarm or access codes for the Property.

4. The Applicant:

   (a)may engage agents to provide services and expertise reasonably necessary or appropriate to assist in the preparation for sale and selling of the Property, including but not limited to real estate agents, valuers, cleaners, tradespeople, accountants, solicitors, conveyancers and auctioneers;

   (b)may sell the Property, and have sole conduct of the sale of the Property;

   (c)may sell the Property by private treaty, auction or tender;

   (d)may, if the Property is sold by auction, decide whether or not to set a reserve price and, if so decided, the reserve price;

   (e)may deal with the goods and chattels deemed abandoned at the Property at their sole discretion;

   (f)may execute all documents, and take all necessary or appropriate steps on behalf of the Respondent in relation to the sale of the Property, including but not limited to the execution of any:

   (i)agreement with a real estate agents, valuers, cleaners, tradespeople, accountants, solicitors, conveyancers, auctioneers or other agent;

   (ii)any contract of sale;

   (iii)nomination form;

   (iv)any document under the Transfer of Land Act (VIC) 1958

   (v)any notice relating to a contract of sale; and

   (vi)any other document relating to the sale of the Property;

5. The Applicant may sell the Property, applying proceeds upon completion as follows:

   (a)paying costs, commissions, duties, taxes, rates and other expenses of the sale and transfer of the Property;

   (b)paying the cost of these proceedings;

   (c)to discharge any mortgage or charge over the Property (in order of priority) registered prior to the Applicant’s appointment as trustee;

   (d)to pay the Applicant’s costs at the Applicant’s firm’s hourly rates and disbursements (including any legal fees) incurred in selling the Property;

   (e)the balance to be divided equally between the Applicant and the Respondent.

6. That the Court order that the Applicant’s costs of this proceeding be paid in priority in accordance with s 109 of the Act from the property of the bankrupt estate of the Respondent.

7. By 6 October 2020 the applicant serve on the respondent at the Property a sealed copy of these orders.

8. The respondent has liberty to apply by 20 October 2020 to vary or discharge any of these orders.

9. The parties have liberty to apply in connection with the interpretation or implementation or variation of these orders.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2108 of 2020

AARON KEVIN LUCAN IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF PAUL DAMIEN RICHES

Applicant

And

PAUL DAMIEN RICHES

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. There is listed before me today an application filed by the trustee in bankruptcy of the estate of Paul Damien Riches (the bankrupt). In that application the trustee seeks an order directing the bankrupt to vacate a property of which the bankrupt, at the time he was made bankrupt, was the sole registered proprietor. The trustee also seeks orders consequential or otherwise related to the principal order that he seeks.

2. The background of the matter is follows: The bankrupt was made bankrupt by a sequestration order made on 27 March 2015, and the trustee was appointed trustee of the bankrupt estate.  According to an affidavit made by the trustee on 4 September 2015, since 30 March 2015, attempts have been made by or on behalf of the trustee to communicate with and engage the attention of the bankrupt.  These attempts included the sending of a letter on 30 March 2015 to the bankrupt providing a form of statement of affairs, requesting that it be completed and returned. That has not occurred. Other attempts to engage with the bankrupt are set out in paragraph 11 of the trustee’s affidavit.

3. In the meantime, the trustee has made investigations of the assets that comprise the estate.  Those investigations revealed that the bankrupt is the sole registered proprietor of a property located at 17 Lawrence Street, Camperdown, in Victoria. On the making of the sequestration order, the interest the bankrupt had in the property vested in the trustee, as did whatever other property the bankrupt had.  Relying on that vesting of interest the trustee took steps to have his name recorded on the register of that property as the sole registered proprietor.  That occurred by the filing of a transmission application, which was lodged on 17 March 2020 and registered on 1 April 2020.  The documents in relation to those transactions are in evidence before me, being annexed to the affidavit of the trustee. The evidence also reveals that the bankrupt has remained in possession of the property, and a notice to vacate has been issued to the bankrupt, but the bankrupt still remains in possession. 

4. I should add there has been no appearance by the bankrupt. There is before me, however, an affidavit of service made by Mr Papst, and that affidavit confirmed that, on 16 September 2020, the application and affidavit of the trustee were served on the bankrupt.

5. The question then is whether the Court has power to make the orders sought.  I examined that question in the judgment of Prentice v Fortune & Anor [2014] FCCA 2199. In paragraph 11 of those reasons, I said:

   [T]here is a substantial body of authority to the effect that the Act [that is the Bankruptcy Act 1966 (Cth)] confers jurisdiction on this Court to order a bankrupt to vacate possession of real property that forms part of the bankrupt estate. The source of the Court’s power to order possession has been held to lie in the combined operation of s.77(1)(g) and s.30 of the Act. [See, for example, Horne (as trustee of the Bankrupt Estate of Sekulovski) v Sekulovski [2009] FCA 1164 (Tracey J); Cook v Tagamilitsky [2001] FMCA 117; Vince (trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis (No 2) [2012] FCA 1298 (Bromberg J)]. Paragraph (g) of s.77(1) provides, among other things, that, unless excused by the trustee, or prevented by illness or other sufficient cause, the bankrupt must “aid to the utmost of his of her power in the administration of his or her estate”.  Paragraph (b) of s.30(1) provides that the Court may make such orders as the Court considers necessary for the purposes of carrying out or giving effect to the Act.

6. In those circumstances, I am prepared, and will in a moment, make orders substantially to the effect sought in the application.

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate: 

Date: 7 October 2020