Lynkonex Pty Ltd v Graeme Edwin (A) Strang

[2016] FCCA 2253

FEDERAL CIRCUIT COURT OF AUSTRALIA

LYNKONEX PTY LTD v GRAEME EDWIN (A) STRANG [2016] FCCA 2253

Catchwords:
BANKRUPTCY – Where bankrupt fails to file statement of affairs – surplus – oral application for annulment of bankruptcy.

Legislation:

Bankruptcy Act 1966, ss.27, 134, 146, 153A.

Applicant: LYNKONEX PTY LTD

Respondent: GRAEME EDWIN (A) STRANG

File Number: SYG 552 of 2011

Judgment of: Judge Street

Hearing date: 30 August 2016

Date of Last Submission: 30 August 2016

Delivered at: Sydney

Delivered on: 30 August 2016

REPRESENTATION

Counsel for the Applicant: Mr B Skinner

Solicitors for the Applicant: Robilliard Lawyers

The Respondent appeared in person.

ORDERS

1. Pursuant to s.146 of the Bankruptcy Act 1966 (Cth), Scott Darren Pascoe as the trustee of the bankrupt estate of Graeme Edwin Strang distribute a dividend of $6,560, together with interests thereon to Lynkonex Pty Ltd (ACN 001 553 859) as if the bankrupt had completed a statement of affairs and Lynkonex Pty Ltd had been stated to be a creditor in it.

2. Pursuant to s.134(4) of the Bankruptcy Act 1966 (Cth), the trustee shall be entitled upon payment to Lynkonex Pty Ltd to form the view that all of the bankrupt’s debts have been paid in full so as to enliven consideration and exercise by the trustee of the powers under s.153A of the Bankruptcy Act 1966 (Cth).

3. The payment of the trustee’s costs, charges and expenses including counsel’s fees of the bankruptcy, including the examination and the s.146 application be paid from the bankrupt estate on a trustee basis.

4. The Court notes the payment of the debts of the bankrupt is to include interest payable on the debt of Lynkonex Pty Ltd.

5. The trustee to file an affidavit in relation to the annulment of the bankruptcy on or before 13 September 2016.

6. Liberty to apply on 24 hours’ notice.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 552 of 2011

LYNKONEX PTY LTD

Applicant

And

GRAEME EDWIN (A) STRANG

Respondent

REASONS FOR JUDGMENT

1. This is a matter within the Court’s jurisdiction under s.27 of the Bankruptcy Act 1966 (Cth) (“the Act”).  The respondent was made a bankrupt on 12 July 2011. 

2. Sadly, the respondent did not complete a statement of his affairs. Nonetheless, the bankrupt has attended the Court today and been the subject of an examination. That examination evidence has been treated as being evidence before the Court in an oral application under s.146 of the Act to permit payment out of funds that have been obtained by the trustee to the only identified creditor. There is such a surplus of funds that, once the trustee’s expenses have been paid, if the trustee takes steps to record the payment in full of the creditors, it may give rise to the annulment of the bankruptcy in relation to the bankrupt.

3. The bankrupt’s circumstances are necessitous.  The bankrupt is homeless, living in Ultimo.  Notwithstanding the bankrupt’s failure to complete the statement of his affairs, I am satisfied that the bankrupt gave a candid response in relation to the identification of his financial position. I am satisfied that this is an appropriate case in which the Court should permit the trustee to make an oral application so as to expedite the annulment of the respondent’s bankruptcy by payment of the creditors and to permit the distribution of the surplus back to the bankrupt.

4. To the extent relevant, I am satisfied this was an appropriate matter for the trustees to engage counsel. I am satisfied that this is an appropriate matter for the Court to make an order in relation to the distribution of dividends to the only identified creditor of the estate together with interest. However, I propose to make an order pursuant to s.134(4) of the Act that the trustee is justified on payment to that creditor, in forming the view that all of the bankrupt’s debts have been paid in full. That will facilitate the trustee taking steps under s.153A of the Act that will give rise to the annulment of the bankruptcy.

I certify that the preceding four (4) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 1 December 2016