Micheletto as trustee of the Bankrupt Estate of Wavish v Wavish

[2018] FCCA 1945

FEDERAL CIRCUIT COURT OF AUSTRALIA

MICHELETTO AS TRUSTEE OF THE BANKRUPT ESTATE OF WAVISH & ANOR v WAVISH [2018] FCCA 1945

Catchwords:
BANKRUPTCY – Application for vacant possession of property – where Respondent did not participate in the proceedings – where Trustee has taken appropriate steps – Respondent vacate property within 21 days – orders for sale of property.

Legislation:

Bankruptcy Act 1966, ss.58, 30, 109.

First Applicant: FABIAN KANE MICHELETTO AS TRUSTEE OF THE BANKRUPT ESTATE OF LISA MAREE WAVISH

Second Applicant: MICHAEL CARRAFA  AS TRUSTEE OF THE BANKRUPT ESTATE OF LISA MAREE WAVISH

Respondent: LISA MAREE WAVISH

File Number: MLG 340 of 2018

Judgment of: Judge Hartnett

Hearing date: 3 July 2018

Delivered at: Melbourne

Delivered on: 3 July 2018

REPRESENTATION

Solicitor acting as Counsel for the Applicants: Ms Horwood

Solicitors for the Applicants: CLH Lawyers

The Respondent: No appearance

THE COURT DECLARES THAT pursuant to ss.30 and 58 of the Bankruptcy Act 1966 (Cth) (‘the Act’) beneficial ownership of the property located at 28 Regent Close Berwick in the State of Victoria 3806 and more particularly described in Certificate of Title Volume 10377 Folio 207 (“the property”) vests in the Applicants as joint owners.

THE COURT ORDERS THAT:

1. The Respondent deliver up to the Applicants vacant possession of the property within 21 days of the date of these orders.

2. The Respondent deliver up all keys for all buildings and improvements on the property to the Applicants within 21 days of the date of these orders.

3. In the event that the Respondent fails to deliver up vacant possession of the property in accordance with the orders (1) and (2) herein, a warrant of possession issue forthwith in favour of the Applicants.

4. The Respondent remove from the property all personal property being vehicles, rubbish and any other chattels (“the personal property”) which do not vest in the Applicants within 21 days of the date of these orders.

5. In the event that the Respondent fails to comply with Order 4 herein, the Applicants are empowered to remove and dispose of the personal property on the property as they see fit.

6. The property be sold and the Applicants have the sole conduct of the sale of the property and be authorised to instruct an agent and/or auctioneer for that purpose.

7. The Applicants are to decide whether the property is to be sold by auction or private treaty.

8. The Applicants are to decide whether to set a reserve price for any auction of the property, and if so, what price.

9. The Applicants be empowered to sign any contract of sale, discharge of mortgage authority, Transfer of Land, Notice to Vacate and any other document or documents on behalf of the Respondent necessary to give effect to the sale and settlement of the property with vacant possession in the event that the Respondent fails or refuses to sign such documents within such time as required by the Applicants’ solicitors.

10. The Respondent do all things as may be reasonably required by the Applicants, their selling agent or solicitors for the purpose of achieving a sale of the property with vacant possession, including but not limited to, providing access to buildings on the property for the purpose of valuation and viewing by potential purchasers.

11. The Applicants’ 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.

12. The parties have liberty to apply on 3 days notice.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 340 of 2018

FABIAN KANE MICHELETTO AS TRUSTEE OF THE BANKRUPT ESTATE OF LISA MAREE WAVISH

First Applicant

MICHAEL CARRAFA AS TRUSTEE OF THE BANKRUPT ESTATE OF LISA MAREE WAVISH

Second Applicant

And

LISA MAREE WAVISH

Respondent

REASONS FOR JUDGMENT

(Edited Ex Tempore Reasons)

1. Before the Court is an application filed on 12 February 2018 wherein the Applicants are Fabian Kane Micheletto and Michael Carrafa as joint and several trustees of the bankrupt estate of Lisa Maree Wavish and the named Respondent is the bankrupt, Lisa Maree Wavish. 

2. Ms Wavish has failed to respond to these proceedings or take part in them in any way.

3. The Court is satisfied as to the service upon Ms Wavish of the initiating application and supporting affidavit with that service being by way of substituted service pursuant to orders made by Registrar Ryan on 17 May 2018.  On that day, Registrar Ryan made the following orders:-

   “1. Personal service of the Application filed 12 February 2018 is dispensed with.

   2. The Application be served as follows:

   (1) by sending the following documents (collectively, the “Documents”) by express post addressed to the respondent at 28 Regent Close, Berwick, Victoria, 3806:

   (a) a covering letter;

   (b) a copy of the email from the Chambers of Judge Hartnett dated 16 May 2018 giving notice that the Directions Hearing listed for 21 May 2018 at 10:00am is adjourned until 25 June 2018 at 10:00am;

   (c) a sealed copy of this order;

   (d) a sealed copy of the Application; and

   (e) a copy of the affidavit of Fabian Kane Micheletto sworn on 12 February 2018;

   (2) by sending the Documents by express post addressed to the respondent care of Telstra, 242 Exhibition Street, Melbourne, Victoria, 3000; and

   (3) by scanning the Documents and sending them by email to the respondent at [email protected].

   3. Service of the Application be deemed to be effected on 29 May 2018 upon condition that the 3 events referred to in paragraph 2 occur by 22 May 2018.

   4. The costs of this application be reserved.

   5. Liberty to apply.”

4. Registrar Ryan’s orders were made as a consequence of an interim application being filed by the Applicants on 4 May 2018, seeking such orders in circumstances where the Applicants had been unable to effect personal service of the Applicants’ application and affidavit of Fabian Kane Micheletto, sworn 12 February 2018, together with Exhibits ‘FKM1’ to ‘FKM11’, upon the Respondent. 

5. The matter next proceeded on 25 June 2018. On that date, the Court was satisfied that the Applicants had complied with the orders of Registrar Ryan of 17 May 2018.  Before the Court were two affidavits of service both sworn by Ms Alison Lieu on 19 March 2018, and a further affidavit of service sworn by Ms Lieu on 31 May 2018. Ms Lieu deposed, on 19 March 2018, to having served Westpac Banking Corporation, the mortgagee registered on the title to the real property situate at Regent Close Berwick in the State of Victoria and more particularly described in the Certificate of Title Volume 10377 Folio 207 (‘the property’) (being property prior to the bankruptcy which was registered in the sole name of the Respondent), with the Applicants’ application and affidavit evidence, together with correspondence from the Applicants’ lawyers, dated 26 February 2018, such that Westpac Banking Corporation had notice of these proceedings.  Ms Lieu further deposed, on 19 March 2018 that on 26 February 2018, Ms Lieu had served South East Water Corporation, being a corporation who had lodged a caveat over the property.

6. Otherwise, the affidavit of service, sworn by Ms Lieu, on 31 May 2018, went to service upon the Respondent in accordance with the orders of Registrar Ryan, dated 17 May 2018.

7. On 25 June 2018, the Court made the following orders:-

   “1. The application filed 12 February 2018 is adjourned to 3 July 2018 at 10.00am for final hearing.

   2. In the event the Respondent fails to appear on the adjourned date there is liberty to the Applicants to seek to proceed undefended.

   3. The solicitors for the Applicants serve a copy of this order upon the Respondent by express post to 28 Regent Close Berwick VIC 3806 and by email to [email protected].

   4. Costs are reserved.”

8. There is before the Court a further affidavit sworn by Ms Lieu on 26 June 2018, which deposes as to service upon the Respondent, in accordance with the orders made 25 June 2018 and which includes, relevantly, paragraph 3, which is as follows:-

   “3. I served the Respondent with the Orders by:

   a) Sending the Order by express post addressed to the Respondent at 28 Regent Close, Berwick, Victoria, 3806;

   b) Sending the Order by express post addressed to the Respondent care of Telstra, 242 Exhibition Street, Melbourne, Victoria, 3000;

   c) Scanning the Order and sending by email to the Respondent at [email protected]”

9. On the hearing of the application this day, the Respondent was called outside the courtroom and failed to answer the call.  She was so called on two occasions.  The matter has proceeded undefended.

10. The Court makes the declaration and orders which are sought by the Applicant in the initiating application as supported by the affidavit evidence contained in the affidavit of Mr Fabian Kane Micheletto, sworn 12 February 2018, and Ms Anna Francesca Horwood, sworn 4 May 2018.  The Court notes that in essence the affidavit of Ms Horwood went to attempts to personally serve the Respondent with the application and supporting affidavit and the unsuccessful nature of those attempts, which required the interim application for a dispensation with personal service.  Otherwise the evidence is relevantly set out below.

Evidence

1. On 6 June 2017, a sequestration order was made against the Respondent.  The Applicants were appointed as joint and several trustees of the Respondent’s bankrupt estate. The date of the act of bankruptcy was 24 February 2017.

2. Shortly after the appointment of the trustees, Mr Micheletto confirmed that the Respondent was the sole registered proprietor of the property.  The Applicants instructed CLH lawyers to lodge a caveat against the property, protecting the Applicants’ interest in the property.  That caveat was lodged against the property on 8 June 2017.  Subsequent to that, the Applicants were transmitted onto the title. 

3. By letter to the Respondent, dated 8 June 2017, sent by registered post to the Respondent, the Respondent was notified by the Applicant trustees of the fact of her bankruptcy, and their appointment as joint and several trustees of her bankrupt estate. The Respondent was requested to complete and lodge her statement of affairs within 14 days. 

4. During the months of June and July of 2017, Mr Micheletto’s staff communicated with the Respondent via email regarding her bankruptcy, requesting that she submit her statement of affairs and address various issues such as the insurance policy over the property.

5. By letter to the Respondent, dated 7 August 2017, sent by registered post and email, Mr Micheletto again notified the Respondent of her bankruptcy and of the appointment of the Applicants as joint and several trustees.  Additionally, Mr Micheletto confirmed for the Respondent that he had identified her interest in the property and how her bankruptcy affected same, together with her rights and obligations. He again requested the Respondent lodge her statement of affairs with the Official Receiver.

6. On 17 August 2017, and failing a response to his letter of 7 August 2017, Mr Micheletto wrote a further letter to the Respondent stating, amongst other things, that:-

   a)he had yet to receive the bankrupt’s state of affairs;

   b)failure to lodge a statement of affairs could result in a penalty being imposed by the Official Receiver; and

   c)he required completion of the statement of affairs by no later than 31 August 2017. 

7. On 8 September 2017, and failing a response to his letter of the 17 August 2017, Mr Micheletto attended the residential address of the property in an attempt to discuss with the Respondent her bankruptcy and to hand deliver copies of his previous correspondence to the Respondent.  At the time, Mr Micheletto received no answer to his knocking on the front door.  He left copies of his correspondence, dated 7 and 17 August 2017 in the letter box.  Mr Micheletto spoke with a neighbour of the Respondent and confirmed that the Respondent resided at the address of the property, but had not been seen for two weeks.

8. On 21 September 2017, Mr Adrian Warry, of Mr Micheletto’s staff, visited the property in an attempt to discuss the Respondent’s bankruptcy and to arrange an interview.  At that time, a discussion took place between the Respondent and Mr Warry. Amongst the matters discussed were the following:-

   a)that Mr Warry was a member of Mr Micheletto’s staff and that Mr Micheletto was having difficulty getting in contact with the Respondent;

   b)that Mr Micheletto had written to the Respondent by letters dated 7 and 17 August 2017, of which copies were, again, provided to the Respondent; and

   c)that the trustees had responsibility to deal with the property as an asset of the Respondent’s bankrupt estate.

9. During the above discussion, the Respondent advised Mr Warry that:-

   a)she would be in contact with Mr Micheletto’s staff the following week to discuss whether she could pay an amount sufficient to annul her estate;

   b)that the mortgage over the property, held by Westpac, was approximately $250,000; that the amount secured by the South East Water Corporation’s caveat was approximately $3000; and that the council rates were approximately six to twelve months in arrears; and

   c)she had lodged her statement of affairs and posted a copy of same to Mr Micheletto’s office. 

10. On 11 October 2017, and failing any contact from the Respondent since Mr Warry’s visit of 21 September 2017, Mr Micheletto, again, wrote to the Respondent, reaffirming that the property vested in the trustees, pursuant to s.58(1) of the Bankruptcy Act 1966 (Cth) and that he had engaged legal representatives to prepare an application for the trustees to be registered on the title of the property.  Mr Micheletto further advised the Respondent:-

    a)that she had failed to attend scheduled meetings with him;

    b)failed to respond to his correspondence of 7 and 17 August 2017;

    c)he had not received her statement of affairs and nor did it appear that she sent a copy of same to the Australian Financial Security Authority;

    d)she had failed to contact Mr Micheletto’s staff by 29 September 2017, which she had specifically informed Mr Warry that she would do at the time of his visit on 21 September 2017; and

    e)given these matters, she was requested to vacate and deliver the keys to the property within 14 days so that the property could be prepared by the trustees for sale.  Should she fail to vacate the property within 14 days, an application would be made to the Court to remove her from the property. 

11. On 29 November 2017, the Applicants were registered on the title of the property.

12. On 6 December 2017, the Applicants instructed their solicitors to forward a further letter to the Respondent, restating all of the matters raised as stated in these reasons above, and requesting a response from her.  No such response was forthcoming. 

13. As at 12 February 2018, the Respondent had not submitted her statement of affairs; had not resolved her bankruptcy; had not responded to correspondence from the Applicants; and had not vacated the property or delivered the keys to the property to the Applicants.  Mr Micheletto noted that he was without funds in the administration of the estate and could not provide an accurate annulment estimate to the Respondent as she had not submitted her statement of affairs. 

14. On 13 February 2018, the Applicants filed an application in this proceeding, seeking orders for vacant possession and sale of the property which formed part of the bankrupt estate of the Respondent. The Applicants placed determinative evidence before the Court which was not challenged by the Respondent.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of Judge Hartnett

Date: 19 July 2018