Michell and Newman (As Trustees of the Property of Syed F Bokhari (Also Known as Syed Farhan Raza Bokhari)) v Bokhari

[2018] FCCA 595

FEDERAL CIRCUIT COURT OF AUSTRALIA

MICHELL AND NEWMAN (AS TRUSTEES OF THE PROPERTY OF SYED F BOKHARI (ALSO KNOWN AS SYED FARHAN RAZA BOKHARI)) v BOKHARI & ANOR [2018] FCCA 595

Catchwords:
BANKRUPTCY – Ruling on final orders sought by the Trustees.

Applicant: STEPHEN JOHN MICHELL AND PHILIP NEWMAN (AS TRUSTEES OF THE PROPERTY OF SYED F BOKHARI ALSO KNOWN AS SYED FARHAN RAZA BOKHARI)

First Respondent: SYED F BOKHARI (ALSO KNOWN AS SYED FARHAN RAZA BOKHARI)

Second Respondent: SYED KALSOOM ZAHRA

File Number: MLG 1465 of 2017

Judgment of: Judge Burchardt

Hearing date: 26 February 2018

Date of Last Submission: 26 February 2018

Delivered at: Melbourne

Delivered on: 26 February 2018

REPRESENTATION

Counsel for the Applicants: Ms Horwood

Solicitors for the Applicants: CLH Lawyers

The First Respondent: No appearance

The Second Respondent: No appearance

ORDERS

THE COURT DECLARES THAT:

1. Beneficial ownership of the property located at 59 Chlorinda Road, Tarneit, Victoria, 3029 and more particularly, described in Certificate of Title Volume 11264, Folio 036 (“the property”) vests in the Applicants as owners of one of two equal undivided parts, and in the Second Respondent as to one of two equal undivided parts, as tenants in common in equal shares.

THE COURT ORDERS THAT:

1. The respondents deliver up to the Applicants vacant possession of the property within 60 days of the date of these orders.

2. The Respondents deliver up all keys for all buildings and improvements on the property to the applicants within 60 days of the date of these orders.

3. In the event that the Respondents fail to deliver up vacant possession of the property in accordance with the above orders, a warrant of possession will issue forthwith in favour of the applicants.

4. The Respondents must remove from the property all personal property being vehicles, rubbish and any other chattels (“the personal property”), which does not vest in the applicants within 60 days of the date of these orders.

5. In the event that the Respondents fail to comply with Order 5, 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 documents, on behalf of the second respondent necessary to give effect to the sale and settlement of the property with vacant possession, in the event that the Second Respondent fails or refuses to sign such documents within such time as required by the Applicants’ solicitors.

10. The First and Second Respondents 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 Second Respondent have liberty to bid at the sale of the property, subject to satisfying the Applicants of the Second Respondent’s ability to complete any such purchase.

12. The net proceeds of the sale of the Property to be paid in the following order:

    (a)Firstly to the payment of any monies due to encumbrancers charging the property prior to the bankruptcy, according to their priorities,

    (b)Secondly to the Applicants’ costs of these proceedings, including the Applicants’ remuneration and disbursements accrued to give effect to these Orders and sell the property, and all other costs, charges and expenses of the sale of the Property;

    (c)Thirdly, 50 % of the balance remaining is to be paid to the Applicants;

    (d)Fourthly, from the funds then remaining, payment is to be made of any monies due to any encumbrancers charging the property subsequent to the bankruptcy, according to their priorities, and then to the Second Respondent.

13. The parties have liberty to apply on 3 days’ notice.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1465 of 2017

STEPHEN JOHN MICHELL AND PHILIP NEWMAN (AS TRUSTEES OF THE PROPERTY OF SYED F BOKHARI ALSO KNOWN AS SYED FARHAN RAZA BOKHARI)

Applicant

And

SYED F BOKHARI (ALSO KNOWN AS SYED FARHAN RAZA BOKHARI)

First Respondent

SYED KALSOOM ZAHRA

Second Respondent

REASONS FOR JUDGMENT

1. On 7 July 2017, the applicants, who are Trustees of the Bankrupt Estate of Syed F. Bokhari, also known as Syed Farhan Raza Bokhari, sought orders, in effect, for the sale and distribution of the proceeds of sale of the matrimonial home of the first and second respondents, as it was before the first respondent became bankrupt.

2. The affidavit material filed on behalf of the Trustees shows that the Trustees are now on title, pursuant to the legislation, as half-owners of the property as a tenant in common, the prior joint tenancy having been severed by the act of bankruptcy itself.

3. The affidavit material suggests that the Trustees have been negotiating with the Second Respondent, the wife of the bankrupt, for a very considerable period of time.  He became bankrupt on 30 October 2014.  It is clear that no offer to pay out the interest now owned by the Trustees has been able to be formulated.

4. Relevantly for these purposes, on 11 September 2017 I made orders that the Respondents file and serve any notice of opposition and affidavit in opposition on or before 2 October 2017.  The bankrupt was present in court on that occasion.  I adjourned it to directions on 8 November 2017, by which stage the Respondents were in default.  Both were in court, so they are fully aware of these circumstances.  Notwithstanding this, no formal documents have been filed by the Respondents.

5. On 16 February 2018, the Second Respondent wrote to my associate seeking an adjournment until April because her father had died in Pakistan and she would have to attend.

6. She relevantly said that, and I quote:

   “Despite our multiple efforts to settle this matter with CLH Lawyers and trustees they are not willing to listen and accept any offers from us which led us to think that they want to bring our family on road even though we have advised them to this loss there is no compassion shown by either trustees or lawyers.  As you are aware We want to settle this matter from the day one of the proceedings but their stubbornness is taking this matter to nowhere.  Our only hope rest with you.

   Kindly extend the date of hearing after we arrive so we are in a good position to defend ourselves.

   Our travel details are given below

   Date of departure 17/2/2108

   Date of arrival. 29/3/2018.” [sic]

7. The Trustees responded on 20 February indicating that the Trustees did not agree to the adjournment and that they would seek to proceed today.  That date, of course, was slightly after the date of departure but, by the same token, the Respondents may or may not have email contact in Pakistan.

8. On any view of the matter, the Respondents are in default within the Court’s rules, and the Court therefore has power to grant judgment to the party seeking it.

9. In circumstances where even the correspondence from the Second Respondent shows that the parties have got nowhere in their negotiations, and in circumstances where the Trustee is required to administer the estate in a timely way, it is quite plain that orders should be made in the form that the Trustee seeks.

10. I note that the 60 day period sought gives the Respondents ample time, should they be so advised, to seek to exercise their rights under Rule 16.05 of the Court’s Rules, and/or adapt themselves to the otherwise apparently inevitable foreclosure, which is going to occur in any event, it would seem, because I am informed by counsel that the bank has already served the notice of default.

11. So for those reasons there will be orders in terms of the applicant’s minute.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date: 13 March 2018