Minton and Minton and Anor

[2013] FamCA 849

FAMILY COURT OF AUSTRALIA

MINTON & MINTON AND ANOR [2013] FamCA 849

FAMILY LAW – PROCEDURAL – Application by wife pursuant to section 133 of Bankruptcy Act 1966 to enable sale of joint property of parties – Application granted – Order that property wholly vest in wife

Family Law Act 1975 (Cth)
Bankruptcy Act 1966 (Cth) ss 35 and 133

APPLICANT: Ms Minton

RESPONDENT: Mr Minton

INTERVENOR: Insolvency And Trustee Service Of Australia

FILE NUMBER: HBC 161 of 2013

DATE DELIVERED: 26 September 2013

PLACE DELIVERED: Hobart

PLACE HEARD: Hobart

JUDGMENT OF: Benjamin J

HEARING DATE: 26 September 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Ryan

SOLICITOR FOR THE APPLICANT: PWB Lawyers

COUNSEL FOR THE RESPONDENT: Mr K Minton in person

SOLICITOR FOR THE RESPONDENT:

Orders

1. Pursuant to section 133(9) of the Bankruptcy Act 1966 (Cth) the property at B Street, C Town in Tasmania more particularly described in Certificate of Title Volume 136981 Folio 1, wholly vest in Ms Minton (“the wife”).

2. I give leave for the wife to apply to this Court for any mechanical orders that may arise, such leave to operate within twenty eight (28) days from today’s date or such other period as is ordered by this Court within that period of time.

IT IS NOTED THAT:-

3. This order does not in any way impact upon the parenting and property proceedings currently in existence between the parties.

4. It is noted that these proceedings if not settled by mediation or conciliation may be proceedings that ought to be considered for transfer to the Federal Circuit Court.

5. There be no order as to costs.

IT IS DIRECTED

6. A copy of these reasons be taken out and placed on the Court file.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Minton & Minton has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT HOBART

FILE NUMBER: HBC 161 of 2013

Ms Minton

Applicant

And

Mr Minton

Respondent

REASONS FOR JUDGMENT

1. These are proceedings under s 133 of the Bankruptcy Act 1966 (Cth) (‘the Bankruptcy Act’).  Ms Minton ‘the wife’) filed an application in the Family Court on 22 April 2013 where she nominated her former husband, Mr Minton (‘the husband’), and the Insolvency and Trustee Service of Australia as the respondents.  The nub of the wife’s application was to enable the sale of a property at B Street, C Town in Tasmania.  That application was served upon the husband, and that is evidenced by an affidavit of service filed 9 July 2013.  There is no evidence of service of the wife’s application in a case on the husband although, the husband appears by telephone today and consents to the orders.  So I need not trouble myself about that.

2. There is, more importantly, an affidavit of service on the Insolvency and Trustee Service filed 9 May 2013.  Further evidence of service of the wife’s application in a case and the wife’s affidavit upon the Land Titles Office is evidenced by an affidavit of service filed 25 September 2013. 

3. The husband filed a response to the wife’s initiating application on the 4 September 2013 of which I have been made aware. 

4. The wife filed an application in a case on 17 September 2013 seeking orders pursuant to the Bankruptcy Act to enable the settlement of the sale of the property at B Street, C Town.  The wife provided and relied upon her affidavit filed the same day which is before me.  She says that she and the husband were married in 2007 and separated in January 2011.  It appears from the file that the parties’ marriage has been dissolved.  There is one child of the parties, D, who is aged four. 

5. In early 2012, the husband was declared bankrupt, and he remains an undischarged bankrupt.  At that time, the husband and wife owned property at B Street, C Town, and the property was subject to a mortgage to the Commonwealth Bank.  The property is currently unlet, and no one is living at the property, and the improvements at the property are falling into some disrepair.  The wife asserts that since separation she has paid the expenses on the property including the mortgage, rates and taxes.  As a consequence of the husband’s bankruptcy, the Insolvency and Trustee Service of Australia lodged a caveat against the interests of the property in August 2012. 

6. In late 2012, the wife received an offer for the property to be purchased for $210,000. At that time, the Insolvency Service of Australia would not agree to the sale of the property, and it appeared that it would need to be sold by virtue of a mortgagee exercising power of sale. In April 2013, the wife filed this application and expressed in that her concern. On 7 June 2013, the Insolvency and Trustee Service gave notice pursuant to s 133(1AA) and s 133(1A) of the Bankruptcy Act disclaiming any interest in the rural property referred to, namely, the property at B Street, C Town.  A certificate was issued to that end. 

7. In September 2013, the wife was no doubt relieved to find another buyer for this property and entered into a contract for the sale of the property.  There is apparently a caveat registered on the property by the Recorder of Titles warning any prospective purchaser of the circumstances impacting on this property. 

8. A copy of the contract between the wife and the prospective purchaser is annexed to her affidavit and is subject to the Commonwealth Bank releasing the mortgage on the property, and apparently they are, at this stage, prepared to settle the sale notwithstanding that there’s a shortfall or the wife will fund the difference.

9. The wife seeks an order that the property vest in her pursuant to s 133(9) of the Bankruptcy Act.  As I indicated to counsel for the wife, I needed to satisfy myself, firstly, that I had jurisdiction and, secondly, that it ought to be exercised.  I am satisfied of a number of things: firstly, as to the accuracy of the facts asserted by the wife in her affidavit; and secondly, that the husband and the Trustee in Bankruptcy are both aware of these proceedings and have expressed no interest in the property except to enable the property to be disposed of in an orderly and effective manner.

10. Section 35 of the Bankruptcy Act provides, relevantly:-

    (1)If, at a particular time:

    (a)a party to a marriage is bankrupt; 

    (b)the trustee of the bankrupt’s estate is: 

    (i)   a party to property settlement proceedings in relation to either or both of the parties to the marriage.

    then, at and after that time, the Family Court has jurisdiction in bankruptcy in relation to any matter connected with, or arising out of, the bankruptcy of the bankrupt.

11. All of those conditions have been met. Firstly, that the husband is a bankrupt. Secondly, that the Trustee is a party to these proceedings in relation to both of the parties to the marriage. Therefore, I am satisfied that this statutorily provides the jurisdiction for this Court to exercise its powers to make the orders for which the wife applies. As to the order itself, s 133(1AA) provides:-

    Where any part of the property of the bankrupt consists of:

    …

    (b)property (including land) that is unsaleable or is not readily saleable; subsection (1) applies.

12. Subsection (1) of s 133 provides:

    Subject to this section the trustee may, notwithstanding that he or she has endeavoured to sell or has taken possession the property or exercised any act of ownership in relation to it and notwithstanding, in the case of property, the transfer of which is required by a law of the Commonwealth or of a State or Territory of the Commonwealth to be registered, that he or she has not become the registered owner of that property by writing signed by him or any other time disclaim the property.

13. That gives the Official Trustee in Bankruptcy the power to disclaim the property.  Section 133(9) consequently provides that:

    The Court may, on application by a person either claiming an interest in, or being a liability not discharged by this Act in respect of, disclaimed property, and after hearing such persons as it thinks fit, make an order, on such terms the Court considers just and equitable, for the vesting of the property in, or delivery of the property to, a person entitled to it or a person in whom, it seems to the Court to be just and equitable that it should be vested in or delivered, or a trustee for that person.

14. The wife in this case seeks that the property be vest in her to enable to her to complete the sale.  That approach is not opposed by the husband and is expressly supported by the Official Receiver of Bankruptcy or the Official Trustee in Bankruptcy.  Having regard to the facts and circumstances in this matter, I propose to make those orders and make those orders today. 

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 26 September 2013.

Associate:

Date:  26 September 2013