Nicholls (Trustee), in the matter of Henne v Henne
[2016] FCA 1533
•8 December 2016
FEDERAL COURT OF AUSTRALIA
Nicholls (Trustee), in the matter of Henne v Henne [2016] FCA 1533
File number: VID 345 of 2016 Judge: DAVIES J Date of judgment: 8 December 2016 Catchwords: BANKRUPTCY AND INSOLVENCY – application by the trustee for a declaration that all the right, title and interest in the property vests in the trustee – application for order for vacant possession Legislation: Bankruptcy Act 1966 (Cth), s 30 Date of hearing: 8 December 2016 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 6 Counsel for the Applicant: A Spencer Solicitor for the Applicant: McLean & Associates Solicitors Counsel for the Respondents: The Respondents did not appear ORDERS
VID 345 of 2016 IN THE MATTER OF THE BANKRUPT ESTATE OF PETER HENNE BETWEEN: ALAN RICHARD NICHOLLS IN HIS CAPACITY AS TRUSTEE IN BANKRUPTCY OF THE BANKRUPT ESTATE OF PETER HENNE
Applicant
AND: PETER HENNE
First Respondent
MARINA HENNE
Second Respondent
JUDGE:
DAVIES J
DATE OF ORDER:
8 DECEMBER 2016
THE COURT DECLARES THAT:
1.All of the right, title and interest of the First Respondent in the property situated at 1 Hut Street, Whittlesea in the State of Victoria being the whole of the land comprised in Volume 08638 Folio 104 (“the Property”) is vested in the Applicant by operation of ss 58 and 116 of the Bankruptcy Act 1966 (Cth) (“the Act”) being the whole of the Property.
THE COURT ORDERS THAT:
2.Pursuant to section 30 of the Act:
(a)judgment be entered in favour of the Applicant for possession of the Property;
(b)the First and Second Respondents give vacant possession of the Property to the Applicant no later than 21 days from the date of these orders.
3.The Second Respondent pay the Applicant’s costs of and occasioned by these proceedings, and otherwise the costs be costs in the Bankrupt Estate of Peter Henne.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)DAVIES J:
The applicant (“the trustee”), who is the trustee of the bankrupt estate of the first respondent Peter Henne (“Mr Henne”) has applied for a declaration that all the right, title and interest of Mr Henne in the property situated at 1 Hut Street, Whittlesea, in the State of Victoria, the whole of the land comprised in Volume 08638 Folio 104 (“the property”), is vested in the trustee by operation of ss 58 and 116 of the Bankruptcy Act 1966 (Cth) (“the Act”). The trustee has also sought an order for possession of the property, and an order requiring Mr Henne and his wife, the second respondent (“Mrs Henne”), to give vacant possession of the property to the applicant no later than 21 days from the date of the orders. On the information presently available to the trustee, the net equity in the property which would be available for the benefit of the bankrupt estate is estimated to be $295,918.85.
Mr Henne has consented to an order for judgment in favour of the trustee for possession of the property and an order that costs be costs in the bankrupt estate of Peter Henne but the orders have been opposed by Mrs Henne. Mrs Henne filed a notice of opposition to the trustee’s application supported by an affidavit. Mrs Henne did not, however, attend the hearing today. It appears that Mrs Henne is currently serving a term of imprisonment, having been sentenced on 23 September 2016. That fact came to the attention of the trustee in late November and the solicitor for the trustee wrote to Mrs Henne at Corrections Victoria advising her that it was the trustee’s intention to proceed with the application listed for hearing on 8 December 2016. There has been no response to that letter, and no communication from Mrs Henne seeking an adjournment, or otherwise, of the hearing today. Mrs Henne has been on notice since 19 September 2016 that the matter was listed for hearing today, when the hearing was further adjourned at her request and listed for today. In the circumstances, I considered that a further adjournment of what already has been a protracted application by reason of various adjournments that have been sought by Mrs Henne since the institution of the proceeding was not justified and the hearing of the application should proceed in the absence of Mrs Henne.
In her notice of opposition, Mrs Henne claimed to be the owner of the property, and disputed that the property had vested in the trustee as trustee of the bankrupt estate of Mr Henne upon Mr Henne’s bankruptcy. In her affidavit in support, Mrs Henne asserted that:
·she has been a major contributor to the financing of the purchase of the land by way of a loan of $10,000 from General Credits, 227 William Street, Melbourne;
·she also aided the financing of the building of the home and other structures on the property;
·Mr Henne entered into a Part X agreement (under the Act) in 1998 when a business he operated with his brother, JHP Henne Builders, failed;
·the property was mortgaged to satisfy creditors and was transferred to Mr Henne on the insistence of the lender; and
·Mrs Henne has contributed to utilities, the mortgage, vehicles and equipment.
Mrs Henne did not support her assertions with any evidentiary material. However, before the Court was the material that Mrs Henne provided to the trustee in July 2015 in support of a claim that she made to him at that time that she held an equitable interest in the property. The trustee rejected that claim on the basis that there was no evidence to support it and Mrs Henne did not appeal the trustee’s decision. That material comprised mainly unexplained bank statements and invoices, at least some of which appeared to be bank statements and various invoices of Mr Henne. It is not possible, without explanation, to make any sense of that material and how that material is said to demonstrate that Mrs Henne has an equitable interest in the property.
The relevance of the transfer of the property to Mr Henne appears to be that the property was originally purchased by Mr and Mrs Henne as joint proprietors in 1981. In December 1994 Mr Henne transferred his interest in the property to Mrs Henne and in June 1999 Mrs Henne transferred her interest back to Mr Henne. Whilst the transfer from Mrs Henne back to Mr Henne was expressed to be for natural love and affection, land title documents show that a loan taken out by Mr Henne at the time of the transfer, secured by a mortgage over the property, was used by Mr Henne to discharge earlier mortgages over the property. The property has been owned by Mr Henne since 1999 and there is nothing in the evidence to support Mrs Henne’s claim that she continues to hold a proprietary interest in the property.
As there is simply no probative evidence substantiating Mrs Henne’s claim to hold a proprietary interest in the property, the trustee is entitled to the declaration that he seeks and the Court has the power pursuant to s 30 of the Act to make the order requiring that vacant possession of the property be given to the trustee. Accordingly, the declaration and orders sought will be made.
I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies. Associate:
Dated: 16 December 2016
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