Nida v Loebenstein (Trustee), in the matter of Nida (Bankrupt)
[2024] FedCFamC2G 942
•23 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Nida v Loebenstein (Trustee), in the matter of Nida (Bankrupt) [2024] FedCFamC2G 942
File number(s): MLG 297 of 2024 Judgment of: JUDGE FORBES Date of judgment: 23 September 2024 Catchwords: BANKRUPTCY – application to join Official Receiver to proceedings – where date of lodging Statement of Affairs in issue – determining all issues in dispute - application granted Legislation: Bankruptcy Act 1996 (Cth) ss 33A, 73, 153B
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 190, 191,192
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 11.01
Division: Division 2 General Federal Law Number of paragraphs: 10 Date of hearing: 6 September 2024 Place: Melbourne Counsel for the Applicant: Mr Levine, direct brief Solicitor for the First Respondent: Mr Serong; Serong Legal Solicitor for the Second Respondent: Ms Tai; Australian Government Solicitor ORDERS
MLG 297 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF ROONA NIDA (ALSO KNOWN AS ROONA FAZAL), A BANKRUPT
BETWEEN: ROONA FAZAL
Applicant
AND: JOSEPH LOEBENSTEIN AS TRUSTEE OF THE BANKRUPT ESTATE OF ROONA NIDA (ALSO KNOWN AS ROONA FAZAL)
First Respondent
THE OFFICIAL RECEIVER
Second Respondent
ORDER MADE BY:
JUDGE FORBES
DATE OF ORDER:
6 SEPTEMBER 2024
THE COURT ORDERS THAT:
Joinder
1.Leave be granted to the Applicant to join the Official Receiver as a Second Respondent to the proceeding.
Amendment
2.Ground 3 of the applicant’s Further Amended Application dated 9 August 2024 be amended to include the following paragraph:
“(e) For the purposes of this ground 3, the “Statement of Affairs” referred to in paragraphs (a) and (b) shall mean the Statement of Affairs dated 17 December 2020 which was sent to the Trustee by the Applicant on 27 May 2022.”
Case management
3.The Applicant forthwith serve upon the Official Receiver a copy of the further amended application and such affidavits as the Applicant proposes to rely upon at the final hearing on 20 September 2024, such service to be effected by email.
4.By no later than 4.00pm on 13 September 2013, the Official Receiver file and serve on the other parties any affidavit or other material on which it wishes to rely in response to ground 3 of the applicant’s Further Amended Application.
5.Order 7 of the Orders of Judicial Registrar Curnow made 19 July 2024 be amended so that the Court Book is filed by no later than 12.00pm on 17 September 2024.
6.By no later than 12.00pm on 17 September 2024 the Applicant file an affidavit of solvency.
7.To the extent that the Applicant has not already done so, the Applicant is to serve on all creditors all previously filed documents in the proceeding, such service to be effected by email.
8.Order 5 of the Orders of Judicial Registrar Curnow made 19 July is vacated.
9.By no later than 5.00pm on 17 September 2024 each party should serve on the other (and forward to the chambers of Judge Forbes) a list of the legal and factual issues that party contends are to be determined by the Court in this proceeding.
10.No later than 72 hours prior to the hearing, the parties give notice to all other parties of any deponent who is required for cross-examination at the final hearing, with a copy of the notice provided to the chambers of Judge Forbes.
Costs
11.The costs of this interlocutory application be reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
(ex tempore reasons revised from transcript)JUDGE FORBES
By an interlocutory application, the applicant seeks an order that the Official Receiver be joined as a second respondent to this bankruptcy proceeding.
In the substantive proceeding the applicant seeks orders, inter alia, that her bankruptcy be annulled pursuant to s 153B of the Bankruptcy Act 1996 (Cth) (the Bankruptcy Act), that the trustee be required to put a proposed composition to a meeting of creditors pursuant to s 73 and an order pursuant to s 33A that the date of lodgement of a Statement of Affairs be amended to the date the applicant reasonably believed it was lodged.
The power to join a party to a proceeding is governed by rule 11.01(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (the Rules). The Court has a general discretion to join a party to a proceeding where it is satisfied that a person is a necessary party to completely and finally determine all matters in dispute in a proceeding. The Court can either act on its own motion in determining that another party should be joined, or it can do so, as here, upon application of a party to the proceeding. The Rules provide that a party should not be included as a further party after the first court date without leave of the court.
Mr Levine, who appeared on behalf of the applicant, contends that an issue before the court - particularly having regard to the relief sought in the proposed Order 3 of the application - is that a statement of affairs that the applicant reasonably believed she filed in December 2020 should be the subject of an order by this court that it was, in fact, filed at that time. The relief sought by the applicant seeks to engage section 33A of the Bankruptcy Act which gives the court a discretion in certain circumstances to order that a statement of affairs be treated as having been filed at a time before it was actually filed.
The application for an order under section 33A will necessarily require the court to determine a number of matters which are currently disputed. The first of those matters is whether a statement of affairs was actually filed, or rather, whether the applicant believed that a statement of affairs had been filed with the Official Receiver. That will require consideration of evidence as to whether a 2020 document purporting to be a statement of affairs was or was not sent, in some manner, to the official receiver. Further, if so, the Court must determine whether it was considered and rejected as non-compliant. These are not questions that the court can currently determine on the evidence before it. The evidence presently before the court certainly suggests that these matters will be the subject of final submissions and possibly cross-examination at trial. But the evidence is not of a state where I can determine these issues now.
The Court will also have to determine whether the applicant had a subjective belief about a document having been filed at an earlier time. And the court will also have to determine whether that subjective belief was objectively reasonable. These are all matters that section 33A requires the court to consider and determine. They are all matters, I might observe, which will fall to the applicant to prove. The applicant clearly bears the onus under section 33A.
Having read the submissions of the respondent trustee and heard the oral submissions today from Mr Serong, my decision to join the official receiver was a very close thing. In my mind, questions remain about whether ultimately the official receiver will prove to be a necessary party to the proceeding. And the nature of relief, if any, sought against the official receiver is far from clear. That said, this is a longstanding and complicated matter which needs to be brought to trial without further delay.
Sections 190 to 192 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) imposes an overarching purpose in the case management of civil proceedings. It is well known to all practitioners in the Court, that the overarching purpose is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and as efficiently as possible. In applying the overarching purpose to case management, the objectives of any orders I make must be the just determination of proceedings, the efficient use of judicial and administrative resources, the efficient disposal of the court's overall caseload, the disposal of proceedings in a timely manner, and the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
The joinder of the official receiver to these proceedings - as has been conceded – will be relevant only to ground three of the further amended application. The Official Receiver does not actively oppose the application and has indicated that it will abide by the Courts discretion. It seems to me that joinder of the official receiver will very quickly and most efficiently bring to a head the issue of whether the official receiver did or did not receive the statement of affairs purported to have been filed in December 2020. And if so, whether the official receiver did anything about that.
The Court could allow for the issue of subpoenas to deal with that issue. But it seems to me that the most efficient manner is to join the official receiver and allow the official receiver to put on evidence and to make submissions, if it sees fit, regarding the purported 17 December 2020 statement of affairs. It may well be that the role of the official receiver in this proceeding is short-lived once that evidence has been filed.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of Judge Forbes. Associate:
Dated: 23 September 2024
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