Nixon (Trustee)

Case [2018] FCA 720


FEDERAL COURT OF AUSTRALIA

Nixon (Trustee) [2018] FCA 720

File number: QUD 243 of 2018
Judge: COLLIER J
Date of judgment: 21 May 2018
Catchwords:

BANKRUPTCY AND INSOLVENCY – application for voluntary resignation of a joint trustee in bankruptcy to be accepted – where one joint trustee in bankruptcy will continue as sole trustee in bankruptcy

BANKRUPTCY AND INSOLVENCY – application for voluntary removal of one liquidator and appointment of another liquidator

PRACTICE AND PROCEDURE – application to dispense with rules relating to service – where cost of individual service to numerous bankrupt estates would be significant – whether utility in liquidator of company serving documents upon themselves

Legislation:

Bankruptcy Act 1966 (Cth) s 180

Corporations Act 2001 (Cth) Sch 2 ss 90-15, 90-20

Federal Court Rules 2011 (Cth) r 1.34

Federal Court (Bankruptcy) Rules 2016 (Cth) rr 1.04(2)(a), 8.02(4)(a), 8.02(4)(b)

Federal Court (Corporations) Rules 2000 (Cth) rr 1.3(a), 2.7(1), 2.8(1)

Cases cited:

Condon v Watson [2009] FCA 11; (2009) 174 FCR 314

Emerton Pty Ltd v Referral Marketing Services Pty Ltd & Ors [2009] NSWSC 738

Nixon, in the matter of Nixon [2015] FCA 976

Shanahan, in the matter of Shanahan [2014] FCA 1080

Date of hearing: 21 May 2018
Registry: Queensland
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 17
Solicitor for the Applicants: Mr M Downes of Mahoneys

ORDERS

QUD 243 of 2018

BRENDAN NIXON

First Applicant

LEON LEE

Second Applicant

JUDGE:

COLLIER J

DATE OF ORDER:

21 MAY 2018

THE COURT ORDERS THAT:

1.In respect of each of the estates set out in Schedule 1 of these orders:

(a)Pursuant to r 1.34 of the Federal Court Rules 2011 (Cth) (the Rules), compliance with the requirements of r 8.02(4)(b) of the Federal Court (Bankruptcy) Rules 2016 (Cth) be dispensed with.

(b)Pursuant to s 180 and Sch 2 s 90-15(1) of the Bankruptcy Act 1966 (Cth):

(i)the resignation of Leon Lee (the Second Applicant) as one of the two trustees of the estate be accepted; and

(ii)from the acceptance of the Second Applicant's resignation, Brendan Joseph Nixon (the First Applicant) be the sole trustee of the estate and be entitled and obliged to act as such.

2.In respect of each of the liquidations set out in Schedule 2 of these orders:

(a)Pursuant to r 1.34 of the Rules and r 1.3(2) of the Federal Court (Corporations) Rules 2000 (Cth) (the Corporations Rules), compliance with the requirements of r 2.7(1)(b) of the Corporations Rules be dispensed with.

(b)Pursuant to Sch 2 s 90-15(1) of the Corporations Act 2001 (Cth):

(i)The Second Applicant be removed as liquidator; and

(ii)The First Applicant be appointed as liquidator.

SCHEDULE 1

Appointment Appointment Type Sole/joint Date of Appointment
Brett Adam Roland Bankruptcy Joint 10/03/2018
Robert Balfour Gibb Bankruptcy Joint 09/03/2017
Stephen McGavin & Kathryn McGavin Bankruptcy Joint 14/09/2016
Michael Tandean Bankruptcy Joint 19/10/2016
Krystina Banks Bankruptcy Joint 12/09/2016
Gerald Peter Birt (s 81A transfer on 28 Oct. 2016)

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AGLC
Nixon (Trustee) [2018] FCA 720
Case
[2018] FCA 720
Decision Date

CaseChat Overview and Summary

This case involved an application by Brendan Joseph Nixon, a registered liquidator, to have Leon Lee removed as a joint trustee in bankruptcy and liquidator, and himself appointed in their place. The application was made to the Federal Court of Australia. The legal issues before the Court were whether the application for voluntary resignation of one joint trustee in bankruptcy should be accepted, the removal of one liquidator and appointment of another, and whether the usual requirements for service of the application should be dispensed with. The Court found that the application should be accepted as there would be no prejudice to the companies involved, Mr Lee had resigned from his employment, and Mr Nixon had consented to being appointed the liquidator and would not charge for familiarising himself with the liquidations. The Court also found that there was no utility in requiring the applicants to serve one of themselves with this application, and ASIC had not raised any opposition to the application. The Court made orders accepting the resignation of Mr Lee, removing him as a joint trustee in bankruptcy and liquidator, and appointing Mr Nixon in their place. The Court also dispensed with the usual requirements for service of the application.

Orders

Orders of the court

1. In respect of each of the estates set out in Schedule 1 of these orders:

(a) Pursuant to r 1.34 of the Federal Court Rules 2011 (Cth) (the Rules), compliance with the requirements of r 8.02(4)(b) of the Federal Court (Bankruptcy) Rules 2016 (Cth) be dispensed with.

(b) Pursuant to s 180 and Sch 2 s 90-15(1) of the Bankruptcy Act 1966 (Cth):

(i) the resignation of Leon Lee (the Second Applicant) as one of the two trustees of the estate be accepted; and

(ii) from the acceptance of the Second Applicant's resignation, Brendan Joseph Nixon (the First Applicant) be the sole trustee of the estate and be entitled and obliged to act as such.

2. In respect of each of the liquidations set out in Schedule 2 of these orders:

(a) Pursuant to r 1.34 of the Rules and r 1.3(2) of the Federal Court (Corporations) Rules 2000 (Cth) (the Corporations Rules), compliance with the requirements of r 2.7(1)(b) of the Corporations Rules be dispensed with.

(b) Pursuant to Sch 2 s 90-15(1) of the Corporations Act 2001 (Cth):

(i) The Second Applicant be removed as liquidator; and

(ii) The First Applicant be appointed as liquidator.

SCHEDULE 1

Appointment

Appointment Type

Sole/joint

Date of Appointment

Brett Adam Roland

Bankruptcy

Joint

10/03/2018

Robert Balfour Gibb

Bankruptcy

Joint

09/03/2017

Stephen McGavin & Kathryn McGavin

Bankruptcy

Joint

14/09/2016

Michael Tandean

Bankruptcy

Joint

19/10/2016

Krystina Banks

Bankruptcy

Joint

12/09/2016

Gerald Peter Birt (s 81A transfer on 28 Oct. 2016)

Bankruptcy

Joint

14/09/2016

Garry James Fleming

Bankruptcy

Joint

27/10/2016

Antonio Rocca

Bankruptcy

Joint

24/11/2016

Paul Edward Beaton

Bankruptcy

Joint

27/10/2016

Moneil Mitesh Chand

Bankruptcy

Joint

21/12/2016

Michael Gordon Gilmont

Bankruptcy

Joint

25/01/2017

Janessa Maylene Gilmont

Bankruptcy

Joint

22/03/2017

Raymond Bible

Bankruptcy

Joint

08/02/2017

Asif Iqbal

Bankruptcy

Joint

02/02/2017

Drakos, Kosta

Bankruptcy

Joint

25/11/2016

Faye Robyn Reis

Bankruptcy

Joint

13/12/2016

Richard Thomas Howard

Bankruptcy

Joint

15/02/2017

Jason Frederick Hancock

Bankruptcy

Joint

16/03/2017

Shane William Rawlings

Bankruptcy

Joint

01/03/2017

Slamar, Troy

Bankruptcy

Joint

22/03/2017

Lee, Chee Keong

Bankruptcy

Joint

16/02/2017

Mannion, Jennifer

Bankruptcy

Joint

02/08/2017

Tait, Nathan

Bankruptcy

Joint

14/02/2017

Jack Henry Blinco

Bankruptcy

Joint

03/05/2017

Shane William Squires

Bankruptcy

Joint

05/04/2017

Wayne Travis Case

Bankruptcy

Joint

03/08/2017

Katie Ruth Cook

Bankruptcy

Joint

10/03/2017

John Victor Duckham

Bankruptcy

Joint

10/05/2017

Timothy Clive Campion

Bankruptcy

Joint

25/05/2017

Jagdeep Singh

Bankruptcy

Joint

25/05/2017

Jubeda Bi Balcaceres

Bankruptcy

Joint

03/08/2017

Matthew John Curtain

Bankruptcy

Joint

19/07/2017

William David John Cashmore

Bankruptcy

Joint

06/09/2017

Clarence Edward Cain

Bankruptcy

Joint

03/08/2017

Brandt William Cain

Bankruptcy

Joint

03/08/2017

Robert Patrick Laurie

Bankruptcy

Joint

27/06/2017

Robert Umberto Palmieri

Bankruptcy

Joint

11/10/2017

David Michael Cranny

Bankruptcy

Joint

30/11/2017

Matthew George Rennie

Bankruptcy

Joint

30/08/2017

Anne Beel

Bankruptcy

Joint

25/10/2017

Moana Harriette Hislop

Bankruptcy

Joint

27/09/2017

Michael Anthony Rodrigues

Bankruptcy

Joint

14/09/2017

Peter Warren Costigan

Bankruptcy

Joint

16/11/2017

Peter Soulios

Bankruptcy

Joint

26/10/2017

Andrew James Lea

Bankruptcy

Joint

09/11/2017

Kathleen Mary Connolly

Bankruptcy

Joint

16/11/2017

Daryl Duncanson

Bankruptcy

Joint

04/10/2017

Paul Leslie Gibb

Bankruptcy

Joint

26/10/2017

Margaret Maree Gal

Bankruptcy

Joint

22/02/2018

Nektarios Diamantis Langanis

Bankruptcy

Joint

08/02/2018

Craig Fahey

Bankruptcy

Joint

07/02/2018

Anthony Rickman

Bankruptcy

Joint

07/02/2018

Terry Francis Dillon

Bankruptcy

Joint

14/02/2018

Ronaldo Adriano Mendes Do Santos

Bankruptcy

Joint

07/02/2018

SCHEDULE 2

Appointment

Appointment

Type

Sole/joint

Date of

Appointment

Continental Cafe Albert Park Pty Ltd

CVL

Sole

08/01/2018

B & C Steele Investments Pty Ltd

CVL

Sole

29/01/2018

Ortrox Pty Ltd

OL

Sole

09/03/2018

Mobile One Australia Pty Ltd

CVL

Sole

08/02/2018

Tau Moemai Pty Ltd

CVL

Sole

16/02/2018

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I am satisfied in the circumstances where:·Mr Lee has resigned from his employment;·there is no utility in requiring the applicants serve one of themselves with this application;·Mr Nixon has consented to being appointed the liquidator, will retain the file accountants presently overseeing the liquidations and will not charge for familiarising himself with the liquidations; and ·ASIC was given notice of the application and has not raised any oppositionthat there would be no prejudice to any of the Companies by:·dispensing with the usual requirements for service of this application under the Corporations Rules;·removing Mr Lee as the liquidator; and·appointing Mr Nixon as the liquidator.CONCLUSION Having considered the material provided in the application and supporting affidavits filed by the applicants, it is appropriate for the Court to make the orders sought.

Ratio Decidendi

Legal Principle Established

For present purposes, s 90-15 of Sch 2 of the Corporations Act relevantly provides:90-15 Court may make orders in relation to external administrationCourt may make orders(1)The Court may make such orders as it thinks fit in relation to the external administration of a company.Orders on own initiative or on application(2)The Court may exercise the power under subsection (1):(a)on its own initiative, during proceedings before the Court; or(b)on application under section 90-20.Examples of orders that may be made(3) Without limiting subsection (1), those orders may include any one or more of the following:…(b)an order that a person cease to be the external administrator of the company;(c)an order that another registered liquidator be appointed as the external administrator of the company;……Section does not limit Court’s powers(7)This section does not limit the Court’s powers under any other provision of this Act, or under any other law. I am satisfied in the circumstances where:·Mr Lee has resigned from his employment;·there is no utility in requiring the applicants serve one of themselves with this application;·Mr Nixon has consented to being appointed the liquidator, will retain the file accountants presently overseeing the liquidations and will not charge for familiarising himself with the liquidations; and ·ASIC was given notice of the application and has not raised any oppositionthat there would be no prejudice to any of the Companies by:·dispensing with the usual requirements for service of this application under the Corporations Rules;·removing Mr Lee as the liquidator; and·appointing Mr Nixon as the liquidator.CONCLUSION Having considered the material provided in the application and supporting affidavits filed by the applicants, it is appropriate for the Court to make the orders sought.