Official Receiver v Gibson

[2002] FMCA 246

FEDERAL MAGISTRATES COURT OF AUSTRALIA

OFFICIAL RECEIVER v GIBSON [2002] FMCA 246

BANKRUPTCY – Pending proceedings in Family Court of Western Australia – whether power to transfer from Federal Magistrates Court to Family Court of Western Australia – Bankruptcy Act 1966, ss.35A(2A), 153B.

Bankruptcy Act 1966, ss.35A(2A), 153B
Family Law Act 1975, s.79A

Mitchell v McGillivray [2001] FCA 326
Official Trustee in Bankruptcy v Bassola(No. 3) (1986) FLC 91-760
Re Sharpe (1996) 896 FCA 1, unreported 17 October 1996

Applicant: OFFICIAL RECEIVER

Respondent: JULIE JEANETTE GIBSON

File No: WZ95 of 2002

Delivered on: 26 September 2002

Delivered at: Perth

Hearing Date: 26 September 2002

Judgment of: McInnis FM

REPRESENTATION

Solicitor for the Applicant: Mr F Carles

Solicitors for the Applicant: Carles Solicitors

Respondent: Ms J Gibson in person

ORDERS

1. The Respondent be granted leave to amend her Application filed 2 July 2002 by deleting "Insolvency & Trustee Service Australia" and inserting in lieu thereof "Official Receiver for and on behalf of the Official Trustee in Bankruptcy."

2. The Applications in proceeding number WZ95 of 2002 filed on 14 May 2002, 2 July 2002 and 16 August 2002 be transferred to the Family Court of Australia at Melbourne pursuant to s.35A(2A) of the Bankruptcy Act 1966 (Cth).

3. The costs of the application to transfer be costs in the cause of the proceedings transferred.

4. Any costs which have been reserved in the proceedings be reserved to the Judge dealing with the matter in the Family Court of Australia.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

WZ 95 of 2002

OFFICIAL RECEIVER

Applicant

And

JULIE JEANETTE GIBSON

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. In this application Mr Carles appears for the Official Receiver, who is the Applicant in an application filed 14 May 2002.  The Official Receiver's application seeks orders against Julie Jeanette Gibson, the Respondent, in relation to a property at 206 Salisbury Road, Bedford (the land). 

2. The Respondent appeared on her own behalf was formerly married to Murray Ian Gibson, (the bankrupt) who became bankrupt, on 9 July 2001 by way of a debtor's petition.  The bankrupt did not appear in these proceedings. 

3. The bankrupt and the Respondent are the registered joint proprietors of the land.  The Respondent and the bankrupt are parties to proceedings currently before the Family Court of Western Australia, which I am told now relate only to the issue of property settlement, with the major asset being the land.  The Respondent apparently had applied to the Family Court of Western Australia for the bankruptcy to be set aside though it seems that that application has not been regarded at the time as being within the jurisdiction of that Court.

4. The Respondent, by an application filed 2 July 2002, seeks orders as follows:

   “1.That the proceedings commenced by the above-named Applicant on 14 May 2002 and the application for annulment of bankruptcy sought by the above-named Respondent in paragraph 2 hereof, be transferred to the Family Court of Australia at Perth;

   2.That the bankruptcy of the bankrupt Murray Ian Gibson, number 1378 of 2001/6, which arose out of the acceptance of his own petition by the Official Receiver on 9 July 2001 be annulled pursuant to section 153B of the Bankruptcy Act 1966;

   3.The costs of the application be costs in the cause of the proceedings transferred and for any costs which have been reserved in the proceedings be reserved to the judge dealing with the matter in the Family Court of Australia.”

5. That application incorrectly, in my view, refers to the Insolvency and Trustee Service of Australia as being the Applicant and should be amended by deleting that reference and in lieu thereof inserting Official Receiver for and on behalf of the Official Trustee in Bankruptcy and I grant leave to amend accordingly.

6. For reasons which will become clear, it is my view that the application of the Respondent should properly be regarded as a cross‑application with the bankrupt as an interested party.  I had originally thought that he perhaps should be named as a party but it seems to me he has sufficient interest, and that will become clear, to be part of those proceedings and does not really need to be formally joined in those proceedings as a party.

7. The bankrupt, by an application filed 16 August 2002, seeks orders relating to the disposition of the land.  It is not necessary for me to recite the orders sought in that application save to say that on

   
   

   16 August 2002 the bankrupt also filed a notice of intention to oppose the Respondent's application filed 2 July 2002 and the bankrupt supported his application and notice by an affidavit sworn 12 August 2002 and an affidavit by his friend Carol Leanne Nelson sworn 15 August 2002. 

8. The bankrupt has also filed an outline of argument dated 3 September 2002, which argues against annulment and against the transfer of these proceedings to the Family Court of Australia.  That outline indicates the following: 

   “1.On the date the Applicant filed for bankruptcy the matter in the Family Court stood adjourned generally with no further action pending,

   2.Application for bankruptcy was filed on the basis of demand for payment letters since 30 November 2000 from the Respondent's mother.  The sum of 39,500 was jointly loaned to the Applicant and the Respondent by the Respondent's mother, who demanded repayment of the loan.”

9. The bankrupt then refers to a notice of demand which had been issued and further refers to the suggestion that there are three mortgages on the land and that all mortgages are in arrears.  He further refers to the Respondent being on a sole pension and unable to refinance the three mortgages, which it is suggested total $129,185.44.  It is also suggested in the outline of argument by the bankrupt that the Respondent is unable to purchase the interest of the Official Receiver.  Further reference is then made to the bankrupt's Visa card to the joint mortgage account being declared a bad debt written off by Bankwest on 13 May 2002, and refers to legal fees since 1 December 2000 included in the bankrupt's bankruptcy remain unpaid.

1. The Respondent has filed an outline of submissions which are dated 16 September 2002 and in that outline of submissions the Respondent argues that most, if not all, of the statements in the affidavits filed by the bankrupt and Nelson are either subject to privilege, being discussions claimed to have taken place at the Family Court conciliation conference, or the allegations are completely irrelevant to the issues before this Court today. 

2. In her outline the issues that are said to be before this Court are whether the ex-husband's bankruptcy should be annulled on the basis that he was and still is able to pay his debts, especially now that Mrs Dawes has withdrawn her claim. Bankwest has written off Mr Gibson's Visa card debt, and Mr Pillay has expressed his willingness to accept an assignment of debt.  The outline of the Respondent refers to Mitchell v McGillivray [2001] FCA 326.

3. The core submission, however, made by the Respondent to this Court is that the obvious entanglement between the bankruptcy proceedings and the Family Court proceedings demonstrates it will be better for all the proceedings to be dealt with in the one Court.  She states:

   “The Family Court proceedings between the bankrupt and myself are in the defended list, awaiting a listing of a pre-hearing conference which will be followed by a trial two to three months later.”

4. I do not need to recite otherwise the outline of submissions that have been made by the Respondent.  The Official Receiver has likewise filed an outline of submissions dated 29 August 2002.  In that outline the Official Receiver notes that there are two substantive applications before the Court, and they are the applications to which I have referred filed 14 May 2002 by the Official Receiver and the application for annulment and transfer by the Respondent filed on 2 July 2002.

5. The Official Receiver notes in the submissions that he does neither consent to nor oppose the application for transfer and also properly draws the Court's attention to the case of Mitchell v McGillivray in which Carr J of the Federal Court ordered a transfer to the Family Court of Australia of a wife's application for annulment under s.153B of the Bankruptcy Act 1966 (the Bankruptcy Act) of the husband's bankruptcy where there are Family Court proceedings pending. It is further indicated in those submissions that it was not possible for the Respondent to apply directly to the Family Court under the Family Law Act1975 (the Family Law Act) to have the bankruptcy set aside by virtue of the decision of the Full Court of the Family Court in Official Trustee in Bankruptcy v Bassola(No.3) (1986) FLC 91-760. That case was decided under s.85 of the Family Law Act which has now been replaced by s.106 of the same Act.

6. In my view it is clearly evident on the material that is before me in the circumstances of this case that the dispute certainly between the bankrupt and the Respondent and the dispute that will no doubt arise in terms of what is to occur in relation to the issue of bankrupt’s annulment are all matters which should properly be determined by the one Court.  It is a matter, in my view, which in the interests of the administration of justice could properly be disposed of by consideration of all the material by one Court and that Court will then have the opportunity to consider the matter in some detail. 

7. I refer to the decision of Mitchell v McGillivray and in particular in that case His Honour Carr J refers in paragraph 3 to the background in terms of the application in that case and then goes on to refer to the history of the establishment of the Family Court of Western Australia.  At that stage in His Honour's judgment he does not distinguish between the Family Court of Western Australia and the Family Court of Australia.  He goes on to say:

   “The former is a State Court established by the Family Court Act 1975 (WA) and continued in existence by s 9(1) of the Family Court Act 1997 (WA). The establishment of the Family Court of Western Australia can be seen to have been anticipated by s 41 of the Family Law Act 1975 (Cth). A problem in this matter, although not an insoluble one, arises out of the fact that s 153B of the act empowers the Federal Court to transfer the principal application to the ‘Family Court’, but s 5(1) of the Act defines Family Court as meaning ‘The Family Court of Australia’.”

8. I should interpolate here that the same definition is provided in the relevant legislation applicable to the Federal Magistrates Court of Australia.  His Honour goes on to say;

   “As a matter of convenience, I shall for the time being not distinguish between the two Family Courts on the assumption that if the principal application is transferred to the Family Court of Australia, it can be heard by the same judge who is hearing the matrimonial cause referred to immediately above. So far as is relevant in this matter, I think that it is reasonably clear that the Family Court of Western Australia, in hearing and determining the matrimonial cause, will be exercising federal jurisdiction conferred by s 41(3) of the Family Law Act 1975 (Cth), being jurisdiction which is relevantly co-extensive with the jurisdiction of the Family Court of Australia.”

9. His Honour then goes on to consider the relevant s.79A of the Family Law Act and other provisions which I do not need to recite in this application. It is relevant, however, that I consider what His Honour states in relation to the issues to be considered in paragraph 14 of His Honour's judgment. His Honour states, and I accept for the purpose of this application as well, that one of the most useful authorities, most helpful authorities in the disposition of the matter is the decision of Lindgren J in Re Sharpe (1996) 896 FCA 1, unreported 17 October 1996.  At page 19 of His Honour's reasons there appears to be the following passage:

   “At the end of the day, considerations of efficiency and economy of judicial administration persuade me that the case is an appropriate one for transfer.  There remain to be determined in the Family Court issues touching the nature and extent of the assets and liabilities, income and expenditure of the Husband.  These issues are directly relevant to the first matter to be determined in the present proceeding, namely, whether the debtor's petition ought not to have been presented or ought not to have been accepted by the Registrar.  While the issues remaining to be determined in the Family Court proceeding may not be identical with those which will arise in this proceeding, there will be substantial overlap.”

10. His Honour Carr J then indicates in paragraph 15 the following:

    “In my view, the question of whether the bankruptcy of the first respondent should be annulled will probably in large measure turn upon his financial position as at the date when he presented his petition.”

11. In my view the same factors apply to the present case.  In my view the Family Court in exercising its jurisdiction ultimately will be considering matters which are clearly relevant to the issue of annulment and other issues between the parties.  His Honour Carr J at paragraph 19 states:

    “I now return to the matter referred to in para 3 above, namely, whether the fact that the Family Court of Australia and the Family Court of Western Australia are different courts should, in the exercise of my discretion, cause me not to make such a transfer order. I do not think so. I take judicial notice of the fact that all of the judges of the Family Court of Western Australia are also judges of the Family Court of Australia. In those circumstances, I can see no reason why the one judge (if he or she saw fit) should not hear all of the evidence and in doing so simultaneously exercise the jurisdiction of both courts. The respective decisions and orders might then be made separately in the exercise of the relevant, but separately conferred, federal jurisdiction. Alternatively, the Family Court of Australia, once this matter is transferred to it, might transfer it to the Family Court of Western Australia under s 5(4) of the Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth) if it saw fit. The definition of "the Supreme Court of a State" in that subsection includes a State Family Court – see s 3(2).”

12. His Honour goes on to say:

    “In any event I am satisfied that if I make the transfer order there is a very strong probability that the proceedings so transferred will be heard and determined by the judge who hears the matrimonial cause to which the applicant and the first respondent are parties.”

13. In my view, without being presumptuous, in the present case I am likewise so satisfied that if I were to make an order transferring these applications then they are likely to be heard and determined by the judge who hears the matrimonial cause, that is the property dispute that's currently before the Family Court of Western Australia. It is equally clear, however, that in making a transfer order I need and am only able to transfer the matter to the Family Court of Australia and I cannot directly transfer the matter to the Family Court of Western Australia. That much is clear in terms of the powers that I have under s.35A(2A) of the Bankruptcy Act1966.

14. It would be my expectation, without again wishing to be presumptuous in any way, that once an order is made by this Court transferring in the circumstances of this case the bankruptcy proceedings to the Family Court of Australia that appropriate steps would be taken to ensure in the interests of the efficiency and administration of justice that where there's a pending application in the Family Court of Western Australia the application will be likewise transferred to that Court so that the matter can be properly and efficiently disposed of in the interests of the administration of justice.

15. It is my view, having considered all the affidavits and the outline of submissions provided by all the parties, that in applying those principles to which I referred, it is in the interests of justice that I should transfer the application.  The orders I propose making therefore are:

    (1)The Respondent be granted leave to amend her Application filed 2 July 2002 by deleting "Insolvency & Trustee Service Australia" and inserting in lieu thereof "Official Receiver for and on behalf of the Official Trustee in Bankruptcy."

    (2)The Applications in proceeding number WZ95 of 2002 filed on 14 May 2002, 2 July 2002 and 16 August 2002 be transferred to the Family Court of Australia at Melbourne pursuant to s.35A(2A) of the Bankruptcy Act 1966 (Cth).

    (3)The costs of the application to transfer be costs in the cause of the proceedings transferred.

    (4)Any costs which have been reserved in the proceedings be reserved to the Judge dealing with the matter in the Family Court of Australia.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of McInnis  FM

Associate: 

Date:  26 September 2002