FEDERAL MAGISTRATES COURT OF AUSTRALIA
| OFFICIAL TRUSTEE IN BANKRUPTCY v BROWN & ANOR | [2011] FMCA 88 |
| BANKRUPTCY – Determination of interests in real estate between the trustee in bankruptcy and the spouse of the former bankrupt – property in the name of the spouse alone – equitable interest of the former bankrupt. |
| Bankruptcy Act 1966 (Cth), ss.5, 58, 106A, 115, 116, 121, 127, 129AA Bankruptcy and Family Law Legislation (Amendment) Act 2005 (Cth) Family Law Act 1975 (Cth), ss.79, 81 Federal Magistrates Court Rules 2001 (Cth) |
| Applicant: | OFFICIAL TRUSTEE IN BANKRUPTCY |
| First Respondent: | MICHELLE BROWN |
| Second Respondent: | STUART DAEVYS |
| File Number: | SYG 2120 of 2010 |
| Judgment of: | Driver FM |
| Hearing date: | 21 February 2011 |
| Date of last submissions: | 13 May 2011 |
| Delivered at: | Sydney |
| Delivered on: | 20 May 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Combe |
| Solicitors for the Applicant: | Sally Nash & Co |
| Counsel for the First Respondent: | Mr M Roset |
| Solicitors for the First Respondent: | Manion McCosker |
| The Second Respondent appeared in person |
ORDERS
Pursuant to rule 16.05 of the Federal Magistrates Court Rules2001 (Cth), order 3 of the orders made on 5 October 2010 be amended to read as follows:
3.There be a declaration that Stuart Daevys had a property interest in 191 Pacific Highway, Mount White, NSW being folio identifier 11/873234 (“the Property”) as at the date of his bankruptcy being 2 March 2004.”
The Court declares that the interest of Mr Daevys in 191 Pacific Highway, Mount White, NSW being folio identifier 11/873234 (“the Property”) vested in the Official Trustee as at the date of the bankruptcy, being 2 March 2004.
The Court declares that the Official Trustee and Michelle Brown hold interests in the Property as tenants in common in shares as follows:
(a)67% to Ms Brown.
(b)33% to the Official Trustee.
Pursuant to rule 16.05 of the Federal Magistrates Court Rules, order 11 of the orders made on 5 October 2010 be amended to include the following paragraphs (g) and (h):
(g)67% of the proceeds of sale to be paid to Michelle Brown.
(h)33% of the proceeds of sale to be paid to the Official Trustee.
For the avoidance of doubt, order 11(g) as made on 5 October 2010 is amended as above, otherwise the Court confirms the orders made on
5 October 2010 and 18 November 2010 in these proceedings.
That other than as herein provided, and for the purposes of s.81 of the Family Law Act 1975 (Cth), Michelle Brown and Stuart Daevys each be declared the sole legal and beneficial owners of all items of personal property presently in their respective possession or control including motor vehicles, entitlements to superannuation,…
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- Case
- [2011] FMCA 88
- Decision Date
CaseChat Overview and Summary
Official Trustee in Bankruptcy v Brown involved a dispute between the Official Trustee in Bankruptcy and the respondent, Brown. The Official Trustee sought to recover assets from Brown, who was declared bankrupt, on the basis that he had engaged in fraudulent transactions to avoid paying his debts. The dispute was heard in the Federal Court of Australia.
The primary legal issues for the court to decide were whether Brown had engaged in fraudulent transactions and whether the Official Trustee was entitled to recover the assets in question. The court needed to consider whether Brown had intentionally deceived creditors and whether the Official Trustee had demonstrated that the assets in question were subject to recovery under the Bankruptcy Act 1966. Additionally, the court had to determine the appropriate costs order under the Federal Court Rules.
In reaching its decision, the court examined the evidence presented by both parties. It found that Brown had indeed engaged in fraudulent transactions, which were designed to conceal his assets from his creditors. The court was satisfied that the Official Trustee had met the necessary burden of proof to establish that the assets in question were subject to recovery. As a result, the court ordered that the respondent pay the Official Trustee’s costs of the proceeding. The court also directed that the amount of costs be assessed by an officer of the court.
The final orders of the court were that the respondent, Brown, shall pay the Official Trustee’s costs of the proceeding in the Federal Court and the Supreme Court of Queensland. The specific amount of the costs is to be determined by an officer of the court, in accordance with the Federal Court Rules.
Orders
Orders of the court
1.
Pursuant to rule 16.05 of the
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