Official Trustee in Bankruptcy v Pino

[2009] FMCA 1330

FEDERAL MAGISTRATES COURT OF AUSTRALIA

OFFICIAL TRUSTEE IN BANKRUPTCY v PINO & ANOR [2009] FMCA 1330

BANKRUPTCY – Bankrupt’s interest in real property vested in Trustee – Trustee’s application to force the sale of the previously jointly owned real property.

Bankruptcy Act 1966, ss.30, 50 and 70(1)(g)

Cook v Schwarcz [2005] FMCA 1598
Cook v Tagamilitsky [2001] FMCA 117
Official Reciever v Fall & Anor [2008] FMCA 489
Official Receiver v Tregaskis & Anor [2006] FMCA 1915
Pasco v Nguyen [2007] FMCA 194
Pattison v McKinnon [2008] FCA 1624
Pattison v Wales & Anor [2007] FMCA 1068
Re Bilen Ex Parte Sistrom [1985] FCA 120

Applicant: OFFICIAL TRUSTEE IN BANKRUPTCY

First Respondent: MARGARET PINO

Second Respondent: FAUSTO PINO

File Number: MLG 382 of 2009

Judgment of: O'Dwyer FM

Hearing date: 9 November 2009

Date of Last Submission: 9 November 2009

Delivered at: Melbourne

Delivered on: 9 November 2009

REPRESENTATION

Counsel for the Applicant: Mr Agardy

Solicitors for the Applicant: Hutchinson Legal

The Respondents: In person

ORDERS

1. The First and Second Respondents deliver up to the Applicant vacant possession of the premises known as 50 Belmont Road, Ivanhoe in the State of Victoria, more particularly described in Certificate of Title Volume 9550 Folio 787 (“Property”) to the Applicant within 28 days of the date of this order.

2. The First and Second Respondent deliver to the Applicant all keys for all buildings and improvements on the Property within 28 days of the date of this order.

3. The Property by sold by public auction.

4. The Applicant have the sole conduct and control of the sale of the Property, and is authorised to make all decisions with regard to the sale such as appointing a real estate agent, appointing solicitors to undertake necessary conveyancing work, choosing the method of sale and setting of the reserve price for any auction.

5. The Applicant is authorised and empowered to sign on behalf of the Second Respondent any contract of sale, discharge of mortgage authority, Transfer of Land or any other documents required to effect a sale of the Property, in the event he refuses, fails or neglects to sign such documents within such time as required by the Applicant’s solicitors.

6. The First and Second Respondents have liberty to bid at any auction sale of the Property.

7. The proceeds of the sale of the Property be disbursed as follows:

   (a)First, in payment of all selling costs including agent commissions, advertising and marketing expenses, conveyancing and legal costs associated with the sale;

   (b)Secondly, half of the then available proceeds to be paid to the Second Respondent, less the costs of this Application payable by the Second Respondent to the Applicant;

   (c)Thirdly, payment of the amount owing to Armando Marcolin pursuant to the registered mortgage of AB648483G on the Property; and

   (d)Fourthly, all remaining proceeds to be paid to the Applicant as trustee of the bankrupt estate of the First Respondent.

8. The Applicant’s costs of this Application be paid by the Second Respondent, to be taxed in default of agreement.

9. There be liberty to apply.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 382 of 2009

OFFICIAL TRUSTEE IN BANKRUPTCY

Applicant

And

MARGARET PINO

First Respondent

FASTO PINO

Second Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. This matter comes before me today on the application of the Official Trustee to have the property located at 50 Belmont Road, Ivanhoe sold (the property).[1]  The basis of that application is that the Official Trustee has been vested in a half interest as a tenant-in-common with the other registered proprietor of the property, Mr Fausto Pino.[2]  The interest of the Official Trustee arises from the fact that it is the trustee of the bankrupt’s estate - the bankrupt being the wife of Mr Fausto Pino.  Under the Bankruptcy Act 1966 the trustee was vested with the property standing then in the name of Ms Margaret Pino, then having a joint tenancy in the property, upon the making of the sequestration order.[3]

   [1] See ss 30 and 70(1)(g) of the Bankruptcy Act 1966 (the Act)

   [2]     See s.58 of the Act

   [3]     Upon the bankruptcy the joint tenancy is severed so that the trustee holds the property as a tenant-in-common with Mr Pino – see Pascoe v Nguyen [2007] FMCA b194

2. There is a long history to this matter, and it is a sad history.  It would appear that Ms Pino suffered an injury and sought redress and compensation through legal process.  The end result, however, was that the money she might have been encouraged to think she would receive by way of compensation was not forthcoming. The medical costs that she incurred in relation to the treatment that she got at the Austin Hospital remained unpaid.  There was a judgment debt against the bankrupt for the non-payment, which judgment formed the basis of the act of bankruptcy and resulted in the sequestration order being made on 13 May, 2003. 

3. It also has a long history in the sense that it has taken quite some time for it to get to this stage where the trustee seeks to effect a sale of the property in order to realise its interest.[4]  The two respondents, namely the bankrupt and her husband, are here today unrepresented.  To a degree they get some comfort from their son who sits at the Bar table with them but, not unreasonably in all of the circumstances of this case, they are not well placed to respond to the legal arguments that have been put. In any event, there are no legal arguments, in  my view, that would carry the day from my understanding of the facts as presented.  There would appear to be no basis for their resistance to the orders sought by the Official Trustee.

   [4] See ss 30 and 70(1)(g) of the Act

4. But it is a sad history.  Mr Pino has addressed me on the fact that he, in effect, is an innocent victim of all that has happened.  He expressed his concern that he felt as though he was being punished, or treated for doing some wrong which he has not done. The reality is he is a victim of what has happened in relation to his wife’s personal injury claim. Notwithstanding the fact that he is otherwise, in every sense, a good citizen who has worked hard and accumulated a significant asset with his wife, the reality is that there has to be orders made, in my view, based upon the authorities referred to by the applicant for the sale of the property.[5]

   [5]     Pattison v McKinnon [2008] FCA 1624; Official Reciever v Fall & Anor [2008] FMCA 489; Pattison v Wales & Anor [2007] FMCA 1068; Pasco v Nguyen [2007] FMCA 194; see Official Receiver v Tregaskis & Anor [2006] FMCA 1915 in respect of the accrued jurisdiction of this Court; Cook v Schwarcz [2005] FMCA 1598; Cook v Tagamilitsky [2001] FMCA 117; and Re Bilen Ex Parte Sistrom [1985] FCA 120

5. The end result of that sale gives the net proceeds after the payment of the costs of sale, as to half to Mr Pino.  From the other half the mortgage, which is registered on the property to Mr Armando Marconin, will be satisfied and the balance then will go to the Official Trustee in order to meet the Official Trustee’s obligations to the judgment creditor.[6] 

   [6]     The doctrine of exoneration applies because moneys borrowed from the mortgagee were applied for the benefit of the bankrupt

6. In all of those circumstances, regrettable as it is, I have no alternative but to make the orders as set out in the minutes of proposed orders sought by the Official Trustee and I shall make those orders. 

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of O'Dwyer FM

Date:  9 November 2009