Official Trustee in Bankruptcy v Shaw - [2019] VSC 681

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2019 04538

OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE OF THE PROPERTY OF JOHN RASHLEIGH SHAW, A BANKRUPT	Plaintiff
v
JOHN RASHLEIGH SHAW	First Defendant
- and -
REGISTRAR OF TITLES	Second Defendant

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JUDGE:	John Dixon J
WHERE HELD:	Melbourne
DATE OF HEARING:	7 October 2019
DATE OF JUDGMENT:	14 October 2019
CASE MAY BE CITED AS:	Official Trustee in Bankruptcy v Shaw & Anor
MEDIUM NEUTRAL CITATION:	[2019] VSC 681

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REAL PROPERTY – Caveat – Ground of claim in caveat described as ‘estoppel’ – No evidentiary basis to suggest caveatable interest – Order that caveat be removed – Transfer of Land Act 1958 (Vic), s 90(3)

PRACTICE AND PROCEDURE – Application for recusal of judicial officer – Apprehended bias – Judicial officer previously heard and determined matter involving applicant – Application refused

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	C Moller	Harris Carlson Lawyers
For the First Defendant	No appearance
For the Second Defendant	No appearance

HIS HONOUR:

Summary of matters giving rise to the proceeding

John Rashleigh Shaw was, until 1 August 2019, registered as the sole proprietor of an estate in fee simple in a residential unit and an associated car parking space, being lots 5 and 19 on registered plan 016333, being the land more particularly described in certificates of title volume 9420 folio 449 and 9420 folio 463 (Property).

On 11 June 2014, the Federal Court of Australia made a sequestration order against Mr Shaw and the Official Trustee was appointed as trustee of his bankrupt estate. There is a history of legal challenges following that order and other matters, but it is not necessary for present purposes that I set out the full history of the litigation.

On 6 July 2019, the Official Trustee entered into a contract to sell the Property to purchasers for $363,000, with settlement due to take place on 4 October 2019.

It is unclear precisely when Mr Shaw became aware of that sale (which I note was at public auction), although it is probable that he was informed of an intention to sell the Property or knew that he was no longer the registered proprietor of it from an earlier point in time.

It is sufficient to note that in one of the extant proceedings, being Federal Court of Australia proceeding number VID778 of 2019, Mr Shaw applied for review of the decision made by the Official Trustee to partially admit a proof of debt advanced in the bankruptcy under the Bankruptcy Act 1966 (Cth). Included in that application was a claim for interlocutory injunctive relief, directed at a related decision made by the Official Trustee to sell the Property.

In reasons for the judgment,[1] Snaden J recorded that:

The interlocutory relief that Mr Shaw sought was the subject of discussion at a case management conference that took place on 9 August 2019.
At my invitation, the parties there…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] VSC 681
Decision Date: 14 October 2019

CaseChat Overview and Summary

The case involved the Official Trustee in Bankruptcy, acting as the trustee for the bankrupt estate of a deceased person, who brought an application to the Supreme Court of Victoria to remove a caveat entered by Shaw. The dispute centred on the validity of the caveat, which Shaw had lodged against a property that was intended to be sold to satisfy a creditor's claim against the bankrupt estate. The caveat was premised on an assertion of an estoppel against the Official Trustee. The court was required to determine whether there was sufficient evidence to support the claim of a caveatable interest by Shaw and whether the caveat should be removed.

The primary legal issue before the court was whether the ground of claim in the caveat, described as ‘estoppel’, had a sufficient evidentiary basis to warrant its continuation. The court considered whether the caveat met the statutory requirements under the Transfer of Land Act 1958 (Vic) and whether it was appropriate for the caveat to be maintained. Additionally, the court examined an application for the recusal of the judicial officer on the basis of apprehended bias, given that the judicial officer had previously heard and determined a matter involving the applicant.

The court found that there was no evidentiary basis to support the claim of estoppel as a caveatable interest, as required by the Transfer of Land Act 1958 (Vic), s 90(3). Consequently, the court ordered the caveat to be removed. Regarding the application for recusal, the court dismissed the application, holding that there was no reasonable apprehension of bias on the part of the judicial officer. The application for recusal was rejected due to the absence of any facts that would suggest a reasonable apprehension of bias in the judicial officer.

The final orders of the court were that the caveat entered by Shaw be removed and that the application for recusal be dismissed. The property could now proceed to be sold to satisfy the creditor's claim against the bankrupt estate.

Orders