Official Trustee in Bankruptcy v Thor

[2006] FMCA 1637

FEDERAL MAGISTRATES COURT OF AUSTRALIA

OFFICIAL TRUSTEE IN BANKRUPTCY v THOR [2006] FMCA 1637

BANKRUPTCY – Failure to file a Statement of Affairs – distribution of dividend amongst creditors.

Bankruptcy Act 1966, ss.54, 77,146, 267B

Official Trustee in Bankruptcy v Raeffaele [2003] FCA 328
Rees v Stubberfield [1999] FCA 1862
Re Sturt; Ex parte Official Trustee in Bankruptcy (2001) 117 FCR 1, [2001] FCA 1649

Applicant: OFFICIAL RECEIVER FOR AND ON BEHALF OF THE OFFICIAL TRUSTEE IN BANKRUPTCY, THE TRUSTEE OF THE PROPERTY OF EJVIND PEDERSEN THOR, A BANKRUPT

Respondent: EJVIND PEDERSEN THOR

File Number: PEG 215 of 2006

Judgment of: Lucev FM

Hearing date: 1 November 2006

Date of Last Submission: 1 November 2006

Delivered at: Perth

Delivered on: 1 November 2006

REPRESENTATION

Counsel for the Applicant: Ms L. Mobilia

Solicitors for the Applicant: Carles Solicitors

The Respondent: No Appearance

ORDERS

1. That the costs, charges and expenses of the administration of the bankruptcy of the Respondent and a distribution of dividends amongst creditors who prove their debts in the estate shall proceed in accordance with Part VI, Division 5 of the Bankruptcy Act as if the Respondent had filed a Statement of Affairs and those creditors had been stated to be creditors in it.

2. That the Respondent not be entitled to any surplus funds remaining after payment of the dividends to creditors until he has lodged his duly completed Statement of Affairs in the required form in the office of the Official Receiver for the State of Western Australia and the Applicant has dealt with the claims of any further creditors disclosed in the Statement of Affairs.

3. That the costs of and incidental to this Application be fixed in the sum of $2261.75 and be paid out of the bankrupt estate of the Respondent.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

PEG 215 of 2006

OFFICIAL RECEIVER FOR AND ON BEHALF OF THE OFFICIAL TRUSTEE IN BANKRUPTCY, THE TRUSTEE OF THE PROPERTY OF EJVIND PEDERSEN THOR, A BANKRUPT

Applicant

And

EJVIND PEDERSEN THOR

Respondent

REASONS FOR JUDGMENT

(Revised from the transcript)

The application

1. The Applicant seeks an order pursuant to s.146 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) that a distribution of dividends be made to those creditors of the bankrupt estate of the Respondent who prove their debts in accordance with Part VI, Division 5 of the Bankruptcy Act (“the Application”).

Evidence

1. The Applicant relies on the following documents:

   a)the affidavit of Jacqueline Riley sworn 28 August 2006;

   b)the affidavits of Stuart Vassiliou sworn 5 October 2006; and

   c)the affidavit of Leisa Mobilia sworn 10 October 2006.

2. Section 54 of the Bankruptcy Act provides that where a sequestration order is made, the person against whose estate it is made must file a Statement of Affairs within 14 days of being notified of the bankruptcy.

3. Section 146 of the Bankruptcy Act provides that where a bankrupt fails to file a Statement of Affairs the court may order a distribution of dividends among creditors who have proved their debts as if the bankrupt had filed a statement of their affairs and those creditors have been named in it.

Service of court documents on the Respondent

1. The affidavits of Vassiliou depose to the service on the Respondent of the Application and supporting affidavit and the subsequent order of Registrar Jan made 25 September 2006 stating the final hearing date of the Application. I note that the orders made by Registrar Jan on

   
   

   25 September 2006 were in the following terms:

   (1) that the Respondent file and serve any notice of opposition supported by affidavit by 10 October 2006;

   (2) that the Applicant file and serve any affidavit in reply by

   
   

   17 October 2006;

   (3) that the Applicant serve a copy of this order on the Respondent no later than 2 October 2006;

   (4) that the Application be listed for hearing for one hour on

   
   

   1 November 2006 at 10 am; and

   (5) that the cost of today, that being 25 September 2006, will be reserved.

2. The affidavit of Mobilia sworn on 10 October 2006 deposes to service of the notice of the hearing date of the Application on the only known creditor of the bankrupt estate and contains a Letter of Response from that creditor. I note that in relation to the orders issued by the Registrar that no Notice of Opposition has been filed.

Section 146 Application

1. In relation to the Application, the affidavit of Jacqueline Riley, sworn 28 August 2006, provides evidence of:

   (a) the Respondent's bankruptcy;

   (b) the Official Trustee's attempts to obtain a Statement of Affairs from the Respondent;

   (c) the Respondent's failure to respond and to file a Statement of Affairs;

   (d) failed attempts to identify creditors of the bankrupt estate other than the petitioning creditor;

   (e) details of the only known assets of the bankrupt estate;

   (f) that the administration of the bankruptcy is complete save for the distribution of a dividend to the Australian Tax Office, being the only known creditor who has proved a debt; and

   (g) that the delay is causing prejudice to creditors.

2. In Re Sturt; Ex parte Official Trustee in Bankruptcy (2001) 117 FCR 1 at 5; [2001] FCA 1649 at para. 19 (“Sturt”) sets out requirements in relation to the level of satisfaction required in relation to s.146 applications.

3. The affidavit of Mobilia sworn 10 October 2006 deposes to notice on the Australian Tax Office of the hearing date and annexes correspondence from that office, advising that it does not oppose the Application.

4. The affidavit of Riley deposes to advertising in The West Australian newspaper in order to ascertain further creditors of the bankrupt estate. No further creditors were identified as a result of the advertising.

5. The affidavit of Riley also encloses an individual commercial report obtained from Baycorp Advantage which also fails to reveal any further creditors of the Respondent.

Findings

1. I am satisfied that the Applicant has advised all known creditors of the hearing and has taken appropriate steps to identify any further creditors of the bankrupt estate. I note that the Respondent has been prosecuted under s.267B(1) of the Bankruptcy Act for his failure to comply with the Notice requiring him to file a Statement of Affairs.

2. In my view the Respondent is fully aware of his bankruptcy and of his obligations under the Bankruptcy Act. In the circumstances I think it is reasonable to conclude that the Respondent's conduct contravenes his obligations under ss.54 and 77 of the Bankruptcy Act and indicates that his failure to file a Statement of Affairs is deliberate.

3. I am satisfied that the court has jurisdiction to make the orders sought by the Applicant under s.146 of the Bankruptcy Act in any event and even if it does not accept that the Respondent's failure to file his Statement of Affairs is deliberate: Sturt FCR at 4, FCA at paragraphs 14 and 15.

4. I am satisfied that failure by the bankrupt to file his Statement of Affairs has prejudiced his creditor as it has incurred further costs to and delayed the administration of the bankrupt estate: Rees v Stubberfield [1999] FCA 1862.

5. In my view it is evident that any further attempts to compel the Respondent to file a Statement of Affairs or notify him of the orders made pursuant to this application would also incur further costs and delay and result in further disadvantage to the bankrupt's creditor.

6. I note the absence of the Respondent in these proceedings. I am satisfied that he has had notice of them. I have also had the Respondent called outside the court shortly after it commenced this morning to no avail.

7. In those circumstances I adopt, with respect, the rationale outlined in the Official Trustee in Bankruptcy v Raeffaele [2003] FCA 328 at para. 7. I apply that rationale to the circumstances of this case and find that there is no necessity for me to make any orders conditional upon further attempts to notify the bankrupt or stay the effect of the orders.

8. For the above reasons there will be orders pursuant to s.146 of the Bankruptcy Act in terms of the Applicant's minute of proposed orders.

Orders

1. Orders are made in the following terms:

   a)that the costs, charges and expenses of the administration of the bankruptcy of the Respondent and a distribution of dividends amongst creditors who prove their debts in the estate shall proceed in accordance with Part VI, Division 5 of the Bankruptcy Act as if the Respondent had filed a statement of affairs and those creditors had been stated to be creditors in it;

   b)that the Respondent not be entitled to any surplus funds remaining after payment of the dividends to creditors until he has lodged his duly completed statement of affairs in the required form in the Office of the Official Receiver for the State of Western Australia and the applicant has dealt with the claims of any further creditors disclosed in the statement of affairs; and

   c)that the costs of and incidental to this application be fixed in the sum of $2261.75 and be paid out of the bankrupt estate of the Respondent.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Lucev FM

Associate: 

Date: