Palmer v Lazar, in the matter of Lazar (Bankrupt) (No 2)

Case [2025] FCA 967

FEDERAL COURT OF AUSTRALIA

Palmer v Lazar, in the matter of Lazar (Bankrupt) (No 2) [2025] FCA 967

File number: NSD 328 of 2025
Judgment of: WIGNEY J
Date of judgment: 6 August 2025
Catchwords: BANKRUPTCY AND INSOLVENCY – application to compel the transfer of property to the trustee in bankruptcy – where the bankrupt failed to engage with the trustee and Court – trustee presently unable to gather-in sufficient funds to discharge the bankrupt estate – property received as distribution of deceased estate – no steps taken to transfer title into personal capacity – bankrupt failed to comply with s 77(1)(e) of the Bankruptcy Act 1966 (Cth) – consent to the proposed transfer given by other registered title holder – where likely surplus funds available following the sale of the property – trustee orders granted directing the transfer of title – order allowing for the execution of any transfer documents by the registrar or court officer – bankrupt to give vacant possession within 28 days
Legislation: Bankruptcy Act 1966 (Cth) ss 30, 54, 77
Cases cited:

Palmer as trustee of the Estate of J Z Lazar v J Z Lazar (a bankrupt) & Ors (No. 1) [2025] FCA 966

Hacker v Weston [2015] FCA 363

Coshott v Prentice (2014) 221 FCR 450
Division: General Division
Registry: New South Wales
National Practice Area: Other Federal Jurisdiction
Number of paragraphs: 30
Date of hearing: 30 July and 6 August 2025
Counsel for the Applicant: Ms K Petch
Solicitor for the Applicant: Woods & Day Solicitors
Counsel for the First Respondent: Litigant in Person
Counsel for the Second and Third Respondents: Second and third respondents filed submitting notices

ORDERS

NSD 328 of 2025

IN THE MATTER OF JOHN ZLATKO LAZAR (A BANKRUPT)
BETWEEN:

CHRISTOPHER JOHN PALMER

Applicant
AND:

JOHN ZLATKO LAZAR (A BANKRUPT)

First Respondent

STEVEN ZDENKO LAZAR

Second Respondent

THE REGISTRAR OF TITLES OF THE STATE OF VICTORIA

Third Respondent

ORDER MADE BY:

WIGNEY J

DATE OF ORDER:

6 AUGUST 2025

THE COURT ORDERS THAT:

1.The First and Second Respondents are to do any act or thing required to be done to transfer title in the land described in Certificate of Title Volume 10507 of Folio 412 in the State of Victoria, known as 2 Drystone Crescent Cairnlea, Victoria, 3023 (the Property) to the Applicant in his capacity as trustee in bankruptcy of the estate of the First Respondent.

2.A registrar, clerk or the chief executive of the Court may sign any document or do any thing required to be signed or to be done on behalf of the First or Second Respondent to give effect to order (1) above, without further notice.

3.The First Respondent is to deliver up vacant possession of the Property to the Applicant within 28 days of the date of this order (being 6 August 2025).

4.The Applicant’s costs of this application be recoverable from the First Respondent’s bankrupt estate as costs of the administration of the estate.

5.There be no other order as to…

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Palmer v Lazar, in the matter of Lazar (Bankrupt) (No 2) [2025] FCA 967
Case
[2025] FCA 967
Decision Date

CaseChat Overview and Summary

The matter of Palmer v Lazar, in the matter of Lazar (Bankrupt) (No 2), involved the application of a trustee in bankruptcy to compel the transfer of a property to the trustee. The bankrupt, Lazar, had failed to cooperate with the trustee and had not fulfilled his obligations under the Bankruptcy Act 1966 (Cth). The property in question was inherited from Lazar’s deceased mother and was held jointly with Steven Lazar. The trustee sought orders to facilitate the transfer of the property, arguing that it was necessary to realise the property to discharge Lazar's estate and pay his creditors.

The primary legal issue before the court was whether the trustee had the authority to compel the transfer of the property from the bankrupt and Steven to the trustee. The court had to consider whether the bankrupt's failure to cooperate and comply with his obligations justified the granting of the trustee's application. Additionally, the court needed to determine whether the alternative relief sought by the trustee, which allowed a court officer to sign any necessary documents on behalf of the respondents, was appropriate.

The court found that the bankrupt's lack of cooperation and his failure to comply with statutory obligations warranted the granting of the trustee's application. The court reasoned that the transfer of the property was essential to realise funds to pay Lazar's creditors in full, with any surplus to be returned to Lazar. The court also noted that Steven had expressed a willingness to facilitate the transfer, but the order permitting a court officer to act on behalf of the respondents would simplify the process. Consequently, the court granted the orders sought by the trustee, directing the transfer of the property and allowing the bankrupt to vacate the property within 28 days. The court further ordered that the costs of the application be recoverable from Lazar's bankrupt estate.

Orders

Orders of the court

1. The First and Second Respondents are to do any act or thing required to be done to transfer title in the land described in Certificate of Title Volume 10507 of Folio 412 in the State of Victoria, known as 2 Drystone Crescent Cairnlea, Victoria, 3023 (the Property) to the Applicant in his capacity as trustee in bankruptcy of the estate of the First Respondent.

2. A registrar, clerk or the chief executive of the Court may sign any document or do any thing required to be signed or to be done on behalf of the First or Second Respondent to give effect to order (1) above, without further notice.

3. The First Respondent is to deliver up vacant possession of the Property to the Applicant within 28 days of the date of this order (being 6 August 2025).

4. The Applicant’s costs of this application be recoverable from the First Respondent’s bankrupt estate as costs of the administration of the estate.

5. There be no other order as to costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons that follow, I propose to make the orders sought by the Trustee which require the Bankrupt and Steven to do all things reasonably necessary to facilitate the transfer of the Property to the Trustee. It is, in those circumstances, unnecessary to make the alternative order sought by the Trustee against the Registrar. FACTUAL BACKGROUND The relevant facts are essentially not in dispute and are narrow in compass. The Trustee was appointed as trustee of the Bankrupt's estate on 3 March 2015. The Bankrupt has not been discharged from bankruptcy, primarily because he has never filed a statement of his affairs as required by s 54 of the Bankruptcy Act: see also s 149(1)(a) of the Bankruptcy Act. It is relevant to note in that context that the Bankrupt has also manifestly failed to cooperate with the Trustee or perform any of his duties pursuant to s 77 of the Bankruptcy Act. While the Trustee has made a small interim distribution to the Bankrupt’s creditors, the creditors have not yet been paid in full. It is in that context that the Trustee continues to endeavour to collect and realise the property of the Bankrupt or the property to which the Bankrupt is entitled. The mother of the Bankrupt and Steven, Ms Verica Lazar, passed away on 24 May 2020. At the time of her death, Ms Lazar owned the Property, which was situated at 2 Drystone Crescent, Cairnlea, Victoria. On 26 February 2021, the Supreme Court of Victoria granted probate to the Bankrupt and Steven in respect of Ms Lazar's estate. The Property formed part of Ms Lazar's estate. In her will, Ms Lazar left her estate in two equal shares to the Bankrupt and Steven. Accordingly, the Bankrupt and Steven, as executors of Ms Lazar's deceased estate, are recorded on the Certificate of Title (Vol 10507 of Folio 412) as being the registered proprietors of the Property. The evidence adduced on the Trustee’s application indicated that, not long after the grant of probate, the Bankrupt and Steven reached an agreement in respect of the distribution of the assets of Ms Lazar's estate. The terms of that agreement were recorded in a Deed of Family Arrangement. While the Deed was not formally executed, the agreement as recorded in it has been partly performed. In particular, the Deed provides that, in consideration of Steven receiving an amount of money from the estate as his distribution, the Bankrupt would receive, among other things, the Property. While Steven has received the monetary distribution specified in the Deed, no effective steps appear to have been taken to transfer title the property to the Bankrupt. In his submissions at the hearing, Steven indicated that he did not know why that was so. He also made it clear that he wanted that situation to be remedied and that he did not want his name to remain on the title. TRUSTEE’S APPLICATION As was noted at the outset, the Trustee’s primary application is to have the title to the Property transferred from the Bankrupt and Steven to him in his capacity as Trustee of the Bankrupt’s bankrupt estate. The Trustee contends, in essence, that pursuant to the Bankrupt’s agreement with Steven, as reflected in the Deed, the Bankrupt was entitled to have the title to the Property transferred into his name. Once that occurred, however, the title to the Property vested in the Trustee as trustee of the Bankrupt's estate by reason of s 58(1)(b) of the Bankruptcy Act, the property has

Evidence

Evidence Before The Court

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Decision

Reasons for decision

It is readily apparent from the evidence that, once the Trustee can take possession of and sell the Property, all the creditors will be able to be paid in full. There will also almost certainly be a surplus which will ultimately be returned or distributed to the Bankrupt. None of that, however, provides any support for the Bankrupt's opposition to the orders sought by the Trustee. CONCLUSION AND DISPOSITION In all the circumstances, I consider that it is appropriate to make an order pursuant to s 30(1)(b) of the Bankruptcy Act directing the Bankrupt and Steven to transfer title in the Property to the Trustee in his capacity as the trustee of the Bankrupt's bankrupt estate. To avoid any further complications, I will also order that a registrar, clerk or the chief executive of the Court may sign any document or do any thing required to be signed or to be done on behalf of the Bankrupt and Steven to give effect to that order. That order is appropriate given the Bankrupt’s previous lack of cooperation with the Trustee. While Steven has demonstrated a willingness to facilitate the transfer of the Property to the Trustee, the order permitting an officer of the Court to sign documents or take any necessary steps on his behalf will undoubtedly simplify the process. Given that I propose to make those orders pursuant to s 30(1)(b) of the Bankruptcy Act, it is unnecessary to consider the availability of the alternative relief sought by the Trustee as against the Registrar. The Trustee also sought an order that the Bankrupt deliver up vacant possession of the property within 21 days. I was initially reluctant to make that order as there was no evidence to suggest that the Bankrupt resided at the property. When he first appeared and sought an adjournment, however, the Bankrupt confirmed that he did live at the property. That was also readily apparent from the Bankrupt's submissions. In those circumstances, and again given the Bankrupt’s demonstrated unwillingness to cooperate with the Trustee, I consider it appropriate to make the ancillary order sought by the Trustee concerning possession of the property in order to facilitate the swift sale of the property and the finalisation of the administration of the Bankrupt's estate. I will, however, allow the Bankrupt 28 days within which to vacate the property.

Ratio Decidendi

Legal Principle Established

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