Pascoe v Nguyen

[2006] FMCA 227

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PASCOE v NGUYEN [2006] FMCA 227

BANKRUPTCY – Application of trustee of bankrupt estate for the sale of property – where the respondent is registered as the joint owner of that property – whether the respondent has any arguable case that would prevent the sale of the property.

Bankruptcy Act 1966 (Cth), s.30

Siew Fong Lin v Official Trustee in Bankruptcy [2001] FMCA 106

Applicant: SCOTT DARREN PASCOE AS TRUSTEE OF THE BANKRUPT ESTATE OF THANH Y NGUYEN

Respondent: LIEN THI KHUAT NGUYEN

File Number: SYG 3351 of 2005

Judgment of: Raphael FM

Hearing date: 16 February 2006

Date of Last Submission: 16 February 2006

Delivered at: Sydney

Delivered on: 16 February 2006

REPRESENTATION

Solicitor for the Applicant: Mr P Soliman

Solicitors for the Applicant: Thomson Playford

Solicitor for the Respondent: Mr D Vo

ORDERS

1. The land comprised in Certificate of Title Folio Identifier 24/7/5701 and known as 9 Rosemont Street Punchbowl in the State of New South Wales (Land) be sold by the Applicant as Trustee for sale, with all the obligations and privileges pertaining (including signing for and on behalf of the Respondent any Contract for the Sale of Land and any Real Property Act form of Transfer and determining the price at which the Land is to be sold) and the proceeds after payment of all expenses of and incidental to such sale be divided equally between the Applicant and Respondent and that prior to distribution of the Respondent's share, there be deducted from such share the Applicant’s costs of and incidental to this application.

2. For the purposes of giving effect to Order 1, the Respondent must do all such things, acts and deeds and sign all documents to list for sale and sell the Land, and for that purpose, including but not limited to the following:

   (i)agree upon a real estate agent(s) to be appointed to facilitate a sale of the Land;

   (ii)agree upon a sale or reserve price at which the Land is to be listed for sale;

   (iii)deliver a signed Real Property Act form of Transfer (Form No. 01T_v3-0) within 24 hours of being requested to do so by the Applicant;

   (iv)maintain the Land in a clean and presentable manner as required for the proper and effective marketing of the Land;

   (v)allow for an inspection of the Land on 24 hours notice of a request made by the Applicant or agent for sale; and

   (vi)give vacant possession of the Land on 7 days notice of a request made by the Applicant or agent for sale or otherwise within 4 weeks from the date contracts for the sale of the Land have been exchanged.

3. Pending the sale of the Land, and to the extent that she is able, the Respondent shall continue to meet one half of the mortgage instalments and meet all other outgoings (including electricity, gas, telephone, council rates) in respect of the Land.

4. In the event that the Respondent defaults in payment of any money available pursuant to Order 3, then the appropriate adjustment and deduction shall be made from that person’s share of the proceeds on completion of a sale of the Land.

5. That upon completion of the sale of the Land, the proceeds thereof be distributed in the following manner and priority:

   (i)First, in discharge of any mortgage or encumbrance now registered upon the title of the Land;

   (ii)Secondly, in payment of agent’s commission, auctioneers and auction expenses, legal and any other costs associated with and reasonably incurred to effect the sale of the Land and/or place the Land in a saleable condition;

   (iii)Thirdly, in adjustment of council rates, water rates and other statutory imposts appropriate and reasonable for a residential property of this nature;

   (iv)Fourthly, in payment of the Applicant’s costs (professional and legal) per order 6 below;

   (v)Fifthly, and subject to order 1, 4 and 5.4 above, in payment of the balance to be divided equally between the Applicant and the Respondent.

6. Respondent to pay the costs of the trustee in the total sum of $11,963 on the basis of the matters contained in the affidavit of Scott Darren Pascoe dated 15 November 2005 and the second affidavit of Scott Darren Pascoe dated 14 February 2006.

7. Respondent to pay the applicant's costs of the proceedings excluding the specific order for costs made on 17 January 2006 in relation to that day's hearing only, to be taxed, if not agreed, pursuant to the Federal Court Act and Rules on a party and party basis.

8. These orders be entered forthwith.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 3351 of 2005

SCOTT DARREN PASCOE AS TRUSTEE OF THE BANKRUPT ESTATE OF THANH Y NGUYEN

Applicant

And

LIEN THI KHUAT NGUYEN

Respondent

REASONS FOR JUDGMENT

1. This application comes before me today to conclude and make orders in relation to an application by Scott Darren Pascoe as the trustee of the bankrupt estate of Thanh Y. Nguyen for the sale of a property in which Mr Nguyen was registered as the joint owner. The case has been before me on a number of occasions.  A solicitor, Mr Vo, has appeared sometimes on behalf of the respondent, the bankrupt’s wife and other joint owner, and sometimes appearing to be making representations on the part of the bankrupt.

2. This morning the case was called on at 9.30am, the time at which it was set down for hearing. Mr Vo was not in attendance. After I had made orders pursuant to s.30 of the Bankruptcy Act 1966 (Cth) permitting the sale of the property, Mr Vo arrived. He presented me with an affidavit dated 15 December 2005. In that affidavit, the respondent suggests that she is in fact the equitable owner of the entire property. Mr Vo, I think, was asking me to set aside the order I had made in his absence and to declare that the sole benefit of the property belonged to his client. Alternatively, Mr Vo was asking me to adjourn this matter so that he could make a similar application in the Supreme Court of New South Wales. I am satisfied that this court has jurisdiction to decide issues of equitable ownership of property in relation to a bankrupt estate (Siew Fong Lin v Official Trustee in Bankruptcy [2001] FMCA 106) and had I been presented at an appropriate time with evidence that constituted a prima facie case, I would have permitted this matter to be heard in full. But this was not done.

3. The affidavit of the respondent was deposed to on 15 December 2005.  This matter came before me on 6 December 2005, on 17 January 2006 and today.  It is only today that the affidavit has surfaced.  The affidavit suggests that the respondent advanced $37,000 of the $67,000 purchase price, the balance being a mortgage to the Commonwealth Bank of Australia, which she says she made all the payments for.  She has produced in corroboration of that statement a photocopy of a receipt for a Commonwealth Savings Bank of Australia indicating that a passbook was taken by the bank with a balance of $30,531.10 in it.  The date is 6 September 1985. As I explained to Mr Vo, that document does not indicate the ownership of the passbook.  It may well be the passbook of his client, but it might equally be a joint passbook between his client and her husband.  The document therefore does not corroborate the respondent's statement. Next to the passbook receipt there is a copy of a letter from the Commonwealth Bank.  It is dated 19 November 1985.  Interestingly, where the name and address of the person to whom the letter is sent should appear, there is a blank; and it could be suggested that this has been deliberately excluded from the copy that is before me.  In any event, it does not prove anything at all, because there is no indication of the person to whom it is addressed. Then there is a Commonwealth Bank bank cheque addressed to James Soulos, solicitor, in the sum of $6480.  I do not know the point of this document and I do not see how it corroborates the respondent's statement. Other documents annexed to the affidavit include a loan approval schedule from the St George Building Society, addressed to both the bankrupt and the respondent.  This does not prove that the respondent made the payments.

4. In all the circumstances, I cannot be satisfied that the respondent has any arguable case that should prevent the sale of this property.  In all probability the sale will not take place for some weeks, so that if the respondent is able to provide more convincing evidence of her alleged equitable interest, the matter can be reopened.  No doubt Mr Vo will advise his client of the risk that she runs as to costs in taking such a step.

5. I confirm the orders which I made before Mr Vo's appearance, being the orders contained in the short minutes of order initialled by me and amended in green, and I also order that the respondent pay the costs of the trustee in the total sum of $11,963 on the basis of the matters contained in the affidavit of Scott Darren Pascoe dated 15 November 2005 and the second affidavit of Scott Darren Pascoe dated 14 February 2006. I further order that the respondent pay the applicant's costs of the proceedings excluding the specific order for costs made on 7 February 2006 in relation to that day's hearing only.  The costs are to be taxed if not agreed pursuant to the Federal Court Act and Rules on a party and party basis.

I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 

Date:  17 February 2006