Polgar v Official Receiver

[2015] FCCA 1840

FEDERAL CIRCUIT COURT OF AUSTRALIA

POLGAR v OFFICIAL RECEIVER [2015] FCCA 1840

Catchwords:
BANKRUPTCY – Urgent application for interlocutory relief – bankruptcy notice – application to extend time for compliance – application granted.

Legislation:  

Bankruptcy Act 1966 (Cth), ss.120, 139ZQ
Administrative Decisions (Judicial Review) Act 1977 (Cth)

Applicant: MANDY FRANCES POLGAR

Respondent: OFFICIAL RECEIVER

File Number: SYG 1829 of 2015

Judgment of: Judge Street

Hearing date: 1 July 2015

Date of Last Submission: 1 July 2015

Delivered at: Sydney

Delivered on: 1 July 2015

REPRESENTATION

Solicitors for the Applicant: Mrs Perry
Pure Legal

No appearance by the respondent.

ORDERS

Upon the applicant by her solicitor Mrs Perry giving the usual undertaking as to damages:

1. An order up to an including 6 July 2015 or further order, that the operation of the decision of the Official Trustee on 7 April 2015 be suspended and that any proceedings under that decision including the notice pursuant to section 139ZQ be stayed.

2. Direct the applicant serve a copy of the application, supporting material and this order on the Trustee Giles Geoffrey Woodgate by 5pm on 2 July 2015.

3. Direct the applicant to serve a copy of these orders upon the respondent by email to [email protected] by 5pm today.

4. There be liberty to apply on 24 hours’ notice.

5. The proceedings be stood over to 6 July 2015 at 10:15 am for directions and/or interlocutory relief hearing.

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT SYDNEY

SYG 1829 of 2015

MANDY FRANCES POLGAR

Applicant

And

OFFICIAL RECEIVER

Respondent

REASONS FOR JUDGMENT

1. This is an ex-parte application for urgent interlocutory relief in respect of a notice pursuant to s.139ZQ of the Bankruptcy Act 1966 (Cth) issued by a delegate of the respondent to the applicant on 7 April 2015 and served on the applicant on 4 June 2015. The application seeks to invoke this Court’s jurisdiction both under the Bankruptcy Act and under the Administrative Decisions (Judicial Review) Act 1977 (Cth) in respect of the notice pursuant to s.139ZQ.

2. Time for compliance with the notice unless the subject of an order suspending the operation of the decision or a stay would expire tomorrow. The applicant is the owner of a particular unit at 3/42A Shirley Road Wollstonecraft which is the subject of an alleged transaction falling within s.120 of the Bankruptcy Act in the notice issued under s.139ZQ. The applicant deposes to the fact that she was not given any opportunity prior to the issue of the notice to provide material or make submissions relating to the subject matter of the notice.

3. The notice refers to a transfer of interest on 22 June 2009 for an alleged consideration of $212,500.  Paragraph 17(v) asserts that no consideration was given for the transfer of a debtor’s share of the property.  The notice identifies in paragraph 12 the proposition that the conveyancing file disclosed no consideration was paid by the applicant to the debtor and that stamp duty was paid on the transaction in accordance with the valuation.

4. Paragraph 14 of the notice identifies a current market value of the property being derived by the estimate of two real estate agents by reason of which a median current market value was derived by the trustee. The applicant contends that the transfer took place prior to the four year relation-back period under s.120 and that the provision has no application. The applicant further contends that the relevant property was the subject of the payment of the deposit, solicitors fees and mortgage payments by the applicant so as to be the subject of a resulting trust.

5. The applicant also seeks to advance an issue as to the adequacy of the valuation method adopted by the trustee.  Noncompliance with the notice under s.139ZQ has significant consequences and at this ex-parte stage, it suffices to say that I am satisfied that there is a sufficiently arguable prima facie case in support of the challenge to the notice relevant under the Bankruptcy Act to justify the grant of urgent interim relief and so as to preserve the status quo. I have not formed a final view as to whether the evidence supports a prima facie case for the purpose of an interparty hearing. Given the serious consequences of non-compliance with the notice, the balance of convenience plainly weighs in favour of granting interim relief.  I also take into account that the applicant has proffered the usual undertaking as to damages.

6. Mrs Perry, the solicitor for the applicant, has drawn the Court’s attention to the communications with the Australian Financial Security Authority which relevantly asserts a delay in the notification of the hearing so as to be unable to appear and that the trustee of the bankrupt’s estate, albeit the bankrupt has been discharged from bankruptcy, has not been made aware of the application.  The email from the Australian Financial Securities Authority requested an adjournment of the matter until the application has been corrected and appropriate parties served prior to the hearing. 

7. Mrs Perry identified to the Court that the decision-maker under the s.139ZQ notice was the Official Receiver who has been joined as the respondent and advanced that, in those circumstances, it was not necessary at this stage to join the trustee. It is clear that the trustee played a material role in the steps taken to issue the notice. However, I am not satisfied that in the urgent circumstances identified the joinder of the trustee is necessary given that the decision was made by the Official Receiver being the party who has issued the notice. Further the delay does not appear to be of kind that would in the circumstances of this case warrant refusal of the urgent ex parte relief.

8. In those circumstances, the request communicated from the Australian Financial Security Authority for an adjournment pending joinder of another party is not, in my opinion, a reason to deny the applicant the urgent relief that is sought today.  The Court will, however, direct that a copy of any application and supporting material be served on the trustee.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate: 

Date:  3 July 2015