Posner v Chen (No.2)
[2007] FMCA 502
•2 April 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| POSNER v CHEN (No.2) | [2007] FMCA 502 |
| BANKRUPTCY – Further declaration and orders – disposition of land – access to land for valuation. |
| COSTS – Indemnity costs – respondent’s conduct and failure to discover documents – indemnity costs ordered. |
| Bankruptcy Act 1966, ss.19(b), (e), (f), (j), (k), 120(1)(b), 121(1), 129(1) |
| Ugly Tribe Company Pty Ltd v Sikola & Os [2001] VSC 189 |
| Applicant: | MELVYN MALCOLM POSNER AS TRUSTEE IN BANKRUPTCY OF THE ESTATE OF RONGBIN CHEN |
| Respondent: | XIOAJING CHEN |
| File Number: | PEG 81 of 2006 |
| Judgment of: | Lucev FM |
| Hearing date: | 2 April 2007 |
| Date of Last Submission: | 2 April 2007 |
| Delivered at: | Perth |
| Delivered on: | 2 April 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr. K Yin |
| Solicitors for the Applicant: | Murcia Pestel Hillard |
| Respondent: | Ms X. Chen appearing in person with assistance of an interpreter |
ORDERS
Further to the declarations and orders made by the Court on 23 March 2007:
THE COURT DECLARES THAT:
The Respondent holds one undivided half share of the Bedford Land on trust, free of all encumbrances, against the Applicant’s one undivided half share.
AND THE COURT ORDERS THAT:
The Applicant be at liberty to sell the Bedford Land and receive the net proceeds of sale (“the proceeds”) on trust for the parties.
The Respondent shall deliver up possession of the Bedford Land to the Applicant or his servants or agents no later than 30 days after the making of this order.
The proceeds be applied to the payment of any outstanding encumbrances according to their priorities and of all other proper costs, charges and expenses of sale or auction, and thereafter to be applied as follows:
(a)half to be paid to the Applicant; and
(b)the remaining half, being the Respondent’s share, to be charged with payment of the Applicant’s costs of these proceedings, with the parties having liberty to apply as to the proper allocation of those funds.
The Respondent shall execute all such documents and do all such things that are necessary to enable the Applicant to effect the sale of the Bedford Land, or if she is unwilling or unable to take such steps or execute such documents, a Registrar of this Court will be empowered or authorized to do so.
The Respondent shall use her best endeavours to assist the Applicant to conduct the sale or auction of the Bedford Land in a timely and efficient manner for a reasonable price.
The Respondent provide reasonable access to the Bedford Land within seven (7) days, between the hours of 9.00 am and 5.00 pm, for the purpose of the Applicant assessing and valuing the Bedford Land.
The address for service of notices on the Respondent shall be:
56 Gummery Street, Bedford WA 6052; and
c/- Tang Lawyers, 2/174 Roe Street, Northbridge WA 6003,
unless or until notice of an alternative address for service within Australia is served on the Applicant.
The Respondent is to pay the Applicant’s costs of these proceedings on a solicitor-client indemnity costs basis, and if not agreed, to be taxed in accordance with Order 62 of the Federal Court Rules.
The Parties have liberty to apply on 48 hours notice.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 81 of 2006
| MELVYN MALCOLM POSNER AS TRUSTEE IN BANKRUPTCY OF THE ESTATE OF RONGBIN CHEN |
Applicant
And
| XIOAJING CHEN |
Respondent
REASONS FOR JUDGMENT
(Revised from Transcript)
Previous orders
In this matter on 23 March 2007, the Court made various declarations and orders, including a declaration that the transfer of what is described in those declarations and orders as the Bedford Land was void against the Applicant under ss.120(1)(b) and 121(1) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”). That was in relation to a transfer of land purportedly registered on 6 September 2002. The Court further declared that with effect from 28 April 2004, the Applicant and Respondent were beneficial owners of the Bedford Land as tenants in common.
In what appears to have been a forlorn hope that the parties might be able to reach agreement with respect to appropriate further directions, orders or declarations, the matter was adjourned to today. Regrettably, no such agreement, either in whole or in part, has been reached and it is necessary for the Court to make further declarations and orders.
Further declaration and orders re land
Having regard to the declaration that the transfer of the Bedford Land is void and the declaration that the Applicant and Respondent are beneficial owners as tenants in common, and having regard to the duties of the Official Trustee under ss.19(b), (c), (f), (j) and (k) and 129(1) of the Bankruptcy Act, it is appropriate that the Court make further declarations and orders concerning the disposition of the Bedford Land.
Having regard to the reasons for judgment and orders and declarations of 23 March 2007, it is appropriate that the Court make a further declaration in addition to the declarations that it has already made in terms of the declaration numbered 3 in the minute of proposed declarations and orders that the Applicant has handed up. The Court will also make orders in terms of the orders in the minute of proposed declaration and orders with respect to the Bedford Land as set out in orders 1, 2, 3, 4, and 5 of the minute of proposed declaration and orders. There will also be an order in terms of order 6 of that minute of proposed declarations and orders with respect to the service of notices.
Indemnity costs
With respect to the issue of indemnity costs, the Applicant’s submission outlined four particular matters in respect of which it was said that indemnity costs ought to be ordered having regard to the very broad discretion that this Court has in relation to the ordering of indemnity costs. Counsel for the Applicant relied in particular upon the Respondent's resistance to discovery of the DIMIA documents, the difficulties with disclosure of the Respondent's passport, the difficulties with discovery of the banking records from the Hong Kong Bank of Communications and the documents in relation to the latter produced eventually under subpoena from DIMIA. The Court need not repeat what was said in relation to those matters as they are fully canvassed in the reasons for judgment of 23 March 2007.
The Court may order indemnity costs in particular circumstances. It has discretion to do so. Generally speaking, two of the reasons for ordering indemnity costs are:
a)conduct which causes loss of time to the Court and to other parties; and
b)the failure until after the commencement of hearing and without explanation to discover documents, the timely discovery of which would have considerably shortened and very possibly avoided the hearing: Ugly Tribe Company Pty Ltd v Sikola & Ors [2001] VSC 189 at para 7 per Harper J.
The discovery of the relevant documents in this case would not have avoided the hearing but early or earlier discovery may well have considerably shortened the hearing and caused the hearing to be conducted in a much shorter time and with much less effort on the part of the Applicant than was otherwise necessary.
In those circumstances, there will be a further order that the Respondent is to pay the Applicant's cost of these proceedings on a solicitor-client indemnity basis, if not agreed, to be taxed under order 62 of the Federal Court Rules. The costs order will indicate that it is in relation to all proceedings in this matter. That does not include the examination before the Registrar which was in a separate proceeding.
Access to land – Further order
The Court will also order that the Respondent provide reasonable access to the Bedford Land within seven days between the hours of 9am and 5pm for the purpose of the Applicant assessing and valuing the Bedford Land. Such an order is necessary to enable the Official Trustee to properly perform his duties under the Bankruptcy Act, and to carry into effect the orders of the Court otherwise made. The Respondent opposed this order, but on the basis that no order ought to be made until after a foreshadowed appeal. That is not a proper basis for opposing such an order.
There will also be a further order also that the parties have liberty to apply on 48 hours' notice.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: M Hewitt
Date: 10 April 2007
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