Re Aley; Ex parte Sweeney & Aley
[1996] FCA 55
•14 FEBRUARY 1996
CATCHWORDS
BANKRUPTCY - transfer by bankrupt to wife of his interest in former matrimonial home void against the trustee in bankruptcy under ss 120 and 121 the Bankruptcy Act 1966 (Cth)
BANKRUPTCY - appointment of trustee of a statutory trust for sale under s 38 the Property Law Act 1974 (Qld) - principles governing the way such a trustee is bound to act stated - whether the applicant trustee in bankruptcy should be appointed trustee of the statutory trust for sale considered - an independent appointment required
Bankruptcy Act 1966 (Cth) - ss 58, 120(1) and (7), 121(1) and (2), 123(6), 139ZQ(1) (2) and (8), 139ZR(1) and (6)
Property Law Act 1974 (Qld) - ss 37, 38 and 39
Cases Considered
Baker v Official Trustee in Bankruptcy (Full Court of the Federal Court, 3 August 1995, unreported)
Dickson v Roy (1992) ANZ ConvR 401
George v McDonald (1992) ANZ ConvR 396
Waller v Waller [1967] 1 All ER 305
Re Naushad Rahmat Aley; Ex parte Paul Desmond Sweeney v Shumshad Begum Aley & Anor.
QB 2020 of 1994
Drummond J
Brisbane
14 February, 1996
IN THE FEDERAL COURT OF AUSTRALIA ) No. QB 2020 of 1994
GENERAL DIVISION )
BANKRUPTCY DISTRICT OF )
THE STATE OF QUEENSLAND )
RE:NAUSHAD RAHMAT ALEY also known as NEIL ALI
Bankrupt
EX PARTE:PAUL DESMOND SWEENEY
Applicant
AND:SHUMSHAD BEGUM ALEY
First Respondent
AND:NAUSHAD RAHMAT ALEY
Second Respondent
MINUTES OF ORDERS
JUDGE MAKING ORDER: Drummond J
DATE OF ORDER: 14 February, 1996
WHERE MADE: Brisbane
THE COURT DECLARES THAT:
The transfer by Mr. Aley of his interest as joint tenant in land described as Lot 31 on Registered Plan Number 178933, County of Stanley, Parish of Bulimba to Mrs. Aley on 27 July, 1993 is void as against the applicant trustee;
A person independent of the applicant trustee and of Mrs. Aley be appointed trustee of the said property, to be held by that trustee on the statutory trust for sale pursuant to s. 38 the Property Law Act 1974 (Qld).
THE COURT ORDERS THAT:
The applicant trustee and Mrs. Aley attempt to agree on the person to be appointed trustee of the statutory trust for the sale of the said property.
In the event that a draft consent order signed by both the applicant trustee and Mrs. Aley providing for such appointment is not delivered to my Associate by Tuesday, 27 February, 1996, the applicant trustee and Mrs. Aley shall deliver to my Associate by Wednesday, 28 February, 1996, their written proposals for such appointment and I will adjourn in that event the further hearing of the application to 9.15 on Thursday, 29 February 1996.
Costs are reserved.
NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.
IN THE FEDERAL COURT OF AUSTRALIA ) No. QB 2020 of 1994
GENERAL DIVISION )
BANKRUPTCY DISTRICT OF )
THE STATE OF QUEENSLAND )
RE:NAUSHAD RAHMAT ALEY also known as NEIL ALI
Bankrupt
EX PARTE:PAUL DESMOND SWEENEY
Applicant
AND:SHUMSHAD BEGUM ALEY
First Respondent
AND:NAUSHAD RAHMAT ALEY
Second Respondent
Coram: Drummond J
Date: 14 February, 1996
Place: Brisbane
REASONS FOR JUDGMENT
Mr. Aley's trustee in bankruptcy attacks Mr. Aley's (the second respondent) transfer to his former wife, Mrs. Aley (the first respondent), of his one half interest as joint tenant in the former matrimonial home as a dealing void as against the trustee, pursuant to both s. 120(1)(a) and s. 121(1) the Bankruptcy Act 1966 (Cth) ("the Act"). Orders are sought with respect to the sale of this property, which is still owned by Mrs. Aley, in reliance on a notice given under s. 139ZQ of the Act and on other grounds.
Mr. Aley and Mrs. Aley married in 1975. The property was acquired by them as joint tenants as their matrimonial home in March 1988. They lived in it with their children until they separated in about January 1993. They were divorced in May 1994. Since their separation, Mr. Aley has, from time to time, resided in the house, in between stays in Fiji. He remarried in March 1995 and is living at the moment with his second wife and the child of that marriage in the downstairs part of the house. Mrs. Aley is living in the upstairs portion with the two children of her marriage to Mr. Aley.
Mr. Aley's financial problems appear to have begun with his purchase of woodworking machinery from the petitioning creditor, Wadkin Public Ltd. Co. ("Wadkin"). Mr. Aley took the machinery to Fiji to use in a manufacturing business which he intended to establish there, together with a sales agency business for Wadkin. He soon began to complain of substantial defects in the machinery. Mr. Aley told his trustee that, by October 1992, he was in financial difficulties. His business ultimately failed. Mr. Aley had threatened to sue Wadkin, but it got in first and sued him in the District Court at Brisbane for $68,895.48, the purchase price of the machinery. Mr. Aley counter-claimed for $53,900. The action was set down for trial, to commence on 28 July 1993.
In about late June of that year, Mr. Aley returned to Fiji, partly in order to gather witnesses for the coming trial. While he was in Fiji, and prior to 28 July, 1993, Mr. Aley received information which he understood to mean that his action against Wadkin had been struck out. In fact, Wadkin, on 7 July, 1993, obtained an order striking out his defence and giving it judgment for the $68,895.48 claimed, plus a further $6,889.54 for interest. Mr. Aley was represented on this occasion by his solicitors. His counter-claim still stood. On 28 July, 1993, however, the District Court made an order, in proceedings in which Mr. Aley was again represented by his solicitor, dismissing this counter-claim. Mr. Aley was successful in having the first judgment set aside later in 1993. He did not, however, attack the second judgment. Wadkin's vigorous attempts, in the latter half of 1993, to enforce its judgment of 7 July, 1993 and to bankrupt Mr. Aley because of his failure to pay the debt under that judgment were frustrated by Mr. Aley's success in having the judgment set aside. Wadkin, however, obtained judgment against him again in September 1994 for the same $68,895.48 of its claim, plus interest to that date.
On 13 October, 1994, Mr. Aley was bankrupted on Wadkin's second petition, presented on 24 August, 1994. The act of bankruptcy relied on was his failure to pay Wadkin's costs of its first petition by 22 August, 1994, in accordance with a bankruptcy notice served on him. According to his
statements of affairs, Mr. Aley had no substantial creditors other than Wadkin and one trade creditor in Fiji.
In late July 1993, Mr. Aley took action to transfer his half interest in the former matrimonial home to Mrs. Aley. He says in his affidavit:
"7.Upon learning of the entry of Judgment (and the consequential striking out of my counterclaim) I decided to apply to have that judgment set aside. Before I had the opportunity of instructing my solicitor to bring that application I received a telephone call from a person who did not identify himself but who said to me words to the effect of `Listen mate this is a serious threat. If you don't pay Wadkin in full I'm going to blow your head off and if you tell anybody about this call I will get your family as well'.
8.I took the threat very seriously and it concerned me greatly. I decided notwithstanding the threat that I would apply to the court to set the judgment aside. Fearful that the threat might be carried out however I decided that I should also transfer my interest in the former matrimonial home at 3 Koola Street, Wishart ("the property") to my wife to ensure that she would be able to continue to provide a home for my children without any legal entanglement in the event that I was seriously injured or killed. I instructed a solicitor to prepare the necessary transfer documents which he did. I did not seek any legal advice from him in relation to the transaction. I also instructed the solicitor who had conduct of the action involving Wadkin to apply to the court for an order setting aside the judgment.
9.I signed the transfer documents relating to the transfer of the property to the First Respondent on July 27, 1993."
Despite what he says in paragraph 7 of his affidavit, he transferred his interest in the home to his
former wife before his counter-claim was dismissed on 28 July, 1993. The memorandum of transfer is dated 27 July, 1993; the consideration is expressed to be "the Natural Love and affection borne" by Mr. Aley for Mrs. Aley. It is common ground that the transfer was not made for any other consideration. The transfer was produced for registration on the same day, 27 July, 1993, after no doubt having first been stamped. It was ultimately registered on 14 October, 1993. Mrs. Aley supports what Mr. Aley had to say about receiving a threatening phone call and how it precipitated the transfer. She says in her affidavit:
"3.On or about July 1993 I observed that my husband was distraught and shaky after receiving a telephone call from an unknown person threatening my husband's life if moneys were not paid to Wadkins Australia Limited, pursuant to an alleged business debt of my husband.
4.We had a conversation and we were concerned, that should the death threat be serious, what would happen to my husband's interest in the house ..."
Mrs. Aley told the trustee much the same when interviewed back in October 1994.
Mr. Aley said he took the threat very seriously. However, he did not pay Wadkin's debt: he said he did not have the money to do that. And although the likely source of the threat was known to him, he did not go to the police. Nor did the threat stop him promptly attacking the judgment of 7 July, 1993. The only thing the threat caused him to do, on
his evidence, was to divest himself of his interest in the house so that his estranged wife and two children would have a home free of legal entanglements if he were harmed. He denied the existence of Wadkin's claim had anything to do with his taking this action:
"Q:... you did not want Wadkins to be coming in there and taking the house off them after you had died or was severely injured?
A:No, it is not Wadkins. Wadkins got nothing to do with this matter. It is my half share. At that time, we were the joint tenant, myself and my wife ... the reason why it [was] transferred at the time, [was] because if something really happened to me, I didn't want [her to] go to the legal battle ... She don't have that money ..."
Mr. Aley took this action to transfer his interest in the house to Mrs. Aley very promptly, between the time he learned of the judgment of 7 July, 1993 and immediately prior to 28 July, 1993, when the trial of his counter-claim was due to commence. He was in contact with his solicitor, Mr. Iqbal, who was acting for him in the litigation, in this period. It was Mr. Iqbal who prepared the transfer documents on Mr. Aley's instructions. It is implicit in Mr. Aley's case that Mr. Iqbal allowed him to incur the expense of ad valorem stamp duty and valuation fees to give Mrs. Aley and the children, in the event that his threatened death occurred, exactly the same security with respect to the home that they would have had, without that expense, upon his death.
The solicitor was not called to give evidence.
By late 1993, Mr. Aley was in need of funds for his planned business venture in Fiji. The financial threat presented by Wadkin's claim was much reduced by action taken by Mr. and Mrs. Aley: in September 1993, Mr. Aley had Wadkin's judgment of 7 July, 1993 set aside; in November 1993, Wadkin's first bankruptcy petition against Mr. Aley was dismissed (although he was ordered to pay Wadkin's costs of the petition) and, on 1 December, 1993, Wadkin was ordered to withdraw a writ of execution it had lodged against the property. Mr. Aley says in his affidavit:
"11.In December 1993 since no attempt had been made to carry out the threats against me and no further threats had been made I approached the First Respondent and asked her to transfer a half share in the property back to me. She declined to do so. We argued over her refusal. Eventually we sat down at a table and discussed the situation rationally. My position was that I wanted to return to Fiji to have another go at operating a timber business as I could see a future in it. However I needed capital to do so. I had advice that the former matrimonial was then worth $300,000.00 and I believed it to be fair that I receive from the First Respondent half of that value. I appreciated however that the First Respondent would have difficulty meeting repayments on a loan taken out to pay the sum I required. The agreement we came to was that the First Respondent would borrow $155,000.00 on an interest only basis and that she would pay those monies to me in settlement of my claim. I would then use those monies to establish another business in Fiji and would use the anticipated profits from the business to service the loan. The First Respondent then took out a loan accordingly.
12.The First Respondent paid to me the whole proceeds of the loan of $155,000.00. I have provided to the Applicant (my Trustee in Bankruptcy) details of the manner in which I then expended the monies paid to me by my wife."
In his oral evidence, Mr. Aley at one point described this arrangement as a loan by Mrs. Aley to him, although he also said, consistently with what he said in his affidavit, that it was entered into by way of settlement of the claim to a share in the house that he intended to make in the then-contemplated divorce proceedings. In any event, Mrs. Aley mortgaged the property and Mr. Aley got the $155,000 of mortgage moneys. Repayments of interest are now in arrears. Mrs. Aley is not in a financial position to resist enforcement of the mortgage against her, an event which appears likely since Mr. Aley has failed to keep his promise to make the payments due in respect of the mortgage.
In my opinion, Mr. Aley transferred his interest in the home to his former wife on 27 July, 1993 with the object of putting it beyond the reach of his then-pressing creditor, Wadkin. I have reached this conclusion having regard to the improbability of the reason he has given for this action being the true explanation for the transfer. I have also had regard to the concerns he says he had at the success Wadkin had achieved on 7 July, 1993 in striking out his defence and getting judgment against him; to the imminence of the hearing of his counter-claim, which was for a sum substantially less than Wadkin's judgment, and to his own poor financial circumstances at that time. I also have regard to what Mr. Aley said he did in late 1993 by way of attempting to persuade Mrs. Aley to transfer a one half interest in the property back into his name when Wadkin's prospects of taking the house must have appeared to him to have faded, as going to evidence that his intention in July 1993 was to put his interest in the house beyond the reach of Wadkin at a time when its claim presented a serious financial threat to him.
I therefore find that the transfer by Mr. Aley of his half interest in the house property to Mrs. Aley is void against his trustee in bankruptcy by force of both ss. 120(1)(a) and 121(1) of the Act. There will be a declaration to that effect. There is no suggestion that the transaction involving Mrs. Aley and the mortgagee, and the subsequent assignment of that mortgage, were anything other than bona fide transactions for value. That the transfer by Mr. Aley to Mrs. Aley is void as against his trustee does not therefore impugn the mortgage as a security over the entire property: see ss. 120(7) and 121(2) of the Act and Baker v Official Trustee in Bankruptcy (Full Court of the Federal Court, 3 August, 1995, unreported) particularly at 31-34.
On 31 March, 1994, Mr. and Mrs. Aley entered into an agreement to obtain consent orders in the Family Court divorce proceedings with respect to a custody, maintenance and property settlement. This agreement was given effect to by the order of the Family Court on 11 May, 1994. The agreement, scheduled to the order, provides:
"4.That as and by way of property settlement and spousal maintenance:
(i)The former matrimonial home situate at 3 Koola Street, Wishart, Brisbane in the State of Queensland be sold and the proceeds of sale be paid in the following manner and priority:
(a)Payment of agent's commission and auction expenses (any) due on the sale;
(b)in payment of legal costs of sale;
(c)in payment of all rates and taxes owing on the property;
(d)in payment of all moneys owing to Perpetual Trustees Q.A. Ltd. pursuant to a loan secured by mortgage over the said property in the sum of approximately $155,000.00;
(e)payment of moneys outstanding on the Commonwealth Bank credit card in the sum of approximately $2,000.00;
(f)the balance of the net proceeds of sale be paid to the wife.
...
9.The wife, for the purposes of the sale of the property specified herein shall be deemed to be the agent for the husband in respect of all matters relating to the listing and sale of the property and the wife shall be entitled to sign all necessary documents, including transfer documents, give consents and do such acts as may be necessary to sell the property and discharge any debts, and the wife shall be deemed to be the attorney for the husband in all respects for such purposes."
The agreement and the consent orders incorporating it appear to have been drawn up on the basis that Mr. Aley retained an interest in the house property. He did not. The transfer in July 1993 of his interest vested in Mrs. Aley full beneficial ownership of Mr. Aley's interest in that property. There is nothing in the evidence to suggest that the July transfer was of Mr. Aley's legal interest only. Mr. Aley's own evidence was that he intended to ensure that Mrs. Aley got full ownership of the property. What each said took place in December 1993, when Mr Aley sought the transfer of one half of the property back to him, confirms that that was Mr. and Mrs. Aley's intentions back in July 1993.
Section 123(6) of the Act provides:
"Subject to section 121, nothing in this Act invalidates, in any case where a debtor becomes a bankrupt, a conveyance, transfer, charge, disposition, assignment, payment or obligation executed, made or incurred by the debtor, before the day on which the debtor became a bankrupt, under or in pursuance of a maintenance agreement or maintenance order."
That Mr. Aley entered into the agreement of 31 March, 1994 and became subject to the Family Court order of 11 May, 1994 incorporating that agreement prior to his bankruptcy cannot protect the title Mrs. Aley took from him in July 1993 to his interest in the property as against Mr. Aley's trustee in bankruptcy. Section 121(1) of the Act invalidates that transfer. Nor does s. 123(6) of the Act prevent s. 120 of the Act operating to invalidate the transfer either: Mr. Aley did not convey any interest in the property to Mrs. Aley under the agreement of 31 March, 1994, nor did he assume any obligation under that agreement or under the order of 11 May, 1994 with respect to his interest in the house property. As from 27 July, 1993, he ceased to have any interest in the property that could be affected by the maintenance agreement of March 1994 or by the Family Court order of a couple of months later. I read the maintenance agreement, against the background of the events of July and December 1993, as evidencing the abandonment by Mr. Aley of any claim he may have had in the divorce proceedings with respect to the house property, a claim he could have made in those proceedings even if he had no legal or equitable interest in the property.
On 28 June, 1995, the Official Receiver issued a notice under s. 139ZQ of the Act to Mrs. Aley requiring her to pay to the applicant trustee the sum of $127,500. The statement of facts and circumstances incorporated in this notice identifies this figure as the value of Mr. Aley's interest in the property which he transferred to Mrs. Aley on 27 July, 1993. The source of this figure is an appraisal by a real estate agent annexed to the notice. It is dated 22 September, 1993 and is addressed to a firm of solicitors, S.J. Guernsey and Company. It is in the following terms and I quote:
Further to your request for an appraisal on the property situated at 3 Koola Street, Wishart we have appraised the property and believe that based on the prevailing market it would attract a price of between $250,000 and $260,000."
The evidence does not indicate for whom these solicitors were acting or why they sought the appraisal. It does not purport to be a valuation of the property, only a real estate agent's opinion as to what it would bring in "the prevailing market". It does not, I think, evidence the value of the property when Mr. Aley transferred his interest in it to Mrs. Aley in July 1993.
I am reluctant to read s. 139ZR of the Act as making a notice under s. 139ZQ of the Act effective to charge property owned by the recipient of the notice with liability to pay the figure asserted in the notice as the value of the transferred property in contrast to the true value of the property at the date of receipt. Section 139ZR(1) of the Act charges the property "with the liability of the person to make payments to the trustee as required by the notice". Under s. 139ZQ(1) of the Act, all that the notice can require by way of payment to the trustee is payment of "an amount equal to ... the value of the property received". It is that, not for example the amount stated in the notice, that is to be paid. Section 139ZQ(2) of the Act does not require any information as to how the figure demanded by the notice was arrived at to be set out in the notice. The figure stated in the notice as the value of the property received from the bankrupt is not given by the Act any evidentiary force. A notice issued in reliance on s. 139ZQ is, in my opinion, only effective to give rise to a debt enforceable under s. 139ZQ(8) of the Act and a charge within s. 139ZR of the Act if the amount demanded by the notice is, in fact, equal to the value of the property at the relevant time. Such an interpretation should not create any significant difficulty since the concept of the value of
property at a particular time will generally involve an imprecise rather than an exact assessment of worth.
The Official Receiver could not properly issue such a notice unless he had available to him information identifying the value of the property at the relevant time; if a notice is challenged, the Official Receiver and the trustee would have the onus of proving that the amount demanded by the notice was an amount equal to the value of the property in question.
Where a notice is given under s. 139ZQ of the Act, the trustee can exercise the power of sale to recover the amount demanded by the notice without seeking direction from the Court. If he does that and cannot prove, if later challenged, that the amount demanded in the notice was the true value of the property, he may be exposed to personal liability to account for the sum by which the amount of the notice exceeded the true value. If the trustee, as here, seeks directions from the Court with respect to a sale under s. 139ZR(6) of the Act, he must, I think, have evidence showing that the amount referred to in the notice is the measure of the true value of the property in question at the time of its receipt.
Although there was no challenge by either Mr. Aley or Mrs. Aley to this (or any other) aspect of the notice, I am not satisfied, on the material before me, that the amount of which it demands payment was the value of the interest in the property in question at the time of its transfer. I do not regard what Mr. Aley had to say about the information he had received about the value of the property, which evidence is not admissible against Mrs. Aley, as filling this evidentiary gap. I will therefore not give any directions for the exercise of the power of sale pursuant to s. 139ZR(6) of the Act.
But, given that this transfer is void as against the trustee in bankruptcy, the applicant trustee is entitled to enforce his rights with respect to the property, even though he cannot enforce them in reliance on the notice. The declaration that the transfer by Mr. Aley of his interest in the property to Mrs. Aley is void as against the applicant trustee confirms that that interest was vested in possession in the trustee from the time when Mr. Aley became bankrupt, pursuant to s. 58 of the Act. The applicant trustee and Mrs. Aley are thus "co-owners" of the property as joint tenants (subject to the registered mortgage) within the meaning of that term in s. 37(1) the Property Law Act 1974 (Qld) ("the PLA"). The applicant has applied to be appointed trustee for the sale of the property pursuant to s. 38 the PLA. It is appropriate to appoint a trustee for sale under the section and to make orders which will enable that trustee to sell the property to realise the applicant's interest in it, since Mrs. Aley does not seek an opportunity to pay out the applicant and the evidence indicates she is not in any position to do that. The sale proceeds of the property will be applied, firstly, in payment of the applicant trustee's costs and expenses of and incidental to the sale; secondly, in payment of the moneys owing to I. and L. Securities Proprietary Limited under a deed of loan secured by registered mortgage no. L780250M. The residue of the sale proceeds is to be paid to the applicant as trustee of Mr. Aley and to Mrs. Aley, in equal shares.
I do not, however, think it is appropriate to appoint the applicant as trustee of a statutory trust for sale in this case. The statutory trustee will be bound by s. 39 the PLA to consult with Mrs. Aley with respect to the terms of the sale. I take, from George v McDonald (1992) ANZ Conv.R. 396, Dickson v Roy (1992) ANZ Conv.R. 401 and Waller v Waller [1967] 1 All E.R. 305, the following principles as those which govern the way in which a trustee of a statutory trust for sale appointed under s. 38 the PLA is bound to act:
(1)The statutory trustee is subject to all the ordinary duties and obligations of a trustee;
(2)The statutory trustee must hold the scales evenly between the beneficiaries - here, the applicant as trustee in Mr. Aley's bankruptcy and Mrs. Aley herself;
(3)The statutory trustee is not entitled to sell, except for the best price reasonably obtainable;
(4)In performing his duties as a statutory trustee, he is bound to exercise the same diligence and prudence as an ordinary prudent man of business would exercise in conducting his own affairs;
(5)The mandatory duty imposed by s. 39 the PLA on the trustee of a statutory trust for sale to consult with all the beneficiaries, who here include Mrs. Aley, would mean more than merely telling Mrs. Aley what the trustee proposed to do. In order to discharge this duty of consultation, the statutory trustee would, at the very least, have to give full information to Mrs. Aley of his intentions for sale and a proper opportunity to her to respond to it; the trustee would also have to give genuine consideration to any such response, which could be expected to be designed to further Mrs. Aley's own interests and which might well conflict with those of the applicant as trustee in bankruptcy;
(6)The Court will intervene to protect one beneficiary under a statutory trust for sale from an improvident sale or any other breach of duty by the trustee by appointing an additional trustee for sale to ensure that that beneficiary's interests are property taken into account when the decision to sell is made.
Here, the appointment of a trustee for sale will be made for the purpose of enabling the applicant to realise his interest, as Mr. Aley's trustee in bankruptcy, in the property, which is limited to a one half undivided share as joint tenant. The applicant's interests lie in the expeditious realisation of this property in fulfilment of his duties to Mr. Aley's creditors, interests that are reflected in the directions the applicant seeks for the speedy sale of the property at public auction after minimal consultation by the applicant to assist him in setting a reserve price. Mrs. Aley, however, stands entirely outside the bankruptcy; her interest is to obtain the maximum price possible for the property and so for her share in it. The interests of the applicant and those of Mrs. Aley are therefore not co-extensive. A trustee appointed under s. 38 the PLA to sell the property could not properly sacrifice Mrs. Aley's interests in the property for a quick sale. If the applicant were to be appointed trustee of the statutory trust for sale, he would not be confined to protecting the interests of the estate he represents in his other capacity as trustee in Mr. Aley's bankruptcy: he would also owe important duties to Mrs. Aley, who would have to rely on him to protect her own interest in obtaining the best price reasonably obtainable for the property.
In addition, there is the criticism by Cooper J in his judgment of 12 February last of those acting under the direction of the trustee, of the applicant trustee, in respect of their conduct in the course of the administration of Mr. Aley's estate which makes it inappropriate for the applicant to have the conflicting responsibilities of serving both his own and Mrs. Aley's interests in connection with the sale of the property.
In my opinion, some person at arm's length from both the applicant and Mrs. Aley should be appointed trustee of the statutory trust for sale in this case. A registered trustee in bankruptcy independent of the applicant would, I think, be a suitable appointment, but the applicant and Mrs. Aley may wish to appoint other suitable appointees.
They will have an opportunity to agree on a person to be appointed trustee for the sale of the property. If they cannot promptly agree, the Court will make the appointment.
I close with a few observations, which I trust Mrs. Aley will take particular notice of. I recognise that she is in the unfortunate position of facing the inevitable loss of her home. However, she has no choice other than to co-operate with the person who will soon be appointed by the Court to sell the property. She cannot expect to delay the sale unreasonably. But it may be that, by acting in co-operation with the appointee, she will be able to realise more for herself from the sale of her home than will be the case if the appointed trustee has to sell over her opposition.
I will make the following orders:
(1)I declare that the transfer by Mr. Aley of his interest as joint tenant in land described as Lot 31 on Registered Plan Number 178933, County of Stanley, Parish of Bulimba to Mrs. Aley on 27 July, 1993 is void as against the applicant trustee;
(2)I declare that a person independent of the applicant trustee and of Mrs. Aley be appointed trustee of the said property, to be held by that trustee on the statutory trust for sale pursuant to s. 38 the Property Law Act 1974 (Qld).
(3)I direct that the applicant trustee and Mrs. Aley attempt to agree on the person to be appointed trustee of the statutory trust for the sale of the said property.
(4)Finally, I direct that in the event that a draft consent order signed by both the applicant trustee and Mrs. Aley providing for such appointment is not delivered to my Associate by Tuesday, 27 February, 1996, the applicant trustee and Mrs. Aley shall deliver to my Associate by Wednesday, 28 February, 1996, their written proposals for such appointment and I will adjourn in that event the further hearing of the application to 9.15 on Thursday, 29 February 1996.
(5)I will reserve costs.
I certify that this and the preceding
20 pages are a true copy of the
reasons for judgment herein of the
Honourable Justice Drummond.
Associate:
Date: 14 February, 1996
Counsel for the trustee: Mr. S.L. Doyle S.C. and
Mr. D.G. Clothier
Solicitors for the trustee: Deacons Graham & James
The respondents appeared in person.
Date of Hearing: 12 February, 1996
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