Re Porter
[2017] FCCA 2191
•1 September 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RE PORTER & ORS | [2017] FCCA 2191 |
| Catchwords: BANKRUPTCY – Acceptance of resignation of one of two trustees of a number of bankrupt estates – where other trustee is to be sole trustee of each of the bankrupt estates – procedural requirements. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.19, 134, 180, 181A, 183, Sch.2 s.45-1 Insolvency Law Reform Act 2016 (Cth) |
| Cases cited: Condon v Watson (2009) 174 FCR 314; [2009] FCA 11 Coshott v Coshott (2010) 184 FCR 495; [2010] FCA 300 Pascoe v Fleming [2010] FMCA 637 Re Official Trustee in Bankruptcy [2009] FCA 850 |
| First Applicant: | JASON LLOYD PORTER |
| Second Applicant: | TERRY VAN DER VELDE |
| Third Applicant: | RICHARD MORETTI |
| File Number: | SYG 2363 of 2017 |
| Judgment of: | Judge Barnes |
| Hearing date: | 1 September 2017 |
| Delivered at: | Sydney |
| Delivered on: | 1 September 2017 |
REPRESENTATION
| Counsel for the Applicants: | Mr Johnson |
| Solicitors for the Applicants: | O'Neill Partners Commercial Lawyers |
ORDERS
The requirements for service of the Application under the Federal Circuit Court Rules 2001 be dispensed with.
Pursuant to rule 1.06 of the Federal Circuit Court Rules and rule 1.04(2) of the Federal Circuit Court (Bankruptcy) Rules 2016 (the Bankruptcy Rules) compliance with the requirements of rules 8.02(3) and 8.02(4)(b) of the Bankruptcy Rules be dispensed with.
Pursuant to section 180 of the Bankruptcy Act 1966 (Cth), the resignation of Richard Moretti on 9 June 2017 as one of the two trustees of each of the bankrupt estates set out in Schedule 1 hereto is accepted.
Pursuant to section 180 of the Bankruptcy Act, the resignation of Richard Moretti on 9 June 2017 as one of the two trustees of each of the bankrupt estates set out in Schedule 2 hereto is accepted.
Pursuant to section 180 of the Bankruptcy Act, the resignation of Jason Lloyd Porter on 9 June 2017 as one of the two trustees of the bankrupt estate set out in Schedule 3 hereto is accepted.
From the time of the Court’s acceptance of Mr Moretti’s resignation, Mr Porter is the sole trustee of each of the bankrupt estates set out in Schedule 1 hereto and is entitled and obliged to act as such.
From the time of the Court’s acceptance of Mr Moretti’s resignation, Mr Van Der Velde is the sole trustee of each of the bankrupt estates set out in Schedule 2 hereto and is entitled and obliged to act as such.
From the time of the Court’s acceptance of Mr Porter’s resignation, Mr Moretti is the sole trustee of the bankrupt estates set out in Schedule 3 hereto and is entitled and obliged to act as such.
The Applicants pay their own costs of this Application (if any) and not be remunerated from any bankruptcy administration for the cost of this Application.
The Applicants notify the Official Receiver c/- AFSA of these orders within 2 business days of today’s date.
SCHEDULE 1
| Debtor given name | Debtor surname |
| CHRISTOPHER MICHAEL | O’BRIEN |
| MICHAEL | WATMOUGH |
| SAMUEL JOHN | SCOTT |
| DUANE | DRAKE |
| MARIE | NONA |
| CYNTHIA ERIKA/DIRK | BIERLING/BIERLING |
| KAYLENE MAREE/ROSS WILLIAM | HAMMOND/HAMMOND |
| MALCOLM | THOMAS |
| NIKOLA | MARINIC |
| COLIN JAMES | RUSSELL |
| DAVID KENNETH | LUSCOMBE |
| MICHAEL | CURRAN |
| HAMISH | MCLAREN |
| RAYMOND JOHN | MALLEY |
| TONY | JOVEVSKI |
| ROBERT | BREED |
| MI SIN | LI |
| GIL JOSE | LI |
| MARCUS JAMES | MCKAY |
| RUSSELL | KENSITT |
| GLENDA | BOYD |
| GLEN | BOYD |
| MITCHELL | CURTIN-SUTHERLAND |
| LAN HEONG | LOW |
| GARY | MCDONOUGH |
| ELIAHU | KAUFMAN |
| CHRISTOPHER ROBERT | COPPIN |
| JACK JOHN | AMATO |
| JOSE DIAS | OUTEIRO |
| SUZANNE HELEN | MILLER |
| DAVID BENJAMIN | ZENATI |
| MARTIN | PARSA |
| WAYNE LAURENCE | PECK |
| DOROTHY ELLEN JACOB | SMITH |
| DANNY | ABRAHAM |
| BIANCA SIMONE | WHITEHILL |
| COREY JAMES/NOELNE JOY | FERGUSSON/SKINNER |
| GEOFFREY | WARREN |
| ALBERT | OSHANA |
| MONICA/JULIO | TABOADA/TABOADA |
| KENT QUANG | NGUYEN |
| EHRIN JOEL | COUPE |
| HENDRIK CORNELIS | MAK |
| LUCY JEAN | MENAGH |
| ANGELA ROSE | NAVARRO |
| JODIE LOUISE | RAFTER |
| TRACEY ANNE | SPARKS |
| STEVEN | TAMBOURAS |
SCHEDULE 2
| Debtor given name | Debtor surname |
| PAUL ROBERT JAMES | EGGERS |
| CARLO ADRIANO | DISARO |
| MOHAMMAD | BAREZ |
| LAUREN DOROTHY | SARGENT |
| MARILYN ANNE | ROWAN |
| ALMIS | MESTROVIC |
| ANTHONY ROSS | O’NEILL |
| WAYNE | FERRARI |
| CHRISTOPHER JOHN | FIRTH |
| COLIN JOHN | GIBLETT |
| JASON ANTHONY | HARRIS |
| COLIN CHARLES | HIRD |
| JOHN REGINALD WILLIAM | LINDLEY |
| TERENCE WILLIAM | STORMER |
SCHEDULE 3
| Debtor given name | Debtor surname |
| JOHN GERARD | KLUMPER |
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2363 of 2017
| JASON LLOYD PORTER |
First Applicant
| TERRY VAN DER VELDE |
Second Applicant
| RICHARD MORETTI |
Third Applicant
REASONS FOR JUDGMENT
(revised from transcript)
This is an application brought by Mr Porter, Mr Van Der Velde and Mr Moretti. They seek to regularise a situation that has arisen in relation to their appointments as trustees of various bankrupt estates. In each case two of the Applicants were trustees of each of the bankrupt estates listed in the Schedules to the application filed on 25 July 2017.
Mr Porter’s evidence (in his affidavit of 24 July 2017) is that he and Mr Van Der Velde are registered trustees and directors in the accounting firm, SV Partners. Mr Moretti is also a registered trustee. He was employed by SV Partners. He resigned his employment at SV Partners on 9 June 2017 and tendered his resignation in all but one of the bankruptcy administrations in which he was appointed as joint trustee with either Mr Porter or Mr Van Der Velde. Some of these estates have been finalised and some of them are still active. It is sought to regularise the position in relation to the trustees of each of these estates.
With one exception, it is proposed that Mr Moretti no longer be a trustee of these bankrupt estates. In other words, his resignation as trustee should be accepted. The exception (described in Mr Moretti’s affidavit of 18 July 2017) is in relation to the bankrupt estate of John Klumper, where it is proposed that Mr Moretti remain the sole trustee at the wish of the major creditor. Mr Porter has tendered his resignation as trustee of this estate. Each of the Applicants consents to continue to act as sole trustee in bankruptcy in respect of the bankruptcy administrations in issue (and see Mr Van Der Velde’s affidavit of 31 July 2017).
Having regard to the nature of the present proceedings it is appropriate to dispense with the requirement of compliance with r.8.02(3) of the Federal Circuit Court (Bankruptcy) Rules 2016 (the Bankruptcy Rules) as to detailed documents as to administration of the bankrupt estates in question that should otherwise accompany supporting affidavits.
The Applicants seek to regularise the position by the Court accepting the resignations of Mr Moretti and, in the one case, Mr Porter. Counsel for the Applicants also now seeks declarations consistent with the form of declaration made by Jagot J in In the matter of Sutherland (Federal Court NSD945 of 2017) as to the consequential effect that the remaining trustee be the sole trustee of each of the bankrupt estates from the time of the Court’s acceptance of the resignations.
In addition to the affidavit of Mr Porter, sworn on 24 July 2014, the affidavit of Mr Van Der Velde of 31 July 2017 and the affidavit of Mr Moretti of 18 July 2017, reliance is placed on two affidavits of Christie Lonnon (of 31 July 2017 and 7 August 2017) attesting, relevantly, to service of this application and the supporting affidavits on the Official Receiver in Bankruptcy (c/- AFSA) and the Inspector General in Bankruptcy. In response, there has been confirmation, both from AFSA and on behalf of the Inspector General in Bankruptcy, that there is no opposition to the application. There has been no appearance for the Official Receiver, AFSA or the Inspector General in these proceedings. I am told from the bar table that this reflects Counsel’s understanding that there is no opposition to the application.
The application is brought in reliance on various provisions of the Bankruptcy Act 1966 (Cth) (the Act). As it is 1 September 2017 today, certain relevant amendments to the Act and Rules come into place by virtue of the Insolvency Law Reform Act 2016 (Cth) and the Insolvency Law Reform (Transitional Provisions) Regulation 2016 (Cth). In addition, the Federal Circuit Court (Bankruptcy) Rules 2016 have been amended from this date. To some extent provisions in Schedule 2 to the Act (the Insolvency Practice Schedule (Bankruptcy)) and the amended Rules are applicable as explained by Counsel for the Applicants.
Relevantly, s.180 of the Act provides that the Court may, subject to such terms and conditions as it thinks just, accept the resignation of a registered trustee from the office of trustee of an estate. There is a discretion in that respect. It is also relevant to have regard to s.45-1 in Schedule 2 to the Act which (as of today) provides that the Court may make such orders as it thinks fit in relation to a registered trustee. This provision also allows a registered trustee to make application to the Court (see s.45-1(3)(a)). It does not limit the Court’s powers under any other provision of the Act or under any other law (see s.45-1(5)).
In this case what is in issue is simply resignation of a registered trustee from the office of trustee in relation to particular bankrupt estates. There is no question of replacement of a trustee or a s.183 release. For each of the bankrupt estates in question there were two trustees. The result of accepting the resignations is that there would be one trustee but, in all cases except the Klumper estate, the estate would continue to be administered by a trustee who was with the same firm with the same contact details. As indicated, the main creditor in relation to the Klumper estate seeks that Mr Moretti remain the trustee in that matter.
Several cases concerning applications of this nature were brought to my attention. These relied on s.180 and s.134(4) of the Act (see for example Condon v Watson (2009) 174 FCR 314; [2009] FCA 11; Re Official Trustee in Bankruptcy [2009] FCA 850; Coshott v Coshott (2010) 184 FCR 495; [2010] FCA 300 and Pascoe v Fleming [2010] FMCA 637). Section 134(4) empowered a trustee to seek directions from the Court. It has now been repealed. Insofar as the present application involves the new provisions, I accept that, as explained in submissions for the Applicants, where there have been applicable changes they are not such as to prevent the orders sought being made. Section 180 remains in effect and s.45-1 in Schedule 2 is broadly expressed.
Before turning to the substance of the application, I note that there is no intention, unless the Court so orders, to serve the application on any person, notwithstanding the usual requirements for service under the Federal Circuit Court Rules 2001 (Cth) and in r.8.02(4) of the Bankruptcy Rules. Notification has been given to the Official Receiver and to the Inspector General in Bankruptcy. When this matter first came before me I raised with the solicitor for the Applicants whether it was appropriate to make any orders for notification of creditors and bankrupts of the various estates, having regard to the fact that it was brought to my attention that in what appeared to be a similar matter (Sutherland) Jagot J had required that the applicant notify each of the creditors and bankrupts of the bankrupt estates not already notified within seven days of the orders and gave leave to such persons to apply to the Court within 30 days of such notice if they had any objection to the orders being made.
The Applicants addressed this issue in supplementary submissions, pointing out that while reasons were not published in Sutherland, the orders made included an order pursuant to s.183 of the Bankruptcy Act that Mr Sutherland be released as trustee. The notification in Sutherland is to be seen in that light (and see s.183(4)(a) of the Act). No s.183 release is sought in this case. Also all three Applicants remain as registered trustees in bankruptcy. This is not a case in which there is to be a replacement trustee or appointment of any additional trustee. As indicated, except in the Klumper bankruptcy administration, the remaining trustee for each estate is in the same accounting firm with the same contact details as in the past. There is nothing in the material before the Court to suggest that there would be any prejudice to any bankrupt or creditor arising from the fact that only one of two trustees will remain as the sole trustee of the affected bankrupt estates.
I also accept that while there is an alternative procedure under s.181A of the Bankruptcy Act for replacing a trustee, in the interests of avoiding unnecessary expenditure (having regard to s.19 of the Act and the Insolvency Practice Schedule) it is hoped to avoid the procedure which, while described as a streamlined method for replacing a trustee, requires a process of notification to all the creditors who are entitled to receive notice of a meeting of creditors and a procedure for objections before there is an administrative replacement of a trustee.
In short, there is no evidence of any dispute as to the ongoing appointment of the relevant remaining trustee. Mr Porter has attested that there are “absolutely no issues” involving the proper administration of any matter between the Applicants and that he is unaware of any complaint or reason why the orders ought not to be made. Some of the bankruptcy administrations are ongoing. Others have been finalised, albeit that they may be reactivated if matters come to light which were not otherwise disclosed or identified by the trustees in their examination of the affairs of each bankrupt. The resigning trustee is not being replaced by a new trustee. The other previous co-trustee will, and is entitled to, act as sole trustee. There is no suggestion of any disruption to the administration of any of the bankrupt estates in issue. On the contrary. There is no evidence or suggestion of any disadvantage to creditors or to the bankrupts concerned.
I also bear in mind that the trustees have obligations to notify creditors of changed circumstances at various times in the administration of bankrupt estates, and are under obligations to give reports to creditors and hold meetings so that in the ordinary course of events, creditors will be notified of the change from two to one trustee.
I am satisfied on the evidence before me that in these circumstances it is appropriate to make the orders sought. I note that there was some discussion of the proposed orders and there has been some modification (including, appropriately, dispensing with the service requirement in r.8.02(4)(b) of the Bankruptcy Rules). The Applicants are to notify the Official Receiver of these orders.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Judge Barnes
Date: 15 September 2017
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