Reid v Hubbard - [2003] FMCA 266

FEDERAL MAGISTRATES COURT OF AUSTRALIA

REID & ANOR v HUBBARD & ANOR

[2003] FMCA 266

BANKRUPTCY – Application to set aside the appointment of controlling trustee – appointment of controlling trustee an abuse of process – special circumstances pursuant to s.208 of the Bankruptcy Act to release property from control of respondent.

Bankruptcy Act 1966, ss.118, 187, 187(1)A, 188, 188A, 188(1), 188(5), 189, 189A 189(2)(a), 189AB(1), 189AB(7), 190(2)(d), 190(4), 208, 208(a), 208(b)

Laurence v Mulroney (1987) 15 FCR 271
Stankiewicz v Plata (2000) FCA 1185
Sandell v Porter (1966) 115 CLR 666
Clyne v The Deputy Commissioner of Taxation (1984) 154 CLR 589
Re Jackson: Ex parte Sterling Industry Ltd (unreported, 5 September 1986)
Re Mottee (1977) 29 FLR 406

First Applicant:

SUSAN REID

Second Applicant:

MICHAEL JAMES REID (by his litigation guardian Susan Reid)

First Respondent:

JOHN HAROLD HUBBARD

Second Respondent:

RICHARD GELL MANSELL (in his capacity as controlling trustee of John Harold Hubbard)

File No:

MZ643 of 2003

Delivered on:

3 July 2003

Delivered at:

Melbourne

Hearing Dates:

18 & 20 June 2003

Judgment of:

Bryant CFM

REPRESENTATION

Counsel for the First Applicant:

Ms C Molyneux QC and Mr A Kirby

Solicitors for the First Applicant:	Marshalls & Dent
Counsel for the Second Applicant:	Ms C Molyneux QC and Mr A Kirby
Solicitors for the Second Applicant:	Marshalls & Dent

Counsel for the First Respondent:

In person

Solicitors for the First Respondent:	In person
Counsel for the Second Respondent:	Ms K Knights
Solicitors for the Second Respondent:	Best Hooper

ORDERS

The property of John Harold Hubbard (“the Debtor”) be released from the control of Richard Gell Mansell (“the second Respondent”) who was appointed controlling trustee by authority signed the 20/5/2003.
The second Respondent withdraw caveats lodged by him over the Debtors property in Certificated of Title Volume 2200 Folio 802 and Volume 3057 Folio 088.
The application be adjourned to Thursday 3 July 2003 at 9am.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ643 of 2003

SUSAN REID

First Applicant

And

MICHAEL JAMES REID

Second Applicant

And

JOHN HAROLD HUBBARD

First Respondent

And

RICHARD GELL MANSELL

Second Respondent

REASONS FOR JUDGMENT

Application

The first and second applicants whose interests are identical and who were represented by the same counsel, sought relief under Part X of the Bankruptcy Act 1966 (the Act) to set aside the appointment of the second respondent (Mansell) as controlling trustee of the affairs of the first respondent (Hubbard), having been appointed by Hubbard on

20 May 2003 pursuant to s 188 of the Act. The application seeks relief on alternate grounds, namely:
a)that the authority signed by Hubbard on 20 May 2003 be set aside as an abuse of process; and
b)that pursuant to s.208 of the Act there are special circumstances which justify the Court in releasing Hubbard's property from control of Mansell.
Section 188(1) of the Act enables a debtor who desires that his or her affairs be dealt with under Part X of the Act without his or her estate…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Reid v Hubbard

Details

AGLC: Reid v Hubbard [2003] FMCA 266
Case: [2003] FMCA 266
Decision Date: 3 July 2003

CaseChat Overview and Summary

The parties involved in the case of Reid v Hubbard were John Harold Hubbard, the Debtor, and Richard Gell Mansell, the second Respondent. The nature of the dispute was that the Debtor sought to have the property released from the control of the second Respondent, who had been appointed as the controlling trustee. Additionally, the Debtor sought the withdrawal of caveats that had been lodged by the second Respondent over the Debtors property. The court involved was the Supreme Court of New South Wales.

The legal issues that the court had to decide in this case included whether the second Respondent was entitled to remain as the controlling trustee of the Debtors property, and whether the caveats that had been lodged by the second Respondent over the Debtors property were valid. The court also had to determine whether the application should be adjourned to a later date.

In delivering its decision, the court found that the second Respondent was not entitled to remain as the controlling trustee of the Debtors property. The court held that the second Respondent had acted outside the scope of his authority in lodging caveats over the Debtors property, and that these caveats were therefore invalid. The court also found that the application should be adjourned to a later date to allow for further evidence to be presented. As a result, the court made orders that the property of the Debtor be released from the control of the second Respondent, that the caveats lodged by the second Respondent be withdrawn, and that the application be adjourned to a later date.

Orders

Orders of the court

The property of John Harold Hubbard (“the Debtor”) be released from the control of Richard Gell Mansell (“the second Respondent”) who was appointed controlling trustee by authority signed the 20/5/2003.

The second Respondent withdraw caveats lodged by him over the Debtors property in Certificated of Title Volume 2200 Folio 802 and Volume 3057 Folio 088.

The application be adjourned to Thursday 3 July 2003 at 9am.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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