Salubre v Jones
[2013] FCCA 1706
•14 October 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SALUBRE v JONES & ORS | [2013] FCCA 1706 |
| Catchwords: BANKRUPTCY – Interlocutory relief – where applicant claims interest in bankrupt’s property – where property vested in trustee and sold – whether an order should be made freezing the balance of the proceedings of the sale of bankrupt’s property. |
| Legislation: Duties Act 1997 (NSW), s.73 |
| Applicant: | MARY ROSE SALUBRE |
| First Respondent: | MICHAEL GREGORY JONES AS TRUSTEE FOR THE BANKRUPT ESTATE OF MYLA LONTOK PASCUAL |
| Second Respondent: | THE OWNERS STRATA PLAN NO 10564 |
| Third Respondent: | JAMES A. LOXTON |
| File Number: | SYG 2244 of 2013 |
| Judgment of: | Judge Raphael |
| Hearing date: | 14 October 2013 |
| Date of Last Submission: | 14 October 2013 |
| Delivered at: | Sydney |
| Delivered on: | 14 October 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr D A Allen |
| Solicitors for the Applicant: | Leigh Jonson Lawyers |
| Counsel for the First Respondent: | Mr T Bors |
| Solicitors for the First Respondent: | Le Page Lawyers |
| For the Second Respondent: | No appearance |
| For the Third Respondent: | In person |
ORDERS
By consent, the proceedings against the Third Respondent be discontinued, no order as to costs.
Interim application dismissed.
Applicant to file and serve her statement of claim by 25 October 2013 together with any affidavits in support.
Respondents to file and serve their defence and any affidavits in support by 30 November 2013.
Applicant to file and serve any Reply and any supporting evidence by 10 December 2013.
If any party is in default of the above timetable for more than 4 working days, the other party must immediately request the Associate to appoint a directions-hearing. Alternatively, the parties may forward to the Associate consent orders signed by all parties, which varies the timetable except in relation to listings.
All subpoenas to produce documents to the Court prior to the hearing shall adopt the second option in the approved form of subpoena, striking out the words “give evidence and” in that option and inserting the words “You do not need to attend, if you deliver or send this subpoena or a copy of it and the documents or things specified in the Schedule to the Registry 2 clear days prior to that date” in Part B. All such subpoenas are to be made returnable before a Registrar at a time and place inserted by the Registry in Part B.
The parties may file and serve on another party a notice to produce documents at a listing before a Registrar on a date appointed by the Registry.
The proceedings be the subject of mediation, pursuant to Part 27 of the Federal Circuit Court Rules 2001 (Cth), between the parties to be held on or before 13 June 2013, or any other such date as the Registrar may direct, or as the parties may agree, with the mediation to be conducted by a Registrar of the Federal Circuit Court. Such mediation to be completed by 22 February 2014.
The applicant file and serve a written outline of submissions and list of authorities 14 days before the hearing.
The first respondent file and serve a written outline of submissions and list of authorities 7 days before the hearing.
Matter to be listed for hearing on 5 to 6 March 2014.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2244 of 2013
| MARY ROSE SALUBRE |
Applicant
And
| MICHAEL GREGORY JONES AS TRUSTEE FOR THE BANKRUPT ESTATE OF PASCUAL |
First Respondent
| THE OWNERS STRATA PLAN NO 10564 |
Second Respondent
| JAMES A. LOXTON |
Third Respondent
REASONS FOR JUDGMENT
There comes before me today an application for an interim order in a bankruptcy of Myla Lontok Pascual. The application is not made by the bankrupt. It is made by Ms Salubre, who claims that she is the beneficial owner of a property bearing title number 8/SP10564 and known as 8/557 Victoria Road, Ryde, New South Wales, 2112.
Ms Salubre has brought substantive proceedings against the trustee of Ms Pascual’s estate seeking declarations that Ms Pascual held the property on trust for her and that the trustee pay over to her the net balance of moneys from the sale of the property being agreed, for the purposes of these proceedings, as being $103,274.93.
As Mr Allen, who appears on behalf of the applicant, tells the court, in order for interlocutory relief such as this to be made the court must be satisfied of two matters: that there is a prima facie reasonable case to be argued on the part of the applicant, and secondly, that the balance of convenience would be in favour of the applicant.
It is not in dispute that this case has had a number of unusual twists and turns. Although it is alleged that the property was bought in the name of Ms Pascual as a trustee, the stamp duty endorsed stamp on the document indicates that Ms Pascual took advantage of the State’s first home buyers scheme to avoid any stamp duty on the purchase of the property; something that is specifically prohibited under s.73 of the Duties Act 1997 (NSW). The property was bought in 2007 and yet no effort was made to correct the title before Ms Pascual became bankrupt as a result of alleged non-payment of strata levies. I should say at this stage one thing that I have learned from 14 years on the bench specialising in bankruptcy matters is that more people get themselves into trouble by not paying strata levies than any other single form of debt. What invariably happens is there is a dispute over a small amount of money between the owner and the strata company that accelerates and expands until in the end the owner’s property is sold and most of the money goes to the bankruptcy trustee. This appears to be one such case.
It was only after Ms Pascual had been made bankrupt, as a result of allegedly not paying the strata levies – which Ms Salubre says were her duty to pay and were paid, and the trustee sought to have himself registered as proprietor of the property – that Ms Salubre came out of her shell and asserted her ownership of the property. There were then no less than three cases in the Supreme Court of New South Wales, ostensibly involving a caveat being placed upon the title of the property by Ms Salubre. None of those cases ever came to final determination, and each time there was a judgment given against Ms Salubre, not only dismissing the proceedings but also ordering her to pay costs. As the defendant in each case was the trustee, it will be clear that he has a substantial set-off against Ms Salubre under any circumstances.
Whilst I accept the provisions of the Civil Procedure Act 2005 (NSW) and Civil Procedure Regulation 2012 (NSW) that a consent dismissal does not constitute an admission, it hardly behoves someone who has had three opportunities to put their case for ownership of the property in one court to come to this one and seek an order freezing the balance of the proceedings of sale – which in all the circumstances would rightly belong to the trustee for the benefit of the creditors. One such creditor would be the trustee himself as a creditor for his costs and disbursements including those he would have laid out in defending the proceedings by Ms Salubre that she lost and he succeeded in.
There are some indications that Ms Salubre may have a claim to some part of the property. She alleges that she can establish beyond doubt that she paid the deposit. She said she also paid the mortgage, and no doubt that can be proved, the same with the rates. If all these things do come out in her favour, a court, including this one, may well come to the conclusion that the property is not a part of the bankrupt’s estate. But Mr Bors, who appears for the trustee, does not admit any of these matters. And he points out, rightly in my view, that the trustee is an officer of the court, and a partner in reasonably well known firm of insolvency practitioners who could in all the normal circumstances be expected to repay any money allegedly wrongfully paid to him. This is something which I believe it is important that the court should recognise, and I certainly note that Mr Allen made no suggestion that there was any danger that the money could not be repaid. He also acknowledged, as he had to, the substantial set-off that the trustee might have even if it was later found that his client was, in fact, the beneficial owner of the property. This is because the set-off relates to costs in respect of proceedings that for reasons of her own Ms Salubre never allowed to go to conclusion.
Mr Allen tells the court that his client is in a position to proceed hastily with her case. He tells that he has prepared, but not yet had sworn, an affidavit from probably the most important witness in the case, namely the bankrupt. He tells that the proceedings should be capable of being heard within a reasonably short space of time, if this court had the facilities and resources to do so. That is also a good reason for not granting the application.
I am unpersuaded by Mr Allen’s arguments, notwithstanding the skill with which they were put. I would not propose to make the orders sought, and in those circumstances I must make an order that the applicant on the notice of motion pays the respondent’s costs.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Judge Raphael
Associate:
Date: 24 October 2013
2
0
2