Scott (Trustee), in the matter of Valencia (Bankrupt) v Valencia

[2025] FedCFamC2G 1070

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Scott (Trustee), in the matter of Valencia (Bankrupt) v Valencia [2025] FedCFamC2G 1070

File number(s):	MLG 864 of 2025
Judgment of:	JUDGE CORBETT
Date of judgment:	16 June 2025
Catchwords:	BANKRUPTCY – Application made by Trustee of the bankrupt estate seeking possession of land and other orders - Where no statement of affairs filed by the Bankrupt – Refusal to deliver possession of land – Mandatory injunctions.
Legislation:	Bankruptcy Act 1966 (Cth), ss 30, 54(1)
Division:	Division 2 General Federal Law
Number of paragraphs:	8
Date of last submission/s:	16 June 2025
Date of hearing:	16 June 2025
Place:	Melbourne
Counsel for the Applicant	Mr N Paterson
Solicitor for the Applicant	Collins & Stephens
Solicitor for the Respondent	The respondent appeared in person, self-represented

ORDERS

MLG 864 of 2025

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

IN THE MATTER OF VALENCIA, BANKRUPT

ANDREW JOHN SCOTT (AS TRUSTEE OF THE BANKRUPT ESTATE OF CECILIA VERONICA VALENCIA)

Applicant

ORDER MADE BY:	JUDGE CORBETT
DATE OF ORDER:	16 JUNE 2025

THE COURT ORDERS THAT:

1.By 4pm on 30 June 2025, the respondent file with the Official Receiver a statement of her affairs and furnish a copy of the statement to the applicant (the Trustee) pursuant to s 54(1) of the Bankruptcy Act 1966 (Cth) (Act);

2.Pursuant to s 30 of the Act, the Trustee is granted an order for possession of the land and improvements known as ‘6 Kate Place, Sunshine’ in the State of Victoria, being the land described in Certificate of Title Volume 10438 Folio 834, being Lot 2221 on Plan of Subdivision 412841E (the Property);

3.By 4pm on 14 July 2025, the respondent vacate the Property and remove from the Property all vehicles, personal property and chattels which have not vested in the Trustee by reason of the sequestration order made against the respondent’s estate on 14 December 2023 (Personal Property);

4.By 4pm on 14 July 2025, the respondent deliver up all keys, gate access controls, security codes (if any) and any other methods of access for the Property and buildings and improvements on it to the Trustee at his address which is ‘2 Riverside Quay, Southbank VIC 3006’, or to his solicitor at the solicitor’s address which is ‘Level 13, 200 Queen Street, Melbourne VIC 3000’;

5.From 4pm on 14 July 2025, the respondent, her servants or agents, be restrained from:

(a)Entering on or remaining on the Property; and

(b)Hindering the advertising and sale of the Property by the Trustee.

6.The Trustee’s reasonable costs and disbursements of this proceeding and the Trustee’s reasonable renumeration, costs and expenses of attending to remove and dispose of any Personal Property on the Property, advertising and preparing the Property for sale, and of and incidental to the sale of the Property be paid in priority out of the bankrupt estate of the respondent pursuant to s 109(1) of the Act; and

7.Liberty to apply.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)( dfg) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT
(Revised from transcript)

JUDGE CORBETT

1. This is an application made 18 March 2025 by the Trustee of the bankrupt estate of Mrs Cecilia Veronica Valencia (Trustee).

2. The Trustee seeks an order that Mrs Valencia be compelled to provide a statement of affairs identifying her assets and liabilities pursuant to s 54(1) of the Bankruptcy Act 1966 (Cth) (Act) and orders for:

   (a)Possession of the property described in certificate of title, Volume 10438, Folio 834, which is the land and improvements known as 6 Kate Place, Sunshine (property);

   (b)Delivery of keys, security codes and gate access controls to property;

   (c)Costs and disbursements of and incidental to this application and the proposed sale of the property; and

   (d)An order in the nature of an injunction restraining Mrs Valencia from interfering with the proposed sale of the property by the Trustee.

3. This proceeding was listed for a directions hearing on 14 April 2025. On that occasion, Mr Paterson of counsel appeared for the Trustee and Mrs Valencia appeared self-represented, with the assistance of an interpreter fluent in the Spanish and English languages. At the hearing, Mrs Valencia raised several objections to the orders sought by the Trustee. I gave Mrs Valencia the opportunity to file and serve a response and affidavit setting out any grounds upon which she opposed the relief sought by the Trustee.

4. On 16 May 2025, Mrs Valencia filed an affidavit affirmed on 16 May 2025 (Exhibit R1) to which she annexed a number of medical reports, including a report from Mr Michael Hodgman, a clinical psychologist, dated 7 May 2025, various police statements and a ‘letter of appeal’. The letter of appeal set out Mrs Valencia's current situation, the history of a dispute that she had with the Bank of Melbourne, her late husband's illness and death and incidents of sexual abuse, personal trauma and misfortune. Mrs Valencia has led an unfortunate and traumatic life which has not been assisted by this bankruptcy. However, the affidavit does not disclose any legal grounds or other basis upon which she can resist the relief sought by the Trustee.

5. Section 30 of the Act empowers this Court to decide all questions, whether of law or of fact in any case of bankruptcy and make such orders as the Court considers necessary for the purpose of carrying out or giving effect to the Act.

6. The Trustee was appointed on 14 December 2023 and since that date has endeavoured to undertake the obligations of a Trustee under the Act. In support of the application for relief, the Trustee relies upon the affidavit and annexures of Robert Scott Ditrich sworn 17 March 2025 and the affidavit of Nicholas Garry Stephens affirmed 17 March 2025 and the annexures thereto. I am satisfied on that evidence that the relief sought in the application should be granted to the Trustee.

7. I am satisfied that Mrs Valencia has not provided a statement of affairs in accordance with s 54(1) of the Act. I am also satisfied that Mrs Valencia occupies the property which has been vested in the Trustee and is now registered in his name. I have considered the affidavit of Mrs Valencia, however, it does not contain any admissible evidence which could be relied upon in opposition to the relief sought, nor does it provide an explanation of why a statement of affairs has not been provided or why Mrs Valencia is not prepared to vacate the property. The property must be vacated and sold in order to affect the obligations of the Trustee to efficiently and as soon as reasonably practicable, administer the bankruptcy estate for the benefit of all creditors.

8. At the moment, apart from the petitioning creditor and the Australian Taxation Office, the Trustee is unaware of the actual creditors of Mrs Valencia, and he is entitled to know of them and to obtain the property vested in him for benefit of those creditors. Accordingly, I am prepared to make orders to the effect sought by the trustee in the application and in the proposed minute of orders attached to the Trustee’s outline of written submissions filed on 6 June 2025.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Corbett.

Associate:

Dated:       9 July 2025