Shields v Official Receiver in Bankruptcy
[1996] FCA 441
•15 MAY 1996
CATCHWORDS
BANKRUPTCY - practice and procedure - right to prosecute appeal - whether sufficient interest as a creditor of the bankrupts to challenge decision of primary judge - appeal dismissed as incompetent.
APPEALS - right to prosecute - appellant was applicant in respect of different matter in same proceedings before trial judge - whether sufficient interest as a creditor of the party in proceedings appealed from to challenge decision of primary judge - appeal dismissed as incompetent.
Federal Court of Australia Act 1976 s24(1)
Sen v The Queen (1991) 30 FCR 173
Johnson v Lapham (1992) 6 WAR 359
ISAAC JOHN MACKAY SHIELDS v THE OFFICIAL RECEIVER IN BANKRUPTCY AND THE OFFICIAL TRUSTEE IN BANKRUPTCY NG 948 of 1995
Black CJ, Carr and Kiefel JJ
Sydney
15 May 1996
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 948 of 1995
)
GENERAL DIVISION )
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:ISAAC JOHN MACKAY SHIELDS
Appellant
AND:OFFICIAL RECEIVER IN BANKRUPTCY
First Respondent
OFFICIAL TRUSTEE IN BANKRUPTCY
Second Respondent
COURT: BLACK CJ, CARR and KIEFEL JJ.
DATE:15 MAY 1996
PLACE:SYDNEY
MINUTES OF ORDER
THE COURT ORDERS THAT:
The appeal be dismissed as incompetent.
The appellant pay the respondents' costs of the appeal.
N.B.Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 948 of 1995
)
GENERAL DIVISION )
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:ISAAC JOHN MACKAY SHIELDS
Appellant
AND:OFFICIAL RECEIVER IN BANKRUPTCY
First Respondent
OFFICIAL TRUSTEE IN BANKRUPTCY
Second Respondent
COURT: BLACK CJ, CARR and KIEFEL JJ.
DATE:15 MAY 1996
PLACE:SYDNEY
REASONS FOR JUDGMENT
BLACK CJ: I agree with the orders proposed by Carr J and with the reasons he gives for those orders. I would add only these comments on the question of the competency of the appeal.
This appeal is from a judgment of Beazley J who had before her applications by three applicants - Isaac John Mackay Shields, Geoffrey Neil Keith Shields and Norma Rose Shields - but those applicants came before her Honour in respect of different matters.
The first applicant, who is the present appellant, Isaac John Mackay Shields, was before her Honour because he claimed that a notice issued to him under s77A of the Bankruptcy Act 1966 should be set aside. As to that, her Honour noted that although the claim was made in the same application in which were raised separate questions concerning any requirement binding on the Trustee in Bankruptcy to obtain a warrant, and concerning the Nissan Patrol station wagon, they were being heard together as a matter of convenience. Her Honour in fact deals with this matter specifically on page 2 of her reasons for judgment.
Therefore, although Mr Isaac Shields is shown as an applicant and as a party to the proceedings before Beazley J which are the subject of this appeal, in truth he was only an applicant in respect of one part of the proceedings. For the reasons given by Carr J he cannot maintain an appeal in respect of those parts of the proceedings as to which he was not an applicant. Were it otherwise, the basis of the rule that parties need a sufficient interest to bring applications to the Court would in a sense be undermined because persons without such an interest would then be able to come into the process at the appellate level.
I certify that this and the preceding 1 page are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black.
Associate:
Date:
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 948 of 1995
)
GENERAL DIVISION )
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:ISAAC JOHN MACKAY SHIELDS
Appellant
AND:OFFICIAL RECEIVER IN BANKRUPTCY
First Respondent
OFFICIAL TRUSTEE IN BANKRUPTCY
Second Respondent
COURT: BLACK CJ, CARR and KIEFEL JJ.
DATE:15 MAY 1996
PLACE:SYDNEY
REASONS FOR JUDGMENT
CARR J: In this matter the appellant, Mr Isaac John Mackay Shields, initially appealed against three separate but related decisions of a judge of this Court.
The first was that the trustee of the bankrupts' estate in this matter was not required to obtain a warrant under section 130 of the Bankruptcy Act 1966 before entering upon property occupied by the bankrupts for the purpose of attaching property. The second was that a Nissan Patrol station wagon was divisible property of the bankrupts in this matter. The third decision was to dismiss an application that a notice under section 77A of the Act addressed to Mr Isaac Shields be set aside.
At the hearing of this appeal Mr Isaac Shields abandoned so much of his appeal as related to the third decision. I will now deal briefly with the factual background.
On 29 January 1992 Geoffrey Neil Keith Shields and his wife, Norma Rose Shields, lodged their petition in bankruptcy. Mr Geoffrey Shields is Mr Isaac Shields' brother. By virtue of the provisions of section 56 of the Act, Mr and Mrs Geoffrey Shields became bankrupt on that date. As no registered trustee had consented to act as their trustee, the Official Trustee in Bankruptcy, the second respondent, thereby became trustee of their estate.
As her Honour explained in her reasons for judgment, section 18 of the Act contains provisions whereby the Official Receiver, the first respondent, may in the name of and on behalf of the Official Trustee, exercise any of the powers or perform any of the functions of the Official Trustee. That is what happened in the present matter.
At the time of their bankruptcy Mr and Mrs Geoffrey Shields were the registered proprietors of a farming property known as White Gums at Nyngan in New South Wales. That property was the subject of a registered mortgage in favour of Mr Isaac Shields and his mother. On the farm there was certain equipment which formed part of the bankrupts' estate and which the Official Trustee wished to realise. Some of that equipment was the subject of a bill of sale to Mr Isaac Shields.
On 17 June 1994 Mr Peter Dwyer, the Senior Assistant Official Receiver, entered upon White Gums for the purposes of taking possession of the above-mentioned equipment. Mr Dwyer was accompanied by the sheriff and possibly a third person. A local real estate agent was also in attendance. It would appear that the original purpose of their visit to the farm was to identify the unencumbered property of the bankrupts and conduct an auction sale.
After Mr Dwyer identified himself he and Mr Geoffrey Shields had the following conversation [and I incorporate by reference the exchange between Mr Geoffrey Shields and Mr Dwyer which appears in the reasons for judgment of the learned primary judge.]:
Geoffrey Shields:
"Oh, you're bloody Dwyer."
Mr Dwyer:
"Yes, and I am here to list everting and then take it all to be sold."
Geoffrey Shields:
"You have no right to be here. Nothing belongs to me. It all belongs to other people."
Mr Dwyer:
"I will do what I like and no one can stop me."
Immediately after the conversation Mrs Norma Shields broke down and her husband called an ambulance. The ambulance arrived a short time later and conveyed Mrs Norma Shields to Nyngan Hospital where she was admitted for three days.
After the ambulance had left the sheriff's officer said to Mr Geoffrey Shields,
"Let them go ahead because they have the right and they are your trustees and are here to look after your interests".
Mr Dwyer and the Sheriff then took an inventory of equipment on the property. Mr Geoffrey Shields did not interfere with their doing so.
After the listing had been completed Mr Dwyer told Mr Geoffrey Shields and his son James that no-one was authorised to remove the equipment which had been identified as the bankrupt's property. The equipment, including the Nissan Patrol station wagon, was later removed from White Gums to Sydney where it was sold at auction. The Nissan Patrol station wagon was sold for $3000.
Her Honour held that it was not necessary for the trustee to obtain either an order under section 30 of the Act or a warrant under section 130 of the Act before entering on to the property occupied by the bankrupts. She also held that if the trustee does not obtain the consent, leave or licence of the bankrupt to enter the property, such entry would be unauthorised.
Her Honour found as a fact that by allowing Mr Dwyer and the Sheriff to remain on the property and to attach the goods Mr Geoffrey Shields yielded to Mr Dwyer's presence on the property and that that was sufficient to constitute consent to Mr Dwyer's entry. Mr Isaac Shields' main ground of appeal is that her Honour erred in characterising what occurred as amounting to consent in all the circumstances.
Her Honour held that as the Nissan Patrol station wagon had been sold for $3000 it had an aggregate value greater than $2500. Her Honour further held that for the purposes of determining aggregate value the cost of sale should not be deducted. Her Honour
gave her reasons for reaching that conclusion. Mr Isaac Shields does not challenge this conclusion.
Finally, in relation to the Nissan Patrol station wagon, her Honour rejected a submission that the Official Receiver's seizure of that vehicle was unlawful because he had failed to act in conformity with article 3(1) of the United Nations Convention on the Rights of the Child. This submission was based on evidence that the station wagon was required as transport for the bankrupt's 14 year old son who has a learning disability and needs constant help with his education.
I now turn to the question whether Mr Isaac Shields has the right to prosecute this appeal. As I have just mentioned, at the hearing of this appeal Mr Isaac Shields abandoned so much of his appeal as related to her Honour's dismissal of his application for relief in respect of the section 81 examination and the section 77A notice.
The respondents submitted that Mr Isaac Shields has no right to prosecute this appeal in respect of the remaining matters of the entry on to the bankrupt's farm and whether the Nissan Patrol station wagon fell within the bankrupt's estate. This was put on the basis that Mr Isaac Shields has no interest in those matters.
Section 24 subsection (1) of the Federal Court of Australia Act refers to appeals against judgments. The only judgment which her Honour made in relation to Mr Isaac Shields was to dismiss his application in respect of the section 77A application.
The decision of the Full Court of this court in Sen v The Queen, 1991 30 FCR, page 173, although perhaps not directly in point, confirms that section 24 subsection (1) should be construed as giving a right of appeal only to a party - that is, a relevant party. That decision was approved by his Honour White J in the case of Johnson v Lapin, 1992 6 Western Australian Reports, page 359 at page 364,
Mr Isaac Shields put forward as a further basis amounting to a sufficient interest to ground a right to prosecute this appeal the fact that he was one of the mortgagees named in the mortgage registered against the title to White Gums. The evidence is not entirely clear what the position was on 17 June 1994, being the date upon which Mr Dwyer entered the property.
It may be, as Mr Isaac Shields suggested, that by that time his shares in that mortgage had been transferred to two other persons named in an exhibit which was passed up - the two other persons being James Isaac Keith Shields and Jennifer Margaret Heaton. Or - and Mr Isaac Shields put this forward as a further alternative - it may have been that the shares which he previously held in that mortgage had vested in the trustee of a family trust in respect of which Mr Isaac Shields was the appointor and his children were beneficiaries under the terms of a discretionary trust.
In any of those circumstances I do not think sufficient has been shown to amount to an interest which would give Mr Isaac Shields the right to prosecute this appeal. It is true that Mr Isaac Shields has to date been treated as a creditor of the bankrupts. However, that has no bearing, in my opinion, on whether he has sufficient interest to challenge her Honour's decisions on the matter of entry on to the farming property and the Nissan Patrol motor vehicle.
In my view, Mr Isaac Shields has no legal or other relevant interest in those questions. They may be matters which concern the bankrupts, but they have not exercised their right to appeal.
For the foregoing reasons I would dismiss the appeal as being incompetent. On the matter of costs, I would order the appellant to pay the respondent's costs of the appeal.
I certify that this and the preceding 5 pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Carr.
Associate:
Date:
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 948 of 1995
)
GENERAL DIVISION )
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:ISAAC JOHN MACKAY SHIELDS
Appellant
AND:OFFICIAL RECEIVER IN BANKRUPTCY
First Respondent
OFFICIAL TRUSTEE IN BANKRUPTCY
Second Respondent
COURT: BLACK CJ, CARR and KIEFEL JJ.
DATE:15 MAY 1996
PLACE:SYDNEY
REASONS FOR JUDGMENT
KIEFEL J: I agree with the orders proposed and with the reasons given by Carr J and concur with the additional observations of the Chief Justice.
I certify that this page is a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.
Associate:
Date:
The appellant appeared in person
Counsel for the respondents: J T Johnson
Solicitors for the respondents: Sally Nash & Co
Hearing:15 May 1996
Where heard: Sydney
Judgment:15 May 1996 (ex tempore)
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