Sutherland v Estate of Ek Kiang Oey

[2015] FCCA 1980

FEDERAL CIRCUIT COURT OF AUSTRALIA

SUTHERLAND v ESTATE OF EK KIANG OEY [2015] FCCA 1980

Catchwords:
BANKRUPTCY – Application for order under s.146 of the Bankruptcy Act 1966 (Cth) (Act) that the distribution of dividends proceed as if bankrupt had filed a statement of affairs as required by the Act – application granted.

Legislation:

Bankruptcy Act 1966 (Cth), s.146

Official Trustee in Bankruptcy; in the matter of Shaw [1999] FCA 968
Re Sturt; Ex parte Official Trustee in Bankruptcy (2001) 117 FCR 1

Applicant: RODERICK MACKAY SUTHERLAND

Respondent: ESTATE OF EK KIANG OEY

File Number: SYG 1734 of 2015

Judgment of: Judge Manousaridis

Hearing date: 15 July 2015

Delivered at: Sydney

Delivered on: 22 July 2015

REPRESENTATION

Solicitors for the Applicant: Mr F Shafiq of J S Mueller & Co

No appearance by or on behalf of the Respondent.

ORDERS

1. Service of the application filed on 25 June 2015 is dispensed with.

2. Pursuant to s.146 of the Bankruptcy Act 1966 (Cth) (Act) the distribution of dividends from the estate of Ek Kiang Oey (bankrupt) to the creditor which has proved its debts proceed in accordance with Part VI, Division 5 of the Act as if the bankrupt or the bankrupt’s legal representative had filed a statement of his affairs and the creditor had been stated to be a creditor therein.

3. The applicant’s costs of the application filed on 25 June 2015 be paid from the estate of the deceased bankrupt.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1734 of 2015

RODERICK MACKAY SUTHERLAND

Applicant

And

ESTATE OF EK KIANG OEY

Respondent

REASONS FOR JUDGMENT

1. Before the Court is an application by the trustee in bankruptcy (Trustee) of the estate of Mr Ek Kiang Oey for an order under s.146 of the Bankruptcy Act 1966 (Cth) (Act) which provides:

   Where a bankrupt has failed to file a statement of his or her affairs as required by this Act, the Court may, on the application of the trustee, upon such terms as it thinks fit, order that distribution of dividends amongst the creditors who have proved their debts shall proceed in accordance with this Division as if the bankrupt had filed a statement of his or her affairs and those creditors had been stated to be creditors in it.

2. The Trustee was appointed trustee in bankruptcy of the estate of Mr Oey as a result of a sequestration order made by this Court on 30 May 2013. Mr Oey passed away on 12 August 2013 without having filed a statement of his affairs as required by the Act.[1]

   [1] Affidavit of R M Sutherland, 17.06.2015, [2]-[3]

3. Section 146 of the Act “is intended to facilitate the distribution of dividends among the creditors of the bankrupt in circumstances where the trustee has not had the benefit of a statement of affairs prepared by the bankrupt”.[2] The purpose of s.146 of the Act is “to give the Court the means of ensuring that the absence of a statement of affairs does not prejudice those with an interest in the bankrupt’s affairs”.[3] Relevant factors to the exercise of the discretion conferred by s.146 of the Act include whether creditors have been notified of the application and have had the opportunity to be heard,[4] and whether the trustee has taken steps to ascertain whether there are creditors other than those who have come to the trustee’s attention by filing a proof of debt.[5]

   [2] Re Sturt; Ex parte Official Trustee in Bankruptcy (2001) 117 FCR 1 at [14] (Sackville J)

   [3] Official Trustee in Bankruptcy; in the matter of Shaw [1999] FCA 968 at [4] (Gyles J)

   [4] Re Sturt; Ex parte Official Trustee in Bankruptcy (2001) 117 FCR 1 at [19] (Sackville J)

   [5] Re Sturt; Ex parte Official Trustee in Bankruptcy (2001) 117 FCR 1 at [19] (Sackville J)

4. The evidence reveals, and I find, the following. During June and July 2013 the Trustee sent to Mr Oey letters enclosing a Bankruptcy Information Sheet and a blank statement of affairs, and on 4 and 12 June 2013, an employee of the Trustee attempted to telephone Mr Oey. On 12 August 2013 Mr Oey passed away. Communications between employees of the Trustee and Mr Oey’s sister-in-law revealed that no action has been taken by any member of Mr Oey’s family to administer Mr Oey’s estate.[6] A search of the records of the Supreme Court of New South Wales undertaken on 24 June 2015 revealed no record of any proceeding having been commenced or orders made for the administration of the estate of Mr Ek Kiang Oey.[7]

   [6] Affidavit of R M Sutherland, 17.06.2015, [5]

   [7] Affidavit of B Allen, 24.06.2015, [1]-[2]

5. On 23 January 2014 employees of the Trustee attended Mr Oey’s home to collect Mr Oey’s books and records.[8] On 18 February 2014 the Trustee issued to persons (creditors) whom the Trustee believed were creditors of Mr Oey a Notice to Creditors of Intention to Declare a First and Final Dividend.[9] On 30 April 2014 the Trustee forwarded letters to those creditors who did not respond to the Notice to Creditors of Intention to Declare a First and Final Dividend; and on 11 August 2014 the Trustee again issued to all creditors a Notice to Creditors of Intention to Declare a First and Final Dividend.[10] On 13 August 2014 the Trustee arranged to be published in the Daily Telegraph a Notice to Creditors of Intention to Declare a First and Final Dividend. Only one of the creditors (admitted creditor) lodged a Proof of Debt Form.

   [8] Affidavit of R M Sutherland, 17.06.2015, [8]

   [9] Affidavit of R M Sutherland, 17.06.2015, [9]

   [10] Affidavit of R M Sutherland, 17.06.2015, [10]-[11]

6. The Trustee has given notice of his intention to apply for an order under s.146 of the Act to the admitted creditor, and also to the sister-in-law and brother of Mr Oey.[11] The Trustee, however, has not given notice of his intention to apply to any other person. In my opinion, given the Trustee had provided to creditors on at least two occasions a Notice to Creditors of Intention to Declare a First and Final Dividend, it was unnecessary for the Trustee to have given such notice. I therefore propose to order that service of the application be dispensed with.

   [11] Affidavit of J S Mueller, 06.07.2015, [2]-[5]

7. I am satisfied the Trustee has undertaken all reasonable steps to ascertain the creditors of Mr Oey, and that the Trustee has given reasonable notice to those creditors of his intention to make a distribution from the estate. I am otherwise satisfied that I should make an order under s.146 of the Act, and an order that the Trustee’s costs of the application be paid from the estate of Mr Oey.

I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate: 

Date:  22 July 2015