Taylor v Walters
[2021] FCCA 713
•9 April 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Taylor v Walters [2021] FCCA 713
File number(s): SYG 38 of 2021 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 9 April 2021 Catchwords: BANKRUPTCY – application by trustee in bankruptcy for an order granting vacant possession of property occupied by the bankrupt. Legislation: Bankruptcy Act 1966 (Cth) ss 30, 58, 77(1)(g) Cases cited: Prentice v Fortune & Anor [2014] FCCA 2199 Number of paragraphs: 17 Date of hearing: 9 April 2021 Place: Sydney Solicitor for the Applicant: Mr P Fagan of Le Page Lawyers, by telephone Respondent: No appearance by the Respondent ORDERS
SYG 38 of 2021 IN THE MATTER OF JULIE MAREE WALTERS
BETWEEN: JOSHUA PHILIP TAYLOR
Applicant
AND: JULIE MAREE WALTERS
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
9 APRIL 2021
THE COURT ORDERS THAT:
1.Pursuant to sections 30 and 77(1)(g) of the Bankruptcy Act 1966 (Cth), by 14 May 2021 the respondent deliver up vacant possession of the premises known as 8/9-15 Blackfriars Street, Chippendale in the state of New South Wales, being the property comprised in Folio Identifier 8/SP18962 (Property).
2.In the event that the respondent fails to give up vacant possession of the Property in accordance with order 1, a writ of possession be issued forthwith in favour of the applicant.
3.By 14 May 2021 the respondent remove from the Property all vehicles, rubbish and chattels which have not vested in the applicant (personal property).
4.In the event that the respondent fails to comply with order 3, the applicant may remove and dispose of the personal property as he sees fit after 14 May 2021.
5.A sealed copy of these orders be served on the respondent by 16 April 2021 as follows:
(a)by sending the orders by ordinary prepaid post addressed to the respondent at 8/9-15 Blackfriars Street, Chippendale, NSW2008, being the respondent’s last known address;
(b)by placing a copy of the orders in a sealed envelope under the door of 8/9-15 Blackfriars Street, Chippendale, NSW2008; and
(c)by affixing a copy of these orders to the front door at 8/9-15 Blackfriars Street Chippendale, NSW2008 utilising an adhesive to prevent the order being torn off the door.
6.The applicant’s costs of this application set in the amount of $4886.11 be paid in priority from the bankrupt estate of the respondent.
7.If the respondent believes she has grounds for setting aside any of these orders, or if the respondent believes she is or she will be in a position to pay to the applicant such amounts as will be sufficient to enable her to be discharged from her bankruptcy, the respondent must by 7 May 2021 send a communication to the court registry and to the applicant in which she requests that this matter be listed before Judge Manousaridis.
8.The parties otherwise have liberty to apply in relation to any question that may arise in relation to the interpretation or implementation of these orders.
THE COURT NOTES THAT:
These orders have been amended pursuant to r 16.05(2)(h) of the Federal Circuit Court
Rules 2001 (Cth) by orders made on 13 April 2021.
REASONS FOR JUDGMENT
(Revised from transcript)
There is listed before me today, for hearing, an application filed by the trustee in bankruptcy (Trustee) of the estate of Julie Maree Walters (Bankrupt). In that application the Trustee seeks an order that the Bankrupt deliver possession of a property known as 8/9-15 Blackfriars Street, Chippendale, in the state of New South Wales, being the property comprised in Folio Identifier 8/SP18962 (Property). The Trustee also seeks orders consequential or otherwise related to the principal order that he seeks.
The background of the matter is as follows. The Bankrupt was made bankrupt by a sequestration order made on 28 November 2019. That sequestration order was made without the Bankrupt appearing to defend it or otherwise participating in the proceeding, which resulted in the making of the sequestration order. That set in motion the pattern of events that I am about to relate.
At the time of the sequestration order, the Bankrupt was the sole registered proprietor of the Property. On the making of the sequestration order, the Bankrupt’s interest in the Property vested in the Trustee, pursuant to s 58 of the Bankruptcy Act 1966 (Cth) (Act). The Property was and is not encumbered by any mortgage, or at least there is nothing to suggest on the title that the Property is encumbered by any mortgage or any charge.
After the Bankrupt’s interest in the property vested in the Trustee, the Trustee took steps to have his interest recorded in the title to the property, and as matters currently stand, the Trustee is the sole registered proprietor of the Property.
The evidence before me, which largely consists of an affidavit made by the Trustee, shows that on 9 December 2019 the Trustee wrote to the Bankrupt with a request that she file a statement of affairs. The evidence reveals that the Bankrupt has not done so. The Trustee has deposed that his staff had, on a number of occasions, and, in particular, on 18 December 2019, 13 January 2020, and 4 February 2020, attempted, but without success, to encourage the Bankrupt to provide a statement of affairs.
On 15 October 2020 the Trustee wrote to the Bankrupt, notifying her of the trustee’s intentions to commence a proceeding to recover possession of the Property. That met with no response from the Bankrupt. Eventually, the Trustee did file an application on 7 January 2021.
That application was served on the Bankrupt on 10 March 2021, and evidence of that service is provided by an affidavit made by Mr Christopher Zadravec. He deposes that he served the Bankrupt with the application, together with the affidavit of the Trustee, being the affidavit to which I have already referred. According to Mr Zadravec’s affidavit, the application and the affidavit of the Trustee were served personally to a person who answered “yes” to the question “are you Julie Maree Walters”, being the name of the Bankrupt.
The matter first came before me on 26 March 2021. There was no appearance by or on behalf of the Bankrupt at that hearing. I decided that I would not hear the application on that day, because I wanted to be satisfied that there were no peculiar circumstances such as age or incapacity or some other infirmities which would account for what the evidence reveals to have been the total non-engagement by the Bankrupt with the trustee, and, indeed, with the application the Trustee has filed for the recovery or possession of the Property.
There is before me – and I will mark as Exhibit A – an email the solicitor for the Trustee sent to the Bankrupt on 22 March 2021, which attached a draft form of orders which, in the email, the solicitor for the Trustee said the Trustee would be seeking at the hearing of the matter. In any event, on 26 March I adjourned hearing of the application to 9 April 2021, which is today. I did so on the basis of a request that I made to the solicitor for the Trustee that he bring before me, if he could, any person who can shed any information about the circumstances of the Bankrupt.
There is before me a copy of an email that the solicitor for the Trustee sent to what appears to be the email address of the Bankrupt on 26 March 2021 – and I will mark that as Exhibit B – in which the solicitor for the Trustee informed the Bankrupt that the solicitor appeared before this Court in relation to this matter. The email further stated that the matter has been adjourned to 9 April 2021 at 9.30 am. The email stated:
Please be advised that we will be requesting a hearing of our client’s application to proceed on that date.
The next part of the narrative is the events that have occurred today. When I came on the bench, there was, on the phone, the solicitor for the Trustee, but there was no suggestion that the Bankrupt had phoned in or attempted to phone. I should also add that there is before me an email – which I will mark as Exhibit C – from the trustee solicitor to the applicant sent on 6 April 2021. That email attaches an email the Court sent to the solicitor for the Trustee on 6 April 2021 confirming that the matter was listed before me at 9.30 am on 9 April 2021, and noting that the listing was to proceed by telephone and providing the dial-in details. As I said, the Bankrupt has not attempted to dial in to today’s hearing.
At the commencement of the hearing, Mr Fagan, the solicitor for the Trustee, informed me that the Trustee would be available by telephone to provide whatever information he might be able to give in relation to the Bankrupt. While waiting for the Trustee to phone in, Mr Fagan identified the material on which he relied and I read the relevant affidavits.
The Trustee, Mr Taylor, joined in, and he gave information in relation to the Bankrupt of which he was aware, and, in particular, inquiries that he had made, or persons on his behalf had made, to engage with the Bankrupt. The effect of what he said is that the Trustee believes that the Bankrupt holds or has held two different jobs, and inquiries were attempted to be made with representatives of who the Trustee believed were, or are, the bankrupt’s employers, but understandably those inquiries revealed very little information. The Trustee also received intelligence from members of the creditor strata committee that the Bankrupt was seen driving a car into and out of the building. The Trustee made a search of the registration number of that car but it was not linked to the Bankrupt. The Trustee also has access to bank statements.
Although the information is rather limited, there is nothing that the Trustee has conveyed to me which suggests that the Bankrupt suffers from any infirmity that would account for her non-engagement with the Trustee and with this proceeding. In those circumstances there is no reason why I should not proceed to make the orders, assuming it is within my power to make those orders. There is no question about my having such power. I examined that question in the judgment of Prentice v Fortune & Anor [2014] FCCA 2199. In paragraph 11 of those reason I said:
[T]here is a substantial body of authority to the effect that the Act [that is the Bankruptcy Act 1966 (Cth)] confers jurisdiction on this Court to order a bankrupt to vacate possession of real property that forms part of the bankrupt estate. The source of the Court’s power to order possession has been held to lie in the combined operation of s.77(1)(g) and s.30 of the Act. [See, for example, Horne (as trustee of the Bankrupt Estate of Sekulovski) v Sekulovski [2009] FCA 1164 (Tracey J); Cook v Tagamilitsky [2001] FMCA 117; Vince (Trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis (No 2) [2012] FCA 1298 (Bromberg J)]. Paragraph (g) of s.77(1) provides, among other things, that, unless excused by the trustee, or prevented by illness or other sufficient cause, the bankrupt must “aid to the utmost of his of her power in the administration of his or her estate”. Paragraph (b) of s.30(1) provides that the Court may make such orders as the Court considers necessary for the purposes of carrying out or giving effect to the Act.
In these circumstances I am prepared to make, subject to modifications I will now address, the orders that the Trustee seeks.
There are two modifications. The first is that instead of giving the Bankrupt 28 days to vacate the Property, I will give her 35 days. The Bankrupt, on the material before me, has had notice since December of 2020, at least, of the Trustee’s intention of seeking to apply to gain possession of the Property. I also propose to include an order informing the Bankrupt that if she believes she has grounds for setting aside the orders I propose to make, or if she has grounds for believing she will be able to pay such amount as will be necessary to secure her discharge from bankruptcy, she can apply to the Court for the matter to be relisted before me.
I should also note that the Trustee seeks costs in the scale amount. Those costs are said to be $4,886.11. The Trustee also seeks an order that those be paid out of the bankrupt estate. I am satisfied that it is appropriate to make the costs order, and I am also satisfied that the amount sought – and that amount includes disbursements – is reasonable.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 13 April 2021
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