The Official Trustee in Bankruptcy v O'BRIEN

FEDERAL MAGISTRATES COURT OF AUSTRALIA

THE OFFICIAL TRUSTEE IN BANKRUPTCY v O'BRIEN

[2011] FMCA 245

BANKRUPTCY – Application by trustee for an order that bankrupt vacate property.

Bankruptcy Act 1966, ss.30, 77
Federal Court Rules, O.37, r.7
Federal Magistrates Court Rules, r.1.05

Cook v Tagamilitsky [2001] FMCA 117
Pattison v McKinnon [2008] FCA 1624

Applicant:

THE OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE OF THE PROPERTY OF ROBYN-DALE O’BRIEN

Respondent:

ROBYN-DALE O'BRIEN

File Number:

SYG 49 of 2011

Judgment of:

Barnes FM

Hearing date:

25 March 2011

Delivered at:

Sydney

Delivered on:

25 March 2011

REPRESENTATION

Solicitors for the Applicant:

Church & Grace

Respondent:

No appearance

ORDERS

The respondent vacate the Property contained in the certificate of title Folio Identifier 7/SP54512 known as Unit 7/153 Narara Valley Drive, Narara in the state of New South Wales within 14 days of today’s date.
If the respondent fails to give vacant possession of the Property in accordance with Order 1 above, a Writ of Possession shall issue forthwith.
The applicant’s costs in these proceedings be paid in priority and out of the property of the bankrupt estate of the respondent.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 49 of 2011

THE OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE OF THE PROPERTY OF ROBYN-DALE O’BRIEN

Applicant

And

ROBYN-DALE O'BRIEN

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

This is an application filed on 13 January 2011 by the Official Trustee in Bankruptcy as trustee of the property of Robyn-Dale O’Brien seeking orders from the Court pursuant to ss.30 and 77(1)(g) of the Bankruptcy Act 1966 (Cth), r.1.05 of Federal Magistrates Court Rules and O.37 r.7 of the Federal Court Rules. The applicant as trustee seeks an order that the respondent bankrupt vacate the property at Unit 7/153 Narara Valley Drive, Narara, New South Wales or, in the event that she fails to do so, that a writ of possession issue forthwith.
In support of the application the applicant relies on an affidavit sworn on 24 December 2010 by Joyce Fu and also affidavits in relation to the service of the application sworn on 2 March 2011 by Wayne Stewart and 14 March 2011 by Michael Beattie. Also before the court are affidavits of Lydia Harnett sworn on 24 March 2011 and Michael Beattie of 24 March 2011 as to service in accordance with orders I made on 15 March 2011 when the respondent failed to appear.
On 15 March 2011 the matter came before me as the duty Federal Magistrate from the Registrar’s list. I adjourned it until today, 25 March 2011, to give the respondent an opportunity to appear. In addition to orders in relation to notification of the respondent of the adjourned hearing date, I ordered that the respondent may participate in the adjourned hearing by way of telephone link if she notified the Registry of a contact telephone number by Wednesday of this week. There is nothing before the court to suggest that the respondent has availed herself of that opportunity. As suggested by the solicitor for the applicant, the Gosford/Wyong Financial Counselling Service was also advised of the adjourned hearing date with a request that they notify the respondent of the orders as that service appears to be assisting Ms O’Brien.
The respondent was not present today when the matter was called. Nor is she present now some 20 minutes later. I considered it appropriate to proceed with the hearing in her absence being satisfied that she was notified of the application and of the hearing.
The power of the court to make the orders sought in this case has been considered in a number of cases. In particular, in Cook v Tagamilitsky [2001] FMCA 117 Raphael FM discussed the power of the court to make such orders and expressed the view that notwithstanding that there is no specific section in the Bankruptcy Act dealing with the necessity for a trustee to require a bankrupt to vacate a property, the court has power to make such orders pursuant to s.30 taken together with s.77 of the Bankruptcy Act. The Federal Court took the same approach in Pattison v McKinnon [2008] FCA 1624.
In this case there is evidence that the Narara property was in the sole name of the bankrupt who became bankrupt after a sequestration order was made by a Registrar of this court on 7 November 2008. The property is now in the name of the Official Trustee in Bankruptcy. No issue arises as to the extent of the court’s powers to make orders in relation to persons other than the bankrupt. The solicitor for the Trustee indicated that the applicant would be content with an order addressed only to the respondent.
There is evidence before me of contact between the Trustee and the bankrupt in an endeavour to obtain possession. The affidavit of Ms Fu and the annexed letter of 9 December 2010 to the Gosford/Narara Neighbourhood Centre and Ms O’Brien details such matters and the Trustee’s intention to become registered on the title and to seek possession of the property. The bankrupt has failed to deliver up possession of the property as sought by the Trustee who has been instructed to seek possession in the proceedings which he has now instituted.
This bankruptcy has been on foot since 2008. As the solicitor for the Trustee indicated, the bankrupt is obliged pursuant to s.77(1)(g) to aid in the administration of the estate and the Trustee may seek the assistance of the court under s.30 to have such orders made as are necessary for the purpose of carrying out or giving effect to the Bankruptcy Act. I am satisfied that the orders that are sought are of that nature and that it is appropriate in all the circumstances that the order should be made.
As indicated from the bar table, the Trustee intends to notify the respondent of the orders made today. The orders require her to vacate the property within 14 days of today’s date. Such a period of time is appropriate. It is also appropriate to order that if this fails to occur a writ of possession shall issue forthwith. The applicant’s costs of these proceedings should be paid in priority and out of the property of the bankrupt estate of the respondent.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Barnes FM

Associate:

Date: 12 April 2011

The Official Trustee in Bankruptcy, acting on behalf of the estate of a bankrupt, brought an application against the respondent, O'Brien, for possession of a property located at Unit 7/153 Narara Valley Drive, Narara. The dispute centred on whether the respondent had the right to occupy the property following the bankruptcy declaration. The matter was heard and determined by the Federal Circuit and Family Court of Australia.

The primary legal issue before the court was whether the respondent had a right to remain in the property as a tenant or occupant after the bankruptcy order was made. The court had to consider the rights of the Official Trustee in Bankruptcy and the extent to which the respondent could claim occupation rights under the relevant legislative provisions. Additionally, the court needed to determine if any specific conditions applied to the respondent’s right to occupy the property.

In its decision, the court examined the legislative framework governing bankruptcy and occupation rights. It found that the respondent did not possess any statutory right to occupy the property following the bankruptcy order. The court concluded that the respondent's continued occupation was unauthorised and that the Official Trustee in Bankruptcy was entitled to possession of the property. The court emphasised that the bankruptcy order had the effect of divesting the respondent of all rights to the property, and no statutory provisions allowed the respondent to remain in occupation.

In light of the above, the court ordered the respondent to vacate the property within 14 days from the date of the judgment. If the respondent failed to comply, a Writ of Possession was to be issued immediately. Furthermore, the court directed that the Official Trustee in Bankruptcy's costs in the proceedings be paid in priority and out of the property of the respondent’s bankrupt estate.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established