THOMSON AS TRUSTEE OF THE BANKRUPT ESTATE OF TIMOTHY JOHN PENSION v PENSION
[2015] FCCA 255
•9 February 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| THOMSON AS TRUSTEE OF THE BANKRUPT ESTATE OF TIMOTHY JOHN PENSION v PENSION | [2015] FCCA 255 |
| Catchwords: BANKRUPTCY – Distribution of dividends to creditors – bankrupt’s failure to file statement of affairs – whether prejudice to creditors – jurisdiction to make orders sought. |
| Legislation: Bankruptcy Act 1966 (Cth), Part VI, Division 5, ss.54, 77, 146, 153A |
| Harrison v Gangell [2013] FCCA 554 Official Trustee in Bankruptcy v Raeffaele [2003] FCA 328 Official Trustee in Bankruptcy v Thor [2006] FMCA 1637 |
| Applicant: | ROSS STEPHEN THOMSON AS TRUSTEE OF THE BANKRUPT ESTATE OF TIMOTHY JOHN PENSION |
| Respondent: | TIMOTHY JOHN PENSION |
| File Number: | PEG 282 of 2014 |
| Judgment of: | Judge Antoni Lucev |
| Hearing date: | 9 February 2015 |
| Date of Last Submission: | 9 February 2015 |
| Delivered at: | Perth |
| Delivered on: | 9 February 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr A F Carles |
| Solicitors for the Applicant: | Carles Solicitors |
| For the Respondent: | No appearance |
ORDERS
The costs, charges and expenses of the administration of the bankruptcy of the Respondent and a distribution of dividends amongst creditors who have proved their debts in the estate shall proceed in accordance with Part VI Division 5 of the Bankruptcy Act 1966 (Cth) (“the Act”) as if the Respondent had filed a Statement of Affairs and those creditors had been stated to be creditors in it.
The Applicant pay interest to any creditors who are entitled to interest within s.153A(6) of the Act in the event that a dividend of 100 cents in the dollar has been paid to creditors.
The Respondent not be entitled to any surplus funds remaining after payment of the dividends to creditors and (if applicable) payment of interest payable on such of those debts as bear interest within s.153A(6) of the Act until he has lodged his duly completed Statement of Affairs in the required form in the office of the Official Receiver and the bankruptcy trustee has dealt with the claims of any further creditors disclosed in the Statement of Affairs.
The costs of and incidental to this application be paid out of the Respondent’s bankrupt estate to the Applicant in sum of $5576.80 in accordance with the priority afforded under the Act.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 282 of 2014
| ROSS STEPHEN THOMSON AS TRUSTEE OF THE BANKRUPT ESTATE OF TIMOTHY JOHN PENSION |
Applicant
And
| TIMOTHY JOHN PENSION |
Respondent
REASONS FOR JUDGMENT
(Edited extempore reasons)
The applicant seeks an order under s.146 of the Bankruptcy Act 1966 (Cth),[1] that a distribution of dividends be made to those creditors of the bankrupt estate of the respondent who have proved their debts in accordance with Part VI, Division 5 of the Bankruptcy Act 1966.
[1] “Bankruptcy Act”.
The applicant replies upon the Affidavits of Lefteri John Papazoglou, sworn 29 January 2015; the present trustee, Ross Stephen Thomson, sworn 8 September 2014; and a paralegal in the office of the applicant’s solicitors, Margaret Mary Woolford, sworn 5 February 2015.
The Court notes that s.54 of the Bankruptcy Act 1966 provides that where a sequestration order is made, the person against whom that order is made must file a statement of affairs within 14 days of being notified of the bankruptcy.
Section 146 of the Bankruptcy Act 1966 provides that where a bankrupt fails to file a statement of affairs, the Court may order a distribution of dividends among creditors who have proved their debts as if the bankrupt had filed a statement of affairs and those creditors had been named in it.
The Court is satisfied on the basis of Mr Papazoglou’s Affidavit that service was effected on the respondent bankrupt of the application and other relevant documents on 12 January 2015. The Court notes that the respondent does not appear today, and the matter has been called outside the Court. The Court is also satisfied that the known creditors of the bankrupt have been notified of today’s hearing, and that no response has been received in relation to those notifications: Ms Woolford’s Affidavit, para.3; Mr Thomson’s Affidavit, paras.26-28. The Court also notes that no notice of opposition has been filed by any creditor, and there is no appearance by any creditor today.
In relation to the application and the requirements of s.146 of the Bankruptcy Act 1966, Mr Thomson’s Affidavit provides evidence of the respondent’s bankruptcy, the appointment of the official trustee as the bankruptcy trustee originally, and the subsequent appointment of Mr Thomson as the trustee of the bankrupt estate: Mr Thomson’s Affidavit, paras.2-4.
There is also evidence of the trustee’s attempts to obtain a statement of affairs from the respondent bankrupt, and the respondent bankrupt’s failure to respond by filing that statement of affairs, notwithstanding there has been some very episodic contact between the bankrupt respondent and the trustee: Mr Thomson’s Affidavit, paras.6-18 and 20-25.
There have also been attempts to identify the creditors of the bankrupt estate. Those details are set out, including the obtaining of a relevant creditor’s report from a credit agency, and advertising in The Australian newspaper in order to ascertain further creditors in addition to those that have been advised in the relevant affidavits in that regard: Mr Thomson’s Affidavit, paras.27-28.
The details of the known assets of the bankrupt have been set out, and Mr Thomson attests to the fact that the administration of the bankruptcy is complete as far as possible without the filing of a statement of affairs, save for the payment of dividend to creditors, and that the delay in that payment is causing prejudice to the creditors, and the Court has no reason in the circumstances, to dispute that: Mr Thomson’s Affidavit, paras.19 and 29-35.
In Re Sturt; Ex parte Official Trustee in Bankruptcy (2001) 117 FCR 1 at 5 per Sackville J; [2001] FCA 1649 at para.19 per Sackville J, the Federal Court set out the requirements in relation to the level of satisfaction required in an application under s.146 of the Bankruptcy Act 1966. Those requirements have been mirrored by the Federal Magistrates Court in Official Trustee in Bankruptcy v Thor [2006] FMCA 1637 (“Thor”) and this Court in Harrison v Gangell [2013] FCCA 554 (“Harrison”). In all the circumstances, the Court is satisfied, having had regard to the evidence in this case, that the applicant has advised all known creditors of the hearing and has taken appropriate steps to identify any further creditors of the bankrupt estate.
The Court is of the view that the respondent is aware of his bankruptcy and of his obligations under the Bankruptcy Act 1966, and that it is reasonable to conclude in the circumstances and on the evidence that his conduct probably contravenes ss.54 and 77 of the Bankruptcy Act 1966, and that there has been a deliberate failure by the bankrupt to file his statement of affairs.
The Court is satisfied that it has the jurisdiction to make the particular orders sought in this case by the applicant under s.146 of the Bankruptcy Act. The Court is also satisfied that the failure by the bankrupt to file his statement of affairs has prejudiced creditors and will incur and has already incurred further costs and will delay the administration of the estate: Rees (Trustee) in the matter of Stubberfield v Stubberfield (Bankrupt) [1999] FCA 1862, and Thor and Harrison to which it has already referred. It is evident that any further attempts to compel the respondent bankrupt to file a statement of affairs or notify him of the orders sought pursuant to the application would also incur further costs and delay, and result in further disadvantage to the bankrupt’s creditors.
The Court has already noted the absence of the respondent in these proceedings, that the matter has been called outside the Court today and that the respondent is not in attendance in these proceedings. The Court is satisfied on the basis of Mr Papazoglou’s Affidavit that the application was served upon the respondent bankrupt. That application included today’s hearing date, and included advice to the applicant that the Court might make final orders in the absence of any parties served with the application. In view of the history of the matter, the respondent bankrupt’s absence is, in any event, hardly surprising.
In the circumstances, the Court adopts the rationale outlined in Official Trustee in Bankruptcy v Raeffaele [2003] FCA 328 at para.7 per Allsop J, and applies that rationale in the circumstances of this case, and finds that there is no necessity to make any further orders or any orders conditional upon further attempts to notify the bankrupt respondent or to state the effect of any orders made today. There will therefore be orders essentially in the terms sought in the applicant’s Minute of Proposed Order.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Associate:
Date: 11 February 2015
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