Townend v Townend & Anor - [2008] FMCA 1610

FEDERAL MAGISTRATES COURT OF AUSTRALIA

TOWNEND v TOWNEND & ANOR

[2008] FMCA 1610 and [2008] FMCAfam 1298

FAMILY LAW – Application for alteration of property interests – respondent spouse a bankrupt – the Court has no jurisdiction under the Family Law Act 1975 (Cth) to make orders affecting property vested in the trustee in bankruptcy where the bankruptcy commenced before 18 September 2005 and where the trustee has not sought to be joined as a party.

BANKRUPTCY – The Court may make orders under the Bankruptcy Act 1966 (Cth) to deal with matrimonial property vested in the trustee in bankruptcy.

Bankruptcy Act 1966 (Cth), ss.5, 30, 58, 59A, 116, 139P, 139Q, 139S, 139ZG
Bankruptcy and Family Law Legislation (Amendment) Act 2005 (Cth)
Family Law Act 1975 (Cth), ss.74, 79, 117

Re Gillies; Ex-parte Official Trustee in Bankruptcy Re Gillies (1993) 42 FCR 571
Re Sharpe; Ex-parte Donnelly (1998) 80 FCR 536
Zachary & Zachary & Ors [2008] FMCAfam 1209

Applicant:

JOYCE MARY TOWNEND

First Respondent:

MILES HAMILTON TOWNEND

Second Respondent:

OFFICIAL TRUSTEE IN BANKRUPTCY

File Numbers:

SYG1919 of 2008
SYC6330 of 2007

Judgment of:

Driver FM

Hearing date:

1 December 2008

Delivered at:

Sydney

Delivered on:

1 December 2008

REPRESENTATION

Counsel for the Applicant:

Mr D Dura

Solicitors for the Applicant:

Gray & Perkins

Counsel for the First Respondent:

Mr D Jarrett

Counsel for the Second Respondent:

Mr J Johnson

Solicitors for the Second Respondent:

Sally Nash & Co

ORDERS

The application against the second respondent is dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG1919 of 2008

SYC6330 of 2007

JOYCE MARY TOWNEND

Applicant

And

MILES HAMILTON TOWNEND

First Respondent

OFFICIAL TRUSTEE IN BANKRUPTCY

Second Respondent

REASONS FOR JUDGMENT

(revised from transcript)

I have before me competing applications under the Family Law Act 1975 (Cth) (“the Family Law Act”) and the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) in relation to certain real estate at 84 Maxwell Street, Turramurra. The family law application which was filed on

10 September 2007
also seeks other relief as between spouses to the marriage in relation to property and also spousal maintenance.
There is a material distinction to be drawn between property vested in the second respondent, the Official Trustee, arising out of the bankruptcy of the first respondent, Miles Hamilton Townend, and other property of the parties to the marriage.
The matter had been proceeding for some considerable time on the basis that I would be dealing with the family law application, specifically in relation to the issues arising as between the applicant, Mrs Townend, and the Official Trustee in relation to the residential property at Turramurra. However, at the outset of the trial of this matter this morning, counsel for the Official Trustee raised a jurisdictional issue. That issue arises from the decision of this Court in Zachary & Zachary & Ors [2008] FMCAfam 1209 per Kemp FM.

I incorporate in this judgment paragraphs 27 through to 32 of that judgment:
The Law
By virtue of the Bankruptcy and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Townend v Townend & Anor

Details

AGLC: Townend v Townend & Anor [2008] FMCA 1610
Case: [2008] FMCA 1610
Decision Date: 1 December 2008

CaseChat Overview and Summary

The matter in Townend v Townend & Anor involved a dispute over the alteration of property interests between the parties, who were spouses. The respondent spouse had been declared bankrupt, and the applicant sought to alter their property interests under the Family Law Act 1975 (Cth). The case was heard in the Family Court of Australia. The central legal issue was whether the Court had the jurisdiction to make orders affecting property vested in the trustee in bankruptcy when the bankruptcy commenced before 18 September 2005 and the trustee had not been joined as a party. The Court considered the interplay between the Family Law Act 1975 (Cth) and the Bankruptcy Act 1966 (Cth) in determining its jurisdiction.

The Court found that under the Family Law Act 1975 (Cth), it did not have the jurisdiction to make orders affecting property vested in the trustee in bankruptcy when the bankruptcy commenced before 18 September 2005 and the trustee had not sought to be joined as a party. The Court concluded that the Bankruptcy Act 1966 (Cth) provided the necessary framework for dealing with matrimonial property vested in the trustee in bankruptcy. Consequently, the Court dismissed the application against the second respondent, who was the trustee in bankruptcy, and determined that it could not proceed with altering the property interests as sought by the applicant.

The Court's reasoning was grounded in the statutory provisions of both the Family Law Act 1975 (Cth) and the Bankruptcy Act 1966 (Cth). The Court found that the legislative intent was to delineate the jurisdictions of the two Acts and that the Family Court did not have the authority to encroach upon the exclusive jurisdiction of the Bankruptcy Act 1966 (Cth) in certain circumstances. The Court's decision was based on a strict interpretation of the relevant legislation and the historical context of the bankruptcy and family law statutes. The Court emphasised that the Bankruptcy Act 1966 (Cth) provided the appropriate mechanism for dealing with matrimonial property vested in the trustee in bankruptcy, and thus, the Family Court was precluded from making such orders in the absence of the trustee's participation.

The final order of the Court was to dismiss the application against the second respondent, who was the trustee in bankruptcy. This outcome reflected the Court's conclusion that it lacked the jurisdiction to alter the property interests as sought by the applicant due to the specific circumstances of the bankruptcy and the statutory framework governing the matter. The Court's decision underscored the importance of adhering to the jurisdictional boundaries set out by the relevant legislation and the need for the appropriate parties to be joined in proceedings affecting property vested in a trustee in bankruptcy.

Orders

Orders of the court

The application against the second respondent is dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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