TRUSTEE IN BANKRUPTCY OF THE ESTATE OF CABADAS & CABADAS
[2020] FamCAFC 200
•12 August 2020
FAMILY COURT OF AUSTRALIA
| TRUSTEE IN BANKRUPTCY OF THE ESTATE OF CABADAS & CABADAS | [2020] FamCAFC 200 |
| FAMILY LAW – APPLICATION IN AN APPEAL – STAY – Where the husband seeks a stay of orders made on 11 October 2019 pending an application to the High Court for special leave to appeal – Where the husband filed the Application after he became a bankrupt pursuant to a court order – Where he has no standing to pursue the application – Where the Trustee indicated no intention to pursue this application or the application for special leave to appeal – Application dismissed – Where the husband’s Trustee in Bankruptcy ought pay the wife’s costs out of the husband’s estate. |
| Bankruptcy Act 1966 (Cth) s 60 Family Law Act 1975 (Cth) s 94AAA(3), 117(2A) |
| Cabadas & Cabadas [2019] FamCAFC 179 Cummings v Claremont Petroleum NL (1996) 185 CLR 124; [1996] HCA 19 Guirguis v Guirguis (1997) FLC 92-726; [1997] FamCA 6 O’Neill v O’Neill (1998) FLC 92-811; [1998] FamCA 67 |
| APPLICANT: | Ms Preston as Trustee in Bankruptcy of the Sequestrated Estate of Mr Cabadas |
| RESPONDENT: | Ms Cabadas |
| FILE NUMBER: | BRC | 8117 | of | 2016 |
| APPEAL NUMBER: | NOA | 99 | of | 2018 |
| DATE DELIVERED: | 12 August 2020 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | 12 August 2020 |
REPRESENTATION
| MR CABADAS IN HIS PERSONAL CAPACITY: | Self-represented via telephone |
| COUNSEL FOR THE APPLICANT: | Ms Murphy via telephone |
| SOLICITOR FOR THE APPLICANT: | McInnes Wilson Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr George via telephone |
| SOLICITOR FOR THE RESPONDENT: | Gallagher Legal |
Orders
The husband’s Application in an Appeal filed on 31 July 2020 be dismissed.
The wife’s costs of and incidental to this application fixed in the amount of $9,064 be paid out of the proportion of the proceeds of the sale of the real property situated at B Street, C Town comprising Lots 1 and Lot 2 on Crown Plan C … on Certificates of Title …94 and …95 respectively which the husband or his Trustee in Bankruptcy receives pursuant to the Orders made on 11 October 2019 (amended on 15 October 2019).
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Trustee in Bankruptcy of the Sequestrated Estate of Cabadas & Cabadas has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NOA 99 of 2018
File Number: BRC 8117 of 2016
| Ms Preston as Trustee in Bankruptcy of the Sequestrated Estate of Mr Cabadas |
Applicant
And
| Ms Cabadas |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
On 11 October 2019, I delivered reasons for judgment[1] and made orders exercising the appellate jurisdiction of this Court pursuant to s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”) in appeal proceedings between Mr Cabadas (“the husband”) and Ms Cabadas (“the wife”).
[1]Cabadas & Cabadas [2019] FamCAFC 179.
The orders made were subsequently amended in a minor respect on 15 October 2019. Relevantly the orders included orders for sale and the disbursement of sale proceeds of real property jointly owned by the husband and the wife situated at B Street, C Town comprising Lots 1 and Lot 2 on Crown Plan C … on Certificates of Title …94 and …95 respectively (“the property”).
Despite, on the wife’s evidence, the complete lack of cooperation by the husband in the ordered sale of the property, a contract of sale was entered into on 26 June 2020 with settlement of that sale scheduled to take place on 25 August 2020.
On 14 July 2020, some nine months after the orders of 11 October 2019 (amended on 15 October 2019) were made, the husband filed an application to the High Court of Australia for special leave to appeal from those orders. On the following day, 15 July 2020, the husband became bankrupt upon the making of a sequestration order appointing a Trustee in Bankruptcy to his estate.
On 31 July 2020, the husband without consultation with, and thus without the approval of his Trustee in Bankruptcy, purported to file an application for a stay of the 11 October 2019 (amended on 15 October 2019) orders pending the outcome of his application for special leave to appeal to the High Court of Australia.
The Trustee in Bankruptcy having learned of the proceedings filed by the husband both in the High Court of Australia and in this Court, has filed a Response in these proceedings and an affidavit in support. Shortly stated, the Trustee in Bankruptcy has confirmed that she will not be prosecuting the application for a stay of the subject orders in this Court, nor will she be prosecuting the application for special leave to the High Court of Australia.[2]
[2] Section 60(3) of the Bankruptcy Act 1966 (Cth) – the Trustee shall be deemed to have abandoned these applications.
The Trustee in Bankruptcy confirms that it is in the best interests of the sequestrated estate of the husband that the sale of the property proceed to settlement on 25 August 2020 which will allow for the creditors to be paid in full and for the bankruptcy to be annulled as soon as possible. The Trustee in Bankruptcy notes that if settlement is delayed the interests of creditors in the sequestrated estate may be prejudiced.
By her Response filed on 11 August 2020, the Trustee in Bankruptcy seeks that the application for a stay be dismissed. The wife supports the Trustee’s position.
It is well settled that the husband in these circumstances does not have standing to pursue the current application. In the matter of O’Neill v O’Neill (1998) FLC 92-811 the Full Court of this Court held that a bankrupt spouse cannot appeal property settlement orders unless he or she can establish some interest in the property which is the subject of the orders and he or she would be unable to establish such interest if the property which is the subject of the orders is vested or will vest in the Trustee in Bankruptcy. The fact that a successful appeal may result in a surplus in which the bankrupt would have a contingent interest will not provide the bankrupt with the necessary interest to institute an appeal in his or her own name. The Full Court relied on authorities including Cummings v Claremont Petroleum NL (1996) 185 CLR 124 and Guirguis v Guirguis (1997) FLC 92-726 for that proposition.
I am satisfied that, as a matter of law, the husband has no standing to pursue the current application for a stay of orders and I accept that the Trustee in Bankruptcy seeks the dismissal of the application in the proper exercise of the statutory powers vested in the Trustee in Bankruptcy.
For these reasons I dismiss the Application in an Appeal filed by the husband on 31 July 2020.
Costs
Following the dismissal of the husband’s Application in an Appeal filed on 31 July 2020 the wife seeks an order for costs. In the first instance she seeks costs on an indemnity basis in the amount of $11,545.90 or in the alternative on a party and party basis in the amount of $9,064.
The evidence before me includes evidence from the Trustee in Bankruptcy in relation to the financial circumstances of the bankrupt husband and his prospective circumstances, in the event that the settlement of the sale of the subject property occurs as scheduled on the 25 August 2020.
It is clear by reference to the orders that I made as amended on 15 October 2019 and by reference to the statement of affairs of the husband that he, or his estate, will have ample financial capacity to meet an order for costs if an order is made.
I have set out in my reasons for judgment delivered on 11 October 2019 relevant matters concerning the financial circumstances of the wife but she too will of course receive the benefit of the property orders that were made with the forthcoming settlement of the sale of the property.
The husband pursued this application for a stay of proceedings notwithstanding his bankruptcy and that he had the evidence from the Trustee in Bankruptcy. He also had the benefit of correspondence from the wife’s solicitors dated 7 August 2020 pointing out the relevant effect of s 60 of the Bankruptcy Act 1966 (Cth). It ought to have been apparent to the husband that his application was doomed to fail because he had no standing to maintain it, and that was plainly so in circumstances where the Trustee in Bankruptcy made it clear that the Trustee in Bankruptcy had elected not to pursue either this application for a stay of orders or the application for special leave to the High Court of Australia.
It is to be noted that the husband purported to file this application subsequent to the sequestration order being made and he filed it without reference to, or consultation with, the Trustee in Bankruptcy. He has consequently put the wife to unnecessary expense in pursuing an application which was always doomed to fail.
The correspondence from the wife’s solicitors on 7 August 2020 included an invitation for the husband not to pursue the application and thus is relevant in terms of it being an offer within the meaning of s 117(2A) of the Act.
I am satisfied that an order for costs in the wife’s favour ought to be made. I am not persuaded, although it is a close thing, that an order for indemnity costs should be made in the circumstances.
I therefore make an order for costs in the wife’s favour for her to receive the costs of and incidental to this application fixed in the amount of $9,064 out of the husband’s share of the proceeds of the sale of the property.
I certify that the preceding twenty (20) paragraphs are a true copy of the ex tempore reasons for judgment of the Honourable Justice Kent delivered on 12 August 2020, edited to correct grammatical errors and some infelicity of expression.
Associate:
Date: 12 August 2020
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