Trustees of the Property of Francis-Wright, in the matter of Francis-Wright (Bankrupt)
[2024] FedCFamC2G 901
•26 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Trustees of the Property of Francis-Wright, in the matter of Francis-Wright (Bankrupt) [2024] FedCFamC2G 901
File number(s): SYG 1474 of 2024 Judgment of: JUDGE CAMERON Date of judgment: 26 August 2024 Catchwords: BANKRUPTCY – Application for leave to distribute dividends to creditors of bankrupt estate – failure to file statement of affairs pursuant to s 77CA of the Bankruptcy Act 1966 (Cth). Legislation: Bankruptcy Act 1966 (Cth), ss 146, 77CA Cases cited: Roufeil (Trustee) in the matter of Jarvie (Bankrupt) [2015] FCA 232
Lombe (Trustee) in the matter of Rahman (Bankrupt) [2017] FCCA 750
Division: General Number of paragraphs: 7 Date of hearing: 26 August 2024 Place: Sydney Solicitor for the Applicant: Mr Tomasello (Craddock Murray Neumann Lawyers) ORDERS
SYG 1474 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF KEVIN FRANCIS-WRIGHT, BANKRUPT
BETWEEN: TRUSTEES OF THE PROPERTY OF KEVIN FRANCIS-WRIGHT, A BANKRUPT
Applicant
ORDER MADE BY:
JUDGE CAMERON
DATE OF ORDER:
26 AUGUST 2024
THE COURT ORDERS THAT:
1.Pursuant to s.146 of the Bankruptcy Act 1966 (Cth) (Act), the applicants, as trustees of the Bankrupt Estate of Kevin Francis-Wright, distribute dividends amongst the creditors who have proved their debts in the Bankrupt Estate of Kevin Francis- Wright in accordance with Division 5 of Part VI of the Act as if Kevin Francis- Wright had filed a statement of affairs and those creditors had been stated to be creditors in it.
2.The applicant’s costs of and incidental to this application are to be paid out of the Bankrupt’s estate in accordance with s.109 of the Act.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE CAMERON
INTRODUCTION
On 28 November 2017, Kevin Francis-Wright was made bankrupt by a sequestration order made by District Registrar Wall of the Federal Court. The subsequent history of Mr Francis-Wright’s bankrupt estate is described in the affidavits of one of his trustees, Andrew Aravanis, those affidavits having been affirmed on 1 July 2024 and 23 August 2024. By an application filed on 3 July 2024, the applicant trustees of the bankrupt estate seek orders that they may proceed to a distribution of his estate in accordance with s.146 of the Bankruptcy Act 1966 (Cth) (Act) and, more generally, div.5 of pt.6 of the Act, notwithstanding that Mr Francis-Wright has not filed a statement of affairs.
There has been no appearance by or for Mr Francis-Wright today, notwithstanding that the matter was called outside the Court and that Mr Aravanis deposes in his affidavit of 23 August 2024 to documents having been sent on 19 August 2024 to the correctional centre where Mr Francis-Wright is presently detained. I note in that connection that in Roufeil (Trustee) in the matter of Jarvie (Bankrupt) [2015] FCA 232, Gleeson J said in relation to a similar application then before her:
12.There is no requirement under the Act that any party be named as a respondent to the application. Accordingly, there was no obligation on the trustee to serve the application on Mr Jarvie or any of the known creditors of the bankrupt estate arising out of this status as a necessary party to the preceding.
Consequently, the fact that there is no appearance by or for Mr Francis-Wright on the present application is not something that should prevent the matter from proceeding today, particularly given that material has been sent to the place where he is presently held.
CONSIDERATION
Mr Aravanis’s affidavits address the considerations relevant to an application such as the present, which were summarised by Judge Barnes in Lombe (Trustee) in the matter of Rahman (Bankrupt) [2017] FCCA 750. Her Honour said:
45.As pointed out by Spender J in Rees & Stubberfield, in support of a s.146 application the trustee should adduce evidence not only of the failure by the bankrupt to file a statement of affairs but also of attempts by the trustee to obtain the statement of affairs, the response of the bankrupt, if any, to any such requests, evidence that the bankruptcy administration is all but complete, except for distribution of a dividend to creditors who have proved their debts, details of creditors known to the trustee, the amounts of debts that have been proved, and the delay in the administration of the estate occasioned by the absence of a statement of affairs, as well as a statement to the effect that the delay is causing prejudice to creditors.
It is apparent from Mr Aravanis’s first affidavit that he has attempted, on more than one occasion, to obtain a statement of affairs from Mr Francis-Wright, even to the extent of one of his employees speaking to Mr Francis-Wright sometime after the sequestration order. I accept, from Mr Aravanis’s affidavits, that Mr Francis-Wright has nevertheless failed to file a statement of affairs.
Mr Aravanis also deposes to the fact that the administration of the bankruptcy is complete save for a distribution to the creditors who have proved their debts. Further, his affidavit of 1 July 2024 sets out details of the creditors who have lodged proofs of debt and the outcome of those claims. A detailed listing of those creditors appears at page 258 of the bundle of documents which was exhibited to Mr Aravanis at the time he affirmed his affidavit of 1 July 2024 and which is exhibit A in this proceeding.
Mr Aravanis also deposes that Mr Francis-Wright’s failure to provide to the trustees or to file with the Official Receiver a statement of affairs has delayed the administration of the estate. He further deposes to his belief that the delay in declaring and distributing a dividend to the creditors of the bankrupt estate is causing them prejudice and that, given Mr Francis-Wright’s refusal so far to lodge a statement of affairs, to seek to compel him by Court order to file a statement of affairs before distribution would only serve to incur further costs and add delay in the administration.
I should also note that I have had regard to Mr Aravanis’s evidence in relation to a potential creditor, NCML, and to the fact that he has had no response from that organisation in connection with the bankrupt estate.
CONCLUSION
In all the circumstances, I am satisfied that it is appropriate to make the orders sought by the applicant trustees.
I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 13 September 2024
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