Valder & Saklani
[2021] FamCAFC 142
•6 August 2021
FAMILY COURT OF AUSTRALIA
Valder & Saklani [2021] FamCAFC 142
Appeal from: Valder & Saklani and Anor [2020] FamCA 502 Appeal number: EAA 93 of 2020 File number: CAC 2098 of 2016 Judgment of: RYAN, ALDRIDGE & WATTS JJ Date of judgment: 6 August 2021 Catchwords: FAMILY LAW – APPEAL – BANKRUPTCY – Appeal against summary dismissal – Where an application to set aside property settlement consent orders was dismissed by the primary judge – Where the appellant was a creditor to the bankrupt estate of the second respondent – Where the second respondent was since discharged from bankruptcy – Standing as a creditor under s 79A of the Family Law Act 1975 (Cth) – Person affected by consent orders – Effect of bankruptcy discharge – Where the primary judge erred in finding that the appellant did not have standing following second respondent’s discharge from bankruptcy – Appeal allowed – Matter remitted for further hearing. Legislation: Bankruptcy Act 1966 (Cth) ss 35, 58, 73, 74, 149, 153, 153A, 153B
Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth)
Family Law Act 1975 (Cth) ss 79, 79A, 80, 106B
Family Law Rules 2004 (Cth) r 14.07
Explanatory Memorandum, Bankruptcy and Family Law Legislation Amendment Bill 2004 (Cth)
Cases cited: Biltoft and Biltoft (1995) FLC 92-614; [1995] FamCA 45
Cantrell & North and Anor (2020) FLC 93-976; [2020] FamCAFC 175
Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589; [1984] HCA 44
Cummings v Claremont Petroleum NL (1996) 185 CLR 124; [1996] HCA 19
Daemar v Industrial Commission of New South Wales (No 2) (1990) 22 NSWLR 178
Fraser v Deputy Commissioner of Taxation (1996) 69 FCR 99; [1996] FCA 708
Grainger & Bloomfield and Anor (2015) FLC 93-677; [2015] FamCAFC 221
Official Trustee in Bankruptcy v Donovan and Donovan and Stevens (1996) FLC 92-703; [1996] FamCA 58
Pegler v Dale (1975) 1 NSWLR 265
Project Blue Sky Inc v Australian Broadcasting Authority; (1998) 194 CLR 355; [1998] HCA 28
Re Bailey and Bailey (executrix of the estate of Bailey (1990) FLC 92-117; [1989] FamCA 45
Rowell and Rowell (1989) FLC 92-026; [1989] FamCA 3
Semmens v Commonwealth of Australia and Collector of Customs (S.A.) (1990) FLC 92-116; [1989] FamCA 40
Zaravinos v Houvardas (2004) 32 Fam LR 490; [2004] NSWCA 421
Division: Appeal Division Number of paragraphs: 54 Date of last submissions: 7 May 2021 Date of hearing: 14 April 2021 Place: Sydney The Appellant: Litigant in person Solicitor for the First Respondent: Holmes Donnelly & Co Solicitors Counsel for the Second Respondent: Mr McGovern SC (direct brief) ORDERS
EAA 93 of 2020
CAC 2098 of 2016APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MS VALDER
Appellant
AND: MS SAKLANI
First Respondent
MR SAKLANI
Second Respondent
ORDER MADE BY:
RYAN, ALDRIDGE & WATTS JJ
DATE OF ORDER:
6 AUGUST 2021
THE COURT ORDERS THAT:
1.The appeal against Order 1 made on 19 June 2020 is allowed.
2.Order 1 made on 19 June 2020 is set aside.
3.The Notice of Contention filed on 30 July 2020 is dismissed.
4.The matter is remitted for further hearing.
Note: The form of the order is subject to the entry in the Court’s records.
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 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Valder & Saklani has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
RYAN, ALDRIDGE & WATTS JJ:
INTRODUCTION
On 19 December 2016, Ms Valder (“the appellant”) filed an Initiating Application in the Family Court of Australia (“the Family Court”) seeking to set aside property settlement orders made by consent (“the consent orders”) between Ms Saklani (“the first respondent”) and Mr Saklani (“the second respondent”), who were married to each other at that time. The appellant asserted that she was an unpaid creditor of the second respondent and thus a person affected by the orders for the purpose of s 79A of the Family Law Act 1975 (Cth) (“the Act”), entitled to apply to have the consent orders set side.
On 19 June 2020, a judge of the Family Court summarily dismissed the application because her Honour was of the view that, whatever may have been the case at the time the application was filed, the appellant no longer met the criteria of being a person affected by the order. This was because the second respondent had become a bankrupt on 6 March 2015 and was discharged from that bankruptcy on 7 March 2018. The primary judge found that upon that discharge, the second respondent was released from the debt he owed the appellant, who thereby ceased to become a person affected by the consent orders.
BACKGROUND
In order to understand the appeal it is necessary to identify some key dates.
On 7 August 2009, the appellant sued the second respondent in the Supreme Court of New South Wales (“the Supreme Court”) seeking a declaration that she held an equitable interest in properties owned by him (“the Suburb W properties”) and the payment of equitable compensation. She was unsuccessful.
The appellant appealed the orders setting aside her application in the Court of Appeal of the Supreme Court of New South Wales (“the Court of Appeal”). On 1 July 2011, the appeal was allowed and orders were made remitting the matter for rehearing.
In December 2011, the matter was reheard by the Supreme Court. On 23 February 2012, judgment in those proceedings was delivered and orders were made dismissing the appellant’s claims.
On 1 July 2013, the appellant successfully appealed against those orders. The matter was remitted to the Equity Division of the Supreme Court for the assessment of the appropriate equitable compensation.
On 13 November 2013, the Family Court made the consent orders dividing all property of the first and second respondents. The effect was to transfer the second respondent’s interests in the Suburb W properties to the first respondent. It is an agreed fact that the respondents represented to the Family Court at the time the property settlement order was made that there was no person who might be entitled to become a party to the case under s 79(10) of the Act and that notice was not served on the appellant before that order was made (Appellant’s Verified Points of Claim filed on 30 May 2017, paragraphs 19–22; First Respondent’s Amended Response to Points of Claim filed on 8 May 2020, paragraphs 19–22; Second Respondent’s Response to Points of Claim filed on 30 April 2020, paragraphs 19–22 and r 14.07 of the Family Law Rules 2004 (Cth)).
The second respondent obtained special leave to appeal to the High Court of Australia from the decision of the Court of Appeal, but his appeal was dismissed on 16 May 2014.
On 18 September 2014, the Supreme Court found that the appropriate amount of equitable compensation to be paid by the second respondent to the appellant was $594,028.25, plus costs of the proceedings (which were in excess of $250,000).
On 6 March 2015, the second respondent became bankrupt on his own petition.
On 8 November 2016, the Federal Court of Australia gave the appellant leave pursuant to s 58(3)(b) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) to bring proceedings against the second respondent in the Family Court. The appellant filed her Initiating Application shortly after, on 19 December 2016 in the Family Court.
The second respondent was discharged from bankruptcy on 7 March 2018 upon the expiration of three years by force of s 149 of the Bankruptcy Act.
On 1 May 2020, the primary judge directed:
1.That the matter is set down for hearing before [the primary judge] on Thursday 4 June 2020 at 10am in relation to whether, following the second respondent’s discharge from Bankruptcy on 7 March 2018, the present proceedings are bound to fail pursuant to section 149 of the Bankruptcy Act1966 (Cth).
The record does not disclose why the appellant’s proceedings did not come before a judge at an earlier stage. The delay is most unfortunate and regrettable.
As we have seen, the primary judge answered that question in the affirmative on 19 June 2020 and, accordingly, dismissed the proceedings.
We commence with the general observation that the word “creditor” is used throughout the Act and the Bankruptcy Act. Whilst it is a general principle of statutory construction that a word should be understood to have the same meaning throughout a section or part of an Act, and ideally the whole of an Act, that is not always the case. The precise meaning of a word may vary according to the proper construction of the particular provision in question (Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355).
For example, the word “creditor” may not always describe a person who has all of the rights of a creditor which the law attributes to them. It is well established that once a person becomes a bankrupt, his or her creditors lose “the remedies against the person and property formerly available” for which there is “substituted a right to prove against the estate” (Clyne v Deputy Commissioner Of Taxation (1984) 154 CLR 589 at 594). Further, “the bankrupt is divested of both his interest in his property and liability for his provable debts” (Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 138).
A discharge from bankruptcy operates to release the bankrupt “from all debts (including secured debts) provable in the bankruptcy” as per s 153(1) of the Bankruptcy Act.
However, in each case, the Bankruptcy Act continues to refer to the person who simply has a right to prove as a creditor. The Bankruptcy Act goes on to provide such creditors (who are described in that way) with various rights and entitlements including rights to lodge proofs of debt and to receive dividends which continue after any discharge of the bankrupt from his or her bankruptcy. It follows that, for some purposes at least, a reference to a creditor in the Bankruptcy Act includes a creditor whose debt has been released by the operation of s 153 of the Bankruptcy Act. They continue to be described as a creditor.
It follows that the release of a debt, by way of the bankrupt being discharged from his or her bankruptcy, does not mean that his or her creditors cease to be “creditors” for all purposes, especially where the relevant statute points in a different direction.
Again, the meaning of the word “creditor” in the Bankruptcy Act is governed by the particular context in which it appears, which may or may not be the same as the meaning of that word in the various provisions of the Bankruptcy Act.
Since 2005, s 79A(4) of the Act has provided that a creditor of a party is taken to be a person whose interests are affected by the order if the creditor may not be able to recover his or her debt because the order has been made. This is a statutory acknowledgment of the well-established principle that a person whose right to recover a debt has been affected by the transfer of property by a property settlement consent order, is a person affected by that order (Semmens v Commonwealth of Australia and Collector of Customs (S.A.) (1990) FLC 92-116 (“Semmens”); see also Cantrell & North and Anor (2020) FLC 93-976).
ISSUES IN THE APPEAL
An instance of the rights of a creditor which extends beyond the right to prove, is provided by s 58(3) of the Bankruptcy Act. Relevantly, s 58 states:
Vesting of property upon bankruptcy—general rule
(1) Subject to this Act, where a debtor becomes a bankrupt:
(a)the property of the bankrupt, not being after‑acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and
(b)after‑acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.
…
(3)Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:
(a)to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or
(b)except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.
…
Thus, a creditor may, with the leave of the court, commence or continue legal proceedings against the bankrupt in respect of a provable debt.
An application by a creditor under s 79A of the Act to set aside property settlement consent orders entered into by a bankrupt is such an application which requires leave from the Federal Court of Australia (“the Federal Court”), the Federal Circuit Court of Australia and, where s 35 of the Bankruptcy Act applies, the Family Court of Australia (Fraser v Deputy Commissioner of Taxation (1996) 69 FCR 99) (“Fraser”).
Section 79A(1) of the Act provides:
(1)Where, on application by a person affected by an order made by a court under s 79 in property settlement proceedings, the court is satisfied that:
(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance …
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under s 79 in substitution for the order so set aside.
The appellant sought and obtained leave to commence her proceedings in the Family Court. In the course of the reasons for judgment, Katzmann J said:
30.Here, [the appellant] does not seek any undue advantage over other creditors. The purpose of her application and, if it succeeds, the effect of her action under s 79A is to augment the bankrupt estate for distribution between all creditors. [The appellant] has given an undertaking to facilitate this course. The willingness of an applicant to enter into an undertaking to hold the benefit of any order made in the Family Court proceedings on behalf of the bankrupt estate has been held to render proceedings of that kind in the interests of “the general body of creditors”: Macquarie Bank Ltd v Bardetta [2005] FCA 507; 216 ALR 670 at [25], [27] (Conti J). See also Green v Official Trustee in Bankruptcy, in the matter of Schneller (Bankrupt) [2001] FCA 1644 (Hill J).
At the time the appellant commenced the proceedings in the Family Court she was entitled to do so. She was the creditor of a bankrupt estate which had been diminished by the operation of the consent orders. She had the requisite leave to commence the proceedings. As well as being “a person affected by an order” for the purposes of s 79A(1), the appellant is also a “party”, a “creditor” and a “person whose interests would be affected by the making of the instrument or disposition” for the purposes of s 106B(4AA)(a), (b) and (c) of the Act.
We therefore do not accept the second respondent’s submission that the appellant’s rights were limited to lodging a proof of debt in the bankrupt estate. In any event, as the New South Wales Court of Appeal pointed out in Zaravinos v Houvardas (2004) 32 Fam LR 490 at [35], this was an argument “that should have been directed to whether leave was appropriately granted in the Federal Court”.
The second respondent nonetheless contended that only his trustee in bankruptcy had standing to bring any proceedings under s 79A of the Act and that the appellant was thereby not a person affected by the consent orders. This, it was submitted, follows from s 79A of the Act itself because “while a creditor may be regarded as a person affected by an order for section 79 purposes, once a person becomes bankrupt then the applicable provision is s 79(10A) which negates the operation of s 79(10)” (Second respondent’s Summary of Argument filed on 3 February 2021, p.4).
Section 79 of the Act empowers the court to make such an order altering the interests in property of the party to the marriage as it considers appropriate. The range of available orders and in whose favour they may be made is broad (s 80(1)(k) of the Act). Whilst such an order includes an order made “for the benefit of either or both of the parties to the marriage or a child of the marriage”, the section does not limit in whose favour such an order can be made to those persons (s 79(1) and s 80(1)(k) of the Act). Similarly, it may alter the interests of the trustee in bankruptcy of one of the parties to a marriage in the property vested in the trustee (s 79(1)(b) of the Act).
Section 79(10)(a) of the Act relevantly provides that a “creditor of a party to the proceedings if the creditor may not be able to recover his or her debt if the order were made” is entitled to become a party to the proceedings. This is statutory recognition of a well-established proposition that a creditor is entitled to intervene in proceedings concerning s 79 of the Act to protect his, her or its interests. See, for example, Semmens; Rowell and Rowell (1989) FLC 92-026; Re Bailey and Bailey (executrix of the estate of Bailey) (1990) FLC 92-117 and Biltoft and Biltoft (1995) FLC 92-614.
That section also entitles “any other person whose interests would be affected by the making of the order” to become a party to the proceedings (s 79(10)(b) of the Act). Section 79(10A) of the Act relevantly provides that:
(10A)Subsection (10) does not apply to a creditor of a party to the proceedings:
(a)if the party is a bankrupt – to the extent to which the debt is a provable debt (within the meaning of the Bankruptcy Act 1966)…
Thus, for the purposes of s 79 of the Act, it is the trustee in bankruptcy, where appointed, who has the right of appearance and not the individual creditors as explained in Grainger & Bloomfield and Anor (2015) FLC 93-677 at [46].
The critical section for present purposes is however s 79A of the Act, which the second respondent contended, in his Notice of Contention filed 30 July 2020, should be construed consistently with s 79 of the Act so that only the trustee in bankruptcy had the right to appear. Section 79A of the Act, however, does not contain a subsection equivalent to s 79(10A) of the Act. Rather, the following two subsections of s 79A of the Act apply:
Setting aside of orders altering property interests
…
(4)For the purposes of this section, a creditor of a party to the proceedings in which the order under section 79 was made is taken to be a person whose interests are affected by the order if the creditor may not be able to recover his or her debt because the order has been made.
(5) For the purposes of this section, if:
(a)an order is made by a court under section 79 in proceedings with respect to the property of the parties to a marriage or either of them; and
(b) either of the following subparagraphs apply to a party to the marriage:
(i) when the order was made, the party was a bankrupt;
(ii) after the order was made, the party became a bankrupt;
the bankruptcy trustee is taken to be a person whose interests are affected by the order.
…
Importantly, both subsections refer to the creditor and trustee respectively as being “taken to be ‘a’ person whose interests are affected” as opposed to “the” person. Thus, in a case where s 79A(5) of the Act applies it is possible for both a creditor and the trustee to be ‘a’ person affected and, hence, ‘the’ person affected for s 79A(1).
Subsections 79A(4) and (5) were inserted into the Act in 2005 by the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth). The Explanatory Memorandum to the Bankruptcy and Family Law Legislation Amendment Bill 2004 (Cth) (“the Explanatory Memorandum”) described the purpose of the amendment as “clarifying” the rights of the bankruptcy trustee and the non-bankrupt spouse (paragraph 13). The stated aim of the new s 79A(5) “makes clear that a bankruptcy trustee is a person whose interests are affected”, so that “the trustee will have standing under section 79A” (paragraph 81).
So explained, s 79A(5) of the Act does not give the trustee standing at the expense of a creditor. However, there was no need for it to do so as the possibility of competing claims by a creditor and the trustee is avoided by the need for a creditor to obtain leave under s 58(3)(b) of the Bankruptcy Act before proceedings can be taken under s 79A of the Act. It can readily be seen that where the trustee had commenced, or was proposing to commence proceedings under that section, with the aim of augmenting the estate for the benefit of all creditors, it would be wrong in principle to grant leave to a creditor to take identical proceedings for the same purpose.
Thus, in circumstances where the Bankruptcy Act allows either a creditor with leave or the trustee to take proceeding under s 79A of the Act, a sensible reading of s 79A(4) and (5) would permit both to be regarded as a person affected. This conforms with the natural meaning of the words used in the subsections and the Explanatory Memorandum. We are confirmed in this by the fact that Fraser was decided in 1996 which was well before the amendments, as well as the above interpretation being consistent with the reasoning in that case.
The second respondent’s submission is not accepted and the Notice of Contention filed on 30 July 2020 will be dismissed.
We turn then to the central question in the appeal which concerns the effect, if any, of the second respondent’s discharge from bankruptcy.
The effect of the discharge of the second respondent from his bankruptcy on 7 March 2018 is that “the discharge operates to release him or her from all debts” (s 153(1) of the Bankruptcy Act) except for those identified in the following subsections. However, a discharge does not operate to revest in the bankrupt the property that had been vested in the trustee (Pegler v Dale (1975) 1 NSWLR 265; Daemar v Industrial Commission of New South Wales (No 2) (1990) 22 NSWLR 178). The bankrupt estate continues until it is annulled because the debts have been paid in full (s 153A of the Bankruptcy Act), by court order (s 153B of the Bankruptcy Act) or because the creditors have accepted a payment under s 73 of the Bankruptcy Act (s 74 of the Bankruptcy Act).
Although, after discharge the bankrupt has been released from his debts, the creditors whose debts have been released, retain their rights under the Bankruptcy Act. They remain entitled to lodge proofs of debt and to receive dividends, for example. They continue to be described as “creditors” in the Bankruptcy Act.
Thus, even after discharge the appellant remained a “creditor” for a number of purposes and provisions of the Bankruptcy Act. Importantly, any dividend that she might receive remained diminished by the consent orders which had the effect of removing property from the bankrupt estate which would otherwise have been available for the second respondent’s creditors, including the appellant. So long as her right to receive a dividend remained on foot, the appellant remained a person affected by the consent orders. Similarly, the leave granted by the Federal Court remained. We see no reason at all to limit the word “creditor” in s 58 of the Bankruptcy Act to a creditor whose debt has not been released by the operation of s 153 of the Bankruptcy Act. That would unduly restrict the operation of the Bankruptcy Act for no good purpose.
The second respondent submitted that, even so, the discharge had the effect of rendering the proceedings regarding s 79A of the Act doomed to fail. This was because the effect of any order under that section would be to revest the property, which was transferred under the consent orders to the first respondent. As he was no longer bankrupt, it would not automatically vest in his trustee in bankruptcy as after-acquired property. Thus, the submission continues, the appellant could not be a person affected by the orders and was not entitled to bring proceedings under s 79A of the Act.
We do not accept, however, the revesting of the property in the second respondent consequent upon the setting aside of the consent orders, is the only available outcome in proceedings under s 79A of the Act. The court is empowered by s 79A(1) of the Act to “vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside”. Section 80(1)(k) of the Act allows the court to “make any other order… which it thinks it is necessary to make to do justice”. If it was found that the consent orders had been entered into with the intention of defeating creditors, we do not see why an appropriate variation or substituted order could not see the provision for the payment of those creditors, either directly (in which case here, the appellant would be obliged by the terms of the leave granted to her by the Federal Court to pay the funds to the trustee in bankruptcy) or indirectly by a payment or transfer of property to the trustee. The court would be astute to make orders to overcome fraud on it, on creditors or on persons whose interests would be affected by the property settlement order. The court also has the power to protect the interests of third parties where there has been a miscarriage of justice in any of the other forms described in s 79A(1)(a) of the Act.
The second respondent relied upon Official Trustee in Bankruptcy v Donovan and Donovan and Stevens (1996) FLC 92-703 (“Official Trustee in Bankruptcy v Donovan”). In that matter, property orders were made on 7 February 1986 on the application of the wife and without any opposition by the husband. As a result of the orders the wife became the sole owner of the family home. On 14 October 1986, a sequestration order was made against the husband. He was discharged from the bankruptcy on 14 October 1989. On 1 August 1990, the Official Trustee, as trustee of the bankrupt estate of the husband, commenced proceedings against the wife pursuant to s 79A of the Act. For various reasons, it was not until May 1995 that the husband was joined to proceedings. The application was dismissed on 1 December 1995, again for a number of reasons. One of those concerned the present argument.
As recorded in the decision of the Full Court of the Family Court in Official Trustee in Bankruptcy v Donovan at 83,413–83,414, the trial judge Moss J said:
“50.But the question that seems to me to arise is this: where an order is made under s. 79A(l)(a) setting aside orders earlier made under s. 79, which has the effect of vesting in or divesting from a party proprietary rights in respect of property, does not the creation of such rights spring from the making of the s. 79A order as at the date the order is made? If, as will usually be the case, where such an order is set aside, a further order is made pursuant to s. 79, then the same question arises as to proprietary rights in property which arise because of the terms of the s. 79 orders. The relevance of this inquiry seems to me to be crucial to the Applicant's case, because if such proprietary rights in property owe their existence to either the making of the s. 79A orders or the subsequent s. 79 orders, then those rights come into existence at the date of the relevant orders. In the circumstances of this case, this would mean that any proprietary rights in property created by any such order in favour of the second Respondent would not vest in the Applicant, because such property would not be property which was vested in the second Respondent at the commencement of the bankruptcy or which was acquired by him prior to his discharge from bankruptcy.
…
55.In my opinion the clear result of these authorities in the present circumstances, is that if the second Respondent were to acquire proprietary rights in the property by reason of an order made in the present proceedings, whether under s. 79A(1)(a) or s. 79, no provision thereby made would have been acquired or have devolved upon him prior to his discharge from bankruptcy (cf Bankruptcy Act, s. 58(1)(b) and (6) and s. 116(1)(a)), and accordingly such provision would be beyond the reach of the Applicant. The result must be that these proceedings commenced by the Applicant are incompetent: Re Davies (1961) ALR 866.”
On appeal the Full Court of the Family Court declined to deal with the grounds challenging these findings because the Court was of the view that even if they were successful it would not alter the outcome of the appeal. This was because the relevant discretionary considerations were such that it was not appropriate to vary or set aside the orders.
We are left then with the reasons for judgment of Moss J. They are predicated on the assumption that the effect of any varied or substituted order will be to revest property in the former bankrupt. As we have explained, that is by no means the necessary outcome.
We are confirmed in this view by the presence of s 79A(4) of the Act which was not in the Act at the time of the Official Trustee in Bankruptcy v Donovan decision. Again, we see no reason to limit the meaning of creditor in that section to a creditor of a non-bankrupt or undischarged bankrupt. As we have explained, creditors retain some rights after discharge, including those under s 58(3) of the Bankruptcy Act.
Thus, we are satisfied that the appellant remained a person affected by the consent orders, notwithstanding the second respondent’s discharge from bankruptcy.
CONCLUSION
The grounds of appeal have been made out. The order dismissing the proceedings will be set aside and the proceedings will be remitted for further hearing.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Ryan, Aldridge & Watts. Associate:
Dated: 6 August 2021
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