Van Der Velde v Mahony

[2015] FCCA 1805

FEDERAL CIRCUIT COURT OF AUSTRALIA

VAN DER VELDE & ANOR v MAHONY [2015] FCCA 1805

Catchwords:
BANKRUPCTY – Application for orders for delivery up of possession of real property.

Legislation:  

Bankruptcy Act1966, ss.77(1)(e), 77(1)(g)

Applicants: TERRY GRANT VAN DER VELDE AND JASON CHANE CRONAN AS JOINT AND SEVERAL TRUSTEES OF GERARD WILLIAM MAHONY (A BANKRUPT)

Respondent: GERARD WILLIAM MAHONY

File Number: BRG 121 of 2015

Judgment of: Judge Jarrett

Hearing date: 9 March 2015

Date of Last Submission: 9 March 2015

Delivered at: Brisbane

Delivered on: 9 March 2015

REPRESENTATION

Solicitor for the Applicant: Mr Cocolas

Solicitors for the Applicant: Rostron Carlyle Solicitors

The respondent appeared on his own behalf

ORDERS

1. Pursuant to ss.77(1)(e) and (g) of the Bankruptcy Act 1966 and pursuant to the provisions of the Bankruptcy Act 1966 generally, the respondent deliver up vacant possession of the property situated at 12 Double Island Drive, Rainbow Beach, Queensland, 4581 (“the property”) to the applicants within 14 days of today.

2. In the event the respondent fails to comply with that order, an enforcement warrant for the possession of the property be issued in favour of the applicants.

3. The applicants’ costs of and incidental to the application should be taxed and paid in accordance with the Federal Circuit Court (Bankruptcy) Rules 2006.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT BRISBANE

BRG 121 of 2015

TERRY GRANT VAN DER VELDE AND JASON CHANE CRONAN AS JOINT AND SEVERAL TRUSTEES OF GERARD WILLIAM MAHONY (A BANKRUPT)

Applicant

And

GERARD WILLIAM MAHONY

Respondent

REASONS FOR JUDGMENT

ex tempore

1. This is an application by trustees in bankruptcy Messrs Van Der Velde and Cronan, who are the trustees of the respondent’s estate in bankruptcy.  By this application they seek to have the respondent deliver up to them vacant possession of certain real property. 

2. That they are his trustees in bankruptcy is not controversial.  Nor is it controversial that they are now the registered proprietors of his interest in the land in question.  They are presently co-owners of that property with Pamela Mahony. 

3. The job of a trustee in bankruptcy is spelled out in the Bankruptcy Act 1966. Put generally, upon appointment, it is to gather in all of the bankrupt’s estate, whatever form it might take, to liquidate it – turn it into cash – and then distribute the cash amongst the creditors of the bankrupt, having regard to the priorities in which that money should be paid away to those creditors and others who might be interested in the proceeds.

4. The bankrupt remains bankrupt until either there is an annulment, by act of the trustee where a bankrupt can pay all of his or her debts, or by order of the court. Sometimes the court can set aside a sequestration order, but usually a bankrupt is discharged by the effluxion of time. The standard timeframe permitted in the Bankruptcy Act is three years, so that three years after the filing of a statement of affairs following the making of a sequestration order they are then discharged. There are exceptions, of course, to all of those generalities.

5. Here, the trustees are doing what is expected of them under the Bankruptcy Act. They would be derelict in their duties if they did not do what they purport to do by these proceedings. The respondent initially asks for an adjournment of these proceedings for three months. He has not filed any affidavit material. He simply sent, it seems, a letter, by email, to my associate and to the other side. But I am prepared to take what he says in his submissions this morning at face value.

6. He is not a well man.  He needs some surgery, which might improve his chances of living a longer, more fulfilling life.  He has described to me this morning that he might undergo some heart surgery in which a stent might be inserted into his heart, or one of the arteries associated with it.  He says, therefore, that the proceedings ought to be adjourned for three months, and thereafter, provided all things go well, there could then be a trial of these proceedings. 

7. I asked the respondent what his defence to the claim was. His answer was confused and confusing, but it seems to be that he suggests that the trustees in bankruptcy in this case suffer from some defect in their appointment, either as trustees of his estate or, more generally, as registered trustees under the Bankruptcy Act.

8. There is no evidence before me that calls into question their appointments and the evidence in fact suggests that their appointments as trustees for this bankrupt are authorised and appropriate.

9. Whether there is some difficulty with their appointment as trustees generally, under the Act, is not clear.  But the respondent’s submissions referred to memorandums of – or articles of – association.  I do not understand that reference.  They are matters which, generally speaking, are relevant to corporations.  But they are not documents which are ordinarily spoken of in respect of individuals such as Messrs Cronan or Van Der Velde. 

10. It is important to understand that they are appointed as bankruptcy trustees in this case in their personal capacities, not as a firm of accountants or insolvency practitioners.  The firm is not appointed; it is the individuals.  As I had cause to point out in a recent judgment delivered only a couple of weeks ago, the obligations cast on people like Messrs Cronan and Van Der Velde are cast on them as individuals, and not on their firm. 

11. I do not understand the argument the respondent wishes to make, but to the extent that he wishes to argue that the appointments of the applicants in this case as registered trustees, or as trustees of his estate in bankruptcy, are invalid, in my view, that argument has no prospect of succeeding. 

12. In the event that the argument that he wishes to agitate has no prospect in succeeding there is little point in granting an adjournment.  It would be futile to do so. 

13. Accordingly, it is appropriate, having regard to the evidence of a demand and a failure to comply with the demand for delivery up of vacant possession, to order that there be vacant possession of the property. 

    ORDERS DELIVERED

14. It was said, in the course of submissions, that the co-owner, Ms Pamela Mahony, supported the application, and then it was said by the respondent that she has withdrawn her support.  Her support for the application is neither here nor there.  It does not matter.  What the applicants are entitled to is delivery up of vacant possession of the interest that they have on behalf of the bankrupt.  The orders must reflect that.  In those circumstances, the orders will be as I have pronounced.

    RECORDED  :  NOT TRANSCRIBED

15. These proceedings have been necessary to enable the applicants to fulfil their obligations under the Bankruptcy Act. As I said earlier in the reasons that I delivered on the principal application, the applicants are doing nothing more than discharging their obligations and responsibilities to the bankrupt’s creditors and, more generally, under the Bankruptcy Act. The application was opposed, and whatever might be the case about the dispute between the applicants and the respondent as the respondent describes it, the fact of the matter remains that they are his trustees in bankruptcy and they are entitled to collect in his property, liquidate it and distribute it amongst his creditors. That is all this application is about. The response was bound to fail. There ought to be an order for costs.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 9 March 2015.

Associate: 

Date:  9 July 2015