Warner v Cunningham - [2009] FMCA 303

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WARNER v CUNNINGHAM

[2009] FMCA 303

BANKRUPTCY – Application that the Respondent Bankrupt and all occupants vacate property – application granted.

Bankruptcy Act 1966 (Cth), ss.30. 68, 77(1)(g), 78
Federal Court Rules (Cth), O.37(7)
Federal Magistrates Court Rules 2001 (Cth), r.13.03A(e)

Applicant:

ANTHONY JOHN WARNER AS TRUSTEE IN BANKRUPTCY FOR THE ESTATE OF JULIE LORRAINE CUNNINGHAM

Respondent:

JULIE LORRAINE CUNNINGHAM

File Number:

SYG 2277 of 2008

Judgment of:

Lloyd-Jones FM

Hearing date:

31 March 2009

Delivered at:

Sydney

Delivered on:

31 March 2009

REPRESENTATION

Solicitors for the Applicant:

Leonard Legal

Solicitors for the Respondent:

Self-represented (No appearance)

ORDERS

The Respondent Bankrupt, Julie Lorraine Cunningham, and all occupants vacate the property identified by Folio Identifier 1685/244503, being the property known as 23 Aminya Crescent Bradbury NSW 2560 (“the Property”), within 21 days of this Order.
In the event that the Respondent Bankrupt and all occupants fail to give vacant possession of the Property in accordance with Order 1 above, an Order that a Writ of Possession be issued forthwith.
The Applicant’s costs of these proceedings be paid in priority out of the Property of the Bankrupt Estate of the Respondent Bankrupt.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2277 of 2008

ANTHONY JOHN WARNER AS TRUSTEE IN BANKRUPTCY FOR THE ESTATE OF JULIE LORRAINE CUNNINGHAM

Applicant

And

JULIE LORRAINE CUNNINGHAM

Respondent

REASONS FOR JUDGMENT

Introduction

This is an application filed by the Trustee of a Bankrupt estate seeking vacant possession under ss.30, 68, 77(1)(g) and 78 of the Bankruptcy Act 1966 (Cth) (“the Act”) and O.37(7) of the Federal Court Rules (Cth). The matter was referred to me by the Duty Registrar, Hedge R, on 24 March 2009. The Applicant Trustee was represented by Ms Van Munster of Leonard Legal who advised the Court that she had received correspondence from the firm of Slater & Gordon Lawyers indicating that they had been approached by the Respondent Bankrupt, Julie Lorraine Cunningham, to arrange appearance in this matter. However, at that stage Slater & Gordon had not been formally retained or received any instructions about representation. The matter was adjourned for one week to allow Ms Cunningham to arrange appropriate representation and the following orders were made:
1. The matter is adjourned to 31 March 2009 at 10.15am for directions.
2. The applicant is to notify the respondent, Julie Lorraine Cunningham, and Slater & Gordon Lawyers of today’s orders.
Ms Van Munster informed the Court that she had discussions with a solicitor from Slater & Gordon on the previous day and that person indicated that they had not been retained and had no instructions to appear for the respondent. In the circumstances, I indicated that I would proceed with the hearing in accordance with r.13.03A(e) of the Federal Magistrates Court Rules 2001 (Cth) in the absence of the respondent. I am satisfied that the respondent had been notified of the original and rescheduled hearing but has not availed herself of the opportunity to appear or instruct solicitors to appear on her behalf.

The proceedings

Anthony John Warner of CRS Warner Krugel (formerly CRS Warner Sanderson) was appointed Trustee of Ms Cunningham’s estate on

24 March 2006
by way of a sequestration order. Ms Cunningham was notified of this by letter titled “Notification of Bankruptcy and Bankrupt’s Responsibilities” on 10 May 2006. Also forwarded was a letter under s.77(1) of the Act requiring Ms Cunningham to produce books and records, a statement of affairs for her to complete and an income assessment statement pursuant to s.139U of the Act.
The Trustee’s enquiries revealed that Ms Cunningham is the sole registered proprietor of the property with Folio Identifier 1685/244503 and known as 23 Aminya Crescent, Bradbury NSW 2560 (“the property”). A caveat was lodged over the property on 5 July 2006.
The Trustee indicated, by letter addressed to Ms Cunningham on 15 February 2007, that as a result of a continued lack of co-operation by Ms Cunningham he had instructed solicitors to take possession of the property and place it on the market.
On 9 December 2008, Leonard Legal (on behalf of the Trustee) filed an Application for Substituted Service in respect of the Application for Vacant Possession of the property. Affidavits in support of the Application were also filed. On 24 February 2009, Hedge R made the following orders:
1. Personal service of the Application be dispensed with.
2. A sealed copy of the Application and this Order, and a copy of each affidavit be served:
a) By handing them to any person apparently over the age of 16 years, but, if this is not possible, by leaving them in the letter box or affixing them to the front door in a sealed envelope addressed to the Respondent at 23 Aminya Crescent Bradbury NSW; and
b) By sending them by prepaid ordinary post addressed to the Respondent at 23 Aminya Crescent, Bradbury, NSW.
3. The applicant be deemed to be served on the respondent five days after service in accordance with Order 2(a) and 2(b) whichever is the latter.
The matter was adjourned for directions on 24 March 2009 at 9.45am. It was then that the matter was referred to me as the Duty Federal Magistrate for bankruptcy.

Evidence

The following evidence was filed in support of the Application for Vacant Possession:
a)Affidavit of Anthony John Warner sworn 25 August 2008 attaching Exhibit “AJW-1”.
b)Affidavit of Service sworn by Craig Sheen, licensed Commercial Agent, on 10 March 2009.
c)Affidavit of Notification sworn by Kellie Van Munster, Solicitor, on 31 March 2009.
d)Affidavit of Service sworn by Craig Sheen on 2 December 2009.
e)Exhibit “A1”: Letter from Julie Cunningham dated 24 February 2009 and addressed to Simon Craddock of Leonard Legal.
f)Exhibit “A2”: Letter of Leonard Legal dated 6 March 2009 and addressed to Julie Cunningham of 11 The Grove, Christchurch, Dorset BH232EX, England.
g)Exhibit “A3”: Bundle of documents addressed to the Chief Federal Magistrate from a Mrs Cribb containing documents addressed to Ms Cunningham at the Bradbury address.

Submissions on behalf of the Applicant Trustee

Ms Van Munster relied upon the contents of Mr Warner’s affidavit and drew the Court’s attention to the exhibit bundle “AJW-1”.
Mr Van Munster advised the Court that the application was brought on the basis that Ms Cunningham had failed to comply with her responsibility to provide the Trustee with a statement of affairs or deliver documents required under the Act. Therefore possession of the property was sought. The respondent was made bankrupt by a sequestration order on 24 March 2006 with the date of bankruptcy being 30 September 2005. Mr Warner was appointed Trustee on

22 March 2006
(Exhibit “AJW-1” at Tab 1).
The Trustee forwarded the following documents to Ms Cunningham’s last known address at 23 Aminya Crescent, Bradbury NSW.:
a)A letter dated 10 May 2006 notifying the bankrupt of the sequestration order and enclosing a copy;
b)A document titled “Notification of Bankruptcy and Bankrupt’s responsibilities”;
c)A letter dated 10 May 2006 enclosing “Notice to deliver books of debtor to the trustee”;
d)A letter dated 10 May 2006 enclosing a “Statement of Affairs” form; and
e)A letter dated 10 May 2006 issued in accordance with s.139U of the Act enclosing an income assessment statement for the period 24 March 2006 to 23 March 2007 (Exhibit “AJW-1” at Tab 2).
Searches carried out by the Trustee established that Ms Cunningham was the sole registered proprietor of the property.
A copy of the title search is located at Exhibit “AJW-1” at Tab 6. Based on the searches, a caveat was lodged by the Trustee over the property on 3 July 2006: Exhibit “AJW-1” at Tab 7. In response to notification from the Department of Land, Land and Property Information Division, NSW, the Trustee received correspondence from Sarah Holmes, solicitor, of the firm of Holmes, Fraser & Lewis in Christchurch, Dorset, England purporting to act for Ms Cunningham: Exhibit “AJW1” at Tab 8. The letter also indicated that Ms Cunningham did own the property identified as 23 Aminya Crescent, Bradbury NSW.
In response, the Trustee forwarded correspondence dated 4 October 2006 and enclosed documents previously sent to the respondent being a letter giving notification of bankruptcy and her responsibilities, a letter under s.77 of the Act to produce books records and a statement of affairs and a letter enclosing an income assessment statement: Exhibit “AJW1” at Tab 2, Tab 9.
The Trustee further disclosed that as part of his investigation, letters were sent to all banks requesting details of accounts held by them on behalf of Ms Cunningham. He advised that the Bendigo Bank replied saying that Ms Cunningham held two accounts with them giving the Bradbury address. He further advised Ms Holmes that Ms Cunningham would remain bankrupt indefinitely unless she completed the relevant documents and a statement of affairs.
On 17 October 2006, Leonard Legal on behalf of the Trustee received further correspondence from Holmes, Frazer and Lewis indicating that Ms Cunningham had received no notification or information concerning her debt or the subsequent bankruptcy: Exhibit “AJW-1” at Tab 10. They indicated that they intended to notify the Law Society of NSW that Leonard Legal had unreasonably bankrupted Ms Cunningham.
On 28 February 2007, the Trustee received further correspondence from Holmes Frazer & Lewis in reply to his letters dated 15 February 2007. The letter stated that legal proceedings would be commenced against the Trustee for unlawfully bankrupting Ms Cunningham: Exhibit “AJW-1” at Tab 13. The Trustee replied on 8 March 2007 advising that he did not bankrupt the respondent and the petitioning creditor was Accounts Control Management Services. On 15 March 2007 Leonard Legal received a letter from the Office of the Legal Services Commissioner regarding a complaint made by Ms Holmes. The letter states:
I am writing to advise you that a complaint has been lodged against you by Sarah Holmes on behalf of her client Julie Cunningham. The complaint relates to your conduct on behalf of your client Anthony Warner with respect to a sequestration order made against Ms Cunningham.
In particular, Ms Cunningham was concerned that a Bankruptcy Notice has been filed against her as she believed she had no debts in Australia. The letter of complaint states:
Michael John Leonard Solicitors of Level 4, 167 Phillip Street, Sydney acting on behalf of Anthony Warner of CRS Warner Sanderson firstly put a Caveat on my client’s property she owns in Sydney, in September 2005. We then informed the above solicitors that my client knew nothing of this debt collector and had no debts in Australia and this was obviously a case of mistaken identity and the Caveat was removed, without any details of what the debt was for.
On February 2006 my client received a letter from the Department of Lands informing my client that a Trustee had been appointed to her property. On further investigation we found out that the Debt Collection agency had bankrupted my client. (Exhibit “AJW-1” at Tab 15)
Regarding the claim of mistaken identity, Leonard Legal forwarded correspondence dated 20 March 2007 to Holmes, Frazer & Lewis requesting that they provide their client’s full name and date of birth (Exhibit note AJW1 at Tab 16). On 29 March 2007, Holmes, Frazer & Lewis replied enclosing a copy of Ms Cunningham’s birth certificate (Exhibit “AJW-1” at Tab 17).
On 3 May 2007, Leonard Legal requested photo identification to establish whether there was a case of mistaken identity as claimed by Holmes, Frazer & Lewis (Exhibit “AJW-1” at Tab 18). No such documentation was received from Holmes, Frazer & Lewis or Ms Cunningham.
The Office of the Legal Services Commissioner wrote to Leonard Legal on 12 July 2007 requesting details of the debt outstanding: Exhibit “AJW-1” at Tab 22. The Trustee and Leonard Legal forwarded letters dated 23 July 2007 and 8 August 2007 to Holmes Frazer & Lewis and the Office of the Legal Services Commissioner providing details of the amounts outstanding, who the debt was payable to and copies of the Court orders: Exhibit “AJW-1” at Tabs 23 and 24.
By a letter dated 14 August 2007 the complaint was dismissed by the Office of the Legal Services Commissioner: Exhibit “AJW-“1 at Tab 25. On 5 September 2007 Leonard Legal received correspondence from Holmes, Frazer & Lewis. The Trustee also received correspondence dated 3 April 2008 which stated:
In relation to the above caveat placed on my client’s property, there are now three different organisations within Australia who agree with us that my client Ms J Cunningham can not possibly be the person you are looking for.
If the caveat on the above property is not removed immediately, with recommendations from the Ombudsman, we have instructed a law firm in Sydney to take legal action against you, for damages and costs to settle this matter. (Exhibit “AJW-1” at Tab 27)
On 15 April 2008, the Trustee forwarded a facsimile to Holmes Frazer & Lewis requesting information obtained from the organisation which the solicitor identified that agreed with her that her client should not be bankrupt. He again requested a photo identification of Ms Cunningham and sought contact details advising that he had attempted to make contact with the office via telephone and email which had failed. He further advised that he would welcome correspondence from a Sydney based lawyer in order to effectively resolve the matter. In the absence of satisfactory evidence that he had the wrong Julie Lorraine Cunningham, the caveat would not be removed. Mr Warner advised that the evidence at hand, being the signature on the credit card application matched the application or the signature on the mortgage and he was satisfied that the Julie Lorraine Cunningham was one and the same. Attached to that correspondence is the facsimile report indicating a failure of the attempt to deliver the email to Holmes, Frazer & Lewis: Exhibit “AJW-1” at Tab 28.
After the correspondence dated 15 August 2008, Leonard Legal as well CRS Warner Kugel did not receive any further correspondence from Holmes, Frazer & Lewis. The Trustee made investigations with the Solicitors Regulation Authority (SRA) in the United Kingdom regarding Sarah Holmes of Holmes, Frazer & Lewis. On 25 July 2008 the SRA advised Mr Malone, manager of CRS Warner Kugel, that Ms Holmes or the firm were not listed with the SRA.
Ms Van Munster indicated that she had also carried out those searches and found no record of their existence. She tendered a letter from Julie Cunningham of 11 The Grove, Christchurch, Dorset BH232EX, England addressed to Leonard Legal dated 24 February 2009 which states:
Heading Reference: Bankruptcy Julie Cunningham (as requested my photo ID was sent to you sometime ago verifying I am not the person that had incurred a debt in Australia and to reverse the bankruptcy placed on me. To date this has not been done.
Your actions in this matter and that of your client have been reported to the ACCC in Australia. I have now been informed that you are acting illegally in this matter and all correspondence from you and CRS Sanderson has been sent to Sydney where the matter will now be dealt with in Court as it is now in the hands of an Australian solicitor.
(Signed Julie Cunningham)
Ms Van Munster submits that after the substituted service orders were granted, Leonard Legal wrote to Ms Cunningham on 6 March 2009 at the Dorset address attaching a copy of the application before this Court. Ms Van Munster submits that in the event that Ms Cunningham does reside in England, she has been sent correspondence setting out the issues before this Court. Ms Van Munster also indicated that she sent correspondence to Slater & Gordon in respect of this matter and was advised on 30 March 2009 that Ms Cunningham had in fact contacted the firm. However they had no instructions to act on her behalf or in relation to the proceedings. In addition, attempts have been made to contact Holmes, Frazer & Lewis.

Consideration

With the benefit of the correspondence contained in Exhibit “AJW-1”, I find it highly unlikely that either Ms Holmes or the firm Holmes, Frazer & Lewis exist. This has been confirmed by the SRA in the United Kingdom and separately by Ms Van Munster. An examination of the correspondence forwarded in the name of Ms Holmes makes it extremely difficult to accept that the author is a legal practitioner.
The legal remedies suggested in that correspondence on behalf of the client are ridiculous. The complaint to the Office of the Legal Services Commissioner and the suggestion of similar complaints to the Ombudsman and the Australian Competition & Consumer Commission appear to be nothing more than cynical ploys to prevent the Trustee from carrying out his lawful duties.
Similarly, the return of documents served at the Bradbury property in accordance with orders made by Hedge R on 24 February 2009 from an 84 year old widow named Mrs Cribb appears to be yet another attempt to frustrate the processes of this Court and the Trustee in the performance of his duties. The various affidavits made by commercial agents and process servers make no reference to a person of this description occupying the property.
I am satisfied that Ms Cunningham has been correctly informed of these proceedings but that she has not taken any steps to appear in person or briefed any legal practitioner to appear on her behalf.

I adjourned these proceedings for one week to provide

Ms Cunningham with an opportunity to appear. That opportunity was ignored. Further, I am satisfied that Ms Cunningham has failed to comply with s.77(1)(g) and s.78 of the Act. In the circumstances, I order that that the Respondent Bankrupt and all occupants vacate the property identified by Folio Identifier 1685/224503, being property known as 23 Aminya Crescent, Bradbury, NSW 2560, within 21 days. In the event that Ms Cunningham and all other occupants fail to give vacant possession of the property, I order that a Writ of Possession should be issued. The applicant’s costs should be paid out of the property of the bankrupt estate of Ms Cunningham.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM

Associate:

Date: 8 April 2009