Warner v Liddell
[2006] FMCA 893
•20 June 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WARNER v LIDDELL | [2006] FMCA 893 |
| BANKRUPTCY – Application for vacant possession of property – application for writ of possession upon failure to give vacant possession of property. |
| Bankruptcy Act 1966 (Cth), ss.30, 58, 77, 78, 157 Bankruptcy Regulations 1996 (Cth), r.4.14 Federal Court Rules 1979 (Cth), O.37.7 |
Cook & Anor v Schwarcz [2005] FMCA 1598
| Applicant: | ANTHONY WARNER (AS TRUSTEE IN BANKRUPTCY FOR THE ESTATE OF EDNA JEAN LIDDELL) |
| Respondent: | EDNA JEAN LIDDELL |
| File number: | SYG543 of 2006 |
| Judgment of: | Lloyd-Jones FM |
| Hearing date: | 20 June 2006 |
| Delivered at: | Sydney |
| Delivered on: | 20 June 2006 |
REPRESENTATION
| Solicitors for the Applicant: | Mr S Craddock of Leonard Legal |
| Respondent: | No appearance by or on behalf of the respondent |
ORDERS
An order that the respondent bankrupt and all occupants vacate the property defined in the schedule within twenty-one (21) days of the Court’s Order.
In the event that the respondent bankrupt and all other 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.
An order that the applicant’s costs of these proceedings be paid in priority out of the property of the Bankrupt Estate of the respondent bankrupt.
SCHEDULE
The property identified by Folio reference 161/785059
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG543 of 2006
| ANTHONY WARNER (AS TRUSTEE IN BANKRUPTCY FOR THE ESTATE OF EDNA JEAN LIDDELL) |
Applicant
And
| EDNA JEAN LIDDELL |
Respondent
REASONS FOR JUDGMENT
The Proceedings
This is an application in the bankruptcy of EDNA JEAN LIDDELL by her trustee Mr ANTHONY WARNER. The application was filed on
21 February 2006 in the name of Circuit Finance Pty Ltd, being the party that filed the creditor’s petition. On 11 April 2006, an amended application was filed in the name of Anthony Warner, as trustee in bankruptcy for the estate of Edna Jean Liddell. It sought five orders pursuant to ss.30, 58, 77(1)(g) and 78 of the Bankruptcy Act 1966 (Cth) (“the Act”) and O.37.7 of the Federal Court Rules1979 (Cth). Those orders relate to a property known as 43 Ferndale Street, Tighes Hill, New South Wales, in respect of which Ms Edna Jean Liddell is the registered proprietor.
Ms Liddell was made bankrupt pursuant to a sequestration order dated 18 May 2005.
Upon the making of the sequestration order, the property of the bankrupt vests forthwith in her registered trustee: s.58(1)(a) of the Act. Thus the trustee, Mr Anthony Warner, is the equitable owner of the property, identified by Folio reference 161/785059, and known as
43 Ferndale Street, Tighes Hill, New South Wales. The trustee now seeks, by way of this application, assistance to become registered as the proprietor, an order that the bankrupt vacate the property, and a writ of possession, together with consequential orders for costs.
In the affidavit of Anthony Warner, sworn 6 February 2006 and filed in these proceedings on 21 February 2006 (“Mr Warner’s first affidavit”), confirms that he was appointed trustee by way of a sequestration order dated 18 May 2005. On 6 June 2005, he wrote to Ms Liddell notifying her of the bankruptcy and the administration of her bankrupt estate. Attached to that letter is a document titled ‘Notification of Bankruptcy and Bankrupt’s Responsibility’. Ms Liddell was asked to acknowledge receipt of that document by indicating that she had read and understood its contents, signing the acknowledgement at the bottom of the letter and returning it to Mr Warner’s office.
On 30 June 2005, Mr Warner wrote the following letters to Ms Liddell:
a)Reminder letter regarding income questionnaire;
b)Reminder letter regarding previous request for access to books and records;
c)Reminder letter regarding lodgement of statement of affairs.
At the time of execution of Mr Warner’s first affidavit on 6 February 2006, he had not received a reply to that correspondence.
On 10 July 2005, Mr Warner issued a statutory report to the creditors in compliance with reg.4.14 of the Bankruptcy Regulations 1996 (Cth). Annexed to Mr Warner’s first affidavit is a document prepared by Giles McCarthy of Mr Warner’s office, which details attempts made by Mr McCarthy to contact Ms Liddell.
On 15 December 2005, Mr Warner wrote to Simon Craddock of Leonard Legal instructing him to initiate recovery proceedings for possession and ultimately the sale of Ms Liddell’s property located at 43 Ferndale Street, Tighes Hill, New South Wales. On the same day, Mr Warner wrote to Ms Liddell notifying her of the repossession and sale of her house. In that letter Mr Warner referred to the previous correspondence and indicated that as a result of Ms Liddell’s continued lack of cooperation, he had instructed solicitors to repossess and ultimately sell Ms Liddell’s house. Mr Warner confirms that at the time of execution of the affidavit, he was not aware of any response or communication from Ms Liddell to either himself or his office.
At some time in late December 2005, Ms Liddell forwarded to Mr Warner a statement of affairs, which was executed by her on
18 December 2005. In the declaration, Ms Liddell indicated that she was assisted by Manus Reay Liddell in the preparation of the statement. That person also records their residential address as
43 Ferndale Street, Tighes Hill, New South Wales. Mr Warner, in his first affidavit, indicated that he had reviewed the statement of affairs and was of the opinion that the contents of it were not true and correct due to false declarations regarding Ms Liddell’s assets and liabilities. A copy of the statement of affairs, which is annexed to the first affidavit of Mr Warner, contains minimum information. Ms Liddell indicated that she is in receipt of an aged pension and a superannuation retirement entitlement. Question 28 of the statement of affairs in respect of real estate states:
28.Do you own, or are you buying, any land or buildings in Australia or overseas?
The response was “no”.
In response to:
Is there a building on the land?
The response was “no”.
In response to all other questions in respect of assets, Ms Liddell answered in the negative.
Annexed to the affidavit of Mr Warner (“Mr Warner’s second affidavit”) sworn on 13 April 2006 and filed in these proceedings on
18 April 2006, is a true copy of an Australian Business Research Title Search dated 10 April 2006, for the property known as Certificate of Title Identifier 161/785059, owned by Edna Jean Liddell. In the second schedule of that title search there are three reservations and conditions in the Crown grant, namely, an encumbrance to Wallalong and Woodville Drainage Company Limited and a caveat each by Circuit Finance Pty Limited and Worrells Solvency & Forensic Accountants. This information is in direct contradiction to the statement of affairs completed by Ms Liddell.
On 16 May 2006, solicitors for the applicant made an application to the Court for substituted service orders in the following form:
1.Personal service of the Application dated 11 April 2006 be dispensed with.
2.A copy of the Application be served as follows:
(a) By prepaid registered post addressed to the Respondent at 43 Ferndale Street, Tighes Hill, NSW 2297; and
(b) By affixing a copy of the Application addressed to the Respondent to the front door of the residents located at 43 Ferndale Street, Tighes Hill NSW 2297; or
(c) By personal service on any person apparently over the age of sixteen years apparently residing at 43 Ferndale Street, Tighes Hill NSW 2297;
3.In each instance referred to in paragraph 2 hereof, that the documents be in a sealed envelope addressed to the Respondent at 43 Ferndale Street, Tighes Hill NSW 2297.
4.That service in accordance with the order shall be deemed good and sufficient service of the Application upon the Respondent.
This application was supported by an affidavit of Michael Karel Bacina, a solicitor of Leonard Legal, which contains annexures detailing attempts to serve various documents on Ms Liddell. Those orders were issued by a Registrar of the Court on 16 May 2006.
An affidavit of notification sworn by Simon Thomas Craddock, paralegal of Leonard Legal, stating that on 13 June 2006 he forwarded a letter dated 13 June 2006 to the respondent by ordinary pre-paid mail, indicating that the matter was listed for hearing on Tuesday 20 June 2006 at 10.15am in the Federal Magistrates Court, Law Courts Building, Queens Square, Sydney, New South Wales.
These proceedings were transferred from the Registrar’s bankruptcy list on 20 June 2006 for a hearing of the amended application filed on 11 April 2006. Mr Craddock of Leonard Legal, appearing for the applicant, filed three affidavits of service, executed by Matthew Ellsmore, who served the documents:
a)Order of Registrar Hedge, dated 16 May 2006;
b)Amended Application, dated 11 April 2006;
c)Affidavit of Anthony Warner, sworn 13 April 2006; and
d)Affidavit of Anthony Warner, sworn 6 February 2006.
This affidavit indicates that the documents were served by hand and were received by a male resident over sixteen years of age at the premises. That person declined acknowledgement of service.
Mr Ellsmore enquired whether Edna Jean Liddell resided at the premises, which the person served replied “Yes”. Mr Ellsmore then left the documents in the presence of that person as he refused to accept the documents by hand.
Conclusion
I am satisfied that the trustee and his representatives have taken all necessary steps to inform Ms Liddell of the circumstances of the bankruptcy and its consequences. I am also satisfied that appropriate attempts have been made to serve all of the relevant documents on
Ms Liddell.
I believe that I have the appropriate authority to issue these orders and I am guided by Barnes FM in Cook & Anor v Schwarcz [2005] FMCA 1598 at [10] and [11] where Her Honour reviews the jurisdiction previously considered by Raphael FM:
10.Reliance is placed on a number of provisions of the Bankruptcy Act 1966 in particular s.30, the general power to make orders, (subs.(1)(a) and (b), 5(a) and (c)) in conjunction with s.77 (1)(g) of the Bankruptcy Act. The power of the Court to make such orders has been considered by Federal Magistrate Raphael in Cook v Tagamilitsky [2001] FMCA 117 at [7]–[10]. His Honour noted in that case at [9] that:
... although recovery of the assets of a debtor frequently involves the sale of the debtor's property and therefore the necessity to require a debtor to vacate possession of that property, there is no specific section in the Bankruptcy Act dealing with this matter in a codified form. Reference has to be made to a number of sections of the Act. However, it is obvious from cases such as Dixon v Ly Ty Tran Cao & Ors, a decision of Beazley J as she then was, unreported 23 June 1995 in the Federal Court and White (as trustee of the bankrupt estate of Lyn) v Lyn [1991] FCA 841 a decision of Finkelstein J, that the Court has power to make such orders and indeed to stay those orders on terms.
11.His Honour was of the view that a combination of s.77(g) and s.30 of the BankruptcyAct was sufficient to ground the jurisdiction of the orders he proposed to make. I agree that such provisions are sufficient to ground the jurisdiction for the orders sought. I am also satisfied on the evidence before me that it is appropriate to make the orders sought despite the absence of the respondent in light of service on him of notification of today’s proceedings, the history of this matter and all the circumstances as outlined above (also see Cook v Tagamilitsky at [10] in which such orders were also made in the absence of the respondent).
I am acutely aware of the impact orders to vacate the premises and a writ of possession will have. Consequently, I have amended the first order to extend the notification period from seven (7) to twenty-one (21) days, to enable the trustee and his legal representatives further time to endeavour to discuss with the applicant the consequences of these orders and to provide her with an opportunity to seek assistance if it is required.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM.
Associate:
Date: 21 June 2006
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