Weston v Szepesvary

[2015] FCCA 3516

FEDERAL CIRCUIT COURT OF AUSTRALIA

WESTON & ANOR v SZEPESVARY & ANOR [2015] FCCA 3516

Catchwords:
BANKRUPTCY – Application in a case – devoid of merit – dismissed.

Legislation:
Bankruptcy Act 1966 ss.30, 77(1)(e), 77(1)(g)
Federal Circuit Court Rules 2001 r.13.10
Federal Court (Bankruptcy Rules) 2005 r.2.01(3)(a)

First Applicant: PAUL GERARD WESTON

Second Applicant: PETR VRSECKY

First Respondent: AARON SZEPESVARY

Second Respondent: BUKET OZDIL

File number: MLG 1036 of 2015

Judgment of: Judge Riley

Hearing date: 21 December 2015

Date of last submission: 21 December 2015

Delivered at: Melbourne

Delivered on: 21 December 2015

REPRESENTATION

Counsel for the applicants: Mr Brenton P. Devanny

Solicitors for the applicants: Smith Leonard Fahey Lawyers

Counsel for the first respondent: The first respondent appeared in person

Solicitors for the first respondent: The first respondent was not represented

Counsel for the second respondent: The second respondent appeared in person

Solicitors for the second  respondent: The second respondent was not represented

ORDERS

1. The application in a case filed on 18 December 2015 be dismissed.

FEDERAL CIRCUIT
COURT OF AUSTRALIA AT
MELBOURNE

MLG 1036 of 2015

PAUL GERARD WESTON

First Applicant

PETR VRSECKY

Second Applicant

And

AARON SZEPESVARY

First Respondent

BUKET OZDIL

Second Respondent

REASONS FOR JUDGMENT

(revised from the transcript)

1. The matter concerns an application in a case filed in the court on

   
   

   18 December 2015 which was made returnable today.  I am told by counsel for the applicants that it was served on them this morning about 20 minutes before court convened.  The application was filed by the respondent bankrupts in person. 

2. The application, firstly, seeks that a number of the applicants’ affidavits be struck out.  I have been told today by counsel for the applicants that they do not seek to rely on those affidavits.  Therefore, that aspect of the matter does not need to be dealt with.

3. The bankrupts also object to the affidavit of Peter Vrsecky, the trustee in bankruptcy of the second respondent.  That affidavit was sworn on 7 May 2015. 

4. The first ground of objection was that the application to which Mr Vrsecky’s affidavit relates states in the court heading that it is in the bankrupt estate of Meredith Jacob Smith.  That person has no connection with this proceeding.  The bankrupts said that the error in the court heading caused them problems in filing documents and so on.  However, the application clearly had the notice of filing attached to it which gave the correct file number.  Also, the parties are correctly named.  This particular objection does not have any relevance to the affidavit of Mr Vrsecky itself.  The error was not perpetuated in the affidavit of Mr Vrsecky.  It does not seem to me that there is any substance to that ground of objection.

5. The bankrupts’ also objected to the affidavit of Mr Vrsecky on the grounds that:

   a)it fails to give sufficient particularity; 

   b)no valid cause of action is apparent; 

   c)it does not assert that it is brought in the interests of the creditors;

   d)it fails to meet the standards of the Bankruptcy Act1966 (“the Act”); and

   e)it relies on assertions of persons that have abandoned the application and no longer have a capacity in the proceeding.

6. Mr Weston and another trustee, Mr Porter, were appointed as joint trustees of the bankrupt estate of Mr Szepesvary, the first respondent.  However, Mr Porter has retired as a trustee.  The bankrupts seem to think that, because Mr Porter is no longer a trustee, it somehow affects the role of Mr Weston and somehow affects the statements of fact that were made in reliance on things that Mr Porter may have said or done.   However, that does not follow.  Where there is a joint trustee, one or the other of them can resign and, in accordance with the general principles that apply to joint appointments or joint ownership, the remaining trustee or owner has the full powers that they each previously had.

7. I do not accept the other allegations.  To say that there is no cause of action is not to the point.  The application that has been brought to the court is for orders for vacant possession, the bankrupts having failed to vacate the house that they jointly owned.  Clearly, as they are now both bankrupt, the house vests in their trustees in bankruptcy.  There is no relevant lack of particularity.  Clearly the application is brought in the interests of the creditors as the property is one of the assets of the bankrupt estates.  I cannot see any substance to the allegation that the application fails to meet the standards of the legislation.

8. The application in a case also seeks the dismissal of the proceeding pursuant to r.13.10 of the Federal Circuit Court Rules 2001.  That rule provides for summary judgment in circumstances where an application has no reasonable prospects of success, or is frivolous or vexatious.  No such circumstance applies in this case.  The trustees have every right to bring the application for vacant possession.  There seems to me to be no basis for summary judgment against the applicants.

9. The bankrupts said that the trustees’ application fails to comply with r.2.01(3)(a) of the Federal Court (Bankruptcy Rules) 2005. That rule requires that the application state each section of the Act upon which reliance is placed. The trustees’ application sets out ss.30, 77(1)(e) and 77(1)(g) of the Act. It seems to me that, consequently, the trustees’ application adequately complies with r.2.01(3)(a) of the Federal Court (Bankruptcy Rules) 2005.

10. The bankrupts also said that the trustees’ application should be dismissed pursuant to r.13.10 of the Federal Circuit Court Rules 2001 because Mr Porter has resigned but Mr Weston had not submitted a new application.  As I have said, that is by the by.  They were joint trustees so the proceeding can continue with just one of them. 

11. The bankrupts also said the application refers to Meredith Jacob Smith.  Again, that was clearly an error but it is not one that is in any sense fatal to the proceeding. 

12. The bankrupts asserted that the resignation of Mr Porter did not automatically give Mr Weston power to continue with the proceeding.  However, as already discussed, they were joint trustees and there is, therefore, power in Mr Weston to continue with this proceeding without Mr Porter’s involvement.

13. The application in a case then seeks an order that a valuer be appointed.  The bankrupts assert that the property has been undervalued.  They said that they have kerbside valuations which show that the property has been undervalued.  However, as explained during argument, the value of the property is really neither here nor there.  The fact is that the trustees have become legally entitled to be registered as owners and they are legally entitled to have vacant possession of the property.  The value of the property will be determined at auction.

14. The application in a case then asks for Mr Porter to be joined to the proceeding, or the proceeding be dismissed.  However, as explained, there is no requirement for Mr Porter to be involved in this proceeding.  The matter can proceed with the involvement of Mr Weston alone. 

15. The application in a case then asks for leave for the bankrupts to file judicial review of the orders made on 8 December 2015.  Those orders concerned an application by the bankrupts for the referral of the matter for pro bono legal assistance.  As I understand it, that is not a matter that can be reviewed.  However, if I am wrong about that, it is simply up to the respondents to file their documents.  I do not understand that the leave of this court is required.  If it is, I would not grant leave.  It seems to me that a referral for pro bono assistance would have been futile.  I have very grave doubts that anyone would have been willing to take on this matter on a pro bono basis.  There seems to be absolutely no basis upon which the bankrupts could resist the substantive application.

16. The application in a case also seeks orders that the bankrupts have leave to bring charges for contempt against Lisa McNicholas who is employed by the solicitor on the record for the applicants.  The matter does not require the leave of the court to bring charges for contempt as I understand it.  If the bankrupts wish to refer the matter to the police, or file the appropriate application, then they can. 

17. The application in a case then asks for an adjournment to allow the parties to obtain a valuation of the property, serve responding affidavits and prepare written submissions.  As I have said, there is no benefit in obtaining a valuation of the property.  This matter has been adjourned a number of times because the bankrupts said they wished to challenge the underlying bankruptcy or seek an annulment.  They assured the court that they would be able to obtain money from friends and relations to get an annulment.  They said they could get private legal assistance.  However, they have not been able to do either of those things.

18. All in all, the matter has been adjourned repeatedly on the assurances of the respondents, but nothing has come to fruition.  In the circumstances, I see no basis for any further adjournment.   

19. The application in a case is without merit and will be dismissed.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judge Riley

Associate: 

Date:  12 January 2016