Yang v Mead

[2008] FCA 1070

FEDERAL COURT OF AUSTRALIA

Yang v Mead [2008] FCA 1070

GRACE YANG v COLIN MEAD

NSD 934 OF 2008

STONE J

18 JULY 2008

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 934 OF 2008

BETWEEN:	GRACE YANG Applicant
AND:	COLIN MEAD Respondent

JUDGE:	STONE J
DATE OF ORDER:	18 JULY 2008
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The application for a stay of the order made on 18 July 2008 in chambers is dismissed.

2.The directions hearing scheduled on 14 August 2008 be vacated.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 934 OF 2008

BETWEEN:	GRACE YANG Applicant
AND:	COLIN MEAD Respondent

JUDGE:	STONE J
DATE:	18 JULY 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This proceeding is an appeal from a decision of Federal Magistrate Smith in which his Honour dismissed the applicant’s application to set aside a bankruptcy notice which was issued by Mr Mead on 5 March 2008; Yang v Mead [2008] FMCA 798. The decision of the Federal Magistrate was handed down on 6 June 2008 and on 13 June 2008 Ms Yang filed a debtor’s petition on her own behalf, following which Mr Robert William Whitten was appointed as trustee of the applicant’s estate. It appears from submissions that the applicant has made before me that she is of the opinion that she filed the debtor’s petition while under a misapprehension as to what she was doing and she wishes to challenge the appointment of Mr Whitten as her trustee in bankruptcy.

2. That being so, it is clear that an appeal from the decision of Smith FM and his order refusing to set aside the bankruptcy notice has nothing to do with that which Ms Yang seeks to establish.  Unless and until Mr Whitten’s appointment is set aside, he has all the powers of a trustee in bankruptcy and, therefore, pursuant to s 60(2) of the Bankruptcy Act 1966 (Cth), the action commenced by Ms Yang is stayed until the trustee makes an election in writing either to prosecute or discontinue the action. 

3. This matter came before me for first directions yesterday and at that time there had been no indication from Mr Whitten as to his position under s 60(2). The matter was stood over to 14 August 2008 to allow time for Mr Whitten to make an election or for the time provided under s 60(3) to expire. Section 60(3) provides that if the trustee does not make an election with 28 days, the trustee is deemed to have abandoned the action. As it happened, after the directions hearing yesterday, a copy of a letter from Mr Whitten to Ms Yang was sent to the Court, in which Mr Whitten stated:

   I refer to my appointment as trustee of the above bankrupt estate on 13 June 2008 when the bankrupt’s debtor’s petition was accepted by the Official Trustee. 
   I am in receipt of a letter from Etheringtons Solicitors, acting for the defendant in the above appeal proceedings, dated 4 July 2008 providing details and background of same.
   I am presently without funds to prosecute the appeal proceedings. Accordingly I elect to discontinue the proceedings pursuant to section 60(2) of the Bankruptcy Act (1966).

4. Following receipt of this letter, I made orders in chambers this morning giving the trustee leave to discontinue the appeal.  Ms Yang has made an urgent application on an ex parte basis seeking the Court to stay that order so that she can challenge Mr Whitten’s appointment.  I have tried to explain at some length to Ms Yang that the question of the fate of the bankruptcy notice is irrelevant to the validity of Mr Whitten’s appointment.  Mr Whitten was appointed pursuant to the debtor’s petition, not pursuant to anything that followed the issue or non-compliance of a bankruptcy notice.  As such, there can be no utility in the present appeal and there is no basis on which the right of the trustee to make an election under s 60 is compromised. 

5. Accordingly, there is no basis on which I should grant the stay which is sought and, therefore, the present application is dismissed.

I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Associate:

Dated:        18 July 2008

The Applicant appeared in person.

Date of Hearing:	18 July 2008
Date of Judgment:	18 July 2008