Bell v Taylor

REASONS FOR JUDGMENT 1 The applicant, Mr Carl William Bell, was a director of a company, Rosmill Pty Ltd (Rosmill). Rosmill was the owner of three properties located in York, Western Australia, at 25 Wheeler Street, 13 Henrietta Street and Lot 3 Great Southern Highway. Rosmill entered into a loan facility agreement with the Bank of Western Australia Limited (BankWest) and granted security over the three properties. BankWest advanced Rosmill monies under the loan facility agreement. 2 In December 2004, Mr Bell entered into a guarantee of Rosmill's repayment obligations under the loan facility agreement. 3 Mr Bell was the owner in his own right of a property at 1 and 3 William Street, York. 4 In June 2007, Mr Bell provided to BankWest a first registered mortgage over his property at 1 and 3 William Street to secure the repayment of all monies owed by Rosmill to BankWest. That mortgage was registered as a first registered mortgage over the William Street property on 11 June 2007. 5 On 18 February 2011, acting pursuant to its powers under the security granted by Rosmill, BankWest appointed Mr Matthew Donnelly as receiver and manager of the assets and undertaking of Rosmill. The property subject to the control of the receiver and manager included the three properties owned by Rosmill. 6 On 16 August 2011, BankWest commenced an action in the Supreme Court of Western Australia (CIV 2512 of 2011) against Mr Bell as guarantor for the amount due under the loan facility agreement between Rosmill and BankWest. Mr Bell defended the claim made by BankWest. 7 On 1 December 2011, Master Sanderson granted summary judgment and ordered that Mr Bell pay to BankWest the sum of $1,011,947 together with interest and indemnity costs. 8 Mr Bell did not meet the judgment debt. 9 BankWest then issued a bankruptcy notice to Mr Bell in respect of the judgment debt arising from the order made by Master Sanderson on 1 December 2011. Mr Bell did not comply with the bankruptcy notice. 10 On 8 June 2012, BankWest commenced bankruptcy proceedings (PEG 126 of 2012) against Mr Bell in the Federal Magistrates Court of Australia (now the Federal Circuit Court of Australia) based on his failure to comply with the bankruptcy notice. 11 On 15 January 2013, Registrar Stanley made a sequestration order in relation to Mr Bell's estate. The Official Trustee in Bankruptcy was appointed as the trustee of Mr Bell's bankrupt estate. 12 On 4 April 2013, the first respondent, Mr Barry Anthony Taylor, was appointed as trustee in bankruptcy of Mr Bell's bankrupt estate to replace the Official Trustee in Bankruptcy. 13 By this proceeding the applicant, Mr Bell seeks an order for an inquiry into the conduct of Mr Taylor and consequential orders, including an order that Mr Taylor be removed as his trustee in bankruptcy. Mr Bell relies upon s 178 and s 179 of the Bankruptcy Act 1966 (Cth). The second respondent to this application is the Commonwealth Bank of Australia which on 1 October 2012 succeeded to BankWest's entire business pursuant to the Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth). 14 In his application, Mr Bell also complains about a decision of Registrar Trott of 28 August 2014 refusing to accept Mr Bell's application for an extension of time and for leave to appeal against a decision of a judge of the Federal Circuit Court. I have taken that complaint to amount to an application to review the decision of Registrar Trott under s 35A(5) of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act). BACKGROUND 15 Before dealing with the merits of Mr Bell's application, it is necessary to set out by way of background, a brief account of some of the litigation in which Mr Bell has been involved. In this regard, I have been assisted by the reasons for decision of Principal Registrar Gething of the Supreme Court of Western Australia in Commonwealth Bank of Australia v Bell [2014] WASC 201. 16 On 1 March 2013, Mr Bell commenced a proceeding in the Federal Magistrates Court (PEG 36 of 2013) for an extension of time within which to review, and to review, the sequestration order made by Registrar Stanley on 15 January 2013. Mr Bell's challenge to Registrar Stanley's decision was based on the contention that the registrar did not have authority to make the sequestration order because a registrar of the Federal Magistrates Court did not have authority to exercise judicial power. On 19 April 2013, those applications were dismissed by Judge Reithmuller in the Federal Circuit Court. 17 On 18 July 2013, Mr Norman Gianatti commenced an action in the Supreme Court of Western Australia against Rosmill (receiver and manager appointed), Mr Bell, Mr Donnelly, BankWest and the Commonwealth Bank. The application was, relevantly, for the extension of the operation of a caveat (L555728) over the William Street property. On 9 August 2013, Justice Edelman dismissed Mr Gianatti's application to extend the operation of the caveat. 18 However, Mr Gianatti's application and the fact that it was dismissed, is of significance because it is a fundamental contention by Mr Bell underlying his complaints in this application that each of the William Street property and the three Rosmill properties, was the subject of a security interest in favour of Mr Gianatti which had priority to the securities granted by Rosmill and Mr Bell to BankWest. 19 On 16 October 2013, the Commonwealth Bank commenced an action in the Supreme Court of Western Australia (CIV 2567 of 2013) seeking an order that Mr Bell deliver up vacant possession of the William Street property. 20 On 12 December 2013, the Commonwealth Bank brought an application for summary judgment for the delivery up of possession of the William Street property. The Commonwealth Bank claimed that as at 11 December 2013, the amount then owing by Mr Bell to the Commonwealth Bank under the mortgage, was $1,493,561.06. 21 On 22 April 2014, Master Sanderson granted the Commonwealth Bank summary judgment and ordered that Mr Bell deliver up vacant possession of the William Street property to the Commonwealth Bank within 21 days. 22 On 8 May 2014, Mr Bell filed a notice of appeal in the Supreme Court of Western Australia against the summary judgment of Master Sanderson on 1 December 2011 (CIV 2512 of 2011) and the summary judgment for vacant possession on 22 April 2014 (CIV 2567 of 2013). 23 On 9 May 2014, Mr Bell filed an application in the Supreme Court of Western Australia for an order suspending enforcement of the two summary judgments of Master Sanderson. 24 On 13 May 2014, Mr Bell filed an application in the Federal Circuit Court seeking among other relief, an order that the sequestration order made against him on 15 January 2013, be annulled on the grounds that the petitioning creditor had no standing and was not his creditor. 25 On 19 May 2014, Registrar Gething heard and, on 3 June 2014, dismissed Mr Bell's application on the basis that Mr Bell's trustee in bankruptcy, who was then Mr Taylor, had not consented to Mr Bell defending the action for vacant possession, nor consented to him bringing the application for the orders seeking to suspend the previous orders for summary judgment. Further, Registrar Gething found that, in any event, there would be no stay of the enforcement of the judgments because Mr Bell had not paid the judgment sum into court and there were no special circumstances which permitted a stay to be granted in the absence of the payment into court of that sum. 26 On 12 June 2014, Judge Jarrett of the Federal Circuit Court summarily dismissed Mr Bell's application for the annulment of his bankruptcy. Mr Bell filed in this Court, a notice of appeal from that decision. I will discuss this matter further later in these reasons when considering the review of Registrar Trott's decision. 27 On 23 June 2014, the Western Australian Court of Appeal dismissed Mr Bell's appeal against the summary judgments of Master Sanderson in respect of the debt owed by Mr Bell and the order for delivery up of the William Street property.