Bredenkamp (Trustee), in the matter of Amin (Bankrupt) v Evolution Health Pty Ltd [2025] FedCFamC2G 674

(i) retaining $95,000 (inclusive of GST) in accordance with the Applicant's agreement with the First Respondent to be applied in respect of his remuneration and expenses in dealing with the Funds;

(ii) retaining 7% of the $95,000 (inclusive of GST) to be remitted to Australian Financial Security Authority (AFSA) in respect of the bankruptcy realisation charge; and

(iii) paying the balance of the Funds to the First Respondent.

1. Following the expiry of order 2 herein, the Applicant is justified, and therefore acting appropriately, in dealing with the vehicles held by the Applicant (Vehicles) by appointing Slattery to sell them at auction and applying the proceeds of sale as follows:

(i) firstly, in payment of Slattery's costs associated with the realisation of the Vehicles;

(ii) secondly, retaining $21,500 (inclusive of GST) in accordance with the Applicant's agreement with the First Respondent to be applied in respect of his remuneration and expenses in dealing with the Vehicles;

(iii) thirdly, retaining 7% of the $21,500 (inclusive of GST) to be remitted to AFSA in respect of the bankruptcy realisation charge; and

(iv) the balance of the net sale proceeds to be paid to the First Respondent.

1. By order of the Court entered 30 October 2024, the application was permitted to proceed in the absence of a person representing the Bankrupt Estate of Shreenil Amin, since deceased (the Second Respondent).

Note: The form of the order is subject to the entry in the Court's records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

1. Before the Court is an application by the appointed Trustee in bankruptcy for orders regarding the administration of a since deceased bankrupt's estate.
2. The since deceased bankrupt misappropriated and misused funds from two prior employers. The first employer successfully obtained a judgement debt and is a principal if not the only known creditor of the deceased bankrupt's estate.
3. The monies stolen from the second employer are known to comprise the property held on trust by the Trustee of the deceased's bankrupt estate. The Trustee and the second employer agree that the property held on trust is therefore not divisible amongst creditors of the deceased bankrupt's estate.
4. The following reasons explain the orders made in resolution of the present application.

1. The relevant parties and actors are as follows:

(a) The Applicant is an executive director of Pitcher Partners Accountants & Advisors WA Pty Ltd, a Mr Daniel Johannes Bredenkamp as Trustee of the Bankrupt Estate of Shreenil Amin.

(b) The First Respondent is Evolution Health Pty Ltd, parent company of Life-Space Group Pty Ltd which entity is the now deceased bankrupt's former employer.

(c) The Second Respondent is the now deceased bankrupt's estate and was not represented in these proceedings.

1. On the materials before the Court, the following is a summary of the uncontentious facts of the matter.
2. On 12 November 2020, GlaxoSmithKline Consumer Healthcare Australia Pty Limited (GSK) commenced proceedings in the District Court of New South Wales alleging misappropriation and misuse of funds in breach of the since deceased's then former contract of employment with GSK. GSK claimed relief in the sum of $413,101.45.
3. On 8 March 2021, the since deceased bankrupt was employed to work for Life-Space Group Pty Ltd, which is the entity which wholly owns the shares of the First Respondent (Life-Space).
4. On 6 June 2021, the since deceased bankrupt voluntarily lodged a debtor's petition and statement of affairs. The cited reason for the bankruptcy was "legal action or potential legal action" and debt owed in the sum of $413,101.45.
5. On 4 January 2022, the since deceased bankrupt commenced a new role with Life-Space with a total remuneration package of $145,280.00 per annum.
6. In the period 13 May 2022 to 23 June 2023:

(a) The since deceased bankrupt's bank account statements record deposits into account ending 3092 as follows:

(i) From the First Respondent, totalling $2,654,751.22; and

(ii) From Life-Space, totalling $135,982.59.

(b) The since deceased bankrupt purchased 3 vehicles with a since estimated value of $136,000 as follows:

(i) On 25 November 2022, a 2020 Toyota Coupe for $85,500;

(ii) On 3 March 2023, a 2023 BMW motorcycle for $37,907; and

(iii) On 5 June 2023, a 2023 Jeep Wagon for $96,750,

1. The Applicant further deposed to additional payments being remitted to the account ending in 3092 in the sum of $99,000.
2. On 29 June 2023, the Applicant was appointed as Trustee of the bankrupt estate of Shreenil Amin.
3. In July 2023, the Applicant requested the National Australia Bank freeze the since deceased bankrupt's bank accounts after the Applicant had identified what they deposed to be significant discrepancies between the bankrupt's reported income and deposits recorded in bank statements. In response, the National Australia Bank transferred funds totalling $284,884.16 to the Applicant's account. The Applicant also obtained records from VicRoads showing the since deceased bankrupt as registered owner of the 3 vehicles.
4. In August 2023, as a result of their inquiries and investigation, the Applicant concluded that the since deceased bankrupt had misappropriated funds from the First Respondent in the amount of $2,750,300 within the period 12 March 2021 to 7 July 2023. Further, the Applicant concluded that the 3 vehicles were purchased using misappropriated funds of the First Respondent.
5. On 18 November 2023, the bankrupt was confirmed to be deceased.
6. On 19 December 2023, the 3 vehicles were collected by Slattery Auctions and placed in storage.
7. On 6 September 2024, these proceedings were commenced by way of initiating application, accompanying affidavit and an outline of submissions. A set of final orders sought was attached to the affidavit accompanying the originating materials. The final orders sought were by consent of the First Respondent and are addressed in turn below.
8. On 8 October 2024, the father of the now deceased bankrupt corresponded with the Applicant's solicitor by which he stated that there was no will and testament, the family have not applied for any grant of administrator or executor and had no such intention.
9. On 9 October 2024, the Applicant caused searches to be performed but found no applications for the grant of probate or letters of administration.
10. On 30 October 2024, by consent of the Applicant and the First Respondent to these proceedings and being satisfied that the requirements of r.9.24(1)(a) of the Federal Court Rules 2011 (Cth) were met on production of evidence, the Court ordered that the proceedings be allowed to continue in the absence of a person representing the estate of Shreenil Amin, bankrupt and deceased (the Second Respondent).
11. The substantive matter proceeded on the basis of the originating materials (application and affidavit of Daniel Johannes Bredenkamp filed 9 September 2024) and their outline of submissions (also filed 9 September 2024). At the final hearing before the Court on 28 April 2025, the Applicant was represented by Counsel and the First Respondent was represented by a solicitor. The respectively proposed orders were substantially agreed. The representatives made oral submissions about the disputed matter and jurisdiction of the Court to make the orders sought.

1. The statute establishes a "general rule" that, where a debtor becomes bankrupt, the property existing upon commencement and acquired prior to discharge of the bankruptcy vests in the trustee of the bankrupt estate: Bankruptcy Act 1966 (Cth) (Act) s.58.
2. All such property is ordinarily divisible among creditors except in specified circumstances. Relevant to the present case, property held by the bankrupt in trust for another person is not property divisible amongst the bankrupt's creditors: s.116(1) and (2)(a).
3. The principle that stolen money is treated as property held on trust by the thief was enunciated in a bankruptcy context by the High Court of Australia in Black v S Freedman & Co [1910] HCA 58; (1910) 12 CLR 105 (Freedman) (O'Connor J):

Where money has been stolen, it is trust money in the hands of the thief, and he cannot divest it of that character.

1. Here, based on the results of their investigation as to the means by which the since deceased bankrupt came to hold the funds and the 3 vehicles (now held on trust by the Applicant as Trustee of the deceased bankrupt's estate), the Applicant seeks an order directed at authorising their dealing with the deceased bankrupt estate as though the property never vested in them. Specifically, they seek orders pursuant to item 90-15 of Schedule 2 of the Act in terms that the Applicant is justified and therefore acting reasonably in the sale and distribution of the property held in trust to the First Respondent whilst retaining an amount being for the Trustee's remuneration and expenses, regulatory fees and costs of realisation of the assets. The breakdown of the Applicant's amended proposal at the time of hearing is as follows:
   1. In respect of the cash held in trust totalling $284,884.16:
      1. $101,600.00 (inclusive of GST) for the Trustee's remuneration and expenses ($95,000.00 as at 6 September 2024 plus $6,600.00 for costs reasonably incurred in bringing these proceedings).
      2. 7% of the $101,600.00 (inclusive of GST) for AFSA's bankruptcy realisation charge.
      3. The balance (after a and b) paid to the First Respondent.
   2. In respect of the 3 vehicles held on trust with an estimated value of $136,000 (in order of precedence):
      1. Payment of Slattery's costs associated with realisation.
      2. $21,500.00 (inclusive of GST) for the Trustee's remuneration and expenses.
      3. 7% of the $21,500.00 (inclusive of GST) for AFSA's bankruptcy realisation charge.
      4. The balance (after a, b and c) paid to the First Respondent.
2. The First Respondent agreed with the orders sought by the originating application but did not agree to the extent that the Applicant amended it to include some $6,600.00 in costs incurred in pursuit of these proceedings. There was no evidence of the Trustee's further $6,600.00 in costs before the Court. The First Respondent argued that the Applicant is not entitled to remuneration and costs arising from dealing with the stolen funds which never vested in them under the Act. Nonetheless, at the time of hearing they remained prepared to consent to an order that would substantially remunerate the Applicant.
3. In response to a question of the Court, the Applicant submitted at hearing that they had not placed the primary creditor or any other potential creditors in bankruptcy on notice of the proceedings. In the interest of avoiding further and potentially unnecessary cost and inconvenience to the parties, the representatives were not opposed to an order which would require the Applicant to so place any creditors of the deceased bankrupt's estate on notice of these proceedings and afforded liberty to apply within a specified period of time to the extent any creditor(s) sought to oppose orders made.
4. On what is before the Court, I am satisfied that the appointed Trustee's application relates to the administration of a regulated debtor's estate. The Court has a broad discretion to make orders as it thinks fit including to determine any question arising in the administration of the estate and make an order in relation to the costs of an action (including court action) taken by the Trustee or another person in relation to the administration of the estate: see item 90-15(1), (2), (3)(a) and (d) of Schedule 2 of the Act and Lane (Trustee), in the matter of Lee (Bankrupt) v Deputy Commissioner of Taxation [2017] FCA 953 (Derrington J).
5. The evidence before the Court includes a contract of employment and bank account transactions which demonstrate that the funds subject of these proceedings were obtained by the since deceased bankrupt after the judgment debt was incurred but not before the bankrupt was discharged from bankruptcy. Further the evidence supports a finding that funds significantly in excess of the value of property now held by the Trustee in the bankrupt estate were stolen by the bankrupt from his employer, the First Respondent.
6. In circumstances where the property currently held by the Trustee was stolen and therefore does not vest in the Trustee in bankruptcy, and absent any contradictor, I am satisfied that in bringing this action to authorise the Trustee's dealing with the deceased bankrupt estate as though the property never vested in them and return the stolen funds to the First Respondent the Trustee is acting reasonably, in faithful performance of his duties and in accordance with his obligations under the Act. However, it is only appropriate that the creditor(s) to the estate be afforded at least an opportunity to address the Court with regard to any competing claims for the funds.
7. Absent evidence as to the matter of the Trustee's additional costs submitted as counsel's fees in bringing these proceedings to a value of $6,600, which is opposed by the First Respondent, I would not be minded to make such orders even if satisfied of an entitlement to remuneration for such costs. However, in all of the circumstances of the present case, it is appropriate that the trustee retain $95,000 of the funds presently held on trust in account ending 3840 being for his remuneration and expenses in dealing with the funds as agreed with the First Respondent. Further, it is appropriate that the Trustee retain a percentage of those funds being for AFSA charges and costs associated with realisation of the Vehicles as agreed with the First Respondent and the balance of the funds be paid to the First Respondent. These orders will operate after the expiration of 42 days to allow sufficient opportunity for any potential creditors to be served with the Court's orders (within 14 days) and exercise liberty to apply (a further 28 days).

1. Orders giving effect to these reasons will be made accordingly.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini.