Burnett v Browne

O'CALLAGHAN J: 1 This is an application by Mr Paul John Cook, who is Ms Burnett's trustee in bankruptcy, to be released and discharged from an undertaking that he gave to Kerr J on 31 August 2020 not to take any steps to comply with the orders that his Honour made on that date permitting him to exercise a power of sale of the Property, namely, 56 Coleman Street, Moonah, Tasmania, more particularly described in certificate of title Volume 55148, Folio 24. 2 The (consent) orders made by Kerr J on 31 August 2020 were as follows: 1. The transfer of the land known as and situated at 56 Coleman Street, Moonah in Tasmania, more particularly described in certificate of title Volume 55148 Folio 24 (Property), from Gail Louise Burnett to the Respondents pursuant to a Transfer dated 13 March 2016, was an undervalued transaction and is void against the Applicant pursuant to s 120(1) of the Bankruptcy Act 1966 (Cth) (Act). 2. The Applicant is authorised, pursuant to s 134(4) of the Act, to exercise a power of sale of the Property pursuant to s 134(1)(a) of the Act as follows: (a) the Respondents provide the Applicant with vacant possession of the Property within 28 days of the making of these orders; (b) in the event that the Respondents fail to give up possession of the Property in accordance with Order 2(a), a Writ of Possession issue forthwith in favour of the Applicant; (c) the Respondents remove from the Property, all vehicles, rubbish and chattels which have not vested in the Applicant (Personal Property) within 28 days of the making of these orders; (d) in the event that the Respondents fail to comply with Order 2(c), the Applicant may remove and dispose of the Personal Property as he sees fit after 28 days have passed from the making of these orders; (e) the Respondents surrender to the Applicant the duplicate Certificate of Title of the Property, if any, within 14 days of the making of these orders; (f) the Applicant: (i) have conduct of the sale of the Property; and (ii) have authority to execute all documents required to effect the sale of the Property (including, without limitation, the contract of sale, vendor's statement, transfer of land documents and appointment of selling agent); (g) the Respondents execute all such documents and do all such things as are necessary to enable the Applicant to effect the sale of the Property failing which a Registrar of the Court is authorised to do so; and 3. The Respondents pay the Applicant's costs of this application. THE COURT NOTES THAT: 1. Paul John Cook, as the trustee of the bankrupt estate of Gail Burnett and personally, by the undertaking of his counsel Mr M Rapley, undertakes to the Federal Court of Australia not to take any steps to enforce, or require the Respondents to take any steps to comply with, the final orders made by the Federal Court of Australia in action number TAD11/2020 on 31 August 2020. 2. Chris Isherwood and Gail Burnett separately, by the undertakings of their counsel Mr G Williams, undertake to the Federal Court of Australia to within 14 days file, serve and then diligently prosecute an application to stay the operation of the final orders made by the Federal Court of Australia in action number TAD11/2020 on 31 August 2020 in the Application of Gail Burnett filed 31 August 2020. 3. Paul John Cook have liberty to apply in the Application of Gail Burnett filed 31 August 2020 to be relieved of his undertaking referred to herein. 4. If the Application of Gail Burnett filed 31 August 2020 is not formally accepted for filing by the Federal Court of Australia, Paul John Cook is relieved of his undertaking referred to herein as from 5:00pm 14 September 2020. 3 The Court obviously has jurisdiction to make an order of the type Mr Cook now seeks. As the plurality of the High Court said in Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated (1981) 148 CLR 170 at 178: "[j]ust as an interlocutory injunction continues 'until further order', so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust". 4 The undertaking given to the Court in this case was interlocutory in nature. To adopt the words of Fisher J in his dissenting judgment in Philip Morris Incorporated v Adam P Brown Male Fashions Pty Ltd (1980) 44 FLR 88 at 112 (approved by the plurality in the High Court at 148 CLR at 179): "it has to me all the indications of an order remaining under the control of the court, which was entitled on proper application to vary, dissolve, discharge or adjust the order to meet changing circumstances". 5 In this case, as counsel for Mr Cook submits, the relevant "changed circumstance" is that the proceeding by Ms Burnett seeking to annul the bankruptcy order made against her, which was the raison d'être of the undertaking given by Mr Cook, has now been dismissed: see Burnett v Brown (No 3) [2021] FCA 703. There is thus no reason that Mr Cook should not be released and discharged from the undertaking that he gave, not to take any steps to comply with the orders made by Kerr J on 31 August 2020 permitting him to exercise a power of sale in respect of the Property. 6 I will accordingly order that Mr Cook be released and discharged from the undertaking that he gave to the Court on 31 August 2020. 7 I will also set aside order 2 of Kerr J's orders made on 31 August 2020 (because they have been overtaken by the effluxion of time) and make new orders which provide for the various necessary steps to be taken to effect the power of sale. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Callaghan.