Commonwealth Bank of Australia v Queensland, Re Hewton

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 24.04(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth)), or to record a variation to the order pursuant to r 24.04 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).

1. The State of Victoria seeks a vesting order under s. 133(9) of the Bankruptcy Act 1966 (Cth) (the Act) of land situated at and known as 20 Ecuador Drive, Golden Beach, in the State of Victoria, more particularly described in Certificate of Title Volume 10849, Folio 178 (the Golden Beach Property).
2. In support of this application, the Applicant relies on an affidavit of Ms Sarah Crute made on 23 January 2026 (Ex A1).
3. No person appeared to oppose the Applicant's application.

1. On 24 December 2004, Mr Mehmet Yaydemir became the registered proprietor of the Golden Beach Property (Ex A1, [5]).
2. On 7 October 2019, Mr Yaydemir became bankrupt on acceptance of his debtor's petition under s. 55 of the Act. Mr Ivan Glavas was appointed the trustee in bankruptcy of Mr Yaydemir's estate (Ex A1, [6]).
3. On his bankruptcy, Mr Yaydemir's interest in the Golden Beach Property vested in his trustee in bankruptcy by operation of s. 58 of the Act.
4. On 19 April 2022, the trustee in bankruptcy disclaimed the Golden Beach Property under s. 133(1) of the Act as onerous property and said in the "Notice of Disclaimer of Property" that it was "property that has no prospect of being realised" (Ex A1, [7], SC-3).
5. On 17 February 2025, the Registrar of Titles registered a registrar's caveat on the certificate of title for the Golden Beach Property (Ex A1, [8], SC-1). Although the reason the Registrar lodged the caveat is not fully apparent on the face of the title, the Registrar may lodge a caveat to protect the Crown's proprietary interest in the land under s. 106 of the Transfer of Land Act 1958 (Vic).
6. On 25 and 26 November 2025, the Applicant published various media notices to inform the public of the Applicant's intention to make an application for a vesting order and called for any parties which believed they had an interest in the Golden Beach Property or which had any objection to the application for a vesting order to contact the Victorian Government Solicitor's Office within 21 days (Ex A1, [10], SC-4). No responses from any person were received to the notice of the intention to make an application for a vesting order. Counsel for the Applicant further informed me that no responses have since been received after that 21-day period.

1. The trustee in bankruptcy has used the statutory sanctioned action of disclaimer of onerous property under s. 133(1) of the Act. Section 133(3) of the Act provides that if a trustee disclaims property, the trustee must give notice of the disclaimer to the Registrar of Titles.
2. I infer in this case that the trustee in bankruptcy gave notice of the disclaimer of property to the Registrar of Titles, which resulted in the subsequent Registrar's lodging of a caveat.
3. In Commonwealth Bank of Australia v Queensland, Re Hewton [2021] FCA 22 (subsequently applied in Re Paksoy; Australia and New Zealand Banking Group Ltd v Victoria [2023] FCA 62, [19]), Derrington J distilled the relevant principles as to the operation of s. 133 which included the following (at [15]):

(3) Where a trustee, who only holds an equitable title in a bankrupt's land because the bankrupt remains the registered owner, disclaims under s 133, the effect is to disclaim both that equitable interest and any legal interest of the bankrupt who remains registered under the relevant Torrens system legislation (Citations omitted)

(4) The primary consequence of disclaiming the fee simple interest is to cause of the process of statutory escheat to take effect with the consequence that full and complete title to the land vests in the Crown ... (Citations omitted)

(5) However, it is now accepted that the erstwhile legal and equitable interests in the fee simple are not dissolved, and nor do they merge in the superior title ... with the consequence that the fee simple, which is taken to vest in the Crown, remains subject to any securities attaching to that interest (Citations omitted)

(7) Prima facie, it is just and equitable to vest title to the disclaimed fee simple interest in land in an unsatisfied security holder whose security exists over that interest because the making of an order removes all doubt as to the veracity of any other action by a security holder to recover their debt ... (Citation omitted)

1. Consistent with what Derrington J described as the "primary consequence of disclaiming the fee simple interest", the trustee in bankruptcy having disclaimed the interest in land, the process of statutory escheat means that the full and complete title to the Golden Beach Property vested in the Applicant on the trustee's disclaimer.
2. The Applicant submitted it nonetheless seeks an order under s. 133(9) "to confirm that the State's escheated interest in the land is absolute". Ms Crute set it out as follows in her affidavit (Ex A1, [13]):

The State of Victoria seeks an order under s 133(9) of the Act to confirm that the State's escheated interest in the land is absolute, and to enable the State of Victoria to be recorded as the registered proprietor of the property in fee simple and to enable the State to deal with the land as the State thinks fit.

1. The Torrens system in various states is a system of title by registration. Under s. 40 of the Transfer of Land Act, the "transfer of title is effected not by execution of an instrument by the parties but by registration of the relevant dealing" (LexisNexis Australia, Halsbury's Laws of Australia (online at 3 March 2026) 355 Real Property, 'III Torrens System' [355-8010]).
2. On the face of the title, Mr Yaydemir remains the registered proprietor of the Golden Beach Property. The process of statutory escheat is not apparent to any person inspecting the title. As a result, I accept the Applicant's submission that it is "just and equitable" under s. 133(9) of the Act to make the orders sought to enable the Applicant to be recorded as the registered proprietor to confirm the State's escheated interest in the land is absolute and to enable the State of Victoria to deal with the land as it sees fit. I note that, as Derrington J observed in Hewton (principle 5, [15], above) the statutory process of escheat does not operate to "dissolve" any "erstwhile legal and equitable interests in the fee simple" and the fee simple remains subject to any relevant securities.
3. For completeness I note that counsel for the Applicant referred me to two decisions in the Supreme Court of Victoria, in which the State was the successful applicant for the vesting of title in it pursuant to cognate provisions under the Corporations Act 2001 (Cth) (Re Kralcopic Pty Ltd [2023] VSC 306, [21]-[37]; Re Energy Brix Australia Corporation Pty Ltd (in liq) [2022] VSC 700).
4. In all the circumstances, I will make the orders that the State of Victoria sought.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge Champion.