THAWLEY J:
1 The applicant is the trustee of the bankrupt estate of the respondent, Mr Gregory Ronald Crawford. By an application lodged for filing on 27 November 2017, the applicant applies for:
(1) A declaration that the interest of the respondent in real property comprised in the Certificate of Title Folder Identifier 1/1021783 together with all improvements erected thereon and known as 5 Denham Court Road, Denham Court in the State of New South Wales ("the Property") is vested in the applicant.
(2) An order that the respondent deliver to the applicant all the documents of title in respect of the Property within his possession within seven (7) days.
(3) An order that the respondent give vacant possession of the Property to the applicant within 28 days.
(4) In the event that the respondent fails to give vacant possession of the Property to the applicant within 28 days of the date of these Orders, a Writ of Possession may issue forthwith.
(5) Costs.
2 The application is supported by an affidavit of Stewart Free sworn 15 November 2017.
3 On 1 April 2010, a sequestration order was made against the respondent by the Federal Magistrates Court under s 43 of the Bankruptcy Act 1966 (Cth) (Act). The Court appointed Mr Roderick Mackay Sutherland (Mr Sutherland) as the trustee of the bankrupt estate.
4 On 28 June 2017, this Court made orders which had the effect that the applicant, Mr Stewart Free, replace Mr Sutherland as the trustee of various bankrupt estates, including that of the respondent.
5 The respondent is an undischarged bankrupt and is due to be discharged on 20 April 2018.
6 The respondent is the sole registered proprietor of 5 Denham Court Road, Denham Court, in the State of New South Wales (Certificate of Title Folio Identifier 1/1021783) (Property). The Property was transferred to him on or about 23 February 2005 pursuant to orders made by the Family Court of Australia on 18 November 2004.
7 A title search exhibited to the affidavit, together with other supporting documents, reveal that the Property is encumbered by a mortgage and four caveats.
8 Pursuant to s 58(1) of the Act, all of the bankrupt's interest in the Property vested in Mr Sutherland upon the making of the sequestration order on 1 April 2010. As noted above, the Property is now vested in the applicant as a consequence of the orders made by this Court on 28 June 2017 which had the effect of transferring the bankrupt estate to him as replacement trustee.
9 On 4 August 2016, a Deed of Agreement (Deed) was entered into between Mr Sutherland in his capacity as trustee of the bankrupt estate, Mr Gregory Crawford and Mr Michael Crawford. This Deed contemplated that a valuation of the Property would be obtained and that the bankrupt would pay the "Settlement Sum" to the trustee within 3 months of the date the valuation was supplied to the bankrupt (referred to as the "Stay Period"). Under clause 3.5 of the Deed, Mr Sutherland agreed not to take steps to sell the Property from the date of the Deed until the end of the Stay Period. The "Settlement Sum" was the greater of $50,000, on the one hand and, on the other, the difference between the valuation less encumbrances. The Deed provided the consequences of failure to pay the "Settlement Sum" within the "Stay Period" in clause 3.10:
3.10 Should the stay period expire without the bankrupt paying the Settlement Sum, the Parties agree that (without limitation to any and all obligations which the Bankrupt has pursuant to the Act):
(a) The Bankrupt is to vacate the Crawford Property within one month;
(b) The Bankrupt is to do all things reasonably necessary to assist the Trustee in selling the Crawford Property;
(c) The Trustee shall sell the Crawford Property; and
(d) The Trustee shall apply the net proceeds of sale in accordance with the Act.
10 The Settlement Sum has not been paid.
11 On 4 April 2017, the trustee caused a letter to be sent to the respondent, by email and express post, requiring the bankrupt to vacate the Property. The respondent has not vacated the Property.
12 The matter was listed for a first case management hearing on 21 December 2017. On 20 December 2017, a notice of appearance was filed on behalf of the respondent, by Celtic Legal.
13 Also on 20 December 2017, consent orders were made vacating the case management hearing for 21 December 2017, listing the matter for a case management hearing on 15 February 2018 and making orders for the respondent to file and serve any affidavit evidence by 12 February 2018.
14 On 15 February 2018, the Court made the following orders:
(1) Adjourn the matter to a date to be advised by the chambers of Thawley J for hearing.
(2) The applicant is to serve a copy of these orders on the solicitors for the respondent by ordinary prepaid post to be dispatched by 5.00pm on 16 February 2018.
15 The orders on 15 February 2018 contained the following notation:
(3) It was informed by the solicitor for the applicant that the solicitor for the respondent had no instructions to appear at the case management hearing listed today and that, upon the matter being called three times outside the Court room, there was no appearance for the respondent.
16 On 21 February 2018, I made the following orders:
(1) The matter be listed for hearing at 10:15am on 15 March 2018.
(2) The applicant file and serve any submissions on which he wishes to rely by 06 March 2018.
(3) The respondent file and serve any submissions on which he wishes to rely by 13 March 2018.
17 These were sent by email to the legal representatives of the applicant and respondent.
18 The respondent did not file any submissions.
19 At 9.00am this morning, the solicitor for the respondent sent my Associate an email attaching consent orders which were said to have been filed that morning. The effect of those orders was that the respondent consented to the declaration and the substance of the orders referred to in paragraph 1 above (except as to timing) and agreed to pay a lump sum by way of costs. The proposed consent orders did not carry an endorsement under rule 41.06 of the Federal Court Rules 2011 (Cth). The orders did not contain a reservation of liberty to apply. The parties were informed by email that the form of the orders would be discussed at the commencement of the hearing.
20 The solicitor for the respondent, who resides in Queensland, did not appear and I was informed by the solicitor for the applicant that he had been informed by the respondent's solicitor that he did not have instructions to appear today. The matter was formally called outside Court and there was no appearance by the respondent.
21 The solicitor for the applicant agreed that it was unnecessary to make the declaration sought, given the other orders sought and the fact that there was no dispute between the parties that the Property had vested in the applicant. The form of orders was discussed and the solicitor for the applicant undertook to see if agreement could be reached with the solicitor for the respondent to a revised form of orders. Agreement was reached as to the form of orders, as confirmed by an email from the respondent's solicitor. I am satisfied that it is appropriate to make those orders.
22 The Act includes the following provisions:
Section 30 General Powers of Courts in Bankruptcy
(1) The Court:
(a) has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and
(b) may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.
Section 58(1) Vesting of Property upon bankruptcy - general rule:
(1) Subject to this Act, where a debtor becomes a bankrupt:
(a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and
(b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.
Section 77 Duties of bankrupt as to discovery etc. of property
(1) A bankrupt shall, unless excused by the trustee or prevented by illness or other sufficient cause: …
(e) execute such instruments and generally do all such acts and things in relation to his or her property and its realization as are required by this Act or by the trustee or as are ordered by the Court upon the application of the trustee; and …
(g) aid to the utmost of his or her power in the administration of his or her estate.
23 This Court has the power to make the orders sought by the applicant by reason of ss 30(1)(b) and 77(1)(e) and (g) of the Act. In Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88 at [92] to [94], Siopis, Katzmann and Perry JJ observed:
92. As is apparent, the power to make orders under s 30(1)(b) must be exercised for the purposes of carrying out or giving effect to the Act in the particular case. Those purposes, in common with any modern system of bankruptcy law, are to provide for the appropriation and equitable distribution of the assets of the insolvent debtor, and upon this, the debtor's release from future liability in respect of his or her existing debts: Storey v Lane [1981] HCA 47; (1981) 147 CLR 549 (Storey) at 556 (Gibbs CJ).
93. In line with these objects and the breadth of the language in s 30(1), it has been held that the provision should not be construed narrowly. As Neaves J observed in Re Bilen; Ex parte Sistrom (unreported, Federal Court, Neaves J, No NSW706 of 1983, 11 April 1985) in a passage quoted with approval by the Full Court in Talacko v Talacko (2010) 183 FCR 311 (Talacko) at 321, s 30(1):
is a facultative provision giving the court full power, within the limits of its jurisdiction to be found elsewhere, to make such orders as it considers should be made in order to carry out and give effect to the Act. The words used are not words of limitation but of extension.
94. Thus, the section has been held to provide sufficient power to make orders against a bankrupt for the vacation of property, issuing a warrant of possession and for the sale of a property in circumstances where the bankrupt is not complying with his or her obligations under the Act: see, eg, Vince (trustee) v Sopikiotis (No 2) [2012] FCA 1298 at [4] (Bromberg J); Pattison v McKinnon [2008] FCA 1624 at [2] (Jessup J); Official Receiver v Fall (2008) 5 ABC(NS) 772 at [10]-[12] (Lucev FM (as his Honour then was)). It also expressly extends to ancillary relief such as injunctions and other equitable remedies to prevent the scheme of the Act from being defeated. Such ancillary orders are, as the Full Court observed in Talacko at [17], "neither novel or unusual": see also Storey at 557 (Gibbs CJ).
24 I make the following orders by consent:
(1) Pursuant to s 30(1)(b) and s 77(1)(e) and (g) of the Bankruptcy Act 1966 (Cth), the respondent vacate and deliver up to the applicant vacant possession of the land together with the improvements erected thereon comprised in Folio Identifier 1/1021783 and known as 5 Denham Court Road, Denham Court, in the State of New South Wales (Property) on or before 26 April 2018.
(2) Pursuant to s 30(1)(b) and s 77(1)(e) and (g) of the Bankruptcy Act 1966 (Cth), the respondent deliver up to the applicant the keys for all buildings and improvements on the Property on or before 26 April 2018.
(3) Pursuant to s 30(1)(b) and s 77(1)(e) and (g) of the Bankruptcy Act 1966 (Cth), the respondent remove from the Property on or before 26 April 2018 all motor vehicles, rubbish, and any other chattels or personal property which have not vested in the applicant as the respondent's trustee in bankruptcy under s 58(1) of the Bankruptcy Act 1966 (Cth).
(4) In the event the respondent fails to comply with order 3 herein, the applicant is empowered to remove and dispose of any and all personal property on the Property as he sees fit.
(5) In the event the respondent fails to give vacant possession of the Property to the applicant in compliance with order 1 herein, order that a writ of possession of the Property issue forthwith in favour of the applicant.
(6) Reserve liberty to apply.
(7) The respondent pay the applicant's costs of these proceedings as agreed between the parties in the sum of $25,240.30.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley.