Leroy v Koutavas, in the matter of Koutavas

1. Pursuant to r 9.24 of the Federal Court Rules 2011 (Cth), the proceeding continue in the absence of a person representing the deceased person Mr Elias Fildissis, the second respondent.
2. Costs reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ROBERTSON J: 1 The applicant is the trustee in bankruptcy of Harry Koutavas (the bankrupt). The trustee claims declarations of right against the bankrupt's former wife, the first respondent, Mrs Kanella Koutavas, in respect of what the trustee contends is the bankrupt's interest as tenant in common in equal shares in the residential property at 47 Staples Street, Kingsgrove, New South Wales (the property); the appointment of trustees for sale of the property; and the removal of the caveat lodged on the title to the property by Mrs Koutavas' parents, the second and third respondents, Mr Elias Fildissis and Mrs Dimitra Fildissis. 2 Since these proceedings were commenced on 17 January 2017, the trustee has become aware that Mr Fildissis, the second respondent, died on 3 March 2016. 3 Mr Fildissis has no legal personal representative. 4 These reasons concern an interlocutory application under r 9.24 of the Federal Court Rules 2011 (Cth) for an order that the proceeding continue in the absence of a person representing the deceased person, Mr Fildissis. 5 The rule provides as follows: 9.24 Deceased persons (1) If: (a) a deceased person was interested in, or the estate of a deceased person is interested in, any matter or question in a proceeding; and (b) the deceased person has no personal representative; a party may apply to the Court for an order: (c) that the proceeding continue in the absence of a person representing the deceased person; or (d) that a person who has consented in writing represent the deceased person's estate for the purpose of the proceeding. (2) An order under subrule (1) and any subsequent order made in the proceeding binds the estate of the deceased person as the estate would have been bound if the deceased person's personal representative had been a party to the proceeding. Note: Before making an order under this rule, the Court may require the application to be served on persons having an interest in the estate, as the Court considers appropriate. 6 The relief claimed in the originating application is as follows: 1. A declaration pursuant to section 30 of the Bankruptcy Act 1966 (Cth) that the First Respondent holds the title to the land in certificate of title folio identifier 26/84988, being the land known as 47 Staples Street, Kingsgrove in the State of New South Wales (Land) on trust as to a one half share as tenant in common for the benefit of the bankrupt estate of Harry Koutavas (Bankrupt). 2. A declaration that the interest of the bankrupt estate of Harry Koutavas in the Land declared in the previous order vests in the Applicant pursuant to section 58 of the Bankruptcy Act 1966 (Cth). 3. A declaration that the obligation to repay loans made by the Second and Third Respondents to the First Respondent, or the First Respondent and the Bankrupt, from about 7 June 2005 until about 15 February 2008 totalling about $113,447 is not secured against the Land. 4. A declaration that the Second and Third Respondents have no estate or interest in the Land. 5. An order pursuant to section 74MA of the Real Property Act 1900 (NSW) that the caveat lodged by the Second and Third respondents numbered AH150232 be withdrawn by the Second and Third Respondents within 7 days of the date of the order. 6. An order that Maxwell Prentice and David Sampson (together Trustees) be appointed as trustees for the sale of the Land pursuant to section 66G of the Conveyancing Act 1919 (NSW). 7. An order that the Land be vested in the Trustees subject to any incumbrances affecting the entirety of the Land but free from incumbrances (if any) affecting any undivided share therein to be held by the Trustees upon statutory trust for sale under Division 6 of Part 4 of the Conveyancing Act 1919 (NSW). 8. An order that the proceeds of sale of the Land are to be paid in the following priority: (a) to pay sale agent's commission and expenses; (b) to pay the costs and disbursements of the conveyancer acting on the sale; (c) to discharge the mortgage to registered on the title to the land; (d) to pay the Trustees' remuneration and expenses; (e) to pay the Applicant's legal costs of these proceedings; (f) the balance remaining to be paid in equal shares to the Applicant and the First Respondent. 9. An order that the First Respondent is entitled to purchase the Land, whether at auction or otherwise, without the payment of a deposit. 10. An order that the Trustees are authorised to charge remuneration for work done at the rates disclosed in their consents to act filed in these proceedings. 11. Any further order as the Court deems fit. 7 I am satisfied, and find, that Mr Fildissis is a deceased person who was interested in a question in the proceeding, being, at least, paragraphs 3, 4 and 5 of the prayers for relief. 8 I am also satisfied, and find, that that deceased person, Mr Fildissis, has no personal representative. I find that on 9 August 2016 Mrs Fildissis gave formal notice of her intention to apply for a grant of probate of the late Mr Fildissis' last will but no such application for a grant has been made. 9 I make those findings on the basis of the affidavit sworn by Ms Vivien Botsikas on 30 March 2017. 10 The caveat referred to in paragraph 5 of the prayers for relief is a caveat recorded on the title of the property on 2 August 2012. The caveators are stated to be Mr and Mrs Fildissis. The estate or interest claimed is an equitable charge by virtue, so it is said, that between 2003 and 2011 the caveators lent sums totalling $148,000 to the registered proprietor, their daughter Mrs Kanella Koutavas to assist in the construction and mortgage repayments for the property. 11 As to service of the application on persons having an interest in the estate, I infer that Mrs Fildissis has an interest in the estate of Mr Fildissis. I am satisfied, and find, that the interlocutory application filed on 31 March 2017 and the affidavit of Ms Botsikas sworn 30 March 2017 were served on Mrs Fildissis at 8 a.m. on 6 April 2017. I refer to the affidavit sworn by Mr Andrew Saad on 6 April 2017. 12 I am also satisfied, and find, that the substantive proceedings were served on Mrs Fildissis. I refer to the affidavit of Mr Andrew Saad sworn 31 January 2017 who deposes to the relevant material being served on Mrs Fildissis on 28 January 2017. 13 In support of the present application, senior counsel for the applicant trustee referred first to Borough of Drummoyne v Hogarth (1906) 23 WN (NSW) 243. The plaintiff Borough of Drummoyne brought suit to establish its right to, and to enforce, a charge in respect of rates accrued due after the death of the owner intestate in 1888. No letters of administration had been granted and the only defendants were the persons beneficially interested. Street J held that he could entertain the suit, although the legal estate was not before the Court, and that he had jurisdiction to declare that the plaintiff Borough was entitled to the charge, and to direct the same to be enforced by sale. The note states that Street J held that to appoint a representative of the estate of the deceased owner would not assist the matter. 14 In Porters v Cessnock City Council [2005] NSWSC 1275; 12 BPR 23,209, Campbell J referred to Borough of Drummoyne v Hogarth as an example of the procedure later to be found in r 7.10 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). Campbell J concluded that it was appropriate to exercise the power to make an order that the proceedings may continue in the absence of a representative of the estate of Mrs Pointer. His Honour took into consideration that extremely extensive enquiries were carried out formerly to find a legal personal representative; more recently further enquiries had been made; the amounts of money involved were small; and the court had an overriding obligation to find a just, quick and cheap way of resolving proceedings. 15 In Steinecke v Wayne [2011] NSWSC 428, Brereton J held that the estate of one Amelia Fleishman had an interest but was not represented in the proceedings. His Honour ordered that the proceedings continue in the absence of a representative of the estate. With reference to r 7.10 of the UCPR, his Honour stated, at [11], that circumstances in which the court may proceed in the absence of a representative include where there are other parties to the proceedings who have the same interests as the estate, where the interest in question is small or contingent, or where the deceased had no practical beneficial interest in the property involved in the proceedings. 16 As I have said, Mrs Fildissis was served with the relevant documents in the substantive proceedings on 28 January 2017. She has not entered an appearance nor has she appeared when the matter has been called. 17 I find that Mrs Fildissis has the same interest as her late husband or her late husband's estate in maintaining the caveat. 18 To the extent that it is necessary to consider the strength of the case, see Steinecke v Wayne per Brereton J at [12], I take into account that as the evidence presently stands there would appear to have been no more than an oral agreement between Mr and Mrs Fildissis and their daughter Mrs Koutavas, and perhaps Mr Koutavas, that their loan to her or them would be repaid from the proceeds of sale of the property. I refer here to the statutory declaration made by Mrs Koutavas on 6 June 2014 at [50]-[52]. The applicant's claim is, therefore, at least reasonable. 19 In the circumstances, I make an order, in this proceeding, that the proceeding continue in the absence of a person representing the deceased person, Mr Fildissis. I note that the effect of this order and any subsequent order made in the proceeding binds the estate of Mr Fildissis as the estate would have been bound if his personal representative had been a party to the proceeding. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.