//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2017] FCA 912
Federal Court of Australia
2017-08-09
Robertson J
Original judgment source is linked above.
BY CONSENT OF THE APPLICANT, THE FIRST RESPONDENT AND THE THIRD RESPONDENT:
THE COURT DECLARES:
Introduction 1 The applicant is the trustee in bankruptcy of Harry Koutavas (the bankrupt). The trustee claimed declarations of right against the bankrupt's former wife, the first respondent, Mrs Kanella Koutavas, in respect of what the trustee contended was 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 trustee also sought 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 became aware that Mr Fildissis, the second respondent, died on 3 March 2016. 3 On 12 April 2017 I ordered that the proceeding continue in the absence of a person representing the deceased person Mr Elias Fildissis, the second respondent: see Leroy v Koutavas, in the matter of Koutavas [2017] FCA 381.
Chronology of events 4 In February 1999, the bankrupt and Mrs Koutavas became the registered proprietors of the property. In December 2004 the bankrupt and Mrs Koutavas granted a first registered mortgage to St George Bank over the property. 5 On 23 June 2010 the bankrupt and Mrs Koutavas made an agreement transferring the bankrupt's interest in the property to Mrs Koutavas. This agreement was made under s 90C of the Family Law Act 1975 (Cth). 6 On 12 July 2010 the bankrupt presented a debtor's petition, which was accepted. Mr Struthers was appointed as the bankrupt's trustee in bankruptcy. Mr Leroy was appointed as the bankrupt's trustee in bankruptcy in place of Mr Struthers on 18 September 2012. 7 On 9 May 2012 orders were made by consent in the Supreme Court of New South Wales setting aside the 23 June 2010 agreement and ordering Mrs Koutavas to transfer a half interest in the property to the bankrupt's trustee in bankruptcy. 8 On 2 August 2012, the second and third respondents, Mr Elias Fildissis and Mrs Dimitra Fildissis, lodged a caveat on the title to the property. The caveat was lodged to give notice of a claimed interest in the property by Mr and Mrs Fildissis who had lent sums totalling some $148,000 to the registered proprietor, their daughter Mrs Koutavas, to assist in the construction and mortgage repayments for the property. 9 In October 2012 the trustee in bankruptcy, now Mr Leroy, began corresponding with Mrs Koutavas to achieve the transfer of title to half the property to the trustee in bankruptcy. 10 In June 2016 the trustee in bankruptcy demanded of Mr and Mrs Fildissis that they withdraw the caveat.
Jurisdiction 11 By s 27 of the Bankruptcy Act 1966 (Cth), this Court and the Federal Circuit Court have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than: (a) the jurisdiction of the High Court under s 75 of the Constitution; or (b) the jurisdiction of the Family Court under s 35 or s 35A of the Bankruptcy Act. 12 The (federal) jurisdiction of this Court is explained in Truthful Endeavour Pty Ltd v Condon (Trustee) Re Rayhill (Bankrupt) [2015] FCAFC 70; 233 FCR 174, see for example at [35]-[37]. 13 Consistently with Rizeq v Western Australia [2017] HCA 23, the laws of New South Wales form part of the single composite body of federal and non-federal law that is applicable to cases determined in the exercise of federal jurisdiction in the same way, and for the same reason, as they form part of the same single composite body of law that is applicable to cases determined in the exercise of State jurisdiction - because they are laws: see the judgment of the plurality at [56]. 14 Although there would not appear to be any different outcome in this case, as explained by the plurality in Rizeq at [63], s 79 of the Judiciary Act 1903 (Cth) is only necessary to ensure that the exercise of federal jurisdiction is effective, and picks up the text of a State law governing the exercise of State jurisdiction and applying that text as a Commonwealth law to govern the manner of exercise of federal jurisdiction. 15 The laws in question here are ss 7(1), 66F and 66G of the Conveyancing Act 1919 (NSW) and s 74MA of the Real Property Act 1900 (NSW). Section 79 of the Judiciary Act would appear to be necessary for those laws to be applicable. In my view, these State laws would not apply without resort to s 79 as they not only create rights and liabilities but also govern the exercise of State jurisdiction. 16 In Coshott v Prentice [2014] FCAFC 88; 221 FCR 450, the Full Court said at [122]: … The trustee in bankruptcy's claim for declarations as to his interest in the Property as an asset to be brought to account in the bankrupt estate is essential to the determination of his claim for orders for the sale of the Property. In other words, the orders for sale were dependent upon the trustee establishing his interest in the Property. Further, both orders are sought by the trustee in bankruptcy in the discharge by him of his duties to bring to account and realise the assets of the bankrupt. The fact that the property is co-owned with a non-bankrupt person does not logically break the connection between the issues. …
Consideration 17 In these circumstances, Mrs Koutavas is presently the only registered proprietor of the property and she is the subject of consent orders ordering her to transfer a half interest to the trustee in bankruptcy. She holds a half share as tenant in common as trustee in favour of the trustee in bankruptcy. 18 Section 66G of the Conveyancing Act provides that where any property is held in co-ownership the court may, on the application of any one or more of the co-owners, appoint trustees of the property and vest the same in such trustees, subject to incumbrances affecting the entirety, but free from incumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition. An equitable interest as co-owner is sufficient to enliven that power. "Property" is defined in s 7(1) of the Conveyancing Act to include any estate or interest in real property. "Co-ownership" is defined in s 66F(1) to mean "ownership whether at law or in equity in possession by two or more persons as joint tenants or as tenants in common" and the term "co-owner" has a corresponding meaning, and includes an incumbrancer of the interest of a joint tenant or tenant in common. 19 I would make orders appointing the two trustees for sale of the property, both having filed consents to so act. I would also make an order in terms of the order of priority set out in prayer 8 of the originating application. 20 I then turn to the question of the caveat. As I have said, the estate or interest claimed is an equitable charge on the basis that between 2003 and 2011 the caveators lent sums totalling some $148,000 to the registered proprietor, their daughter Mrs Koutavas, to assist in the construction and mortgage repayments for the property. 21 Section 74MA provides: 74MA Application to Court for withdrawal of caveat (1) Any person who is or claims to be entitled to an estate or interest in the land described in a caveat lodged under section 74B or 74F may apply to the Supreme Court for an order that the caveat be withdrawn by the caveator or another person who by virtue of section 74M is authorised to withdraw the caveat. (2) After being satisfied that a copy of the application has been served on the person who would be required to withdraw the caveat if the order sought were made or after having made an order dispensing with service, the Supreme Court may: (a) order the caveator or another person, who by virtue of section 74M is authorised to withdraw the caveat to which the proceedings relate, to withdraw the caveat within a specified time, and (b) make such other or further orders as it thinks fit. (3) If an order for the withdrawal of a caveat is made under subsection (2) and a withdrawal of the caveat is not, within the time limited by the order, lodged with the Registrar-General, the caveat lapses when an office copy of the order is lodged with the Registrar-General after that time expires. 22 I am satisfied as to service of the application: see my earlier judgment Leroy v Koutavas, in the matter of Koutavas at [12]. 23 It appears that this loan was made as a result of an oral agreement between Mr and Mrs Fildissis and their daughter Mrs Koutavas and Mr and Mrs Fildissis did not thereby acquire, and do not have, an interest in the property. I would make orders to remove the caveat on the basis that Mr and Mrs Fildissis have no estate or interest in the property. 24 In the case of Mr Fildissis, by virtue of r 9.24(2) of the Federal Court Rules 2011 (Cth), the orders made in the proceeding bind the estate of Mr Fildissis as the estate would have been bound if his personal representative had been a party to the proceeding. Conclusion 25 For these reasons, and because they are by consent, I make the orders proposed by the applicant, the first respondent and the third respondent. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.
Leroy
Koutavas, in the matter of Koutavas