MEAGHER AS TRUSTEE IN BANKRUPTCY OF PAMELA STEIN -v- STEIN [2025] WASC 235 | Case summary

Supreme Court of WA|2025-06-17|Before: Forrester J

The application has been brought pursuant to O 14 r 1(1) of the Rules.
I am satisfied that all of the relevant documents have been served on the Defendant.
The preconditions for the making of an application have been met. To the extent that any extension of time is required, bearing in mind that the application was originally made by originating summons and was ordered to proceed as if it was commenced by writ, Master Russell granted such an extension by order made on 30 January 2025.
An affidavit has been filed in support of the application, which complies with O 14 r 2(1).
The legal principles relevant to an application for summary judgment pursuant to O 14 r 1 are well established. As the Court of Appeal observed in Kounis v Westpac Banking Corporation:

Summary judgment is a procedure designed to deal with cases that are not fit for trial. The power to determine a proceeding summarily must be attended with great care - sometimes expressed in terms of 'exceptional caution'. It is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceedings if they went to trial, that summary judgment ought properly to be granted. The claimant carries the burden of persuading the court that the claim is a good one, that there is no defence to it, that leave to defend should not be granted and that judgment should be given for the claimant. If the claimant can establish a prima facie right to summary judgment, the burden then shifts to the defendant to satisfy the court why judgment should not be given against him or her. In this respect the defendant has an evidentiary burden. However, the overall burden of persuasion remains on the party moving for summary judgment.

Relief is sought pursuant to s 126(1) of the Property Law Act 1969 (WA), which relevantly provides:
1. In action for partition Court may direct land to be sold

(1) Where in an action for partition the party or parties interested, individually or collectively, to the extent of a half share or upwards in the land to which the action relates request the Court to direct a sale of the land and a distribution of the proceeds, instead of a division of the land between or among the parties interested, the Court shall, unless it sees good reason to the contrary, direct a sale accordingly.

(2) The Court may, if it thinks fit, on the request of any party interested, and notwithstanding the dissent or disability of any other party, direct a sale in any case where it appears to the Court that, by reason of the nature of the land, or of the number of the parties interested or presumptively interested therein, or of the absence or disability of any of those parties, or of any other circumstance, a sale of the land would be for the benefit of the parties interested.

(3) The Court may also, if it thinks fit, on the request of any party interested, direct that the land be sold, unless the other parties interested, or some of them, undertake to purchase the share of the party requesting a sale; and, on such an undertaking being given, may direct a valuation of the share of the party requesting a sale.

(4) On directing a sale or valuation to be made under subsection (3) the Court may give also all necessary or proper consequential directions.

...

(6) On any sale under this section the Court may allow any of the parties interested in the land to bid at the sale, on such terms as the Court deems reasonable as to non-payment of deposit, or as to setting off or accounting for the purchase money or any part thereof instead of paying the same, or as to any other matters.

In Bombara v Bombara,[26] Allanson J summarised the principles to be applied in relation to s 126(1) in the following terms:

Section 126 of the Property Law Act provides an alternative remedy to partition. In an action for partition, if a party or parties interested to the extent of a half share or more requests the court to direct a sale of the land and a distribution of the proceeds 'the court shall, unless it sees good reason to the contrary, direct a sale accordingly'.

The court has a complete discretion as to who it will appoint to conduct a sale. As a matter of practice, ordinarily the conduct of the sale is given to the plaintiff.

In exercising such a discretion, the court must have regard to matters which are consistent with the objects of the Act. In Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [22], speaking of the discretion to award costs, Gaudron and Gummow JJ said:

The power conferred by the section is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent. However, subject to such considerations, the discretion conferred is, to adapt the words of Dixon J, unconfined except in so far as 'the subject matter and the scope and purpose' of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be 'definitely extraneous to any objects the legislature could have had in view'. (citations omitted).[27]

The onus of proof for the purposes of s 126(1) is upon the defendant to establish a good reason why the sale should not go ahead.[28]

Section 19 of the Bankruptcy Act 1966 (Cth) relevantly provides:

19 Duties etc. of trustee

(1) The duties of the trustee of the estate of a bankrupt include the following:

...

(b) determining whether the estate includes property that can be realised to pay a dividend to creditors;

(f) taking appropriate steps to recover property for the benefit of the estate;

(g) taking whatever action is practicable to try to ensure that the bankrupt discharges all of the bankrupt's duties under this Act;

(j) administering the estate as efficiently as possible by avoiding unnecessary expense;

(k) exercising powers and performing functions in a commercially sound way...

The Plaintiffs submit that they have made 'extensive, exhaustive and collaborative attempts to resolve the matter of the Property with the Defendant (or, alternatively, arrange an annulment of the bankruptcy) without result'.[29]
The evidence establishes that, in the more than six years since Ms Stein was declared bankrupt, and in the (at least) four years of the Plaintiffs or their lawyers communicating with the Defendant and Ms Stein, the Defendant has not made any substantive steps towards resolution of the Proceedings.
The Plaintiffs have a positive obligation to realise assets for the benefit of creditors.[30]

The Defendant had no substantive submissions in opposition to the application. His submission was simply that the court should not make the orders and should adjourn the Proceedings (including the Application) to enable him to have more time to obtain the necessary funds to resolve the Proceedings. However, he was unable to point to any steps he could take in the near future, and it appeared he hoped to await the outcome of his common law proceedings in the District Court. Apart from unsuccessfully seeking free legal assistance, he was unable to point to any steps he had taken to otherwise deal with the matter.

In the circumstances, the Defendant was provided with an additional three weeks in order to seek the assistance of a financial counsellor (and he was provided with some assistance to locate such assistance). I ordered that if the matter was unable to be resolved after that time, I would then make a decision on the papers.
After the expiration of the three weeks, I was informed that the matter had not been resolved, and I have therefore proceeded to determine the matter.

I am satisfied that the First Plaintiff is a person interested in the Property to the extent of a half-share or upwards and thus s 126(1) of the Property Law Act 1969 (WA) applies.
The Plaintiffs have a duty to take appropriate steps to recover the Property and apply it to the debts of Ms Stein's Estate. They have been attempting to do so in an alternative manner for more than four years.
Such evidence as has been put on by the Defendant is to the effect that, at some uncertain point in the future, he may come into funds which enable him to annul Ms Stein's bankruptcy. However, the evidence is, at best, speculative.
In Orrman v Orrman [No 2], EM Heenan J observed:

There is authority to suggest that the discretion to refuse an order under s 126, because of good reason to the contrary, is not a justification to refuse relief absolutely but is only a justification to order physical partition in lieu of sale. I consider that to be the correct interpretation of the section.[31]

On this basis, even if I were to accept the Defendant's evidence as more than mere speculation, it could not constitute a good reason to order physical partition of the Property. Neither party requests a partition of the Property in lieu of sale, and there is no evidence before me upon which I could find that partition is a possible, let alone practicable, alternative to sale in this case.
In those circumstances, I am satisfied that there is no arguable defence to the Plaintiffs' claim.
In those circumstances, the Application should be granted.
The Defendant has not sought to adduce evidence as to how the sale should be effected. Indeed, he has repeatedly been offered the opportunity to conduct the sale himself and failed to take up the opportunity. In those circumstances, I consider it to be appropriate for the Plaintiffs to have the conduct of the sale.

Pursuant to Order 14 rule 3(1) of the Rules, judgment is entered for the Plaintiffs against the Defendant. 2. Pursuant to section 126(1) of the Property Law Act 1969 (WA), the whole of the land described in Certificate of Title Volume 2182 Folio 907, known as 10 Willespie Drive, Pearsall WA 6065 (Land), owned by the First Plaintiff and the Defendant as tenants in common in equal shares, be sold on the basis of unencumbered vacant possession. 3. The First Plaintiff have the conduct of the sale of the Land and for that purpose:

(a) the First Plaintiff shall engage, in the name of the First Plaintiff and the Defendant, a qualified real estate agent carrying on business in the area of Pearsall and its surrounding districts to act on such sale (Agent), and cause the Agent appointed by the First Plaintiff: > > > (i) to recommend a reserve price for the sale of the Land, which recommendation may be altered by the Agent at any time;
> >
> > (ii) to adopt the reserve price recommended by the Agent from time to time as a reserve for the sale of the Land; and
> >
> > (iii) to market, advertise and otherwise offer the Land for sale by way of auction or private treaty as recommended by the Agent; and > >
>
> (b) the First Plaintiff, upon being notified by the Agent of a recommended reserve, shall give notice to the Defendant of such reserve.

The Defendant co-operate fully with the Agent appointed by the First Plaintiff in the sale process. 2. On any sale of the Land made pursuant to the terms of this Order:

(a) the First Plaintiff shall be authorised by this Order to sign for and on behalf of itself and the Defendant any transfers, notice of appointment of agent or other documents necessary to give effect to the sale of the Land;
>
> (b) each party to the action will be at liberty to bid at auction, or make offer by way of private treaty; and
>
> (c) the First Plaintiff be entitled to disburse the proceeds of the sale of the Land in the following priority: > > > (i) paying any registered encumbrancer of the entirety of the Land;
> >
> > (ii) discharging all costs, charges and expenses properly incurred in the sale of the Land; and
> >
> > (iii) paying the residue, if any, in equal shares to the First Plaintiff and the Defendant, subject to Order 8.

The Defendant be personally served with this Order, and that he deliver up vacant possession of the Land to the First Plaintiff within 30 days after service of the Order. 2. In the event the Defendant fails to deliver vacant possession of the Land in accordance with order 6 herein, a property (seizure and delivery) order in relation to the Land, being real property, may be issued pursuant to s 95 of the Civil Judgments Enforcement Act 2004 (WA). 3. The costs of the action and application be paid by the Defendant out of the Defendant's share of the proceeds of the sale of the Land, to be taxed if the Defendant does not agree to them in writing within 14 days of settlement of the sale of the Land.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Glew v Frank Jasper Pty Ltd [2010] WASCA 87.

[2] Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10].

[10] First Meagher Affidavit, 2 [4], 5.

[25] Kounis v Westpac Banking Corporation [2023] WASCA 185 [8] ‑ [9]. See also Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24].

[26] Bombara v Bombara [2010] WASC 314.

[27] Bombara v Bombara [2010] WASC 314 [79] - [81].

[28] Martin-Smith v Woodhead [1990] WAR 62, 69.

[29] First and Second Plaintiffs' Outline of Submissions and List of Authorities in Support of Chamber Summons filed 28 March 2025, 2 [4].

[31] Orrman v Orrman [No 2] [2008] WASC 17 [38].

Judgments Enforcement Act 2004

Due allowance must, of course, be made for the fact that [an appellant] is unrepresented. A court should always be careful to see that the rights of an unrepresented litigant have not been 'obfuscated by their own advocacy': Neil v Nott [1994] HCA 23 [5]; [1994] HCA 23; (1994) 121 ALR 148,150. It must be alert to the possibility that beneath inadequately expressed and often irrelevant material there may lurk an arguable case. And some leniency may be required in relation to compliance with the rules. But in the end the allowances that can be made for a litigant in person are necessarily limited, both as a matter of fairness to the other party, who must be adequately informed of the case they have to meet, and because the provision of acceptable grounds of appeal is fundamental to the exercise of the appellate function by the court.[2]

MEAGHER AS TRUSTEE IN BANKRUPTCY OF PAMELA STEIN -v- STEIN [2025] WASC 235 (17 June 2025)

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