Re Williams, P. Ex parte Official Trustee in Bankruptcy v. Di Pietro, E [1994] FCA 916

Federal Court of Australia|1994-11-30|Before: Northrop J

EXERCISING FEDERAL JURISDICTION . No NB 3348 of 1991 IN. BANKRUPTCY .

AS TRUSTEE OF THE ESTATE OF PATRICIA WILLIAM Applicant

AND: OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE OF THE ESTATE OF PATRICIA WILLIAMS Respondent

On 12 November 1991, the Federal Court of Australia made a sequestration order against the estate of Patricia Williams. As a result of that order, on that day Patricia Williams became a bankrupt. In these reasons, wherever appropriate,

the term "the bankrupt" will be used to describe the person

The sequestration order was made under section 52 of the Bankruptcy Act 1966 on "the petition of Deputy Commissioner of Taxation, a judgment creditor of the bankrupt. The act of bankruptcy relied on by the Deputy Commissioner occurred on 1

Upon the sequestration order being made, by reason of section 58 of the Bankruptcy Act, and in the words of subsection 58(1), the property of the bankrupt' vested forthwith in the Official Trustee. The essential issue raised by the applications presently before the Court is whether

particular property of the bankrupt has vested in the Official

On 12 November 1991, property situated and known as 31 Redgum Avenue Cronulla in the State of New South Wales upon which a dwelling house had been erected, was registered in the name of Aileen Patricia Di Pietro and Elio Di Pietro as tenants in common in equal shares. This property, which will be referred to as Redgum Avenue, is lot 3 on the plan of subdivision 507292. In October 1993 it was said to be valued at about $600,000. The Official Trustee claimed that the bankrupt and Aileen Patricia Di Pietro, the person named as the tenant in common of Redgum Avenue, were one and the same person with the result that her interest in Redgum Avenue had

vested in the Official Trustee on 12 November 1991.

whe Thereafter, so it was said, the Official Trustee and Elio Di Pietro were tenants in common in equal shares of Redgum Avenue. The Official Trustee lodged a caveat to protect its interest in Redgum Avenue. Aileen Patricia Di Pietro denied

that she and Patricia Williams were one and the same person.

By application filed with the Registrar in Bankruptcy on 2 March 1993, the Official Trustee, as trustee of the estate of the bankrupt and as applicant, sought certain orders against "Patricia Williams also known as Aileen Patricia Di

For present purposes, the relevant orders so sought in

their form as amended by leave on 3 June 1993 were:

"1. A Declaration under Section 30 of the Bankruptcy Act that Patricia WILLIAMS, the bankrupt, is one in

(sic) the same person as Aileen Patricia DI PIETRO, the joint registered proprietor with Elio DI PIETRO of the property known as 31 Redgum Avenue, Cronulla, being Folio Identifier 3/507292 ('the property').

A_ Declaration that the interest of Aileen Patricia DI-PIETRO in the property and any other divisible property of Aileen Patricia DI-PIETRO vests in the Official Trustee _ in Bankruptcy by virtue of Section 58 of the Bankruptcy Act."

In conformity with the requirements of Bankruptcy Rule 106 and Form 46 of the Bankruptcy Ruies, the respondent to

that application opposed the orders sought on the following

"1. 'That the Court in exercise of its Jurisdiction in

Bankruptcy under the provisions of the Bankruptcy Act 1966 should not make the declaration sought in paragraph 1 of the Application as such declaration is unnecessary and oppressive.

No interest in the property referred to in the application or any other divisible property vests in the applicant for the following reasons:

i) she is not identical with PATRICIA WILLIAMS the Bankrupt in these proceedings;

ii) PATRICIA WILLIAMS has no estate or interest in the property described as Folio Identifier 3//507292;

iii) neither the property described in Folio Identifier 3/507292 nor any other property of the Respondent Aileen Di Pietro vests in the Official Trustee;

iv) that AILEEN PATRICIA DI-PIETRO is not a Bankrupt and the Official Trustee is not trustee of her estate;

vi) that the Respondent has been denied natural justice as she has not been served with the

process upon which judgment was obtained against Patricia Williams."

The respondent to that application, by what was described as a cross application, sought an order that the Official Trustee withdraw the caveat that had been lodged against her

The application and the cross application came on for hearing before the Federal Court constituted by Sweeney J on 28 September 1993. On 8 October 1993, the Court gave judgment and published its reasons for judgment. The Court made the

declares that Aileen Patricia Di-Pietro of 31 Redgum Avenue, Cronulla in the State of New South Wales is the bankrupt in these proceedings ("the bankrupt");

declares that the bankrupt is the joint registered proprietor with Elio Di-Pietro of the property known as 31 Redgum Avenue, Cronulla being Folio Identifier 3/507292 ("the property");

declares that the interest of the bankrupt in the property vests in the Official Trustee as trustee of the estate of the bankrupt;

4, orders that the cross application filed 23 July 1993 be dismissed; and

orders that the costs of the Official Trustee of and incidental to the application and cross application

be taxed and paid out of the estate of the bankrupt."

Some comments are made with respect to the orders made. The issue between the parties was whether Patricia Williams and Aileen Patricia Di Pietro were one and the same person. This is made clear by a reading of the reasons for judgment and the "pleadings" to the application and cross application. Declaration 1 has the effect of identifying Aileen Patricia Di Pietro as the bankrupt. Thus, in the balance of these reasons, the words "the bankrupt" will be used to describe the one person Patricia Williams and Aileen Patricia Di Pietro as well as the same person masquerading under a number of names during relevant times. The effect of Declaration 1 was to confirm the position asserted by the Official Trustee with the result that section 58 of the Bankruptcy Act operated of its own force to vest forthwith in the Official Trustee on 12 November 1991 the one half interest of the bankrupt in Redgum

Avenue. That section operated automatically upon the making

of the sequestration order. No Court order was required to

vest the property in the Official Trustee. Hence a declaration was made. The Bankruptcy Act operated on the facts so declared. The position was no different, for

example, from a case where the name of a registered proprietor of land had changed before a bankruptcy by reason, for

Declaration 2 causes some difficulty. On the date the Declaration was made, 8 October 1993, the bankrupt was not the joint registered proprietor with Elio Di Pietro of Redgum Avenue. Since 12 November 1991, the Official Trustee and Elio

Di Pietro had been tenants in common in equal shares of Redgum

Difficulties arise also with respect to Declaration 3. The interest in Redgum Avenue had already vested in the Official Trustee. The use of the word "vests", namely in the present tense, was relied upon by counsel for the Official Trustee in the matters presently before the Court. In truth, the property had vested in the Official Trustee on 12 November

No order of the Court was required to vest the property

In pursuance of the obligation to get in the estate of the bankrupt, the Official Trustee desired to sell Redgum Avenue to obtain a one half share of the purchase money. In

New South Wales this is done pursuant to Division 6 of Part 4

of the Conveyancing Act 1919 (NSW) and in particular under sections 66F and 66G. To a Victorian lawyer used to the provisions of Part IV, Partition, of the Property Law Act 1958 (Vic) and in particular sections 221, 222 and 223, the NSW provisions appear novel. In either case, it would be expected that legal proceedings would have begun in the Supreme Court of the State in which the land was situated. Re Passmore Ex parte Official Receiver in Bankruptcy (1984) 56 ALR 181

In the present case, however, the Official Trustee by application filed with the Registrar in Bankruptcy on 8 January 1994 sought orders pursuant to section 66G of the Conveyancing Act for the appointment of specified persons as trustees of Redgum Avenue, to vest the property in them and to be held by them on the "statutory trust for sale", and consequential orders to enable Redgum Avenue to be sold and the proceeds distributed between the tenants in common of that land. Elio Di Pietro was named as the respondent to this application. The Official Trustee sought to rely upon the provisions of the Jurisdiction of Courts (Cross Vesting) Act 1987 (NSW) and (Cth) which have the effect of conferring jurisdiction with respect to State matters on the Federal Court of Australia. The Federal Court has jurisdiction in bankruptcy, see subsection 28(1) of the Bankruptcy Act and the definition of "bankruptcy" appearing in subsection 5(1). The application of the Official Trustee under section 66G of the

Conveyancing Act is not a proceeding under or by virtue of the Bankruptcy Act but, as appears later in these reasons, a number of other proceedings under or by virtue of the Bankruptcy Act are involved in the consideration of the application. Accordingly the Court, in the exercise of its discretion under paragraph 5(4)(b)(iii) of the Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth), determined that the Federal Court should exercise the jurisdiction to hear and

As indicated earlier, Elio Di Pietro is named as the respondent to the application. He is now the husband of the bankrupt. In these reasons I shall refer to him as Elio Di Pietro. He has a significant role in the history of these matters. He, by chance, has an interest as a tenant in common

Unfortunately, the legal advisers of Elio Di Pietro did not comply with the requirements of Bankruptcy Rule 106 and Form 46. No grounds of opposition were stated but during the course of the hearing of the application the ground of defence became clear and the issue can be identified. In truth, the ground of opposition was that the interest of the bankrupt in Redgum Avenue had not vested in the Official Trustee under section 58 of the Bankruptcy Act or at all and accordingly he and the Official Trustee were not tenants in common of Redgum Avenue. Thus, it was contended, the Official Trustee had no standing to bring the application under section 66G of the

Conveyancing Act and thus the application should be dismissed.

~t A brief elaboration of this ground of opposition may be given. The provisions of paragraph 58(1)(a) of the Bankruptcy

"58(1) Subject to this Act, where a debtor becomes a bankrupt:

(a) the property of the bankrupt... vests forthwith in the Official Trustee ... "

In section 5 of the Bankruptcy Act the word "property" is defined in a way which, on 12 November 1991, included the interest of the bankrupt in Redgum Avenue. The phrase "the

property of the bankrupt" is defined in section 5, in relation

(i) the property divisible among the bankrupt's creditors; and

(ii) any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt; and

It is not necessary to set out paragraph (b) of the

Applying this definition to the phrase "the property of the bankrupt" in paragraph 58(1)(a), it is only the property of the bankrupt which was divisible among her creditors which,

pursuant to section 58, vested in the Official Trustee.

Section 116 of the Bankruptcy Act specifies property of a bankrupt which is divisible amongst the creditors of the bankrupt. Subsection 116(1) lists property which constitutes property divisible amongst the creditors of a bankrupt. This includes all property that belonged to or was vested in a bankrupt at the commencement of the bankruptcy, see paragraph 116(1)(c). Paragraph 116(2)(a) provides that subsection 116(1) does not extend to property held by a bankrupt in trust for another person. See the discussion on equitable rights in Corke v Corke (1994) 48 FCR 359 per Lockhart J at 365. In the present case, Elio Di Pietro claims that on 12 November 1991 the bankrupt held her interest in Redgum Avenue as a bare trustee for her two children. Thus, it is argued, the property was not "property of the bankrupt" under paragraph 58(1)(a) of the Bankruptcy Act and thus it did not, nor could

This ground of opposition raised a disputed question, namely, whether, on 12 November 1991, the bankrupt held her one half interest as tenant in common Redgum Avenue as a bare

Further, even if Elio Di Pietro succeeded on this ground of opposition, the Official Trustee contended that the ground of opposition failed because the order of the Court made on 8 October 1993 constituted a judgment in rem which prevented Elio Di Pietro from relying on this issue since the order

constituted a res judicata or an estoppel preventing him from

The other matter before the Court is an application filed with the Registrar in Bankruptcy on 7 April 1994. In this application Elio Di Pietro, Kim Bonnie Donaldson and Keith Connor Donaldson are named as applicants and the Official Trustee is named as respondent. Kim Bonnie Donaldson and Keith Connor Donaldson are the two children of the bankrupt by a former marriage. In its form as amended by leave on 5 October 1994, the three applicants are seeking a number of

orders, the relevant ones for present purposes being:

"1. A declaration that the respondent has no estate or interest in the land in Folio Identifier 3/507292 by reason of the operation of section 58 of the Bankruptcy Act, 1966 or otherwise.

<A declaration that the interest (if any) of Aileen Di Pietro, also known as Patricia Williams, in the land in Folio Identifier 3/507292 is not divisible property of the bankrupt within the meaning of section of s 116 of the Bankruptcy Act.

A declaration that the interest of Aileen Patricia Di Pietro in and to the land in Folio Identifier 3/507292 is held by here in trust for the second and third applicants as tenants-in-common in equal

An order that the application under section 66G be dismissed.

An order that the Official Trustee execute and sign

all documents to effect a withdrawal of the caveat No E596670 lodged by in respect of the land in Folio Identifier 3/507292."

The Official Trustee did not comply with the requirements of Bankruptcy Rule 106 and Form 46. No grounds of opposition

were stated but it was clear that the opposition consisted of a denial of the fact that the bankrupt held her interest in Redgum Avenue as a bare trustee for her two children and that in any event the defences to the claim of Elio di Pietro in the first application had equal application to this

By agreement, the two applications were heard together. It should be noted that the bankrupt is not a party to either

The material contained in the affidavits filed on behalf of the Official Trustee support the making of the orders sought by it. In the absence of further evidence the orders would have been made. Thus the shifting onus to call evidence passes to Elio Di Pietro in his capacity as respondent to the application of the Official Trustee although the Official Trustee has the onus of proof cast upon it to establish its claim on the balance of probabilities. Elio Di Pietro relied upon affidavits sworn by himself, the bankrupt, and each of the two children of the bankrupt. In addition, Elio Di Pietro tendered in evidence a copy of the file Donaldson v Donaldson No 1253 of 1971 in the Matrimonial Causes Division of the Supreme Court of New South Wales. This file related to the divorce proceedings between the bankrupt and her then husband, Keith Connor Donaldson. The same affidavits and material were relied upon by Elio Di Pietro and the two children to support their application for orders against the Official Trustee. On

this application the onus of proof is on them to establish

The affidavits relied upon by Elio Di Pietro and the two children of the bankrupt are most unsatisfactory. They contain much material of a hearsay nature, opinions, conclusions and argumentative matter. Although the bankrupt was called to be cross-examined, the cross-examination was not pursued because counsel for her husband and children conceded, quite properly, the defects in the affidavits. He announced that he would not rely upon the facts alleged in the affidavits challenged by the Official Trustee but would rely upon certain facts not disputed and the documents, being copies of documents on the Supreme Court file, and copies of

documents filed with the Registrar General of New South Wales.

From an examination of this material and the facts not disputed in the affidavits, the following facts are found. The bankrupt and Keith Connor Donaldson were married on 15 December 1951. There are two children of the marriage namely Keith, born on 7 August 1955, and Kim, born on 27 April 1957. They are two of the applicants presently before the Court seeking declarations as to an equitable interest in the one half interest in Redgum Avenue held by the bankrupt on 12 November 1991. By petition dated 11 March 1971, the bankrupt, as petitioner, sought a decree of dissolution of her marriage with her then husband on the ground of cruelty. Consequential orders were sought. By cross-petition filed 24 May 1971, her

then husband sought a dissolution of marriage on a number of

~ ke grounds including the ground of separation. It is accepted that the matrimonial proceedings between the bankrupt and her

At the time of the matrimonial proceedings, the bankrupt and her two children were living at 33 Kendall Street Sans Souci, ("33 Kendall Street") which was registered in the name of the bankrupt's then husband. The War Service Homes Division held a first mortgage over 33 Kendall Street. It was claimed that 33 Kendall Street was valued at about $15,000 and

that about $4,500 was owing to the War Service Homes Division.

In September 1971, the bankrupt and her then husband reached an agreement on the matters raised in the matrimonial proceedings. Following this agreement, on 13 September 1971, the Supreme Court of New South Wales granted a decree nisi of dissolution of marriage on the cross petition by the bankrupt's then husband on the ground of separation and made

"1. That the Petition filed herein on the eleventh day of March 1971 be and is hereby dismissed.

That the Petitioner have the custody of Keith Connor Donaldson and Kim Bonnie Donaldson the children of the marriage.

That the Deed of Settlement between the parties dated the thirteenth day of September 1971 a copy of which is filed herein and marked as Exhibit ''C' be sanctioned and approved pursuant to Section 87(1)(k) of the Matrimonial Causes Act 1959-66.

That each party pay his or her own costs of and incidental to this Suit. AND THE COURT NOTED the contents of the document titled

"Terms of Settlement" dated the thirteenth day of September 1971 marked as Exhibit 'B' and filed herein.

AND THE COURT DECLARED that it was satisfied that the only child of the marriage in relation to whom Section 71

of the Act applied is the said Kim Bonnie Donaldson and that proper arrangements in all the circumstances had been made for the welfare of the said child of the marriage."

A copy of the deed of settlement is before the Court. It is expressed to be entered into by the bankrupt and her then husband. It is dated 13 September 1971. The copy before the Court is not signed by the parties to the deed. By the substantive facts of the deed, which were made subject to the sanctioning of the deed by the Supreme Court under section 87(1)(k) of the Matrimonial Causes Act and the granting of the Decree Nisi, the husband agreed to transfer 33 Kendall Street to the bankrupt subject only to the registered first mortgage in favour of the Director of War Service Homes and the

"accepts the said transfer in full satisfaction and discharge to all and sundry her rights to maintenance permanent maintenance and or any settlement under Part VIII of the Matrimonial Causes Act and this Deed may be pleaded in Bar in any application by her or her behalf by virtue of this said Act."

The "Terms of Settlement" which are noted in the Decree Nisi and orders of the Supreme Court contain what is alleged to be the foundation of the trust under which the children of the bankrupt claim an interest in Redgum Avenue. The "Terms

of Settlement" is not part of the order of the Supreme Court.

Poy It is a document under the heading of the Supreme Court proceedings. It is headed "Terms of Settlement and Minutes of Proposed Orders". It is not signed by the bankrupt. It is signed respectively by the solicitors for the bankrupt and her

"IT IS NOTED that the petitioner seeks no order for the maintenance for the abovementioned children and relies on her capacity to work to support herself and the children of the marriage and undertakes to the respondent and to the court that she will not thereafter make any application for maintenance for the support of either of the two said children and further acknowledge (sic) that she will hold this property or such other residence as she may later acquire on trust for the two said children of the marriage."

There are difficulties involved in the constructin of this clause with respect to the words "the petitioner (bankrupt) ... acknowledge (sic) that she will hold this property (presumably 33 Kendall Street) or such other residence as she may later acquire on trust for the said two children of the marriage". The proper construction of this clause can be deferred. The bankrupt did not "hold" 33 Kendall Street on 12 November 1991 when the sequestration order was made against her estate. Elio Di Pietro and the two children, by a process of tracing, contend that the one half interest held by the bankrupt in Redgum Avenue on 12 November 1991 was a residence later acquired by her within the meaning of the clause and thus was held by her on trust for her two children. In order to trace this interest, reliance was placed upon the formal documents subsequently filed with the

Registrar General. These transactions are summarized.

The memorandum of transfer of 33 Kendall Street from the bankrupt's former husband was not registered until 5 July 1976. The transfer was said to be in consideration "by virtue of the other orders made in the Decree Nisi". The Director of War Services Homes consented to the transfer but that consent was "not to be construed as or have the effect of releasing Keith Connor Donaldson from personal liability under the mortgage". The transfer is dated 29 November 1971. The transfer was signed on behalf of the bankrupt by her solicitor but, apparently, not lodged until 1976. By transfer dated 18 June 1976 the bankrupt transferred 33 Kendall Street to Angelo Di Minni. The consideration was stated to be $37,000. The transfer was registered on 29 July 1976. By transfer dated 18 June 1976 Angelo Di Minni transferred to the bankrupt, in the name of Patricia Williams, a residence known as 62 Water Street Caringbah. The consideration was stated to be $67,000. The transfer was registered on 6 July 1976. By a mortgage dated 2 June 1976, the bankrupt granted a mortgage over 62 Water Street in favour of the Commonwealth Savings Bank of Australia as security for the loan of $30,000. The mortgage was registered on 6 July 1976. The date of discharge was 6

May 1981. The discharge was registered on 31 July 1981.

In chronological order, the next transaction related to Redgum Avenue. By transfer dated 1 May 1981 the bankrupt and her present husband Elio Di Pietro became registered as tenants in common in equal shares of Redgum Avenue. The

consideration was stated to be $250,000. The transfer was registered on 4 June 1981. These transactions were completed before the bankrupt ceased to be registered as the proprietor

By transfer dated 12 June 1981 the bankrupt transferred 62 Water Street to Michael Phillip Cain and Myrma Rosemary Cain. The consideration was stated to be $98,000. The transfer was registered on 31 July 1981 being the day on which

the mortgage to the Commonwealth Savings Bank was discharged.

In the absence of evidence, an inference is drawn that the money, if any, received by the bankrupt from the sale of 62 Water Street cannot be traced to the moneys provided for

In my opinion, even on a construction of the clause purporting to create the trust in favour of the children of the bankrupt most favourable to those children, their claim must be refused. At the very least the declaration of trust

is unenforceable and in any event the interest of the children

The clause purports to be a declaration of trust by the bankrupt with respect to land. Paragraph 23C(1)(b) of the Conveyancing Act 1919 (NSW) requires such a declaration to "be manifested and proved by some writing signed by some person who is able to declare such trust". The whole of subsection

"23C (1) Subject to the provision of this Act with respect to the creation of interests in land by parol:

(a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, ox by operation of law;

(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to deciare such trust or by his will;

(c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the

same or by his will, or by his agent thereunto lawfully authorised in writing."

The clause is contained in the document headed "Terms of Settlement and Minutes of Proposed Orders". That document is not signed by the bankrupt, being the person able to declare the trust purporting to be created by the clause in that document. The document is signed by the solicitors for the bankrupt. Paragraph 23C(1)(b) does not contain the words "or by his agent thereto lawfully authorized in writing" which appear in paragraphs 23C(1)(a) and (c). In any event there is no evidence of her solicitors being lawfully authorized in writing to sign the document. There is no evidence of any other writing signed by the bankrupt manifesting and proving the declaration of trust. It is accepted that' the manifestation and proving may result from a combination of a number of documents one of which may be signed by the donor. There was no referrence to any series of documents satisfying

this test. In this regard it is noted that the consideration expressed for the transfer of 33 Kendall Street to the bankrupt refers to the Decree Nisi but the transfer is not signed by the bankrupt. It is signed by her solicitor and there is no evidence that the authority of the solicitor was in writing. The later transfers signed by the bankrupt, irrespective of the name by which the bankrupt signed, made no reference to the clause and cannot be connected to the

A number of authorities were referred to in the course of submissions on this issue. They do not assist the two children or Elio Di Pietro. The principles contained in those authorities have been applied to the facts found. The

Meagher, Gummow & Lehane Equity, doctrines & Remedies para 705-708

Meagher, Gummow Jacob's Law of Trusts in Australia 5th Ed paras 705-707

As a result, the Official Trustee has established its claim and Elio Di Pietro has failed in his ground of opposition. The claim by the two children and Elio Di Pietro has not been proved. Their application must be dismissed. The Court does not need to consider the question of whether the Court has a discretion to refuse to make an order sought

even where the conditions for making the order have been

are established, cf Re Tettell (1952) 52 SR (NSW) 221, Stephens v Dubrey (1960) SR (NSW) 469, Re Ngatoa v Ford (1989) 19 NSWLR 72 and Williams v Legg (1993) 29 NSWLR 687. This is not an issue in Victoria where the applicant has an interest of one moiety or more, see section 223 of the Property Law Act 1958

(Vic). Here the Official Trustee has such an interest.

Further, the claim of the children fails on the tracing principle. Accepting there is an enforceable declaration of trust by the bankrupt in favour of her two children created by the clause, the result was that the bankrupt held 33 Kendall Street in trust for her two children. Accepting further that the proceeds of the sale of that property were then mixed by the bankrupt with moneys borrowed from the Commonwealth Bank to enable her to become registered as the proprietor of 62 Water Street, it might be argued that the new property constituted a residence within the meaning of the trust. Accepting that proposition, the evidence does not establish that any of the proceeds of the sale of 62 Water Street were used in the purchase of Redgum Avenue. No tracing can be had. To be successful, the two children would have to establish they had the equitable interest in any residence acquired by the bankrupt at any time and irrespective of the source of funds used to acquire that residence. This construction, in my opinion, is not open to them. In any event, the bankrupt had not acquired another residence. She had an interest in land and in one sense was the owner of that land but her

Having reached these conclusions, the other matters raised by the Official Trustee need not be considered. It is sufficient to say that there are great difficulties facing the Official Trustee in relying upon the order made by Sweeney J on 28 September 1993 as being a judgment in rem establishing the fact that on 12 November 1991 the bankrupt was registered as a tenant in common in equal shares of Redgum Avenue. That

judgment did not determine whether that property of the bankrupt was divisible among her creditors. If it was property of that kind, it vested in the Official Trustee by the operation of section 58 of the Bankruptcy Act. If it was not, it did not vest. The property did not vest by reason of Declaration 3 of the orders made on that day. Paragraph 116(2) would have prevented the property vesting if, in law,

The ground of opposition based upon Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 589 should not be accepted. The two children are not claiming an equitable right through an equitable right held by the bankrupt. Their rights, if established, are adverse to the rights of the bankrupt, see generally Tanning Research Laboratories Inc v O"Brien (1990) 169 CLR 332. For similar reasons neither res judicata nor estoppel can have any application, see generally Effem Foods Pty Ltd v_ frawl

Having come to these conclusions it is not necessary to consider the issues raised by the Official Trustee in relying upon the provisions of the Defence Service Homes Act 1918, as amended, and in particular section 55, and the authorities Pearce v Pearce (1977) 1 NSWLR 170, Horton v The Public

Trustee (1977) 1 NSWLR 182 and Olsen v Olsen (1977) 1 NSWLR 189.

Accordingly, orders are made in accordance with these

I certify that this and the preceding twenty two (22) pages

are a true copy of the Reasons for Judgment of The Honourable Mr Justice R.M. Northrop.

In relation to the application filed with the Registrar in Bankruptcy on 2 March 1993:

Counsel for the Applicant: Mr D. Ronzani Solicitor for the Applicant: Abbott Tout

Counsel for the Respondent: Mr J.K. Chippindall Solicitor for the Respondent: Ferrier & Associates

In relation to the application filed with the Registrar in

Bankruptcy on 7 April 1994 and amended pursuant to leave granted on 5 October 1994:

Counsel for the Applicants: Mr J.K. Chippindail Solicitor for the Applicants: Ferrier & Associates Counsel for the Respondent: Mr D. Ronzani

Bankruptcy Act 1966(Cth)s 58(1), s

Conveyancing Act 1919(NSW)s 23C(1), s

Jurisdiction of Costs (Cross Vesting) Act 1987(Cth)s 5(4)(b)(iii)

Jurisdiction of Courts (Cross Vesting) Act 1987(NSW)

Jurisdiction of Courts (Cross Vesting) Act 1987(Cth)

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