Trustees of the Property of Shane L Fuz (Bankrupt); in the matter of Shane L Fuz (Bankrupt) v NSW Trustee and Guardian

Judgment (5 paragraphs)

[1]

Pursuant to rule 9.05 of the Federal Court Rules 2011 (Cth) ("the Rules"), Joshua Mark Fuz and Mathew Lea Fuz as Executors of the Deceased Estate of Joanne Kim Fuz be joined as the second respondent.
Pursuant to rule 9.05 of the Rules, the Trustees of the Property of Aaron Shane Fuz, a Bankrupt be joined as the third respondent.
Andrew Aravanis and Ronil Prakash Roy as Trustees for Sale of 90 Yalwal Road, West Nowra, distribute the Net Proceeds held by them in an interest bearing account pursuant to Order 5(f)(ii) of the Orders made on 29 August 2019, as follows: (a) $34,080.25 to the Trustees of the Bankrupt Estate of Aaron Shane Fuz; and (b) the balance to the executors of the Deceased Estate of Joanne Kim Fuz. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

[2]

GOODMAN J 1 On 8 March 2023, I made orders for the distribution of the net proceeds of the sale of a property at Nowra in New South Wales, which proceeds are held on trust by the applicant trustees. I also made orders for the joinder of several parties as respondents. Set out below are my reasons for doing so. I refer below to members of the Fuz family (Shane, his late wife Joanne and their four children - Joshua, Mathew, Jayanne and Mathew) by their first names for convenience and without intending any disrespect.

BACKGROUND 2 As at February 2012, Shane and Joanne owned the property jointly. 3 In February 2012, Shane became bankrupt and the trustees were appointed as trustees of his bankrupt estate. 4 On 6 July 2015, Joanne passed away leaving a will. The beneficiaries under her will are her four children. Upon her passing, her estate was deemed to be vested in the respondent, the New South Wales Trustee and Guardian, pursuant to s 61 of the Probate and Administration Act 1898 (NSW). 5 In July 2016, Aaron became bankrupt. The trustees were also appointed as trustees of his bankrupt estate. 6 On 9 May 2019, the trustees commenced this proceeding by originating application, seeking orders appointing themselves as trustees for sale of the property and facilitating the corresponding sale and distribution of funds. 7 On 7 June 2019, the respondent notified the trustees' solicitor that as the respondent was not administering Joanne's estate, and as the object of s 61 of the Act is to "… put the title in the Public Trustee and to hold the position in statu quo until a personal representative is appointed…" (citing Ex parte Newlands Brothers Pty Ltd; Re Kenniff (1955) 56 SR(NSW) 35 at 40 per Street CJ, Maxwell and Herron JJ), it proposed to take no active role in the proceeding. The respondent has not filed a notice of appearance. 8 On 29 August 2019, Flick J made a series of declarations and orders in this proceeding. Relevantly for present purposes his Honour appointed the trustees as trustees for the sale of the property and made orders for the distribution of the proceeds of sale of the property: Trustees of the Property of Shane L Fuz (Bankrupt); in the matter of Shane L Fuz (Bankrupt) v NSW Trustee and Guardian [2019] FCA 1311 (Fuz (No 1)). Order 5(f) was in the following terms: 5. Following completion of the sale of the Property by the Trustees for Sale, the settlement funds shall be distributed by the Trustees for Sale in the following order: ... f. Finally, the remaining balance of the sale proceeds ("the Net Proceeds") be divided equally and distributed as follows: (i) one-half of the Net Proceeds be paid to the Applicant; and (ii) one-half of the Net Proceeds be paid into an interest bearing account to be held by the Trustees for Sale on trust for the Deceased Estate of Joanne Kim Fuz, pending further order of the Court. … 9 As Flick J noted at [2] of Fuz (No 1), as at the date of his orders, no application for probate in respect of Joanne's will had been made. 10 On 10 November 2020, the trustees sold the property. The proceeds of sale have been held in an interest bearing account in accordance with order 5(f)(ii). 11 On 15 June 2022, probate was granted in respect of Joanne's will. Joshua and Mathew were appointed as the executors of Joanne's deceased estate. Thus, the trustees are now in a position to seek the further order contemplated by order 5(f)(ii). 12 The trustees (in their various capacities) and the executors have liaised and reached an agreement regarding a distribution of the proceeds from the sale of the property. In essence, they have agreed that Aaron's bankrupt estate should receive $34,080.25 of the proceeds of sale, and the executors receive the balance, to be distributed to the other beneficiaries under the will. 13 On 27 October 2022, the solicitor for the trustees wrote to the respondent enclosing a copy of orders they proposed to seek from the Court, and requesting that the respondent confirm whether there was any objection to the proposed orders and to indicate whether the respondent wished to be heard. No response was received from the respondent. 14 On 3 February 2023, the trustees filed an interlocutory application seeking orders for the joinder of (1) the executors and (2) themselves, in their capacity as trustees of Aaron's bankrupt estate, together with the following order: An order that Andrew Aravanis and Ronil Prakash Roy as Trustees for Sale of 90 Yalwal Road, West Nowra, distribute the Net Proceeds held by them in an interest bearing account pursuant to Order 5(f)(ii) of the Orders made on 29 August 2019, as follows: (a) $34,080.25 to the Trustees of the Bankrupt Estate of Aaron Shane Fuz; and (b) the balance to the executors of the Deceased Estate of Joanne Kim Fuz.

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