Official Trustee in Bankruptcy v Van Duong [2002] FMCA 17 (11 January 2002)

Last Updated: 27 March 2002

FEDERAL MAGISTRATES COURT OF AUSTRALIA

OFFICIAL TRUSTEE IN BANKRUPTCY v VAN DUONG & ANOR

[2002] FMCA 17

BANKRUPTCY - Order for vacant possession - Federal Magistrates Court Rule 21.10

Applicant:

OFFICIAL TRUSTEE IN BANKRUPTCY

Respondents:

NGHIEP VAN DUONG & THANH KIM TRINH

File No:

BZ 624 of 2001

Delivered on:

11 January 2002

Delivered at:

Brisbane

Hearing Date:

11 January 2002

Judgment of:

Rimmer FM

REPRESENTATION

Solicitors for the Applicant:

Bennett and Philp, Solicitors of Brisbane

Counsel for the Respondent:

Ms Heyworth-Smith, of Counsel

Solicitors for the Respondent:

Lawson Jones, Solicitors of Brisbane

ORDERS

(1) That the RESPONDENTS deliver up possession of the property situated at 108 Holland Road, Holland Park Brisbane as described as Lot 4 on registered plan 73549, County of Stanley, Parish of Bulimba, Title Reference 15126128 to the APPLICANT by no later than Friday, 18 April 2002.

(2) That pursuant to Rule 21.10 of the Federal Magistrates Court Rules 2001 in default of any agreement the RESPONDENT shall pay the APPLICANTS costs and disbursements pursuant to Rule 21.10 of the Federal Magistrates Court Rules 2001.

(3) That both parties be granted liberty to apply by contacting the Associate to Federal Magistrate Rimmer upon the given of 7 days notice to the Court.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE

BZ 624 of 2001

OFFICIAL TRUSTEE IN BANKRUPTCY

Applicant

And

NGHIEP VAN DUONG & THANH KIM TRINH

Respondents

REASONS FOR JUDGMENT

Application

1. This is an application brought by the applicant, who is the Official Trustee in Bankruptcy, against the respondents seeking an order for vacant possession of a property which is registered in the name of the Official Trustee and has vested as property in the applicant's bankrupt estates in the Official Trustee. The property is situated at Holland Park, and a detailed description of the property has been provided in the material to the Court and the application. There is a second leg to the application in which the applicant seeks that the respondent pay their costs on an indemnity basis.

Background

2. In this matter, the history of the matter is that a debtors petition was lodged and received by each of the respondents and accepted by the Official Trustee on 15 June 1998. As a result of the effluxion of time and the required period of three years passing, the respondents were each discharged from bankruptcy on 16 June 2001. In my view, there is no proper explanation in the material provided to the Court to explain what steps have been undertaken by the Official Trustee to bring these bankrupt estates to a conclusion between the period of June 1998 and 2001, save to say that the applicant says that there were negotiations taking place between ITSA and the respondents through a person who was employed by them to assist them in that regard.

3. However, the facts still remain that there are a number of creditors who clearly have been nominated in the debtors statement of affairs as their creditors, who are still not determined by the Official Trustee as having proper provable debts. That exercise, it is deposed to in the material on behalf of the applicant, will be undertaken by 18 January 2002. It has not been until very recently, as at late 2001, that a request has been made by the applicant of those creditors to provide documentation to prove their debt or the debts.

4. Clearly, in this matter I am satisfied that no proper determination can be made as to the rights of all possible creditors, including the unsecured creditors who have already had their debts accepted by the applicants, until such time as that step has been undertaken by the applicants. There are questions in this matter as to whether those debts are joint or several, and the priorities which may flow as a result of that in relation to particularly the proceeds of sale of the property which the Trustee seeks to obtain possession and then take steps to sell. It is further the case that, no proposal can be properly put by the debtors, in my view, until there has been a proper determination of who the accepted creditors in their bankruptcy are, and no proposal can be sensibly considered by any creditors until that step has been undertaken. In my view, that is the critical step that needs to be undertaken without any further delay by the Official Trustee particularly after the unexplained delay in that being done to date.

5. In those circumstances, I propose to provide a period of time before I order that the respondents be required to provide vacant possession of three months. The 18^th January 2002 is the date which the applicant has indicated in the material that they will be able to establish who the creditors of both estates are thereafter. I will provide sufficient time for a meeting of any creditors to be held, and also if any proposal put by the debtors or any debt of a creditor is not accepted by the Official Trustee, the applicant in these matters, take into account that the creditors may need to exercise their rights in relation to any applications that they may wish to bring to the Court.

6. I do not propose to accede to the respondents application to adjourn the matter and then further determine it after those above steps have been completed. In my view, that raises the serious issue of prejudice to the applicant, who, as the Official Trustee in Bankruptcy, must have a mind to the costs to the bankrupt estates. Any further adjournment will only add to the costs.

7. Given the matters which have been of significance to my determination, I am not satisfied that this is a matter in which there are such circumstances that would give rise to an order being made for indemnity costs.

8. Clearly, in my view, for that to occur, the applicant would need to establish to the Court that they have exercised due diligence in finalising the applicants bankruptcy estates; and in this matter, I simply do not have sufficient evidence before me to establish that that is the case. I therefore propose to dismiss the application for indemnity costs and order that the respondents deliver to the applicants vacant possession of the property by 18 April 2002.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Rimmer FM

Associate:

Date: