Harrison v O'Brien [2010] FMCA 339 (17 May 2010)

Last Updated: 21 May 2010

FEDERAL MAGISTRATES COURT OF AUSTRALIA

HARRISON v O'BRIEN

[2010] FMCA 339

BANKRUPTCY – Application to deliver up vacant possession of premises – power to make orders – application granted.

Bankruptcy Act 1966, ss.19, 30, 77

Cook v Schwarcz [2005] FMCA 1598 Cook v Tagamilitsky [2001] FMCA 117 Official Receiver v Tregaskis & Anor [2006] FMCA 1915 Pascoe v Paula Wallin [2002] FMCA 112 Sheahan v O'Brien and Another (2002) 188 ALR 676

Applicant:

BRETT RICHARD GEOFFREY HARRISON AS TRUSTEE FOR THE BANKRUPT ESTATE OF CAROL ANN O'BRIEN

Respondent:

CAROL ANN O'BRIEN

File Number:

SYG 761 of 2010

Judgment of:

Lloyd-Jones FM

Hearing date:

4 May 2010

Delivered at:

Sydney

Delivered on:

17 May 2010

REPRESENTATION

Counsel for the Applicant:

Mr A R Zahra

Solicitors for the Applicant:

Gilbert M Johnstone & Co

Respondent:

No Appearance

ORDERS

(1) The Respondent deliver up vacant possession of the premisis known as Unit 3, 4 Lyons Road, Drummoyne in the State of New South Wales being Folio Identifier 3/SP6272 (“Property”) within 28 days.
(2) In the event that the Repsondent fails to give up vacant possession of the Property in accordance with Order 1, a writ of possession issue forthwith in favour of the Applicant.
(3) The Respondent remove from the Property all vehicles, rubbish and chattles which have not vested in the Applicant (“the personal property”) within 28 days.
(4) In the event that the Respondent fails to comply with Order 3, the Applicant may remove and dispose of the personal property as he sees fit after 28 days have passed from the making of this Order.
(5) The Applicant’s costs of this application be paid from the bankrupt estate of the Respondent.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY

SYG 761 of 2010

BRETT RICHARD GEOFFREY HARRISON AS TRUSTEE FOR THE BANKRUPT ESTATE OF CAROL ANN O'BRIEN

Applicant

And

CAROL ANN O'BRIEN

Respondent

REASONS FOR JUDGMENT

The proceedings

1. In this matter by way of an application dated 7 April 2010, Brett Richard Geoffrey Harrison as Trustee for the bankrupt estate of Carol Ann O’Brien, sought orders from the Court pursuant to s.77(1)(g) and s.30 of the Bankruptcy Act 1966 (Cth) (“the Act”) requires the bankrupt Respondent Carol Ann O’Brien to vacate her property, Unit 3, 4 Lyons Road, Drummoyne in the State of New South Wales. Pursuant to s.19 of the Act, the Trustee is under a duty to progress the administration of the bankrupt’s estate and to satisfy the debts owing to creditors.
2. That application was required to be served personally on the bankrupt, and in his affidavit of 30 April 2010, David Lloyd Ball, a licenced commercial agent deposes that he personally served:
   1. Application for Final Orders dated 7 April 2010;
   2. Affidavit of Brett Richard Geoffrey Harrison sworn 23 March 2010; and
   100. A copy of the Exhibit marked BRGH1 referred to in the affidavit of Brett Richard Geoffrey Harrison sworn on 23 March 2010

to Carol Ann O’Brien on 27 April 2010 at 2:55pm.

In the affidavit of service, paragraph 3, David Lloyd Ball states

At the time of service I said to the person served:

• “Are you Carol Ann O’Brien, the person referred to in these documents as the First Respondent?”

She replied:

• “Yes I am”

I said:

• “I have these documents for you”

3. Carol Ann O’Brien was made bankrupt by a Sequestration Order made on 3 June 2009. Brett Richard Geoffrey Harrison was appointed her Trustee in bankruptcy. Carol Ann O’Brien was the registered proprietor of Unit 3, 4 Lyons Road, Drummoyne in the State of New South Wales being Folio Identifier 3/SP6272. A Bankruptcy Application was registered with the Department of Lands, noting Brett Richard Geoffrey Harrison as the registered proprietor of the property.
4. Brett Richard Geoffrey Harrison in his affidavit dated 23 March 2010 at [16] states:
   • On or about 25 August 2009, I caused a letter to be sent by ordinary prepaid post to the Respondent. In that letter, I advised the Respondent that special levies in the order of $44,000.00 were to become payable in the future with respect to her unit, in addition to the ordinary ongoing levies, and that this was the third bankruptcy arising from her non-payment of strata levies in respect of the Property. I also explained to the Respondent, that should she not be able to come up with the required funds, then she should explore the local real estate market to establish the availability of alternative residential properties, as we would have no other option but to put the unit on the market.
5. Further, paragraph [34] states:
   • I am informed by Mr Stanley Wise of Allen Dale Real Estate, which firm became the strata manager on 19 January 2010, that the Respondent continues to become indebted to the Owners Corporation in respect of the Property in relation to levies due and payable on the Property in the amount of $933.71 per quarter as well as an interest rate of 10% per annum on the total unpaid levies pursuant to the Strata Schemes Management Act 1996. The current amount outstanding in the levies is $31,707.70. Mr Harrison has put Ms O’Brien on notice of this proposed application
6. Mr Harrison has put Ms O’Brien on notice of this proposed application. In his affidavit of 23 March 2010 at [29] he states:
   • [29] Emails were sent to the Respondent both on 1 February 2010 and 9 February 2010 where she was advised that no funds had been received and that in the absence of funds being received by close of business on 9 February 2010 instructions would be issued to my solicitors to make an application for a possession order.
   • [30] On or about 4 March 2010, I instructed my solicitors to take the necessary steps to transmit the title of the Property into my name, as the Trustee in Bankruptcy.
   • [31]. On or about 4 March 2010, my solicitors sent a letter to the Respondent by ordinary pre-paid post and by email advising her that steps were being undertaken to prepare an application to the Court to seek possession of the Property.
7. Mr Zahra, appearing for Mr Harrison, informed the Court that Mr Harrison had given Ms O’Brien to make arrangements to avoid this application, but despite informing Mr Harrison on numerous occasions over many months that Ms O’Brien would secure funds to discharge her debts, she has been unable to do so. Ms O’Brien has also refused an offer by Mr Boyd to purchase the property at a fair value (Affidavit of Mr Harrison at [15] – [32]. After 27 January 2010, Ms O’Brien ceased to communicate with Mr Harrison.

Consideration

8. The first matter with which I have to deal is whether or not this order should be made. In the details of claim, six orders are requested and from
   • 1. The Frist Respondent deliver up vacant possession of the premisis known as Unit 3, 4 Lyons Road, Drummoyne in the State of New South Wales being Folio Identifier 3/SP6272 (“Property”) within 28 days.
   • 2. In the even that the First Repsondent fails to give up vacant possession of the Property in accordance with Order 1, a writ of possession issue forthwith in favour of the Applicant.
   • 3. The First Respondent remove from the Property all vehicles, rubbish and chattles which have not vested in the Applicant (“the personal property”) within 28 days.
   • 4. In the event that the Respondent fails to comply with Order 3, the Applicant may remove and dispose of the personal property as he sees fit after 28 days have passed from the making of this Order.
   • 5. The Applicant’s costs of this application be paid from the bankrupt estate of the Respondent.
9. Mr Harrison seeks orders pursuant to s.30 and s.77(1)(g) of the Act in order to recover the Lyons Road property. In Cook v Tagamilitsky [2001] FMCA 117 His Honour Federal Magistrate Raphael was of the view that s.77(1)(g) and s.30 of the Act allowed him to make orders sought by the Applicant, the Trustee in bankruptcy of the bankrupt Respondent in that case. Those orders included that the bankrupt Respondent vacate the property and that a writ of possession issued forthwith in the event that the Respondent failed to do so. His Honour states at [9]:
   • It is interesting that although recovery of the assets of a debtor frequently involves the sale of the debtor’s property and therefore the necessity to require a debtor to vacate possession of that property, there is no specific section in the Bankruptcy Act dealing with this matter in a codified form. Reference has to be made to a number of sections of the Act. However, it is obvious from cases such as Dixon v Ly Ty Tran Cao and Ors, a decision of Beazley J as she then was, unreported 23 June 1995 in the Federal Court and White (as trustee of the bankrupt estate of Lyn) v Lyn [1999] FCA 841 a decision of Finkelstein J, that the Court has power to make such orders and indeed to stay those orders on terms.
10. This has been subsequently followed in a number of cases: Pascoe v Paula Wallin [2002] FMCA 112; Cook v Schwarcz [2005] FMCA 1598; Official Receiver v Tregaskis & Anor [2006] FMCA 1915, Sheahan v O'Brien and Another (2002) 188 ALR 676.
11. In this matter O’Brien is not present, nor has there been any communication with the Court or the Trustee or their representatives seeking a stay of any orders, an adjournment or any other form of participation in these proceedings. It is my view that a combination of s.77 and s.30 of the Act is sufficient to ground the jurisdiction for the orders sought.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM

Associate:

Date: 17 May 2010