Bankruptcy

Posted 19 May, 2016

Articles

To bankrupt or not to bankrupt – [1994] Insolvency Law Journal Vol 2 No 1

The parameters of bankruptcy examinations – Australian Business Law Review April 1994

Alienation of Property

Alienations of property with intent to defraud creditors within the meaning of s.89(1) of the Property Law Act 1969: First Industry Corp v Goh [2002] WASC 111

Administration of assets — Gift of land to trust — Bankrupt held beneficial titleOffences under Bankruptcy Act — Transfer of land to family trust Marchesi v Apostolou [2007] FCA 986

Administration of assets — Transfer of property — Solvency at time of transfer — Appeal against decision of Federal Magistrates Court of Australia (FMCA) — Bankrupt transferred half-interest in former matrimonial home to appellant husband prior to bankruptcy: Sharp v Rangott [2008] FCAFC 45

Assignment of Trustees Cause of Action

It would not be proper for a trustee in bankruptcy to assign a cause of action which demonstrably had no prospects of success: Freeman v National Australia Bank Limited [2004] FCAFC 318 at [35]; Citicorp Australia Ltd v Official Trustee in Bankruptcy (1965) 71 FCR 550

Trustee — Assignment of chose in action — Undischarged bankrupt — Application for declaratory relief: Meriton Apartments Pty Ltd v Industrial Court of New South Wales [2008] FCAFC 172

Trustee — Assignment of chose in action — Hopelessness — Appeal against decision of Federal Magistrates Court of Australia (FMCA) dismissing application under (CTH) Bankruptcy Act 1966 s 178: Primelife Corp Ltd v Buffalo [2008] FCA 1742

Avoidance of Transactions

Proceedings seeking to establish equitable charge on property — Declaration sought that property charged in favour of party other than trustees of bankrupt — Second respondent party not a bankrupt — Whether proceedings arises out of bankruptcy: Scott v Bagshaw [2000] FCA 816

Assignment and release — After sequestration — Application by trustee to avoid transaction — Effect of assignment and release after sequestration order: Pitman v Pantzer [2002] FCA 46

Knowledge — Transferee — Application to avoid transfer of property — Transfer of property to family trust for value by bankrupt: Jessup (Trustee) v Mountain View Farm [2002] FCA 312

Informal agreement — Spouses — Appeal from decision of trial judge — Transaction allegedly void against official trustee — payment of more than one-half interest of the matrimonial home to the wife on failure of the marriage pursuant to an informal agreement of the husband (bankrupt) and wife — whether an informal agreement between the bankrupt and wife can constitute an implied forbearance to sue — whether the transferee gave consideration of less value than the market value of the property — relationship between consideration required under s120 of the Bankruptcy Act 1966 (Cth) and factors relevant under s79 of the Family Law Act 1975 (Cth): Official Trustee in Bankruptcy v Lopatinsky [2003] FCAFC 109

Resulting trusts — Presumptions — Appeal from decision of trial judge — Barrister became bankrupt four years ago – Avoidance of transactions: Cummins v Trustees of the Property of John Daniel Cummins [2004] FCAFC 191

Trustee — Transaction — Void — Appeal against decision that transfer of property void – Respondent trustee in bankruptcy: Tyler v Thomas [2006] FCAFC 6

Dispositions made with intent to defraud creditors — Disposition of shares with no commercial value at time of disposition: Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557

Books and Records

Section 77A Bankruptcy Act – whether trust account records were books “of” associated entity – rights of beneficiary to inspect trust documents: Re Simersall 108 ALR 375

Composition

Application for composition to be declared void or set aside. Whether omission of material particular or inclusion of incorrect material particular – estimate of income tax on income earned but not assessed – creditors ignorant of tax liability – whether declaring composition void in the interests of creditors: Re Curari 34 FCR 544

Composition with creditors — Fraud exception — Summary dismissal — Notice of motion for summary dismissal of plaintiff’s claim for damages for fraud — Plaintiff claimed defendant fraudulently induced plaintiff to advance funds to defendant: Skalkos v Smiles [2006] NSWSC 192

Composition with creditors — Power of court to set aside composition — Grounds — Application to set aside composition with creditors — Second and third respondents registered proprietors of various parcels of land: Labocus Precious Metals Pty Ltd v Thomas [2007] FCA 1154

Compromise

For difference between deed of arrangement, assignment and compromise see Gee v Schmutter (1971) 123 CLR 503

Costs

Costs against non-party – discretion: Bent v Gouth 108 ALR 131

Cross demand

Whether pre-exisintg common money count a “cross demand”: Re Smith Ex Parte Chesson 106 ALR 359

Bankruptcy notices — Set aside — Counterclaim — Appeal against decision of Federal Magistrates Court of Australia (FMCA) — FMCA ordered bankruptcy notice addressed to respondent be set aside on basis respondent had equal counter claim set-off: ICM Agriculture Pty Ltd v Young [2009] FCA 109

Debts and Set Off of Debts

Sequestration — Debts — Set-off — Appeal from decision of Federal Magistrate appellant’s estate be sequestrated — Bankruptcy notice found upon order for costs order: Edwards v McVeigh [2004] FCA 1374

Whether indemnity costs order is a proveable debt incurred prior to bankruptcy arising from the judgment in the action: Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56

Deed of Arrangement

Sale of legal practice — Application for review of trustee’s decision to allow secured creditor to vote at a creditor’s meeting on a special resolution extending time for compliance with the deed — Whether Bank had represented to applicant that it would not vote at the meeting: Radin v Commonwealth Bank of Australia [1999] FCA 748

Setting aside — Avoidance — Application to set aside deed of arrangement — Deed voted on by creditors: Bamco Villa Pty Ltd v Montedeen Pty Ltd [2002] VSC 184

Delivery up of Premises

Application to deliver up vacant possession of premises — Power to make orders — Application granted: Harrison v O’Brien [2010] FMCA 339

Discharge

Application for early discharge – see cases referred to in (1991) 196 FCRer 222

Duty of trustee to collect and realise assets after discharge – entitlement to become registered proprietor of bankrupt’s interest in Torrens Title land: Gosden v Dixon 107 ALR 329

No attempt to make contribution to the estat: Re Mcdonald (1993) 219 FCRer 23

Statement of affairs — Date of filing — Application seeking declaratory relief to alter the date of discharge of bankruptcy — Applicant provided trustee with statement of affairs which not filed with the Registrar until 2 years later extending date of discharge of bankruptcy: Macchia v Nilant (Trustee) [2006] FCA 213

Objection to discharge — Failure to disclose — Application for discharge of bankruptcy — Respondent trustee filed notices of objection to applicant’s discharge: Frost v Sheahan [2008] FCA 1073

Disclaimer by Trustee

Bank registered first mortgagee of properties under Torrens title — Mortgagor bankrupt — Trustee in bankruptcy disclaims mortgagor’s properties — Whether mortgagee is person claiming an interest in properties pursuant to Bankruptcy Act 1966 (Cth) s 133(9) — Whether mortgagee entitled to order vesting properties in mortgagee: National Australia Bank Limited v The State of Victoria [2010] FCA 1230

Divorce

Property adjustment taking effect before husband’s bankruptcy – whether conferring enforeceable equitable interest in wife: Mountney v Treharne [2002] 3 WLR 1760

Examination

Trustees — Misconduct — Application that summons requiring attendance for examination be set aside — Application for conduct of inquiry into conduct of bankrupt’s estate: Ambrose v Little [2002] FCA 877

Examination summons — Examinable affairs — Application to set aside examinations summons — Summons for examination and production of documents: Turner (Trustee) v Ackerman [2003] FCA 679

Summons for examination of a person concerning affairs of discharged bankrupt – application to set aside – whether summons too wide or oppressive – Re Florence (1992) 211 Federal Court Reporter 198

Fraud

Avoidance of transactions — Dispositions made with intent to defraud creditors — Disposition of shares with no commercial value at time of disposition: Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557

General

Whether Trustee in Bankruptcy can substitute himself as trustee of discretionary trust of which debtor is a beneficiary: Dwyer v Ross(1992) 211 Federal Court Reporter 199

Whether a sequestration order should be made – whether evidence of prejudice to creditors of company – exercise of discretion: Re Daley 8 ACSR 395

Deed containing assignment of property to trustees, whether deed of arrangement or assignment: Re Leask 66 ALR 487

Real property received instead of fees: Re Weiss 7 FCR 121

Over statement of amount claimed in bankruptcy notice – whether misleading: Re Whittet (1990) 180 FCR 186

Beneficiary under will – interest in property devised – nature of – effect of bankruptcy: Official receiver in Bankruptcy v Shultz 96 ALR 32

Power to direct that person not be discharged from bankruptcy: Powell v Offical Receiver 96 ALR 607

Transaction involving disposition of monies by a bankrupt – whether settlement within Bankruptcy Act s 120 – nature of a settlement: Re La Rosa ex Parte Norgard v Rocom Pty Ltd (1990) 182 FCR 212

Statutory stay of proceedings upon bankruptcy – whether procs may be revived by bankrupt on his discharge from bankruptcy: Daemar v Industrial Comm 99 ALR 789

Whether appeal pending on judgement in relation to which the petition has been filed entitles debtor to stay of bankruptcy proceedings: Lewin Ex Parte Miller (1986) 11 FCR 312 and 76 ALR 591

Creditor petition – onus of proof of debt – going behind judgement: Wolff v Donovan 29 FCR 480; Maddestra v Penfold Wines 44 FCR 303

Application for review of bankruptcy notice where failure to serve originating process upon which bankruptcy notice founded: March v Paramount Leisure Products 32 FCR 482

Ranking of solicitors lien for costs: Worrell v Power (1993) 118 ALR 237

Director of company in liquidation – whether claim against him under s.556 is a “proveable debt” under Part X: Vale v TMH Haulage 12 ACSR 124

After-acquired income – Whether vests in trustee Re Gillies; Ex parte Official Trustee in Bankruptcy v. Gillies (French J) (1993) 42 FCR 571

Declaration that a person being a joint registered proprietor of property was in fact the bankrupt – declaration that interest in property vest in Official Trustee: Official Trustee v Williams (1994) 231 FCR 21

Administration of assets – Fair apportionment required in relation to outlay: Re Manivilovski; Ex parte Official Trustee in Bankruptcy 117 ALR 537

Torrens title land – Joint tenancy – One tenant declared bankrupt – Nature of trustee in bankruptcy’s interest – Whether interest abandoned by failure to register – Whether trustee in bankruptcy’s interest defeated by indefeasibility provision: Sistrom v Urh 117 ALR 528

Set off- Bankrupts right of action against creditor- Creditor having counter claim against bankrupt- Whether trustee entitled to assign right of action to plaintiff bankrupt before account of mutual dealings with creditor: Stein v Blake (1995) 2 All ER 961

Whether appeals commenced prior to bankruptcy are automatically stayed on the bankruptcy of the appellant – Whether a right of appeal is property vested in the trustee – Whether a right of appeal is assignable – Whether constitutes “powers over or in respect of property” that might have been exercised by the bankrupt for his or her own benefit – Whether right to appeal vests in the trustee where appeal relates to property which vested in the trustee or relates to a claim by the bankrupt for money or property that would be vested on recovery in the trustee – Whether right to appeal against a money judgment entered in an action against a bankrupt is property of the bankrupt and thus vested in the trustee – Whether fact that the judgment was enforceable only against property vested in the trustee meant that the bankrupt ceased to have the interest necessary to give a right to appeal – Whether claims for unliquidated damages against the bankrupt were provable debts at the time when the appellant became bankrupt – Whether the merger of all claims with the claims arising from breach of fiduciary duty converted the judgment entered against the defendant after the bankruptcy into provable debts – Whether bankrupt has a financial interest which would confer locus standi to appeal in so far as a judgment entered in an action against a bankrupt creates or evidences a provable debt – Whether bankrupt’s contingent interest in a surplus created if appeal successful gives him or her an interest which would allow him or her to sue to enforce proprietary rights – Whether trustee can institute appeal – Circumstances in which the Court may order the trustee to institute an appeal where such appeal may affect the professional reputation of the bankrupt – Whether the trustee’s costs would have to be met by sources other than the bankrupt estate – Whether judgment constitutes a wrong done to the bankrupt – Held: Bankrupt had no right to appeal: Cummings v Claremont Petroleum (1996) 185 CLR 124

Whether partner of bankrupt has a debt proveable in the bankrupt’s bankruptcy in respect of partnership debts: Staples v Milner 83 FCR 203

Whether Bankruptcy Act provides exclusive code to the exclusion of equitable claims – whether equitable claims vest in official receiver or trustee: Pridmore v Magenta Nominees Pty Ltd 161 ALR 458

Bankrupt plaintiff prior to trial – stay of proceedings pending election by trustee whether to continue with proceedings – whether trustee could assign rights of action back to bankrupt – whether assignment valid – No power in trustee to assign chose in action to bankrupt – Even if power to assign, power only arises after election made by trustee under s 60(2) – Course of action taken by trustee amounting to refusal to make election – Trustee deemed to have abandoned action for purposes of s 60(3) – Effect of Bankruptcy Act 1966 (Cth), s 60(4), read in combination with ss 58 and 116: Temsign Pty Ltd v Biscen Pty Ltd 20 WAR 47

Deeds of arrangement — Creditor’s meeting — Sale of legal practice — Application for review of trustee’s decision to allow secured creditor to vote at a creditor’s meeting on a special resolution extending time for compliance with the deed — Whether Bank had represented to applicant that it would not vote at the meeting: Radin v Commonwealth Bank of Australia [1999] FCA 748

Claimants cause of action vested in trustee in bankruptcy – whether assignment to claimant altering her capacity to sue: Haq v Singh [2001] 1 WLR 1594

Administration of assets — Superannuation fund — Interest in fund — Application for injunctive relief — Injunction sought restraining first respondent from dealing with moneys in superannuation fund: Official Trustee in Bankruptcy v Trevor Newton Small Superannuation Fund— Federal Court of Australia [2001] FCA 1267

Lapse of time does not prevent a creditor from coming in and proving so long as there is any estate to be distributed though he cannot disturb the distribution of past dividend: Doolan v Dare [2004] FCA 682

Resulting trusts — Joint tenancy — Unequal shares — Appeal against Full Court of Federal Court of Australia decision — Declarations sought by trustee of bankrupt’s estate regarding transfers of assets to former wife and family trust: Trustees of the Property of Cummins (a bankrupt) v Cummins [2006] HCA 6

Trustee — Election to prosecute action — Leave to discontinue — Application by trustee for leave to discontinue prosecution of action — Election under (CTH) Bankruptcy Act 1966 s 60(2) to prosecute appeal commenced before bankruptcy: Owens v Comlaw (No 62) Pty Ltd [2006] VSCA 151

Administration of assets — Transfer of property — Severance of joint tenancy — Appeal against Federal Court of Australia decision finding deceased estate entitled to property sale proceeds — Dispute concerned transfer of joint tenancy by deceased bankrupt — Respondents executors of deceased bankrupt’s wife’s estate — Property sold following sequestration order made against bankrupt husband’s estate — Wife pre-deceased husband and husband subsequently executed transfer of registration to himself — Executors of wife’s estate claimed husband severed joint tenancy and entitled to property as tenant in common — Appellants claimed unilateral severance of joint tenancy void by operation of (CTH) Bankruptcy Act 1966 s 121 — Whether appellants as trustees could claim whole proceeds of sale: Peldan v Anderson [2006] HCA 48

Both the course of established authority dealing with the position of mortgagees of land which has been disclaimed by a trustee of bankruptcy, or a liquidator of an insolvent company, and these considerations of principle, point to the need for a mortgagee seeking to exercise its powers in respect of property over which it has security, but where one or more of the mortgagors has become bankrupt and his or her trustee has disclaimed the property, to obtain a vesting order under s 133(9) of the Bankruptcy Act, or await the vesting of the property in some other person who can then be joined in the enforcement proceedings, before steps can be taken to obtain possession of the property, or to sell it under the provisions of the mortgage or, where action for the possession of a sale has already been commenced, before that can be continued: RAMS Mortgage Corporation Ltd -v- Skipworth & Anor (no 2) [2007] WASC 75

Administration of assets — Claim of beneficial interest in property — Adverse credibility findings — Appeal against decision of Federal Magistrates Court of Australia (FMCA) — FMCA made orders under (CTH) Bankruptcy Act 1966 (Act) s 30 for sale of residential property: Lien Thi Khuat Nguyen v Pascoe [2007] FCAFC 181

Sequestration — Opposition — Bankruptcy notice — Application for sequestration order — Respondent claimed bankruptcy notice invalid because debt amount overstated: Deputy Commissioner of Taxation v Cumins (No 5) [2008] FCA 794

Official Receiver electronically issued bankruptcy notice under s41(1) of Bankruptcy Act 1966(Cth) – whether valid: Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144

Bankruptcy – jurisdiction – cross-vesting – applicant trustee of bankrupt estate sought leave to appeal against decision of trial judge that Supreme Court had jurisdiction to hear and determine respondent’s claim to an interest in property and that matter was not a special federal matter which Supreme Court was required to transfer to Federal Court under s6(1) Jurisdiction of Courts (Cross Vesting Act) 1987 (Cth) – trustee contended primary judge erred in failing to hold proceeding raised a special federal matter arising under Bankruptcy Act 1966 (Cth) – held: primary judge should have held proceeding was a special federal matter because it was necessary for the trustee in bankruptcy to rely on a sequestration order made under the Bankruptcy Act, and the title conferred on him as a consequence of that order, to resist respondent’s claim – proceeding transferred: Turner v Gorkowski [2014] VSCA 248

Effect of bankruptcy of one joint creditor – whether only half of debt now due: Re Kevin McNamara & Son Pty Ltd [2014] VSC 337

Prospect that bankruptcy would be annulled under s153A with result that surplus assets revert to bankrupt pursuant to s154(1)(c): Low v Barnet (Trustee); In the Matter of Mathai [2014] FCA 728

Husband & Wife

Husband and wife joint tenants of matrimonial home – bankruptcy of husband – wife’s entitlement to beneficial half share – Trustee’s statutory duty to realise husbands interest – Exercise of court’s discretion to postpone sale: In Re Citro (1991) Ch 142

Trustee takes possession of boat registered in joint names of bankrupt and spouse – bankrupt’s share held on trust for spouse: Re McComish (1993) 219 FCRer 22

Administration of assets — Application by creditor for sale of property – Debtor and wife joint tenants — Property paid for by wife — No contribution by debtor Official Trustee in Bankruptcy v Eterovic [1999] VSC 48

Application by trustees under s 121 of Bankruptcy Act 1966 (Cth) – Issue as to quantum of bankrupt’s beneficial interest in former matrimonial home registered in joint names – Wife of bankrupt contributing larger part of purchase price – Trusts – Resulting trust – Whether common intention to acquire property as beneficial owners – Whether presumption of resulting trust rebutted – Whether trustee entitled to one half of net proceeds of sale of property: Prentice v Cummins (No 6) 31 Fam LR 398

Insurance Proceeds

Where trustee received funds from an insurer in relation to a claim made against bankrupt by a 3rd party, the trustee must pay the funds directly to the 3rd party – s.117 of Bankruptcy Act (and 562 Corporations Act in case of liquidation)

Joint and several Liability

Debts — Judgment debt — Joint and several liability — Appellant and sister jointly and severally liable for judgment debt — Construction of agreement between bank and appellant’s sister: Pollak v National Australia Bank Ltd [2002] FCA 237

Meeting of Creditors

Debt disputed – whether court chairman can be restrained from permitting a creditor to vote – injunction – balance of convenience against relief: Sent v. Thomson (1992) 211 Federal Court Reporter 199

Under Part X – applicant excluded from voting at meeting of creditors by chairman – courts jurisdiction to determine right to vote at meeting – whether review of chairman’s decision or rehearing – whether arguable claim is sufficient – exercise of discretion: Re McLean 108 ALR 360

Deed of arrangement – whether sufficient particulars of debt – whether conflict of interest where chairman debtor’s solicitor: Re Peters Ex Parte NZI Securities (1993) 218 FCRer 10

Mortgagees

Notice

Bankruptcy notice, judgement expressed in foreign currency: Re Ikin 58 ALR 759; The Flying Tiger Line 62 ALR 318; Vehicle Wash Systems Pty Ltd v Mark VII Equipment 25 ACSR 709; Re Bond Ex parte Hong Kong Bank 105 ALR 581 and 106 ALR 329

Amount of interest claimed on judgement debt wrong – whether notice should be set aside: Re Athans 29 FCR 312

No grounds stated in application: Re Lenin 29 FCR 363

Date at which validity is to be tested: Re Chambers 29 FCR 507

Validity of – discretion to go behind judgement – whether debtor has counterclaim, set-off or cross demand – mortgage – unconscionable conduct – whether whole transaction should be set aside: Halstead v Westpac Banking (1991) 196 FCRer 221Bankruptcy notice – Compliance with form of – Whether failure to demand payment to judgment creditor a fatal defect: Goldsmith v First Pacific Mortgage Ltd (1993) 42 FCR 522

Part X

Power of court to review decision of chairman at a meeting of creditors – whether a debt in dispute encompasses a contingent debt: Forshaw v Thomson 106 ALR 633

Validity of second written authority to call meeting of creditors: Re De Katznow 107 ALR 219

Preference

What constitutes preference: Re Wardle 22 FCR 290

Whether repayment of monies to investor within 6 months of liquidation of company was repayment in good faith: Spedley Securities v Southern Sea Farms 6 ACSR 142

Whether conduct of creditors in permitting debts to remain unpaid may be taken into account: Taylor v Carroll 6 ACSR 255

Payments made to creditor within relation back period – whether payments constitute preferences void against trustee: Re Puntoriero 104 ALR 523

Whether payments made in the ordinary course of business – whether for valuable consideration – whether in good faith – relationship between s 122(1) of Bankruptcy Act and s 453 of Company Code: Sheahan v Workers Rehab (1991) 56 SASR 193

Transfer of interests in land to wife of debtor – whether intention to defraud creditors relevant where intention directed to “anticipated creditors” – whether debts of bankrupt required to be ascertained before orders made transferring property to trustee: Re Ebner; Ebner v Official Trustee in Bankruptcy 161 ALR 557

Preference — Application for declaration that transaction void — Agreement to transfer share of property — Whether agreement created a trust in the equitable interest in the property — Transfer occurred later: Sheahan v Cooper [1999] FCA 766

Priority of Creditors

Priority of creditors — Banks — Subordinate on-loans — Application for declaration — First applicant listed public company holding company of group controlled by interests of deceased: Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) [2008] WASC 239

Proof of Debt

Set-off – mutuality – mortgagees right of set-off: McIntyre v Perkes 22 FCR 260

Proof of Bankruptcy

Section 260 of Bankruptcy Act

Property Divisible among Creditors

Interest under discretionary trust – capacity to exercise power – entity controlled by bankrupt: Dwyer v Ross 34 FCR 463

Money payable to bankrupt from superannuation fund on cessation of employment: Re Barrett 34 FCR 508

Property of bankrupt – Whether vesting in trustee – Right of appeal against judgment for liquidated sum entered against bankrupt after sequestration order made: Fuller v Beach Petroleum NL 117 ALR 235

Deed of assignment – preferential payments – equitable assignments – intention of parties – construction of agreement: Gagie v Nickpack Pty Ltd (1993) 222 FCR 66

Administration of assets – Proceeds of life insurance policy – Whether protected under Bankruptcy Act from creditors of bankrupt policy holder – Whether benefits should be apportioned for purposes of protection from creditors: NM Superannuation Pty Ltd v Young 113 ALR 39

Relation Back

Proposal by bankrupt prior to bankruptcy to invest in a bond accepted after bankruptcy by issue of bond therein stated to commence on a date prior to bankruptcy – whether bond treated in equity as effective prior to bankruptcy: Re Barrett 34 FCR 508; Re Barrett; Ex parte Young 106 ALR 549

Setting Aside Bankruptcy Notice

Trustee — Bankrupt estate — Valuation — Appeal against decision of Federal Magistrates Court of Australia (FMCA) setting aside notice — Second respondent husband transferred properties into own name prior to declaration of bankruptcy: Sutherland v Vale [2008] FCAFC 148

Bankruptcy notices — Set aside — Counter claim — Appeal against decision of Federal Magistrates Court of Australia (FMCA) — FMCA ordered bankruptcy notice addressed to respondent be set aside on basis respondent had equal counter claim set-off: ICM Agriculture Pty Ltd v Young [2009] FCA 109

Settlement

See s.86 of Bankruptcy Act

Meaning of – permanency test – Section 120 Bankruptcy Act: Re Castropil (1991) 33 FCR 135

Winding up of principal debtor – surety pays creditor – whether surety entitled to set-off money owed by creditor to principal debtor – whether contingent liability sufficient: Emerson v Wrecker 103 ALR 404

Stay

Sequestration — Stay — Pending appeal — Application for stay of sequestration order — Stay sought pending appeal against sequestration order: Beames v Rigby [2002] FCA 806

Sequestration — Stay of actions — No basis for granting stay — Appeal against three decisions of Federal Magistrates Court of Australia (FMCA) — First proceeding related to application made by appellant to have bankruptcy notice issued against appellant set aside: Fitzpatrick v Kidney [2007] FCA 1658

Trustee

Following from Doolan v Dare [2004] FCA 682 “[37]: The trustee’s duties in the course of administering an estate are prescribed by s 19 of the Act and, except as modified by the Act, a trustee in bankruptcy is subject to the general law affecting trustees: Adsett v Berlouis (1992) 109 ALR 100. It is clear that the trustee has an obligation to administer the estate in the interests of the creditors and the bankrupt. The High Court approved the following statement of principle in The Attorney-General for the Commonwealth v Breckler (1999) 197 CLR 83 at 99. Where a trustee exercises a discretion, it may be impugned on a number of different bases such as that it was exercised in bad faith, arbitrarily, capriciously, wantonly, irresponsibly, mischievously or irrelevantly to any sensible expectation of the settler or without giving a real or genuine consideration to the exercise of the discretion. [38] In my judgment, the payment of the dividend was motivated not by a consideration of the interests of the creditors or of Mr Doolan but by a consideration of the trustee’s own self-interest, and her conduct in borrowing the funds and declaring the dividend was for an improper purpose.”

The liability of the trustee in bankruptcy — statutory and equitable duties: Hacker v Weston [2015] FCA 363

Trustee — Appointment — Validity — Appeal from second respondent’s decision to appoint first respondent as trustee of estate — Appellant declared bankrupt: O’Brien v Sheahan [2005] FCAFC 59

Joint mortgagors — where one mortgagor became bankrupt and other mortgagor continued to make mortgage repayments — where bankrupt mortgagor provided general financial support to other mortgagor whilst bankrupt — disclaimer — whether trustee in bankruptcy disclaimed interest in property — estoppel — where trustee in bankruptcy inactive with respect to real property for 16 years — whether trustee in bankruptcy estopped from asserting interest in property — after-acquired income — whether after-acquired income of bankrupt vests in trustee in bankruptcy — whether bankruptcy should be annulled pursuant to s 153B of the Bankruptcy Act 1966 (Cth). EQUITY — express trusts — whether husband’s interest in real property held on trust for wife — whether clear intention to create express trust — whether requirements of s 29 of the Law of Property Act 1936 (SA) that creation of interest be evidenced in writing satisfied — whether Magistrate overlooked material evidence in finding no express trust — constructive trusts — circumstances in which constructive trust imposed — equitable accounting — relevant principles — trustees — claim for damages against trustee in respect of administration of estate: Draper v Official Trustee in Bankruptcy [2006] FCAFC 157

Trustee — Resignation — Joint or several appointment: Condon v Watson [2009] FCA 11

Trustee — Removal — Proper cause — Application for removal of trustee in bankruptcy — Alleged failure by trustee to advise: Hughes v Holbrook [2002] FCA 920

Bankruptcy

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