Official Receiver v Frith [1999] FCA 576

FEDERAL COURT OF AUSTRALIA Official Receiver v Frith [1999] FCA 576

OFFICIAL RECEIVER for and on behalf of the OFFICIAL TRUSTEE in Bankruptcy v FRITH SG 7124 OF 1998 MANSFIELD J ADELAIDE 7 MAY 1999

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY SG 7124 OF 1998

BETWEEN: OFFICIAL RECEIVER for and on behalf of the

OFFICIAL TRUSTEE in bankruptcy

Applicant

AND: JENNIFER ANNE FRITH

Respondent

JUDGE: MANSFIELD J

DATE OF ORDER: 7 MAY 1999

WHERE MADE: ADELAIDE

THE COURT ORDERS THAT: 1. The application is dismissed. 2. The applicant pay to the respondent her costs of the application to be taxed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY SG 7124 OF 1998

BETWEEN: OFFICIAL RECEIVER for and on behalf of the

OFFICIAL TRUSTEE in bankruptcy

Applicant

AND: JENNIFER ANNE FRITH

Respondent

JUDGE: MANSFIELD J

DATE: 7 MAY 1999

PLACE: ADELAIDE

REASONS FOR JUDGMENT 1 Jennifer Anne Frith ("Mrs Frith") became bankrupt on 25 March 1994. The Official Trustee in Bankruptcy ("Official Trustee") is the trustee of her bankrupt estate. At the time of her bankruptcy, Mrs Frith was registered as the proprietor of the property situated at 47 Durham Street Ballarat in the State of Victoria, being the whole of the land comprised and described in (Victorian) Crown Land Grant Register Book Volume 9619 Folio 616 ("the Property"). When Mrs Frith became bankrupt, the Official Trustee lodged a caveat over the Property. He has been unable to realise the Property for the benefit of the creditors because Mrs Frith claims that she holds the Property on trust for her daughters Michelle Jennifer Lewis ("Michelle Lewis") and Angela Kay Lewis ("Angela Lewis"). Where it is convenient to do so, I will refer to Michelle Lewis and Angela Lewis as the "daughters". 2 Official Trustee now seeks a declaration that the Property is property divisible amongst creditors of the bankrupt estate of the respondent. The daughters were served with the proceedings and have participated in the hearing. 3 Mrs Frith married Peter Leslie Lewis ("Mr Lewis") on 7 September 1974. The daughters are the children of that marriage. Michelle Lewis was born on 8 August 1976 and Angela Lewis on 27 March 1978. The marriage broke up in about August 1987, and it was dissolved on 13 April 1989. On 12 December 1990, consent orders were made in the Family Court of Australia concerning the property settlement between Mrs Frith and Mr Lewis. 4 On 6 January 1990, Mrs Frith married Rodney Graeme Frith ("Mr Frith"). They separated in May 1993 and that marriage was dissolved in November 1994. 5 The Property was purchased on 21 October 1988 for $89,000. I accept the evidence that Mrs Frith and the daughters had been living in a unit since about August 1987, and were not content in that accommodation. Mrs Frith approached Mr Lewis to assist in purchasing the Property in order to procure alternative and better accommodation for herself and their daughters. They lived in the Property until about January 1991. 6 The critical question is whether the Property was purchased in her name but subject to a trust in favour of the daughters. No document declaring or evidencing such a trust was executed at the time the Property was purchased. In December 1993, in consultation with Mr Lewis, she signed a document entitled "Deed of Trust" ("the Deed") which was then dated 20 October 1988. The terms of the Deed are as follows: