Higham v Official Trustee in Bankruptcy [2001] FCA 967

FEDERAL COURT OF AUSTRALIA

Higham v Official Trustee in Bankruptcy [2001] FCA 967

BANKRUPTCY – relief sought against Official Trustee in Bankruptcy – where claims made that the Official Trustee should contribute to legal fees accumulated by discharged bankrupt – consideration of s 30 and s 178 of Bankruptcy Act – whether proceedings appropriate to invoke Court's jurisdiction.

Bankruptcy Act 1966 (Cth) Administrative Appeals Tribunal Act 1975 LORRAINE HIGHAM v THE OFFICIAL TRUSTEE IN BANKRUPTCY NO. NG 7183 OF 2001

JUDGE: BEAUMONT J DATE: 6 JUNE 2001 PLACE: SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 7183 OF 2001

BETWEEN: LORRAINE HIGHAM

APPLICANT

AND: THE OFFICIAL TRUSTEE IN BANKRUPTCY

RESPONDENT

JUDGE: BEAUMONT J

DATE OF ORDER: 6 JUNE 2001

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The claims be dismissed summarily, with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 7183 OF 2001

BETWEEN: LORRAINE HIGHAM

APPLICANT

AND: THE OFFICIAL TRUSTEE IN BANKRUPTCY

RESPONDENT

JUDGE: BEAUMONT J

DATE: 6 JUNE 2001

PLACE: SYDNEY

REASONS FOR JUDGMENT

BEAUMONT j: 1 Before the Court is a general application prepared by an applicant who, at this stage of the proceedings, has appeared for herself, in which application four claims for final relief and a claim for interlocutory relief is made. 2 The history of the matter up to and including 20 April 2001 is explained in my reasons for judgment given on that day. Those reasons need, themselves, to be read with earlier reasons I gave on 10 April 2001 refusing the claim then made for interlocutory relief but upon the footing that the dismissal of that claim was without prejudice to any claim that may be made by the applicant for relief by way of a charge or other equity in respect of her claim to have made expenditure by way of improvements or maintenance of the subject property. 3 On 26 April 2001, having dealt with the first two claims made in the general application filed on 10 April 2001, I stood over until today the hearing of claims three and four. I also fixed the matter for directions before myself on 5 June 2001. The matter was before me yesterday and it was apparent then that the applicant was indicating to the Court that she was having difficulty in preparing for today's final hearing. 4 A perusal of the reasons for judgment already given will themselves explain why a party appearing without the benefit of legal advice would be experiencing such a difficulty and, consistent with the approach she has taken previously, the applicant has now applied to the Court for an adjournment of the proceedings for four weeks so that she can at least better prepare or, alternatively, seek legal advice. The application is, however, strenuously opposed by the respondent and, in my view, that opposition is understandable and justified. 5 The long history of this matter commences in 1984 when the applicant's petition as a debtor for bankruptcy was accepted by the Court. Since then the applicant has sought to agitate on a range of issues in respect of the administration of her estate. In my opinion, the applicant has had ample time in which to present any claim that may be properly maintainable in this Court on her behalf and, in my view, any further adjournment of the proceedings would be futile as I see no reasonable prospect of her being able to propound, before this Court, any reasonable course of action except, perhaps, the one that I have previously mentioned (that is to say, the possibility of a claim for relief by way of a charge or other equity arising out of any expenditure that may be found to have been made in respect of the subject property by way of improvements or maintenance). 6 I say nothing about the actual prospects of success of that claim for several reasons. In the first place, the evidence before me is not in a satisfactory condition or a proper form. More important, the applicant's former husband is not a party to the present proceedings and, of course, he would be an essential party to any such claim. 7 I, therefore, refuse the application for adjournment. 8 There has also been made an additional claim for interlocutory relief. This is a claim which seeks to prevent the respondent from dealing with his interest in the subject property until the final decision of this Court in the present matter. As I have indicated, I had already dealt with, but dismissed, subject to the condition I have stated, a similar claim. 9 It is true that the earlier claim was based upon a notice to vacate, but in my judgment of 10 April 2001 I said, at par 9, that it was then my opinion, and it remains my opinion, that the only conceivable proprietary interest that the applicant could establish at this stage is a claim in the nature of a constructive trust or similar equity by virtue of money she had spent in improvement of the property and in outgoings in that connection. 10 But, as I there went on to say, there was no quantification of the amounts spent by way, of improvements (although the sum of $35,000 expenditure by way of rates and by way of mortgage payments was mentioned). However, as I have already said, in the absence of the applicant's former husband, and having regard to the unsatisfactory state of the evidence, I do not propose to pursue this claim for interlocutory relief. I regard it as, in substance, an attempt to re-agitate the previous claim and it would be, I think, an abuse of process to permit that claim to come forward now in the light of my earlier ruling. 11 For those reasons, I refuse the application for adjournment and I refuse the application for interlocutory relief. 12 I come then to pars 3 and 4 of the general application to the Court, filed on 10 April 2001. Those claims are expressed as follows: "3. That the office of the Official Trustee in Bankruptcy contribute to the legal fees accumulated by the discharged bankrupt through the course of the bankruptcy. 4. Claim for unspecified damages (further particulars to be provided closer to hearing of this matter)." 13 It is accepted by Ms Riley, and this does, in any event, appear on the face of the claim, that claim 4 is consequential, and in that sense directly related to claim 3. The question raised by the claim, therefore, is whether the Official Trustee in Bankruptcy has a legal obligation to contribute to the legal fees accumulated by the applicant through the course of the bankruptcy. 14 A number of efforts have been made by the applicant, who, as I mentioned, is unrepresented at this stage of the proceedings, to formulate and to provide evidence in support of the claim made in paragraph 3. I should however, mention at this stage that there are on foot proceedings in the Administrative Appeals Tribunal ("the Tribunal"), being an application by the applicant seeking a review by the Tribunal of decisions made under s 283 of the Bankruptcy Act 1966 ("the Act") and under regulation 16.10 of the Bankruptcy Regulations. 15 Section 283 of the Act confers upon the Inspector General a power to remit an amount of interest charge, realisation charge or late payment penalty that is payable, but has not been paid, if the Inspector General thinks that, amongst other things, failure to remit the amount would cause the person hardship. Section 283(2)(d) provides for a review, upon application, by the Tribunal of a decision to refuse an application or to remit a lesser amount than was applied for. It will be seen, of course, that proceedings under s 283 do not concern the Trustee as a party to the proceeding. 16 Regulation 16.10 provides for the waiver or remission of fees by the Inspector General in certain circumstances. Again there is an express provision for review by the Tribunal upon application, of a decision under this Regulation (see Reg 16.11). 17 I have been informed that, subject to one qualification, the hearing before the Tribunal has concluded. The qualification is that the matter has been re-listed before the Tribunal on 14 June 2001 and I was informed that the purpose of that particular listing was so that the Tribunal could be informed of the outcome of the proceedings in this Court and, in particular, whether the applicant had succeeded in obtaining relief and specifically substantial relief from this Court as a result of the present proceedings. 18 I was informed, and I accept, that neither the Inspector General nor the Official Trustee makes any challenge to the jurisdiction of the Tribunal to entertain the applications before it. I note in this connection, that it is further accepted on behalf of the Trustee that s 44(1) of the Administrative Appeals Tribunal Act 1975 confers jurisdiction upon this Court, upon application, to judicially review a decision of the Tribunal in these areas, but on a question of law only. 19 Apart from that specific provision, attention is also drawn by the Trustee to the general jurisdiction conferred by s 178 of the Act, by which a bankrupt, the creditor or any other person affected by an act, omission or decision of the Trustee may apply to the Court and the Court may make such order in the matter as it thinks just and equitable. As I previously said, the applicant has had difficulty formulating the precise claim she seeks to make in the present connection and in adducing evidence in support of that claim in a form which is appropriate. 20 I have previously catalogued the material filed by the applicant in support of her claim over several months but I am unable to perceive within that material any articulation of a legal claim or a claim in equity which has any reasonable prospects of success, subject to the one qualification previously mentioned. That is to say, it is possible, and I say no more at this point in the absence of the applicant's former husband, that the applicant may be able to frame a claim maintainable in a Court of general equitable jurisdiction, seeking equitable relief by way of a charge of similar equity in respect of a claim to have incurred expenditure by way of improvements or maintenance of the subject property. 21 I would not, however, by that reservation wish the applicant to gain the impression that I have formed any view as to the prospects of the maintenance of such a claim. I have not. I prefer to deal with the present claims, that is to say, the claims made in pars 3 and 4, upon the footing that I have mentioned in argument. That is to say, I accept, and as I follow the argument, the Trustee also accepts, that by virtue of s 30 of the Act and perhaps by virtue of s 178 of the Act, the Court has jurisdiction to deal with the present matter. However, whilst that jurisdiction may be available, it may be invoked only in an appropriate case. In my view, the present proceedings are not an appropriate vehicle in that connection. What is before the Court is an inarticulate effort to propound a claim which in my opinion is bound to fail. I propose therefore to dismiss the claims made in pars 3 and 4 summarily and I so order.