FEDERAL COURT OF AUSTRALIA Verge (Trustee), in the matter of Underdown (deceased) (a bankrupt) v Fazio (No 2) [2013] FCA 728 Citation: Verge (Trustee), in the matter of Underdown (deceased) (a bankrupt) v Fazio (No 2) [2013] FCA 728 Parties: EVAN ROBERT VERGE AND GEORGE AUBREY LOPEZ AS TRUSTEES OF THE ESTATE OF SAMANTHA UNDERDOWN (DECEASED) (A BANKRUPT) v ARTURO SALVATORE FAZIO and REGISTRAR OF TITLES File number: WAD 252 of 2012 Judge: GILMOUR J Date of judgment: 25 July 2013 Catchwords: PRACTICE & PROCEDURE – application to set aside orders under r 39.05(a) of the Federal Court Rules 2011 (Cth) (the Rules), or alternatively an order under r 41.03 of the Rules for a stay of the orders Legislation: Bankruptcy Act 1966 (Cth) s 134(4) Federal Court Rules 2011 (Cth) Cases cited: Verge (Trustee), in the matter of Underdown (deceased) (a bankrupt) v Fazio [2013] FCA 18 Date of hearing: 11 April 2013 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 16 Counsel for the Applicant: Ms K Levy Solicitor for the Applicant: Kott Gunning Counsel for the 1st Respondent: The first respondent appeared in person IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 252 of 2012 IN THE MATTER OF: THE ESTATE OF SAMANTHA UNDERDOWN (DECEASED) (A BANKRUPT) BETWEEN: EVAN ROBERT VERGE AND GEORGE AUBREY LOPEZ AS TRUSTEES OF THE ESTATE OF SAMANTHA UNDERDOWN (DECEASED) (A BANKRUPT) Applicant AND: ARTURO SALVATORE FAZIO First Respondent REGISTRAR OF TITLES Second Respondent JUDGE: GILMOUR J DATE OF ORDER: 25 JULY 2013 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The first respondent's interlocutory application dated 4 April 2013 be dismissed. 2. The first respondent pay the applicants' costs. 3. The order made on 11 July 2013 be discharged. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 252 of 2012 IN THE MATTER OF: THE ESTATE OF SAMANTHA UNDERDOWN (DECEASED) (A BANKRUPT) BETWEEN: EVAN ROBERT VERGE AND GEORGE AUBREY LOPEZ AS TRUSTEES OF THE ESTATE OF SAMANTHA UNDERDOWN (DECEASED) (A BANKRUPT) Applicant AND: ARTURO SALVATORE FAZIO First Respondent REGISTRAR OF TITLES Second Respondent JUDGE: GILMOUR J DATE: 25 JULY 2013 PLACE: PERTH REASONS FOR JUDGMENT 1 The first respondent, Mr Fazio, by an interlocutory application dated 4 April 2013, seeks orders pursuant to rr 39.05 and 41.03 of the Federal Court Rules 2011 (Cth) setting aside orders made by McKerracher J on 6 February 2013 on grounds that these orders were made in his absence. He also seeks an order, in effect, to stay execution upon those orders. 2 The 6 February 2013 orders principally granted the applicants the right under s 134(4) of the Bankruptcy Act 1966 (Cth) to exercise a power of sale of land and premises at 10 Hannah Place, Leeming. Mr Fazio was ordered to provide the applicants with vacant possession of this property. There were consequential orders. 3 Mr Fazio read an affidavit sworn by him on 3 April 2013. The applicants rely upon the affidavit of their solicitor, Ms Elise Croft, sworn on 6 February 2013. 4 The applicants submits that Mr Fazio is seeking, in effect, to reopen WAD 252 of 2012 to allow him to put before the Court arguments he failed to present in WAD 252 of 2012 and in WAD 4 of 2010. I do not accept this submission. The present application is quite a discrete, albeit related, matter directly concerning the 6 February 2013 orders. Rule 39.05(a) 5 This rule relevantly enables the Court to set aside a judgment or order after it has been entered if it was made in the absence of a party. 6 It is a fact that Mr Fazio did not appear before the judge who made the 6 February 2013 orders. The question is whether this was not his fault. His affidavit explains at length why he did not appear. In short, he deposes that he never received service by mail of the Form 2 application and other documents, including notice of when the hearing was. 7 However, as McKerracher J noted at [3] in his reasons for decision delivered 17 January 2013, and which underpinned the subsequent 6 February 2013 orders, orders for substituted service (by ordinary prepaid post) had been made and there was proof of the duly authorised substituted service: Verge (Trustee), in the matter of Underdown (deceased) (a bankrupt) v Fazio [2013] FCA 18. The order for substituted service was made because process servers had refused to enter Mr Fazio's property as he had signs reading: "Unless you are invited, you must leave the property as you are trespassing". 8 The order for substituted service was dated 2 October 2012 which was the first return date of the substantive application. An order was also made on that date setting the date for the final hearing at 15 October 2012. A copy of the Form 2, the affidavit of Ms Elise Croft sworn 21 September 2012, the order of McKerracher J dated 2 October 2012 were sent to Mr Fazio by ordinary mail advising him that the application was set down for hearing on 15 October 2012 at 10.15 am. He did not attend the hearing. 9 Mr Fazio says that he never received the documents. There is in evidence a letter dated 15 January 2013 from him to the Manager, Australia Post, Southlands Shopping Centre, Willetton in which he advises Australia Post, in rather colourful terms, that since 27 December 2012 he had not received mail until the date of his letter of 15 January. He further wrote that on that day he had received 23 normal post items crammed into the box and that prior to then, all that had been in his P.O. Box was a card. The card is also in evidence. It is in the following terms and is obviously from someone in the post office directed to Mr Fazio. will you please come pick up extra mail from back hatch or counter as soon as possible please. please bring cards back. (Original emphasis.) 10 It is apparent from his letter that amongst the envelopes he obtained on that day was a large envelope marked "4/10" by the post office but dated 2 October 2012 and which advised of the requirement for Mr Fazio to attend the 15 October 2012 hearing. 11 Two things emerge from these facts. First, Mr Fazio asserts that he got all his mail received prior to 27 December 2012. In that event, he would have got the envelope marked by the solicitor for the applicants prior to that date. Second, even if he did not get that envelope it was his own fault. The post office had left cards, including the one in evidence, asking Mr Fazio to pick up his mail from the back hatch or counter. Until 15 January 2013 he did not do so. The postal manager, as a matter of courtesy, kept Mr Fazio's mail for longer than 10 days. The post office protocol was that mail not collected within 10 days was returned to sender. That did not happen in this case. Moreover, the postal manager attempted to contact Mr Fazio by telephone regarding his uncollected mail but was unable to make contact with him. 12 In these circumstances, where there was the order for substituted service and compliance with it there was nothing untoward in McKerracher J hearing the substantial application in the absence of Mr Fazio. He has no-one but himself to blame for this outcome. 13 Justice McKerracher reserved judgment on 15 October 2012 and delivered his reasons to which I have referred on 17 January 2013. 14 Final orders were made on 6 February 2013 after the mortgagee had been given notice of the orders contemplated. 15 The alternative application under r 41.03 for an order staying the orders of McKerracher J is without foundation. The judgment was entered regularly even although the present applicant was not present. Accordingly, the application dated 4 April 2013 will be dismissed with costs. 16 I made an order on 11 July 2013 staying the 6 February 2013 orders. In light of these reasons that order ought be discharged. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate: Dated: 25 July 2013