FEDERAL COURT OF AUSTRALIA Official Trustee in Bankruptcy, in the matter of the Bankrupt Estate of Curry [2014] FCA 1131 Citation: Official Trustee in Bankruptcy, in the matter of the Bankrupt Estate of Curry [2014] FCA 1131 Parties: OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE OF THE BANKRUPT ESTATE OF THE LATE MICHAEL JAMES CURRY File number(s): TAD 22 of 2014 Judge(s): KERR J Date of judgment: 17 October 2014 Catchwords: BANKRUPTCY – administration of bankrupt estate – application to distribute dividends from bankrupt estate – interests of family members of deceased Legislation: Bankruptcy Act 1966 (Cth) ss 134, 146, 244, 246 Date of hearing: 17 October 2014 Place: Hobart Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 10 Counsel for the Applicant: Mr C Groves Solicitor for the Applicant: M+K Dobson Mitchell Allport IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY GENERAL DIVISION TAD 22 of 2014 IN THE MATTER OF THE BANKRUPT ESTATE OF THE LATE MICHAEL JAMES CURRY BETWEEN: OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE OF THE BANKRUPT ESTATE OF THE LATE MICHAEL JAMES CURRY Applicant JUDGE: KERR J DATE OF ORDER: 17 OCTOBER 2014 WHERE MADE: HOBART THE COURT ORDERS THAT: 1. The affidavit of service of Stewart John James sworn on 18 September 2014 not be available for inspection without leave of the Court. 2. The affidavit of Daniel Ross Burke presented in draft and received by the Court on the undertaking of counsel that it be affirmed in identical terms and filed no later than 22 October 2014 not be available for inspection without leave of the Court. 3. Pursuant to s 146 of the Bankruptcy Act 1966 (Cth), the distribution of dividends from the bankrupt estate of the late Michael James Curry, to the creditor who has proved her debt, proceed in accordance with Part VI, Division 5 of the Bankruptcy Act 1966 (Cth) as if the bankrupt had filed a statement of his affairs and the creditor had been stated to be a creditor therein. 4. Pursuant to s 134(4) of the Bankruptcy Act 1966 (Cth), the Official Trustee in Bankruptcy may distribute dividends in accordance with paragraph 3 of these orders. 5. The costs of this application be paid out of the bankrupt estate of the late Michael James Curry. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY GENERAL DIVISION TAD 22 of 2014 IN THE MATTER OF THE BANKRUPT ESTATE OF THE LATE MICHAEL JAMES CURRY BETWEEN: OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE OF THE BANKRUPT ESTATE OF THE LATE MICHAEL JAMES CURRY Applicant JUDGE: KERR J DATE: 17 OCTOBER 2014 PLACE: HOBART REASONS FOR JUDGMENT 1 This is an application brought by the Official Trustee in Bankruptcy as trustee of the bankrupt estate of the late Michael James Curry. The trustee has filed an affidavit by Daniel Ross Bourke affirmed on 25 August 2014 which sets out that Mr Curry was made bankrupt by order of the Federal Circuit Court of Australia made on 21 October 2013 upon the creditor's petition of his mother, Susan Maria Curry. The affidavit annexes the order of the Federal Circuit Court. 2 Mr Curry is deceased, leaving a former de facto partner and a child. The court was concerned that those parties may wish to engage in these proceedings and, in an abundance of caution, sought the agreement of the Official Trustee in Bankruptcy to ensure that these proceedings were brought to the attention of the former de facto partner Ms Narelle Berry. I have an affidavit of service before me which indicates that on 17 September 2014 Mr James personally served Ms Berry with a number of documents. The court, on the basis of the affidavit, has no doubt that the person referred to in the affidavit of service was, in fact, Ms Berry. 3 The materials that she was served with included a letter which informed her that the Official Trustee was seeking an order from the court which would allow it to make a distribution of dividends from Mr Curry's bankrupt estate. She was provided with a copy of the affidavit of Daniel Ross Bourke affirmed in support of the application. Ms Curry was advised that the application was listed for further hearing before the Federal Court of Australia at 10 am today in its Tasmanian District Registry. 4 Her attention was drawn to the fact that she may need to appear in the Official Trustee's proceedings to address relief which the Official Trustee was seeking. Independently of her interests, she was advised that her daughter Annabelle Curry may also need to appear in the proceeding to address that relief. She was advised of the Official Trustee's intention to declare a dividend in Mr Curry's bankrupt estate. She was advised she had an opportunity to submit a proof of debt on or before 3 October. It was recommended that she seek legal advice regarding those matters and also in respect of independent legal advice for her daughter, who was not of an age to act in her own interests. 5 She was advised as to how she might appear in the proceedings and the forms required to do that. She was asked if she intended to take any part in the proceeding. She was invited to contact Mr Groves of M+K Dobson Mitchell Allport, who is counsel in these proceedings. He assures me that no such contact has been made. She was advised that should the court and he have received no appearance or any other contact from her or on behalf of her daughter by 17 October, his expectation was that the court would proceed to hear and determine the Official Trustee's application in her absence. 6 It is plain that, having been served and notified of those circumstances, Ms Berry as trustee or guardian of her infant daughter has taken no steps to pursue the remedies that she might have had had she sought to engage in these proceedings. That simply leaves a matter which, stripped of those complexities, is relatively straightforward. Section 146 of the Bankruptcy Act 1966 (Cth) provides that: Where a bankrupt has failed to file a statement of his or her affairs as required by this Act, the Court may, on the application of the trustee, upon such terms as it thinks fit, order that distribution of dividends amongst the creditors who have proved their debts shall proceed in accordance with this Division as if the bankrupt had filed a statement of his or her affairs and those creditors had been stated to be creditors in it. 7 As Mr Groves indicates in his written submissions, there are two persons under West Australian law who prima facie are entitled or would be entitled to obtain letters of administration in Mr Curry's deceased estate. They are the late Mr Curry's mother and his former de facto partner, Narelle Berry. The court is aware that Mr Curry's mother Susan Curry made some initial steps to seek letters of administration, but they did not ultimately proceed, by reason of the view of the Supreme Court of Western Australia that such a step should not occur without notice to and participation by Mr Curry's former de facto partner Narelle Berry. But whatever reasons those letters were not pursued is now immaterial. Ms Berry herself has not sought to take out letters of administration. 8 The applicant seeks an order under s 146 of the Bankruptcy Act to dispense with a statement of affairs and distribute a dividend to the late Mr Curry's creditors, of which only one, Mrs Curry, has been admitted to proof. The trustee also draws attention to some complexities of the construction of s 246 of the Bankruptcy Act and whether or not, absent a direction under s 134 authorising the Official Trustee in Bankruptcy to make the distribution, some future issues might arise by reason of the possibility, albeit one that no one has suggested is likely to arise, but the at least legal possibility that one or other of those two persons might make an application for letters of administration. 9 Mr Groves draws attention to two possible constructions of s 246 of the Bankruptcy Act and what is then obliged to occur in the making out of a statement of a deceased person's affairs and consequential matters that follow. The court agrees with Mr Groves that the more likely proper construction of those provisions is that the requirement for a statement of affairs only exists where there is a legal personal representative as at the date of the order made under s 244. 10 Nonetheless, against the unlikely but hypothetical possibility that that is not the preferred construction of that provision, the court is minded to make the orders that Mr Groves seeks to enable the distribution to occur with certainty and to dispose of this matter notwithstanding the complexities of the personal relationships that have been adverted to and which have been between the deceased's mother and his former de facto, which have occasioned the orders for confidentiality which will also be made in these proceedings. The court will make orders under s 146 that the Official Trustee in Bankruptcy as trustee of the Bankrupt Estate of the late Michael James Curry may distribute dividends amongst the creditors who have proved their debts in accordance with Division 1 of the Bankruptcy Act, as if the bankrupt had filed a statement of his or her affairs and those creditors had been stated to be creditors in it. The court, pursuant to s 134(4), will direct that the Official Trustee in Bankruptcy may distribute the dividends in accordance with that order. The court will also order that the costs of these proceedings be paid out of the Bankrupt Estate of the late Michael James Curry, and that would include the proceedings previously in these matters. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kerr. Associate: Dated: 22 October 2014