FEDERAL COURT OF AUSTRALIA

Rees (Trustee) in the matter of Stubberfield v Stubberfield (Bankrupt)

[1999] FCA 1862

RE: JOHN RICHARD STUBBERFIELD; JOHN ROBERT REES, REGISTERED TRUSTEE; JOHN RICHARD STUBBERFIELD (Respondent)

SPENDER J

17 DECEMBER 1999

BRISBANE

In the Matter of the Estate of JOHN RICHARD STUBBERFIELD

Q 7460 OF 1999

THE COURT ORDERS THAT:

(1)   Pursuant to s 146 of the Bankruptcy Act 1966 as amended, the distribution of dividends amongst the creditors of the bankrupt estate of John Richard Stubberfield, who have proved their debts, proceed in accordance with Division 5 of Part VI of the Bankruptcy Act, as if the bankrupt John Richard Stubberfield had filed a statement of his affairs, and those creditors had been stated to be creditors in it; and that the Trustee, John Robert Rees, so act.

(2)   The costs of the applicant, of and incidental to this application, be paid out of the estate of the bankrupt.

(3)   The Trustee have liberty to apply.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

In the Matter of the Estate of JOHN RICHARD STUBBERFIELD

Q 7460 OF 1999

REASONS FOR JUDGMENT

1                     I am presently dealing with an application by Mr John Rees as trustee of the bankrupt estate of Mr John Richard Stubberfield.  Mr Stubberfield was made bankrupt pursuant to a sequestration order, made by District Registrar Ramsey on 28 July 1999.  The trustee makes application pursuant to s 146 of the Bankruptcy Act 1966 for an order permitting the trustee, upon such terms as the Court may order:

"...[to] proceed to make distribution of dividends amongst the creditors who have proved their debts in accordance with Division 5 of Part VI of the said [Bankruptcy] Act as if the bankrupt had filed a statement of his affairs and those creditors have been stated to be creditors in it."

2                     Section 146 of the Bankruptcy Act provides:

"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.

3                     This application then is premised on the fact that Mr Stubberfield has failed to file a statement of affairs.  Mr Rees deposes to the fact that Mr Stubberfield has sufficient moneys in the estate to pay all known creditors in full.

4                     Mr Rees wrote a letter to Mr Stubberfield on 30 July 1999, requesting completion of a statement of affairs, to be returned within 14 days.  No response was received to this letter.  That letter was sent to the same address to which I directed that notice of these proceedings be given, and in respect of that notice there was apparently no difficulty in Mr Stubberfield receiving that notice and responding to it.  The reason I directed that Mr Stubberfield be notified of this application was that I thought the bankrupt was entitled to have the opportunity of being heard on the issue of whether there had been a failure to file a statement of affairs pursuant to the obligation in s 54 of the Act.

5                     Subsequent to the lack of response to the letter requesting completion of a statement of affairs, Mr Rees made numerous attempts to contact Mr Stubberfield by telephone and letter on dates including 5 August, 6 August, 16 August, 20 August and 26 August.  Mr Rees received no response to any of this correspondence.  The trustee then wrote to the Official Receiver on 25 August, setting out the situation and requesting the Official Receiver's assistance to ensure that Mr Stubberfield produced a statement of affairs.  In addition, Mr Rees sought the issue by the Official Receiver of a s 77C notice to Mr Stubberfield, demanding the statement of affairs.

6                     On 7 September 1999 Mr Stubberfield came to the office of the trustee and there was an acrimonious meeting.  The details of this meeting are set out in the affidavit of Mr Rees, filed 28 October 1999, at pages 4 and 5.

7                     On 9 December 1999 Mr Stubberfield was personally served with a notice to give evidence and produce books, pursuant to s 77C.  This required Mr Stubberfield to attend at the offices of the Insolvency and Trustee Service Australia ("ITSA") on 10 September 1999.  On 10 September 1999 Mr Stubberfield attended ITSA and was given a 30 day extension for the filing of his statement.

8                     No further correspondence has been received by the trustee from Mr Stubberfield.

9                     The details of the proofs of debts in relation to the bankrupt estate of Mr Stubberfield are set out at page 8 of the affidavit of Mr Rees, filed 28 October, and updated in the more recent affidavit of Mr Rees filed 10 December 1999.

10                  There have been very serious difficulties in effecting service on Mr Stubberfield of documents relating to the bankruptcy proceedings.  These difficulties have occurred over a significant period of time.  Some details of these difficulties are set out in an affidavit of Mr Lippiatt, who is a creditor of Mr Stubberfield's estate, filed 28 October 1999.

11                  Mr Stubberfield, while submitting that he has had insufficient time to respond to the material which I directed he be given in relation to Mr Rees's application, has filed two affidavits, both bearing the filing date of 15 December 1999.

12                  In the shorter of those two affidavits, Mr Stubberfield asserts that the bankruptcy proceedings are, inter alia, incompetent and persecutory.  Mr Stubberfield appears to believe that he is the victim of a conspiracy in which, amongst other persons, the government, the trustee in bankruptcy, Mr Lippiatt, the Courts, including the High Court, the Court of Appeal Queensland, and the legal profession in general, are all co-conspirators.  The shorter affidavit also refers to Mr Stubberfield's foreshadowed intention to make an application to annul the bankruptcy.

13                  The longer affidavit deals more directly with matters which it seems would be relevant to an application to annul the bankruptcy on the grounds, amongst others, that Mr Stubberfield is solvent, that the debts are not bona fide or are the result of abuse of process and extortion.  The affidavit is of some fifty pages in length and annexes over 200 further pages.  Something of the nature of the material and the grounds that Mr Stubberfield wishes to pursue appear in the longer of his two affidavits.  Paragraph 2 of that affidavit, at page 2, commences:

"Claims 1-3 of the petitioner Lippiatt & Co, those of Paradise Grove Pty Ltd and Redland Shire Council, derive from the same judgment of the Queensland Court of Appeal, No 38 of 1993.  When the justices hearing that matter, the respondents and their lawyers, conspired to pervert justice, and my enforcement of statute law of this state."

Mr Stubberfield then continues:

"I depose to the facts;"

and alleges later:

"At trial I was prevented by the President from arguing the basis of my case, ie, that a local authority has no power to consent to development in contravention of it's (sic) gazetted planning scheme and statutory requirement, and any such consent would be invalid and void.

By fundamental law I was entitled to obtain, and the courts had a duty to make, the declarations sought, and order payment of my costs, yet my appeal was dismissed with a costs order against me."

14                  Mr Stubberfield has continued to protest that the judgment of the Court of Appeal was corrupt.  An application for special leave to appeal was refused by the High Court, and Mr Stubberfield continues to assert that:

"At the time of the appeal hearing, 10/6/93 it is thus patent that both respondents and their lawyers were aware of the legal consequences of their activities, their silence shows conspiracy of deceit on me as appellant, and the court, (unless it had concurred in such action)."

15                  He also alleges that there have been sworn false affidavits, and that the bankruptcy proceedings have been instigated illegally, maliciously, and are a persecution.

16                  Various aspects of bankruptcy proceedings in relation to Mr Stubberfield have been heard in this Court by Justices Drummond and Dowsett, and by a Full Court of the Federal Court, comprising Justices Ryan, Whitlam and Kiefel.

17                  It is apparent from that brief reference to the material of Mr Stubberfield that he contends that the judgments on which his petition was founded were obtained wrongly.  It is apparent that he is solvent, but that circumstance is not a matter which would prevent the making of a sequestration order.  Rather, it is a matter to which the court would have regard in considering whether, in the exercise of its discretion, a sequestration order ought be made: s 52(2) of the Act.

18                  Given the history of the matter, and Mr Stubberfield's failure to achieve, by legal procedures, the vindication of his claims in relation to the matters the courts have found against him, I would find it difficult to see that a Court of Bankruptcy would exercise its discretion against the making of an sequestration order.

19                  Be that as it may, as I indicated at the outset, I am not now concerned either with an application to annul the bankruptcy, or with any dispute as to the admission as proved debts, of debts upon which Mr Rees is prepared to act.  I am concerned only with the question of whether, on the failure to file a statement of affairs, the court should make the orders for which s 146 of the Bankruptcy Act provides.  It is plain beyond argument that the failure by Mr Stubberfield to file a statement of affairs is a deliberate choice on his part.   He has thus failed to comply with s 54 of the Bankruptcy Act, and is exposed to the consequences of that deliberate failure.  There is no lawful excuse or any valid reason in the material before this court to explain or justify the failure by the bankrupt to make a statement of affairs.  

20                  In the circumstances, in the light of the continued refusal by Mr Stubberfield to make a statement of affairs, it is appropriate that the Trustee proceed with the administration of the bankrupt estate,.  The delay in the administration of the estate is now causing significant prejudice to the creditors of the bankrupt.

21                  In those circumstances, I make the following orders:

(1)   Pursuant to s 146 of the Bankruptcy Act 1966 as amended, the distribution of dividends amongst the creditors of the bankrupt estate of John Richard Stubberfield, who have proved their debts, proceed in accordance with Division 5 of Part VI of the Bankruptcy Act, as if the bankrupt John Richard Stubberfield had filed a statement of his affairs, and those creditors had been stated to be creditors in it; and that the Trustee, John Robert Rees, so act.

(2)   I further order that the costs of the applicant, of and incidental to this application, be paid out of the estate of the bankrupt.

(3)   I grant the Trustee liberty to apply.

22                  Any applications which Mr Stubberfield wishes to make, and which he is permitted to make pursuant to the provisions of the Bankruptcy Act or the general law, will be dealt with in the ordinary and proper course.

Associate:

Dated:              17 December 1999