FEDERAL COURT OF AUSTRALIA

Sutherland, in the matter of Abdali Khanafer [2000] FCA 463

BANKRUPTCY – application to transfer proceedings to Family Court of Australia pursuant to s 35A of the Bankruptcy Act 1966 (Cth)

Bankruptcy Act 1966 (Cth), s 35A

IN THE MATTER OF ABDALI KHANAFER

RODERICK MACKAY SUTHERLAND v MOUZAIN KHANAFER

NG 7866 of 1998

MADGWICK J

13 MARCH 2000

SYDNEY

IN THE MATTER OF ABDALI KHANAFER

THE COURT ORDERS THAT:

1.                  The proceedings be forthwith transferred to the Family Court of Australia.

2.                  The respondent is to pay the costs of the applicant thrown away by the vacation of the hearing set to commence in this Court on 16 March 2000, on an indemnity basis.

3.                  The respondent is to pay the costs of the applicant thrown away by this application.

IN THE MATTER OF ABDALI KHANAFER

REASONS FOR JUDGMENT

(revised from transcript)

HIS HONOUR:

1                     The applicant in the principal proceedings claims that the transfer of a suburban house and land from a now bankrupt husband to his wife was (at least) an uncommercial transaction occurring within a relevant relation back period and that it should be set aside.  The matter has had a long and chequered history in this Court.  The wife, Mrs Khanafer, now applies, three days before the matter is listed to be heard in this Court, to have her case transferred to the Family Court of Australia pursuant to s 35A of the Bankruptcy Act 1966 (Cth).

2                     Mrs Khanafer says that her case is not ready through no personal fault of her own.  She had instructed a solicitor, Mr Krayem of Parragon Lawyers, who told her that her case would be covered by legal aid and that she need not worry about paying any fees.  Later, Mr Krayem's firm was placed under Law Society management and Mr Michael Chahoud of Messrs Chahoud and Associates acted as agent for the Law Society.

3                     In October 1999 Mrs Khanafer found her way to her present solicitor, Mr Ardino of Morgan, Ardino and Company and at that time he had some discussion with her about the necessity that his fees and those of counsel be paid.  He was, however, not to obtain Mr Krayem’s files.  It seems that Mrs Khanafer understood that her case was ready for presentation, and there would be no special reason for Mr Ardino not to have accepted that view.  The file was made available ultimately to Mr Ardino by Mr Chahoud on 2 March 2000, that is eleven days ago.  The reason for a delay of over four months in Mr Chahoud affording the files to Mr Ardino has not been made clear (by saying that I do not necessarily imply any criticism of Mr Chahoud). 

4                     A subsidiary issue has arisen in the proceedings.  The Trustee in Bankruptcy is represented by Mr John Ajaka, solicitor, who in 1988 acted jointly for the husband and wife on their purchase of the subject real property.  Nobody suggested that, at that time, Mr Ajaka had gained any knowledge or information or had had any relationship such that he would now be debarred from acting for the Trustee.  However, Mrs Khanafer says that during the first half of 1995 she sought advice about her matrimonial problems from Mr Ajaka.  Further, she gave him certain information about the respective contributions that she and her husband had made to their joint assets, principally the subject real property, and she received advice from him on what "split" of the property she could expect to receive.  Mr Ajaka, as I understand it, denies any such conversation. 

5                     Mrs Khanafer wishes, as a preliminary issue, for the Court to determine whether Mr Ajaka may act against her.  I am prepared to accept that those advising Mrs Khanafer should have rather more time than would now be available quietly to consider her case and to advise on the evidence that might be called in the light of that which has been filed against her on this issue.

6                     Further, there are existing Family Court orders, pursuant to which, ultimately, the residential property was transferred from the husband to the wife, allegedly upon her assuming certain obligations which otherwise would have been the husband's alone.  In my opinion it would be preferable that issues as to the reasonableness of the marital property settlement should be determined by the Family Court of Australia.  If there were to be any suggestion that the processes of that Court had been lent to an uncommercial transaction it would be preferable that that Court itself should resolve the matter.

7                     Moreover, the processes and expertise of the Family Court are more likely to produce a more certain resolution more cheaply than those of this Court, which are adapted to different kinds of cases.  That is not to say that the task would be beyond this Court, but in my view the Family Court would be the preferable venue for such questions.  Otherwise the factual issues are relatively simple and do not raise any commercial issues of a kind as to which it might be thought that this Court had some special expertise.

8                     Being aware that costs orders would be an inevitable concomitant of the success of the application, Mrs Khanafer has indicated that no submissions would be made should the Court think it appropriate that indemnity costs would be ordered.  It is true that the application comes very late.  It is true that there is probably some financial detriment to those for whose benefit the Trustee is taking this action, but it seems to me that orders for indemnity costs will see that they are not out of pocket in relation to the costs thrown away by the vacation of the hearing fixed to commence in three days time.

9                     I order that the proceedings be forthwith transferred to the Family Court of Australia pursuant to s 35A of the Bankruptcy Act.  Mrs Khanafer, is to pay the costs of the Official Trustee thrown away by this application and by the vacation of the hearing which was set to commence on 16 March 2000 in this Court.

Associate:

Dated:              13 March 2000