FEDERAL COURT OF AUSTRALIA

Aravanis & Roy (Trustees), in the matter of Destanovic (Bankrupt) v Destanovic (No 2) [2016] FCA 1005

ORDERS

BY CONSENT, THE COURT ORDERS THAT:

1.    The orders of the Court made on 13 April 2016 numbered 2 to 7 inclusive be vacated save that the respondent pay the applicants’ legal costs in relation to paragraph 7(b) of those orders fixed in the sum of $11,547.10.

THE COURT NOTES THAT:

2.    The parties have agreed that the applicants’ costs of these proceedings are $37,870.73.

3.    The respondent has paid the applicants the monies due and owing pursuant to the orders of the Court made on 13 April 2016 and pursuant to order 1 and note 2 above.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    These are reasons for consent orders made in chambers on 19 August 2016.

2    On 9 May 2014, a sequestration order was made in the Federal Circuit Court of Australia against the estate of Mr Meta Destanovic (“Mr Destanovic” or “Bankrupt”) and the applicants were appointed as the joint and several trustees of his bankrupt estate (“Trustees”). The respondent is the Bankrupt’s wife (“Mrs Destanovic”).

3    By an application filed on 9 December 2015 and amended with leave on 7 April 2016, the Trustees sought a declaration that a property in Cairnlea, Victoria, details of which are set out in the schedule to the application (“Property”), was subject to a charge under s 139ZR(6) of the Bankruptcy Act 1966 (Cth) and ancillary orders. A notice had been issued pursuant to s 139ZQ of the Bankruptcy Act on 17 September 2015 and served on Mrs Destanovic on 24 September 2015 (“Notice”).

4    On 13 April 2016, I made the following declaration and orders:

(1)    That the Property was subject to a charge under s 139ZR(1) of the Bankruptcy Act in favour of the Trustees to secure the payment to them of $170,498 pursuant to the Notice and that the Trustees have the power to sell the Property conferred by s 139ZR(6).

(2)    That Mrs Destanovic give vacant possession of the Property to the Trustees by 12 May 2016.

(3)    A writ of possession may issue on or after 13 May 2016.

(4)    The Property be sold, free of all encumbrances, by the Trustees.

(5)    That Mrs Destanovic execute all documents and do all things as are necessary to enable the Trustees to effect the sale of the Property failing which a Registrar of the Court is authorised to do so.

(6)    The manner in which sale was to be effected including the establishment of a reserve price.

(7)    The manner in which the proceeds of sale were to be applied.

(8)    Judgment be entered in favour of the Trustees against Mrs Destanovic in the sum of $170,498 (“Judgment Sum”).

(9)    Mrs Destanovic pay the Trustees’ costs of the proceedings as agreed or taxed.

(10)    Liberty to apply.

5    See Aravanis & Roy (Trustees), in the matter of Destanovic (Bankrupt) v Destanovic [2016] FCA 388 for the background to those orders. Mrs Destanovic did not file an appearance and she did not appear at the hearing of the application but I was satisfied that she had been made aware of the hearing (on a number of occasions) and of her opportunity to present evidence and arguments.

6    Solicitors for the Trustees have advised the Court that Mrs Destanovic did not vacate the Property and a warrant for possession of the Property was issued on 6 July 2016 but it has not been executed.

7    On 21 July 2016, Mrs Destanovic appointed her son, Elvis Destanovic, as her attorney under a document expressed to be an enduring power of attorney made under Part 3 of the Powers of Attorney Act 2014 (Vic) and witnessed by Wei (Victor) Wang and Kimberly Linda Grant of Ascot Solicitors.

8    The solicitors for the Trustees advised the Court that following discussions with Mrs Destanovic, amounts have been paid to the Trustees sufficient to satisfy the Trustees’ claims in relation to the Judgment Debt, interest payable and amounts which the parties agree should be fixed as the Trustees’ costs of the proceedings and legal costs in respect of the steps taken in relation to the sale of the Property. Consent orders dated 28 July 2016 were submitted, signed by Mr Mulette, solicitor for the Trustees and Mr Elvis Destanovic as attorney for Mrs Destanovic. The effect of the Consent Orders would be to vacate the orders (2) to (7) referred to at [4] above, to fix the Trustees’ costs and to acknowledge payment by Mrs Destanovic of the Judgment Sum and those costs.

9    Following supplementary submissions from the solicitors for the Trustees dated 11 August 2016, I was satisfied that s 22 and s 43(3)(d) of the Federal Court of Australia Act 1976 (Cth) and rr 39.05(a), 39.05(f) and 39.11 of the Federal Court Rules 2011 (Cth) authorise the making of the orders sought. I was also satisfied that it was in the interests of the just and economic resolution of this matter on the basis that the Trustees had received the monies to be recovered under the Notice, the amount of costs had been agreed and the proposed orders are consent orders.

Associate:

Dated:    22 August 2016