Commonwealth Bank of Australia v State of Queensland [2019] FCA 1695

File number:

QUD 576 of 2019



Date of judgment:

9 October 2019


BANKRUPTCY AND INSOLVENCY – application under s 133(9) of the Bankruptcy Act 1966 (Cth) – disclaimed property – criteria in s 133(9) satisfied – application allowed


Bankruptcy Act 1966 (Cth) s 133

Cases cited:

National Australia Bank v New South Wales [2014] FCA 298

National Australia Bank v South Australia (No 2) [2015] FCA 240

Date of hearing:

9 October 2019




General Division

National Practice Area:

Commercial and Corporations


General and Personal Insolvency



Number of paragraphs:


Solicitor for the Applicant:

Ms BA Sim of Gadens Lawyers

Solicitor for the Respondent:

Ms AJ Skoein of Crown Law


QUD 576 of 2019










9 OCTOBER 2019


1.    Pursuant to s 133(9) of the Bankruptcy Act 1966 (Cth), the estate in fee simple in the property described as Lot 1 on Survey Plan 248064, Title Reference 50883821 being the land situated at 203 Webb Road, Majors Creek in the State of Queensland (Property), vest in the applicant for the purpose of the applicant exercising its powers as mortgagee under the Land Title Act 1994 (Qld), the Property Law Act 1974 (Qld) and the registered mortgage number 715649380 (Mortgage).

2.    On the vesting of the Property in the applicant pursuant to s 133(9) of the Bankruptcy Act 1966 (Cth), the applicant:

(a)    may, but is not bound to deal with the Property as if it were exercising its powers as mortgagee in possession under the Land Title Act 1994 (Qld), the Property Law Act 1974 (Qld) and the Mortgage, including exercising the right to sell the estate in fee simple of the Property in exercise of its power of sale and all its other rights under the Mortgage;

(b)    for the purpose of selling the estate in fee simple of the Property in exercise of its power of sale, is not required to serve:

(i)    a notice of default or demand whether under s 88 of the National Credit Code, being Sch 1 of the National Consumer Credit Protection Act 2009 (Cth) or otherwise; and

(ii)    a notice pursuant to s 84 of the Property Law Act 1974 (Qld);

(c)    is entitled to calculate the entirety of the debt secured and owing pursuant to the Mortgage as including all monies that would have been secured by the Mortgage had the Trustee not disclaimed the Property and to deduct and retain for its own use in its absolute discretion such amount from any proceeds of sale of the Property as if it were money secured by the Mortgage (including costs of this application and all costs properly incurred in selling, and incidental to the sale of, the Property);

(d)    will apply the proceeds of sale from the Property as follows:

(i)    first, in payment of any statutory charges affecting the Property, which the relevant statute provides are payable in priority to the applicant;

(ii)    secondly, in payment of all costs, charges and expenses properly incurred by the applicant as incidental to the sale or any attempted sale, or otherwise;

(iii)    thirdly, in discharge of the debt owed to the applicant by Thomas Norman Hoey (Mr Hoey) as secured by the Mortgage; and

(iv)    fourthly, in payment of any subsequent mortgages (if any).

(e)    must, after any sale of the Property, provide an account of its payments and receipts to:

(i)    Moira Kathleen Carter as Trustee in Bankruptcy of the Bankrupt Estate of Thomas Norman Hoey;

(ii)    Mr Hoey;

(iii)    The Registrar of the Court; and

(iv)    The respondent.

(f)    must pay into Court the surplus, if any, arising from any sale of the Property.

3.    There be no order as to costs against the respondent.

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




1    The applicant, the Commonwealth Bank of Australia, has applied pursuant to s 133(9) of the Bankruptcy Act 1966 (Cth) (the Act) for an order that real property disclaimed by the trustee in bankruptcy of Thomas Norman Hoey vest in the applicant.

2    Mr Hoey was the registered proprietor in fee simple of land located at 203 Webb Road, Majors Creek in Queensland. On 20 February 2014, Mr Hoey executed a mortgage over the property in favour of the applicant, which was registered on 12 March 2014 and allocated dealing number 715649380. The mortgage secured a principal amount of $528,924 advanced by the applicant to Mr Hoey. Mr Hoey has been in default under the loan agreement since September 2018 when he ceased to make scheduled repayments.

3    On 11 October 2018, Mr Hoey presented a debtor’s petition, and Ms Moira Carter was appointed as his trustee in bankruptcy. On 4 September 2018, the trustee disclaimed the property pursuant to s 133(1) of the Act. The applicant wishes to exercise its power of sale over the property.

4    Section 133 of the Act provides a mechanism for a trustee in bankruptcy to disclaim property when it is burdened by onerous covenants or is unsaleable or not readily saleable. Section 133 provides, relevantly:

(1AA)    Where any part of the property of the bankrupt consists of:

(a)    land of any tenure burdened with onerous covenants; or

(b)    property (including land) that is unsaleable or is not readily saleable;

subsection (1) applies.

(1)    Subject to this section, the trustee mayby writing signed by him or her, at any time disclaim the property.

(2)    A disclaimer under subsection (1) or (1A) operates to determine forthwith the rights, interests and liabilities of the bankrupt and his or her property in or in respect of the property disclaimed, and discharges the trustee from all personal liability in respect of the property disclaimed as from the date when the property vested in him or her, but does not, except so far as is necessary for the purpose of releasing the bankrupt and his or her property and the trustee from liability, affect the rights or liabilities of any other person.

(3)    If a trustee disclaims property whose transfer must be registered under a law of the Commonwealth or of a State or Territory of the Commonwealth, the trustee must give notice of the disclaimer as soon as practicable to the officer who has the function of registering the transfer.

(9)    The Court may, on application by a person either claiming an interest in, or being under a liability not discharged by this Act in respect of, disclaimed property, and after hearing such persons as it thinks fit, make an order, on such terms as the Court considers just and equitable, for the vesting of the property in, or delivery of the property to, a person entitled to it or a person in whom, or to whom, it seems to the Court to be just and equitable that it should be vested or delivered, or a trustee for that person.

(10)    Subject to subsection (11), where an order vesting property in a person is made under subsection (9), the property to which it relates vests forthwith in the person named in the order for that purpose without any conveyance, transfer or assignment.

5    Unless a vesting order is made under s 133(9) of the Act, a mortgagee is precluded from taking action to realise the property the subject of security after a disclaimer has occurred: National Australia Bank v New South Wales [2014] FCA 298 at [98].

6    In order for the Court to make a vesting order pursuant to s 133(9), the following must be established:

(a)     that there has been a disclaimer of the relevant property pursuant to s 133(1);

(b)     the applicant claims an interest in the disclaimed property within s 133(9);

(c)     the applicant is entitled to the disclaimed property or the Court considers it to be just and equitable that it should be vested in the applicant.

(See National Australia Bank v South Australia (No 2) [2015] FCA 240 at [19].)

7    It is apparent from the evidence before the Court that the trustee has disclaimed the property.

8    A mortgagee of land under the Torrens system has been held to be a person with an interest in disclaimed property who is entitled to make an application for a vesting order and to receive such an order: see, for example, National Australia Bank v New South Wales at [10].

9    The applicant’s interest in the disclaimed property as mortgagee is apparent from the evidence placed before the Court. The applicant is the sole registered mortgagee over the property. The amount owing to the applicant is secured by the mortgage was $530,378.75 as at 10 September 2019. Mr Hoey is in default and has been in default since September 2018. Accordingly, the applicant has an interest in the property within the meaning of s 133(9) of the Act.

10    There is no opposition to the application. The respondent, the State of Queensland, has appeared, but has not opposed the orders sought. The trustee in bankruptcy has been served with the application, but has not appeared. The applicant is unable to sell the property under its powers under the mortgage unless orders are made under s 133(9). In these circumstances, it is appropriate that orders for the vesting of the property in the applicant be made.

11    I will make orders in accordance with the draft, subject to the changes that I have indicated to the parties.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.


Dated:    16 October 2019