Federal Court of Australia

Palmer v Lazar, in the matter of Lazar (Bankrupt) (No 2) [2025] FCA 967

ORDERS

THE COURT ORDERS THAT:

1.    The First and Second Respondents are to do any act or thing required to be done to transfer title in the land described in Certificate of Title Volume 10507 of Folio 412 in the State of Victoria, known as 2 Drystone Crescent Cairnlea, Victoria, 3023 (the Property) to the Applicant in his capacity as trustee in bankruptcy of the estate of the First Respondent.

2.    A registrar, clerk or the chief executive of the Court may sign any document or do any thing required to be signed or to be done on behalf of the First or Second Respondent to give effect to order (1) above, without further notice.

3.    The First Respondent is to deliver up vacant possession of the Property to the Applicant within 28 days of the date of this order (being 6 August 2025).

4.    The Applicant’s costs of this application be recoverable from the First Respondent’s bankrupt estate as costs of the administration of the estate.

5.    There be no other order as to costs.

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

REASONS FOR JUDGMENT

(Delivered ex tempore; revised from transcript)

WIGNEY J:

1    The applicant in this matter is Mr Christopher John Palmer, the Trustee of the bankrupt estate of Mr John Zlatko Lazar (the Bankrupt). The Trustee has commenced this proceedings to, in effect, compel the Bankrupt and his brother, Mr Steven Zdenko Lazar, to transfer to him certain real property situated in Victoria (the Property) which is said to be owned by the Bankrupt, or to which the Bankrupt is said to be entitled: ss 30(1)(b) and 77(1)(e)-(g) of the Bankruptcy Act 1977 (Cth). The Property, the Trustee argues, may be taken to have vested in him in his capacity as the Trustee of the Bankrupt's bankrupt estate pursuant to s 58(1)(b) of the Bankruptcy Act. In the alternative, the Trustee seeks an order pursuant to s 30(1)(b) of the Bankruptcy Act directing the Registrar of Titles of the State of Victoria to take various steps which would result in the Trustee being recorded as the proprietor of the Property.

2    The Bankrupt initially failed to engage with the Trustee or the Court in respect of the Trustee's application and failed to appear at the first case management hearing. He belatedly appeared at the hearing of the Trustee's application, albeit by telephone, and applied an adjournment. He was granted a brief adjournment. When the matter was next called on for hearing, the Bankrupt sought a further adjournment. That further adjournment application was refused. My reasons for refusing that adjournment are dealt with in a separate judgment: Palmer as trustee of the Estate of J Z Lazar v J Z Lazar (a bankrupt) & Ors (No. 1) [2025] FCA 966.

3    The Bankrupt's brother, who I will refer to in these reasons as Steven to avoid any confusion, is a respondent to the proceeding because, as will be explained in due course, he is still recorded in the official records as being the owner or proprietor of the Property along with the Bankrupt. Steven filed a submitting notice in respect of the proceeding, having previously advised the Trustee that he did not oppose the Trustee’s application. Despite having filed a submitting notice, Steven appeared at the hearing and advised the Court that he not only did not oppose the Trustee’s application, but that actively supported it. The Registrar also filed a submitting notice.

4    For the reasons that follow, I propose to make the orders sought by the Trustee which require the Bankrupt and Steven to do all things reasonably necessary to facilitate the transfer of the Property to the Trustee. It is, in those circumstances, unnecessary to make the alternative order sought by the Trustee against the Registrar.

FACTUAL BACKGROUND

5    The relevant facts are essentially not in dispute and are narrow in compass.

6    The Trustee was appointed as trustee of the Bankrupt's estate on 3 March 2015.

7    The Bankrupt has not been discharged from bankruptcy, primarily because he has never filed a statement of his affairs as required by s 54 of the Bankruptcy Act: see also s 149(1)(a) of the Bankruptcy Act. It is relevant to note in that context that the Bankrupt has also manifestly failed to cooperate with the Trustee or perform any of his duties pursuant to s 77 of the Bankruptcy Act.

8    While the Trustee has made a small interim distribution to the Bankrupt’s creditors, the creditors have not yet been paid in full. It is in that context that the Trustee continues to endeavour to collect and realise the property of the Bankrupt or the property to which the Bankrupt is entitled.

9    The mother of the Bankrupt and Steven, Ms Verica Lazar, passed away on 24 May 2020. At the time of her death, Ms Lazar owned the Property, which was situated at 2 Drystone Crescent, Cairnlea, Victoria.

10    On 26 February 2021, the Supreme Court of Victoria granted probate to the Bankrupt and Steven in respect of Ms Lazar's estate. The Property formed part of Ms Lazar's estate. In her will, Ms Lazar left her estate in two equal shares to the Bankrupt and Steven. Accordingly, the Bankrupt and Steven, as executors of Ms Lazar's deceased estate, are recorded on the Certificate of Title (Vol 10507 of Folio 412) as being the registered proprietors of the Property.

11    The evidence adduced on the Trustee’s application indicated that, not long after the grant of probate, the Bankrupt and Steven reached an agreement in respect of the distribution of the assets of Ms Lazar's estate. The terms of that agreement were recorded in a Deed of Family Arrangement. While the Deed was not formally executed, the agreement as recorded in it has been partly performed. In particular, the Deed provides that, in consideration of Steven receiving an amount of money from the estate as his distribution, the Bankrupt would receive, among other things, the Property. While Steven has received the monetary distribution specified in the Deed, no effective steps appear to have been taken to transfer title the property to the Bankrupt. In his submissions at the hearing, Steven indicated that he did not know why that was so. He also made it clear that he wanted that situation to be remedied and that he did not want his name to remain on the title.

TRUSTEE’S APPLICATION

12    As was noted at the outset, the Trustee’s primary application is to have the title to the Property transferred from the Bankrupt and Steven to him in his capacity as Trustee of the Bankrupt’s bankrupt estate. The Trustee contends, in essence, that pursuant to the Bankrupt’s agreement with Steven, as reflected in the Deed, the Bankrupt was entitled to have the title to the Property transferred into his name. Once that occurred, however, the title to the Property vested in the Trustee as trustee of the Bankrupt's estate by reason of s 58(1)(b) of the Bankruptcy Act, the property has

13    The Trustee has, however, been unable to secure the cooperation of the Bankrupt to transfer the title in the Property to him. That is despite the fact that the Bankrupt was effectively obliged to take steps to transfer the Property to the Trustee by reason of s 77(1)(e) of the Bankruptcy Act , which relevantly provides as follows:

(1)    A bankrupt shall, unless excused by the trustee or prevented by illness or other sufficient cause:

…
(e) execute such instruments and generally do all such acts and things in relation to his or her property and its realization as are required by this Act or by the trustee or as are ordered by the Court upon the application of the trustee;

14    In those circumstances, the Trustee seeks an order directing the Bankrupt and Steven to transfer title in the Property to him in his capacity as trustee of the bankrupt estate. The Trustee primarily relies on s 30(1)(b) of the Bankruptcy Act, which provides as follows:

(1) The Court:

…

(b) may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.

15    I am satisfied that the Court is empowered by s 30(1)(b) of the Bankruptcy Act to make the order sought by the Trustee.

16    Subsection 30(1)(b) of the Bankruptcy Act confers on the Court a broad power which should not be narrowly construed or confined. In Hacker v Weston [2015] FCA 363, Flick J stated as follows (at [148]):

Section 30(1)(b), in particular, confers a power which it has been said should be “generously construed”: Vale v Sutherland [2009] HCA 26 at [19] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ. Section 30(1), it has been said, “is a facultative provision giving the court full power, within the limits of its jurisdiction to be found elsewhere, to make such orders as it considers should be made in order to carry out and give effect to the Act”: Re Bilen; Ex parte Sistrom (unreported, Federal Court of Australia, Neaves J, 11 April 1985). In Talacko v Talacko [2010] FCAFC 54 at [18] to [19], (2010) 183 FCR 311 at 321 Gray, Mansfield and McKerracher JJ similarly observed that the “words used are not words of limitation but of extension”.  See also: Verge, Re Underdown (a bankrupt) v Fazio [2013] FCA 18 at [21] per McKerracher J.

17    In the present case, s 30(1)(b) of the Bankruptcy Act should be read together with s 77(1)(e) of the Bankruptcy Act which, at least impliedly, indicates that the Court may, upon the application of a trustee in bankruptcy, order a bankrupt to execute an instrument or do an act in relation to his or her property and its realisation.

18    The evidence adduced by the Trustee establishes that after the Bankrupt became a bankrupt, he acquired the Property, or it devolved on him, by the combined operation of his mother's bequest and the agreement he reached with Steven concerning the distribution of Ms Lazar’s estate. Given the position taken by Steven in respect of the Trustee’s application, it matters not that the Deed between him and the Bankrupt was not finally executed. Nor does it matter that no steps were taken to complete the formalities required to transfer the Property to the Bankrupt following the grant of probate. Indeed, it is the Bankrupt's unwillingness to cooperate with the Trustee to complete those formalities that necessitated the commencement of these proceedings.

19    Difficult questions might have arisen had Steven not consented to (or supported) the making of the order sought by the Trustee. That is because it has been held that s 30(1) of the Bankruptcy Act does not extend to the making of an order which would effectively destroy the rights that a third party might have in respect of property: see Coshott v Prentice (2014) 221 FCR 450 at [100]. In those circumstances, absent Stevens’s consent, it may have been necessary for the Trustee to resolve the impasse concerning the Property by seeking two orders: first, an compelling the sale of the Property under applicable state legislation which deal with the sale of properties that are co-owned; and second, an order in respect of the distribution of the proceeds of the sale of the Property: see Coshott at [105] – [118].

20    Fortunately for the Trustee, it is unnecessary to consider that issue given, as indicated above, that Steven consents to the order sought by the Trustee under s 30(1)(b) of the Bankruptcy Act.

21    While I refused the Bankrupt's further adjournment application, I gave him the opportunity to make any submissions he wished to make in opposition to the orders sought by the Trustee.

22    Aside from reiterating his need for legal advice and an adjournment, the Bankrupt's submissions addressed the current state of his estate and the Trustee's conduct in administering the estate. He complained that the Trustee had taken money from his bank accounts and had denied him access to that money. He also claimed that the money that had been recovered by the Trustee from his bank accounts was more than ample to repay all the debts he had owed. He contended that it was therefore unnecessary for the Trustee to take possession of and sell the Property to pay all the creditors of his bankrupt estate.

23    The Bankrupt acknowledged, in that context, that he had failed to engage with the Trustee in relation to the administration of his estate. He maintained, however, that it was unnecessary to sell the Property because the Trustee already had sufficient funds to pay all his creditors. He also emphasised his unfortunate personal circumstances, including that if the Property is sold, he would have nowhere to live.

24    Unfortunately for the Bankrupt, none of the submissions he advanced provide any grounds for refusing the orders sought by the Trustee. Moreover, the Bankrupt's submissions in relation to the administration of his bankrupt estate were not only unsupported by any evidence adduced by him, but were plainly contradicted by the evidence which had been adduced by the Trustee in support of his application.

25    Most significantly, the Trustee's Fifth Report to Creditors dated 10 June 2025 was in evidence. It indicated, among other things, that the current state of affairs in relation to the Bankrupt’s bankrupt estate was that there were outstanding unsecured creditors whose debts totalled approximately $160,000, whereas the cash currently held by the Trustee on account of the estate totalled just shy of $88,000. Contrary to the Bankrupt’s contentions, it is therefore necessary for the Trustee to obtain title to the Property and sell it in order to discharge the proven debts owed to the creditors and finalise the administration of the estate.

26    It is readily apparent from the evidence that, once the Trustee can take possession of and sell the Property, all the creditors will be able to be paid in full. There will also almost certainly be a surplus which will ultimately be returned or distributed to the Bankrupt. None of that, however, provides any support for the Bankrupt's opposition to the orders sought by the Trustee.

CONCLUSION AND DISPOSITION

27    In all the circumstances, I consider that it is appropriate to make an order pursuant to s 30(1)(b) of the Bankruptcy Act directing the Bankrupt and Steven to transfer title in the Property to the Trustee in his capacity as the trustee of the Bankrupt's bankrupt estate.

28    To avoid any further complications, I will also order that a registrar, clerk or the chief executive of the Court may sign any document or do any thing required to be signed or to be done on behalf of the Bankrupt and Steven to give effect to that order. That order is appropriate given the Bankrupt’s previous lack of cooperation with the Trustee. While Steven has demonstrated a willingness to facilitate the transfer of the Property to the Trustee, the order permitting an officer of the Court to sign documents or take any necessary steps on his behalf will undoubtedly simplify the process.

29    Given that I propose to make those orders pursuant to s 30(1)(b) of the Bankruptcy Act, it is unnecessary to consider the availability of the alternative relief sought by the Trustee as against the Registrar.

30    The Trustee also sought an order that the Bankrupt deliver up vacant possession of the property within 21 days. I was initially reluctant to make that order as there was no evidence to suggest that the Bankrupt resided at the property. When he first appeared and sought an adjournment, however, the Bankrupt confirmed that he did live at the property. That was also readily apparent from the Bankrupt's submissions. In those circumstances, and again given the Bankrupt’s demonstrated unwillingness to cooperate with the Trustee, I consider it appropriate to make the ancillary order sought by the Trustee concerning possession of the property in order to facilitate the swift sale of the property and the finalisation of the administration of the Bankrupt's estate. I will, however, allow the Bankrupt 28 days within which to vacate the property.

Associate:

Dated:    18 August 2025