Federal Court of Australia

O’Kearney (Trustee) v Capell (Bankrupt), in the matter of Capell (Bankrupt) (No 2) [2026] FCA 724

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to ss 30 and 77 of the Bankruptcy Act 1966 (Cth), the Respondent, Toni Monique Capell, deliver up vacant possession of the property identified as Lot 3 on Survey Plan 106503, Title Reference 50223186, more commonly known as 6 Koala Place, Capalaba, in the State of Queensland (Property), to the Applicant (the Trustee in bankruptcy) within 45 days of the date of today’s Order (by Monday 13 July 2026).

2.    The Respondent deliver up to the Applicant within 45 days of today’s Order all keys for all buildings and improvements of the Property, that are within the Respondent’s possession, custody or control.

3.    In the event that the Respondent fails to deliver vacant possession of the Property in accordance with Orders 1 and 2 above, upon the Applicant filing an affidavit (personally or by his solicitors) deposing to that non-compliance and that the Applicant does not have possession of the Property, a writ of possession be issued forthwith in favour of the Applicant.

4.    The Respondent remove from the Property all personal property, including vehicles, rubbish and other chattels (Personal Property) which are not vested in the Applicant within 45 days of the date of today’s Order.

5.    In the event that the Respondent fails to comply with Order 4 above, the Applicant is empowered to remove and dispose of the Personal Property on the Property as the Applicant sees fit.

6.    The Respondent do all things as may be reasonably required by the Applicant (or by his agent or solicitor) to enable the Applicant to effect the sale of the Property, including providing access to the Property and executing any documents.

7.    Liberty to apply on two business days’ notice.

8.    The costs of the Applicant on this application be paid from the estate of the Respondent in accordance with the Bankruptcy Act 1966 (Cth).

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

REASONS FOR JUDGMENT

WHEATLEY J:

1    Ms Toni Monique Capell was made bankrupt more than two years ago, on 11 October 2023, pursuant to a sequestration order under the Bankruptcy Act 1966 (Cth) (the Act). Mr Glen Thomas O’Kearney, the Applicant, was appointed the trustee in bankruptcy of Ms Capell’s estate (the Trustee). An asset in Ms Capell’s bankrupt estate is a property known as Lot 3 on Survey Plan 106503, Title Reference 50223186, more commonly known as 6 Koala Place, Capalaba in the State of Queensland, 4157 (Property). At the time of her bankruptcy Ms Capell was the sole registered owner of the Property. Ms Capell remains in possession of the Property.

2    The Trustee now brings an originating application for possession of the Property.

3    Ms Capell has not participated in these proceedings. On 27 February 2026 orders were made for substituted service of Ms Capell. Those orders required service of the originating application, affidavit in support and the Applicant’s genuine steps document as well as the orders and reasons for substituted service.

4    Ms Capell has been served in accordance with the orders for substituted service, with all of the material for today’s hearing. Ms Capell was called at Court this morning, however, she has not appeared. I am satisfied that the proceedings would have come to her attention by way of the compliance with the orders for substituted service and I have proceeded to hear the Trustee’s application for possession.

THE TRUSTEE’S POSSESSION APPLICATION

5    The Trustee commenced this proceeding for possession of the Property on 3 November 2025. After hearing and making orders for substituted service, the hearing of the Trustee’s originating application was set for today.

6    The evidence is that Ms Capell continues to occupy the Property.

7    The Trustee has brought this application to this Court seeking, in summary, that:

(1)    Ms Capell deliver up vacant possession of the Property;

(2)    the sheriff be empowered to enter and take possession of the Property and to remove Ms Capell (and any other occupier) should vacant possession not be delivered; and

(3)    the Trustee’s costs be paid from the bankrupt estate.

8    Ms Capell has not appeared today on this hearing. Nor has Ms Capell appeared on the earlier case management hearing, or made any contact with the Court, regarding this proceeding. Ms Capell has not sought an adjournment for additional time to be able to respond to and deal with the Trustee’s application for possession of the Property. Nor has Ms Capell provided any evidence or information regarding her circumstances or how long she will require to vacate the Property.

9    However, earlier (as referred to in the substituted service application O’Kearney (Trustee) v Capell (Bankrupt), in the matter of Capell (Bankrupt) [2026] FCA 175 (Judgment)) there was some communications with Ms Capell by email. That email address was one of the methods of substituted service.

10    The issues to resolve this matter are as follows:

(1)    Is Ms Capell bankrupt?

(2)    Does the Court have power under s 30(1)(b), and s 77(1)(g) of the Act to make orders sought by the Trustee for possession of the Property?

(3)    Does the Property form part of Ms Capell’s bankrupt estate for which the Applicant is the Trustee?

(4)    Are the orders sought necessary for carrying out or giving effect to the requirements of the Act?

(1)    Is Ms Capell bankrupt?

11    Ms Capell was made bankrupt on 11 October 2023 and remains bankrupt. There is no evidence before the Court of any annulment of her bankruptcy, nor is there any evidence that Ms Capell has filed any application in the Court seeking to annul her bankruptcy. There is also no evidence that Ms Capell has sought review of the original orders of the Registrar making the sequestration order.

12    Early in the administration of Ms Capell’s bankrupt estate, the Trustee identified that there may have been sufficient assets to annul the bankruptcy. However, no steps have been taken by Ms Capell to seek or advance any annulment of her bankruptcy.

13    In the Trustee’s last report to creditors dated 1 August 2025, he stated that subject to the total quantum of creditor’s claims being lodged and the outcome of the adjudication process and the time and costs to realise the real property, creditors may be paid in full.

14    However, whether or not Ms Capell has the financial capacity to annul her bankruptcy or whether all of her creditors will be paid in full, is unnecessary to decide.

15    It is clear that Ms Capell was made bankrupt on 11 October 2023 and remains bankrupt.

(2)    Does the court have power to make orders for possession?

16    Section 30(1) of the Act provides as follows:

The Court:

(a)    has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and

(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.

17    Section 30 is to be generously construed: see Vale v Sutherland (2009) 237 CLR 638; [2009] HCA 26 at [19] (Gummow, Hayne, Heydon, Crennan and Kiefel JJ). The words are not to be construed narrowly; these are words of extension, not limitation: see Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88 at [93] (Siopis, Katzmann and Perry JJ). Also see the useful summary of these principles in Hacker v Weston [2015] FCA 363 at [148] (Flick J).

18    The Court in Coshott stated (at [94]) as follows:

[94]    Thus, the section has been held to provide sufficient power to make orders against a bankrupt for the vacation of property, issuing a warrant of possession and for the sale of a property in circumstances where the bankrupt is not complying with his or her obligations under the Act: see, eg, Vince (Trustee) v Sopikiotis v Sopikiotis (No 2) [2012] FCA 1298 at [4] (Bromberg J); Pattison v McKinnon [2008] FCA 1624 at [2] (Jessup J); Official Receiver v Fall (2008) 5 ABC(NS) 772 at [10]–[12] (Lucev FM (as his Honour then was)). It also expressly extends to ancillary relief such as injunctions and other equitable remedies to prevent the scheme of the Act from being defeated. Such ancillary orders are, as the Full Court observed in Talacko at [17], “neither novel or unusual”: see also Storey at 557 (Gibbs CJ).

19    This section of the Act has been held to provide the Court with sufficient power to make orders against a bankrupt for the vacation of property, issuing a warrant of possession and for the sale of a property in circumstances where the bankrupt is not complying with his or her obligations under the Act: see Coshott at [94]. Button J in Michell (Trustee) v Sinnott, in the matter of Sinnott [2023] FCA 464 at [29] collected a cohort of cases where the exercise of this power under s 30(1)(b) has been engaged in similar circumstances, to which I gratefully refer and adopt. To those can also be added the observation of Tracey J in Horne (as trustee of the bankrupt estate of Sekulovksi) v Sekulovski [2009] FCA 1164 at [8].

20    Also relevant to this application is s 77 of the Act, which provides the duties of bankrupts as to discovery and the like of property. That section imposes various duties on the bankrupt, unless excused by the trustee or prevented by illness or other sufficient cause.

21    The Trustee also relies on s 77 of the Act which requires, amongst other matters in sub-paragraph (1)(g) that the bankrupt “aid to the utmost of his or her power in the administration of his or her estate”.

22    In essence, s 77 imposes an obligation on the bankrupt to cooperate with the trustee: Re Bond; Ex Parte Ramsay (1994) 54 FCR 394; [1994] FCA 1052 at 401 (Sheppard J). In this context I have also had regard to s 19 of the Act which refers to and provides the duties of the trustee. Relevantly, the duties include taking appropriate steps to recover property for the benefit of the estate, taking whatever action is practicable to try and ensure that the bankrupt discharges all of the bankrupt's duties under this Act, and administering the estate as efficiently as possible by avoiding unnecessary expense: see ss 19(1)(f), (g) and (j).

23    It is clear that the Court does have power pursuant to s 30(1)(b) and s 77(1)(g) of the Act to make orders for possession.

(3)    Does the Property form part of the bankrupt estate?

24    The Trustee has given evidence, including by way of documents and searches from Queensland Titles Registry that the Property was solely in the name of Ms Capell at the time of her bankruptcy. The Trustee has taken steps to have the Property registered in the name of “The trustee of the property of Toni Monique Capell, a bankrupt”.

25    Pursuant to s 58 of the Act, the property of the bankrupt vests in the trustee upon the making of the sequestration order.

26    The Property does form part of Ms Capell’s bankrupt estate, and the Applicant is trustee of her bankrupt estate.

(4)    Are the orders sought necessary?

27    The sequestration order in this case was made on 11 October 2023. The Trustee issued a notice to vacate the Property under the cover of a letter dated 3 September 2025. The Notice to vacate provided 35 days to vacate and deliver possession of the Property to the Trustee, which was by 9 October 2025. Ms Capell remains in possession of the Property despite that notice to vacate having been issued. The Trustee requires the sale of the Property to meet or to be able to pay the outstanding creditors and for the proper administration of the bankrupt estate. The Trustee has filed with the Court affidavit material which provides evidence of the steps taken and the administration of the estate to date.

28    The Trustee is acting in accordance with his duties under the Act by bringing this application and seeking to take steps to recover property for the benefit of the creditors of the bankrupt.

29    The originating application of the Trustee filed on 3 November 2025 sought that the Property be delivered up by way of vacant possession within 30 days.

30    It is fair to observe that Ms Capell has been on notice of this application and the requirement to vacate the Property for some time. Ms Capell has known since receiving the notice to vacate in September 2025 that she would be required to vacate and deliver possession of the Property. Further, by way of the substituted orders and Judgment, Ms Capell would be aware of these proceedings by the Trustee, seeking orders of the Court for her to deliver up vacate possession. Ms Capell would have earlier been aware on being declared bankrupt in October 2023 that the Property then vested in her trustee in bankruptcy.

31    There is no evidence from Ms Capell regarding a sufficient and reasonable period of time for which she will be able to provide vacant possession of the Property.

32    Although the Trustee submitted that the period of 30 days was appropriate, no specific prejudice was submitted would be encountered if a longer period was allowed.

33    In all the circumstances, a slightly longer period is appropriate. I will make the Orders sought but on the basis that Ms Capell deliver up vacate possession within 45 days of today. That is by Monday 13 July 2026.

34    The title search provided by the Trustee, which records the Trustee as the registered owner, has no mortgage registered on the Property. The Trustee gives evidence, which I accept, that a writ which was registered on the title has since expired.

COSTS

35    The Trustee sought an order that the costs of and incidental to this application be costs of the administration of Ms Capell’s bankruptcy. That is an appropriate order in relation to the costs of this application.

CONCLUSION

36    For those reasons, I will make orders largely in the form of orders sought in the Trustee’s originating application for Ms Capell to delivery vacate possession of the Property.

Associate:    

Dated:    10 June 2026