Federal Court of Australia

Carrafa v Freeman, in the matter of the bankrupt estate of Freeman [2026] FCA 1401

ORDERS

THE COURT DECLARES THAT:

1.    Pursuant to s 58(1)(a) of the Bankruptcy Act 1966 (Cth), the Respondent’s interest in Unit 4, 33–35 Peterkin Street, Traralgon in the state of Victoria, more particularly described in Certificate of Title 9876 Folio 978 (Property) is vested in the Applicants.

THE COURT ORDERS THAT:

1.    Pursuant to s 134(1)(a) of the Act, the Applicants exercise a power of sale of the Property.

2.    Pursuant to s 77(l)(e) of the Act, the Respondent, within 45 days of the date of this Order:

(a)    vacate the Property and provide vacant possession of the Property to the Applicants;

(b)    remove all personal property, chattels, vehicles and rubbish that are not vested in the Applicants; and

(c)    deliver up all keys for all buildings and improvements on the Property to the Applicants at Level 17, 200 Queens Street, Melbourne.

3.    In the event that the Respondent fails to deliver up vacant possession of the Property in accordance with Order 3, a writ of possession of the Property be issued forthwith.

4.    The Applicants have sole conduct of the sale of the Property (including determining the process of sale, what, if any, reserve price be set, or sale price accepted, for the sale of the Property and the period for settlement of the sale) and are authorised to engage and instruct an agent and auctioneer of their choosing to act in relation to the sale.

5.    The Respondent must do all things that the Applicants, the selling agents and their solicitors reasonably require for the purposes of achieving a sale of the Property, including allowing such viewings and inspections of the Property for the purposes of sale to occur as the Applicants require, upon reasonable notice to the Respondent and signing any documents that are required to be signed by her in relation to the sale.

6.    The costs of and incidental to this application be costs in the bankruptcy of the Respondent.

7.    Liberty to apply on three (3) days’ written notice to the other party.

8.    A copy of these Orders be served on the Respondent in the manner specified in the Order made on 25 June 2026.

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

REASONS FOR JUDGMENT

HESPE J:

1    On 24 April 2025, a sequestration order under the Bankruptcy Act 1966 (Cth) was made against the estate of the respondent, Peta Freeman. The applicants were appointed as joint and several trustees of the respondent’s estate.

2    At the date of the applicants’ appointment, the respondent was the sole registered proprietor of the property known as Unit 4/33–35 Peterkin Street, Traralgon in the state of Victoria, being the property more particularly described in Certificate of Title Volume 9876 Folio 978 (Property).

3    On or about 19 May 2025, the applicants caused a caveat to be lodged on the Property title.

4    On 20 May 2025, the applicants unsuccessfully attempted to contact the respondent by phone. On 27 June 2025, representatives of the applicants attended the Property and attempted to speak to the occupant, who identified herself as the respondent. The respondent refused to engage with the applicants’ representatives.

5    A letter from the applicants’ solicitors were sent to the Property address, marked for the respondent’s attention on 31 October 2025. The respondent was informed that the Property had vested in the applicants as trustees of her bankrupt estate and that the applicants intended to sell the Property as part of the administration of that estate. The respondent was invited to inform the applicants’ solicitors if she wished to discuss the process required to annul her bankruptcy by 17 November 2025. The respondent did not make contact with the solicitors for the applicants.

6    By May 2026, the respondent had taken no steps to engage with the applicants or to annual her bankruptcy.

7    On 13 May 2026, the applicants applied for the following orders: declaring that the Property had vested in the applicants, requiring the respondent to vacate the Property and remove all personal property, authorising the applicants to sell the Property and requiring the respondent to do all things reasonably necessary for the applicants to achieve a sale of the Property.

8    The principal affidavit in support of the application was sworn by the first applicant on 12 May 2026. A number of affidavits of service concerning substituted service of the application and other materials were also relied upon. By those affidavits and having regard to the order for substituted service made by the Court on 25 June 2026, the respondent was informed of the hearing to be conducted on 17 September 2026. The respondent has not participated in the proceeding: she has not filed a notice of appearance, has not otherwise engaged with the applicants regarding their application and did not appear at the hearing on 17 September 2026.

CONSIDERATION

9    The applicants seek the orders in the following terms pursuant to ss 30, 58 and 77 of the Bankruptcy Act (without amendment):

(1)    A declaration that pursuant to section 58(1)(a) of the Bankruptcy Act 1966 (Commonwealth) (the Act), the Respondent’s interest in Unit 4, 33-35 Peterkin Street, Traralgon in the State of Victoria, more particularly described in Certificate of Title 9876 folio 978 (the Property) vested in the Applicants.

(2)    The Applicants be appointed forthwith trustees for the sale of the Property.

(3)    Pursuant to sections 30 and 77(l)(e) of the Act, the Respondent, within 28 days of the date of this Order:

(a)    vacate the Property and provide give vacant possession of the Property to the Applicants;

(b)    deliver up all keys for all buildings and improvements on the Property to the Applicants at Level 17, 200 Queens Street, Melbourne.

(4)    By no later than the time stipulated in Order 3, the Respondent remove all personal property, chattels, vehicles and rubbish that are not vested in the Applicants (Personal Effects).

(5)    In the event that the Respondent fails to deliver up vacant possession of the Property, in accordance with Order 3, the Applicants have leave for apply forthwith for a writ of possession of the Property.

(6)    In the event that the Respondent does not comply with Order 4, the Applicants are authorised, upon obtaining possession of the Property, to remove and dispose of the Personal Effects in any lawful manner as they see fit without further notice to the Respondent.

(7)    The Property be sold (either by public auction or private treaty as the Applicants determine) on the terms and conditions in the relevant standard form contract for sale of land prepared by the Law Institute of Victoria subject to any additional special conditions reasonably required by the Applicants.

(8)    The Applicants have sole conduct of the sale of the Property (including determining what, if any, reserve price be set, or sale price accepted, for the sale of the Property and the period for settlement of the sale) and are authorised to engage and instruct an agent and auctioneer of their choosing to act in relation to the sale.

(9)    The Respondent must do all things reasonably (including signing any documents that are required to signed by her in relation to the sale) that the Applicants, the selling agents and their solicitors require for the purposes of achieving a sale of the Property, including prior to the Respondent providing vacant possession of the Property, allowing such viewings and inspections of the Property for the purposes of sale to occur as the Applicants require, upon reasonable notice to the Respondent.

(10)    The Respondent pay the Applicants’ costs of this application including reserved costs.

(11)    Such further or other order as the Court considers necessary or appropriate.

(12)    Liberty for apply on three (3) days written notice to the other party.

(13)    A copy of these Orders as authenticated by served on the Respondent in the manner specified in the Court's Order made on 25 June 2026.

10    The Court’s general power in relation to bankruptcy is set out in s 30(1) of the Bankruptcy Act:

(1)    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.

11    Section 30(1) has been described as “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 [1985] FCA 141, cited with approval in Talacko v Talacko [2010] FCAFC 54; (2010) 183 FCR 311 at [18] (Gray, Mansfield and McKerracher JJ) and Coshott v Prentice [2014] FCAFC 88; (2014) 221 FCR 450 at [93] (Siopis, Katzmann and Perry JJ). The section has been held to provide 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), in the matter of Sopikiotis (Bankrupt) v Sopikiotis (No 2) [2012] FCA 1298 at [4] (Bromberg J); Pattison v McKinnon [2008] FCA 1624 at [2] (Jessup J); Coshott at [94].

12    When a person becomes a bankrupt, s 58 of the Bankruptcy Act vests the property of the bankrupt in the Official Trustee or a registered trustee by virtue of s 156A. Household property of the bankrupt that is of a kind prescribed by the regulations does not vest in the trustee of a bankrupt’s estate: Bankruptcy Act s 116(2)(b); Bankruptcy Regulations 2021 (Cth) pt 6 div 3. This includes basic household property.

13    Section 77(1) of the Bankruptcy Act imposes various duties on the respondent as a bankrupt, including the duty to “aid to the utmost of his or her power in the administration of his or her estate”: s 77(1)(g).

14    Section 134(1) of the Bankruptcy Act confers powers on the trustee in bankruptcy, including the power to “sell all or any part of the property of the bankrupt”: s 134(1)(a).

15    Section 19 of the Bankruptcy Act sets out the duties of the trustee, including “taking appropriate steps to recover property for the benefit of the estate”, “taking whatever action is practicable to try to 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 expenses”.

16    Because the respondent was the sole proprietor of the Property prior to becoming bankrupt, there is no issue of co-ownership of the kind discussed in Coshott at [100].

CONCLUSION

17    I am satisfied that the Court has the necessary power to make the following orders and I am satisfied that it is appropriate that I make orders in in the following terms in order to give effect to the Bankruptcy Act, and to support the applicants in the discharge of their functions and duties under the Bankruptcy Act:

(1)    A declaration that pursuant to s 58(1)(a) of the Bankruptcy Act 1966 (Cth), the Respondent’s interest in Unit 4, 33–35 Peterkin Street, Traralgon in the state of Victoria, more particularly described in Certificate of Title 9876 Folio 978 (Property) is vested in the Applicants.

(2)    Pursuant to s 134(1)(a) of the Act, the Applicants exercise a power of sale of the Property.

(3)    Pursuant to s 77(1)(e) of the Act, the Respondent, within 45 days of the date of this Order:

(a)    vacate the Property and provide vacant possession of the Property to the Applicants;

(b)    remove all personal property, chattels, vehicles and rubbish that are not vested in the Applicants; and

(c)    deliver up all keys for all buildings and improvements on the Property to the Applicants at Level 17, 200 Queens Street, Melbourne.

(4)    In the event that the Respondent fails to deliver up vacant possession of the Property in accordance with Order 3, a writ of possession of the Property be issued forthwith.

(5)    The Applicants have sole conduct of the sale of the Property (including determining the process of sale, what, if any, reserve price be set, or sale price accepted, for the sale of the Property and the period for settlement of the sale) and are authorised to engage and instruct an agent and auctioneer of their choosing to act in relation to the sale.

(6)    The Respondent must do all things that the Applicants, the selling agents and their solicitors reasonably require for the purposes of achieving a sale of the Property, including allowing such viewings and inspections of the Property for the purposes of sale to occur as the Applicants require, upon reasonable notice to the Respondent and signing any documents that are required to be signed by her in relation to the sale.

(7)    The costs of and incidental to this application be costs in the bankruptcy of the Respondent.

(8)    Liberty to apply on three (3) days’ written notice to the other party.

(9)    A copy of these Orders be served on the Respondent in the manner specified in the Order made on 25 June 2026.

18    I am satisfied that there is utility in making the declaration sought in the present case, given the history of this matter. I am not satisfied that there is no legal controversy about the property having vested in the applicants given the respondent’s lack of engagement and apparent denial of the fact of her bankruptcy: cf Lo Pilato (Trustee), in the matter of Ghougassian (Bankrupt) v Ghougassian (No 3) [2022] FCA 1532 at [27]–[28] (Markovic J); Michell (Trustee) v Sinnott, in the matter of Sinnott [2023] FCA 464 at [35] (Button J).

19    I am not satisfied that orders enabling the applicants to dispose of personal property be made at this time. As noted above, such property does not vest in the trustees in bankruptcy. If the respondent fails to comply with the orders of the Court, any issues arising from that non-compliance may be addressed at that time. I have not made orders that I consider are subsumed in the terms of other orders.

20    The applicants sought a period of 28 days for the respondent to vacate and deliver up all keys to the Property, and to remove all personal property. As it is not clear whether the respondent continues to reside at the Property, I consider that a reasonable period of time ought to be afforded to the respondent to secure alternative accommodation. I consider that a period of 45 days is a reasonable period, having regard also to the need to progress the administration of the bankrupt estate.

21    The applicants have been largely successful in obtaining the orders sought in their application. Costs of the application are to be treated as costs of the bankruptcy and recovered from the estate in accordance with s 109 of the Bankruptcy Act.

Associate:

Dated:    22 September 2026