FEDERAL CIRCUIT COURT OF AUSTRALIA
PRENTICE v CONSTANTINIDIS (No.2)	[2015] FCCA 904	

Catchwords: 
BANKRUPTCY – Application by trustee for possession of land of which bankrupt was the registered proprietor – whether the land is subject to a lease – whether there is sufficient equity in the land to justify trustee seeking order for possession – whether there are any occupiers of the land other than the bankrupt – whether notice to occupants should be given before Court may consider whether an order for possession should be made – application adjourned to permit service of notice to occupants.	

Legislation:
Bankruptcy Act 1966 (Cth), ss.30(1)(b), 58, 77(1)(e), 77(1)(g)
Civil Procedure Act 2005 (NSW), ss.20, 92, 104(1)
Federal Circuit Court of Australia Act 1999 (Cth), ss.5, 78, 78(2), 78(3)
Federal Circuit Court Rules 2001 (Cth), rr.29.11, 29.11(1), 29.11(2)
Uniform Civil Procedure Rules 2005 (NSW), rr.6.8(1), 6.8(2), 39.1, 39.2, 39.3
Uniform Civil Procedure Rules 2005 (NSW), Form 5, Form 59	

Capital Access Australia Pty Ltd v Hraiki [2011] NSWSC 109
Cook v Tagamilitsky [2001] FMCA 117
Horne (as trustee of the Bankrupt Estate of Sekulovski) v Sekulovski [2009] FCA 1164
Vince (Trustee), in the matter of Sopikiotis (Bankrupt) v Sopikiotis (No.2) [2012] FCA 1298	

Applicant:	Maxwell William Prentice As Trustee Of The Bankrupt Estate Of George Constantinidis	

Respondent:	George Constantinidis (a Bankrupt)	

File Number:	SYG 2805 of 2014	

Judgment of:	Judge Manousaridis	

Hearing date:	31 March 2015	

Delivered at:	Sydney	

Delivered on:	14 April 2015	

REPRESENTATION
Counsel for the Applicant:	Mr D L Cook	

Solicitors for the Applicant:	Polczynski Lawyers	

Respondent in person assisted by Ms G Patania	

ORDERS
(1)	The application filed on 9 October 2014 is adjourned for hearing at 10.15 am on 19 May 2015.
(2)	By 21 April 2015 the applicant serve on the occupiers of the property known as 17 Woodford Road, Rockdale, in the State of New South Wales, and more particularly described as Lot 13 in plan 5076 and Lot A in plan 314636 being all of the land comprised in Certificate of Title Auto Consul 4602-154, a notice to occupier in the form or substantially in the form of the notice set out in Annexure A to these orders attaching a copy of the application filed on 9 October 2014.
(3)	The notice to occupier referred to in order (2) may be served on the occupiers of the property referred to in order (2) in the manner provided for by r.6.8(2) of the Uniform Civil Procedure Rules 2005 (NSW).

ANNEXURE A
NOTICE TO OCCUPIER

COURT DETAILS 	
Court 	Federal Circuit Court of Australia	
Registry 	Sydney	
Case number 	SYG2805/2014	

TITLE OF PROCEEDINGS 	
Applicant 	Maxwell William Prentice as trustee of the Bankrupt Estate of George Constantinidis 
	
Respondent 	George Constantinidis (A Bankrupt)	
		
OCCUPIER'S DETAILS 	
Name (if known) 		
Land being occupied 		

	
NOTICE TO OCCUPIER
1.	Attached to this notice is the application filed in these proceedings. 
2.	The applicant is claiming possession of part or all of the land you are occupying. 
3.	You may apply to the Court for an order that you be added as a respondent in the proceedings.
4.	If you are not already a respondent in these proceedings and you do not apply to the Court within 10 days after this notice is served on you:
(a)	the Court may enter judgment or make an order in your absence, and
(b)	you may be evicted from the land.
5 	You can get further information about the application and this notice from:
A legal practitioner.
The Court registry for limited procedural information.

SIGNATURE 	
Signature of legal representative 		
Capacity 	[eg solicitor, authorised officer, role of party] 	
Date of signature 		

(1)	
FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT Sydney	
SYG 2805 of 2014
Maxwell William Prentice As Trustee Of The Bankrupt Estate Of George Constantinidis	
Applicant

And

George Constantinidis (a Bankrupt)	
Respondent

REASONS FOR JUDGMENT
Introduction
1.	Before the Court is an application by the trustee in bankruptcy of the estate of George Constantinidis for orders designed to give the trustee possession of a property of which Mr Constantinidis was the registered proprietor (Property). 
2.	Mr Constantinidis ceased to be the registered proprietor of the Property on or about 21 May 2014 when the trustee became the registered proprietor. The trustee became the registered proprietor on the ground that the interest Mr Constantinidis had in the Property vested in the trustee pursuant to s.58 of the Bankruptcy Act 1966 (Cth) (Act) on the making of the sequestration order against the estate of Mr Constantinidis in March 2014.
3.	Mr Constantinidis opposes the Court making the orders on three grounds. First, he asserts there is a lease over the Property, the lessee of which is A.S.P.E.C.T Australasian South Pacific Educational & Commercial Training Incorporated Inc (Aspect). Second, he claims there is no equity in the Property. Third, Aspect has granted sub-leases to persons, but the trustee has not served on Aspect nor on any of the sub-tenants a notice to vacate.
Power to make orders
4.	There is no question the Court has power to make orders of the type the trustee seeks. The sources of the Court’s power lie in the separate or combined operation of s.77(1)(e), (g) and s.30(1)(b) of the Act. Paragraph (e) of s.77(1) provides that, unless excused by the trustee or prevented by illness or other sufficient cause, the bankrupt must “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”. Paragraph (g) of s.77(1) of the Act provides that, unless excused by the trustee, or prevented by illness or other sufficient cause, the bankrupt must “aid to the utmost of his or her power in the administration of his or her estate”. And paragraph (b) of s.30(1) of the Act provides that the Court may make such orders as the Court considers necessary for the purposes of carrying out or giving effect to the Act.
Is the Property subject to a lease?
5.	The only evidence that Aspect has a lease over the Property is the assertion Mrs Constantinidis makes in an affidavit that “Aspect Inc lease the entire property known as 17 Woodford Rd Rockdale”. Mrs Constantinidis also asserts in her affidavit that Aspect subleases that property to nine other tenants.
6.	I do not accept Aspect holds any lease over the Property. Mrs Constantinidis did not annex any written lease to her affidavit to support her assertion that Aspect leases the Property. If a written lease did exist, Mrs Constantinidis would have annexed it to her affidavit. I asked Mrs Constantinidis why, having asserted in her affidavit there was a lease over the Property, she did not put the lease in that affidavit. Mrs Constantinidis said “[t]hat’s a very good point, your Honour. I guess I missed that one”. That Mrs Constantinidis did not annex the lease to her affidavit by itself leads me not to accept Mrs Constantinidis’ assertion that Aspect holds a lease over the Property. But there are additional reasons why I do not accept there is such a lease.
7.	First, Mr Constantinidis did not apply for a short adjournment to make any effort to bring before the Court the lease Mrs Constantinidis asserts Aspect holds over the Property, even though Mrs Constantinidis informed me that the lease was in the office of Aspect in Rockdale. If, in truth, a written lease was in an office in Rockdale, Mrs Constantinidis would have applied for a short adjournment to attempt to arrange for a person to attend the office in Rockdale, locate the lease, and arrange for it to be faxed or a scanned copy emailed to the Court. Instead, Mrs Constantinidis answered in the negative questions I asked about whether there was any person in the office at Rockdale who might be able to locate the lease and fax it to the Court, or whether there was some other person who could be contacted by telephone who might be able to go to the Rockdale office to obtain the lease. And Mrs Constantinidis did not suggest any other means by which a copy of the lease that she claimed was in the office at Rockdale could be provided to the Court.
8.	Second, on 10 July 2014 Mrs Constantinidis, purportedly as secretary of Aspect, sent by email a letter dated 10 July 2014 to the trustee in which she stated:
A.S.P.E.C.T. INC is the primary lease holder of these premises. As a current lease has been in place since the year 2001 and subsequently renewed in 2011, as a not for profit organization one of the charters that it embodies is to provide low income and emergency accommodation to needy persons.
9.	By letter dated 17 July 2014, the trustee responded to this part of Mrs Constantinidis’ letter as follows:
There is no record of the purported lease between George Constantinidis and A.S.P.E.C.T. INC recorded on the title of the property in the records of the Land Titles Office. Furthermore, my enquiries with the relevant authorities failed to find any reference to A.S.P.E.C.T. INC being a registered organisation charitable or otherwise. Accordingly, I do not accept that any such lease exists.
10.	Given the trustee informed Mrs Constantinidis as long ago as 17 July 2014 that he disputed there was any lease with Aspect, it would be reasonable to expect that Mrs Constantinidis would have provided a copy of the lease to the trustee. She has not done so.
11.	Third, there are conflicting descriptions in the evidence about the nature of the business Aspect undertakes. In the passage from the letter dated 10 July 2014 to the trustee I have set out above, Mrs Constantinidis refers to Aspect’s purpose being “to provide low income and emergency accommodation to needy persons”. In the application to incorporate Aspect dated 22 February 2011, and signed by Mr Constantinidis, the objects of Aspect are stated to be “Provide Educational Assistance & Equipment to Vanuatu”. In another letter dated 14 July 2014 Mrs Constantinidis stated that Mr Constantinidis “is not associated to our organization other than as a casual volunteer in the area of second hand clothing export department”. And in a file note taken by an employee of the trustee of a conversation she had with Mr Constantinidis on 11 March 2014, the employee recorded that Mr Constantinidis “confirmed that he is unemployed and that he does charity work for Autism Spectrum Australia (Aspect)”. These different statements of purpose give rise to a doubt about whether Aspect is a bona fide association, that is, an association which in fact undertakes or intends to undertake the objects for which it has been formed. The relevance of that doubt is that, unless it is removed by my being satisfied on the balance of probabilities that Aspect is a bona fide association, I cannot be satisfied that any lease Aspect may have entered into with Mr Constantinidis is not a sham. There is nothing in the material before me that satisfies me that Aspect is a bona fide association.
12.	Although I am not satisfied Mr Constantinidis granted a lease to Aspect, there is evidence there have been and there may currently be occupants of the Property, and that those occupants have paid and are paying money for their occupation. First, there is a file note of Ms Bennett, a senior accountant assisting the trustee, recording a conversation with Mr Constantinidis on 11 March 2014. She recorded Mr Constantinidis stating that one of his properties is a rental and does receive an income, although not enough to cover the mortgage repayments. Second, there is an email Ms Bennett sent on 18 March 2014 to a process server in which Ms Bennett identified two properties, one of which is the Property, and stated she believes “both these properties are leased”. Third, there is a file note made by a process server about his visiting the Property at around 2.30pm on 31 May 2014 and meeting “the tennant [sic] of the front part of the house”. Finally, there is the evidence Mrs Constantinidis gave in cross-examination. In broad terms, Mrs Constantinidis said there are tenants who pay rent to an account that Aspect holds, and that that money is used to make mortgage payments. 
13.	Although I make no finding about whether money has been or is paid to Aspect, I find there may be persons other than Mr Constantinidis who occupy the Property who pay money for their occupation. The question that arises is whether, given the possibility of there being such occupants, I should make any orders at this stage or modify the orders I would otherwise be disposed to make. I will deal with this question when I consider the third ground on which Mr Constantinidis opposes the Court making the orders the trustee seeks.
Is there any equity in the Property?
14.	Whether or not there is equity in the Property is a matter that is relevant to whether the Court should make an order for possession under s.30(1)(b) of the Act. The power conferred by s.30(1)(b) is discretionary. The absence of any evidence of the bankrupt estate having equity in the property of which the trustee seeks to gain possession may indicate that the trustee is not exercising his powers for the purposes of carrying out or giving effect to the Act. 
15.	The trustee, in an affidavit he has sworn, says he seeks possession of the Property because he believes there is equity in the Rockdale Property that may be available to the creditors of the estate of Mr Constantinidis. The trustee bases his belief on the following matters:
a)	In addition to the Property, Mr Constantinidis had a 50% interest in another property (Erowal Property).
b)	The Property and the Erowal Property are each encumbered by two mortgages granted to Westpac to secure two debts. As at no later than 2 October 2014, the debts were $496,561.00 and $397,323.00 respectively. 
c)	The trustee received a market appraisal on 19 March 2014 which indicates the Rockdale Property could fetch between $1,000,000 and $1,100,000, and on 23 July 2014 that appraisal was updated so that the estimated sale price was between $1,000,000 and $1,050,000.
d)	The trustee in his affidavit assumes that, as at 2 October 2014, the Erowal Property had a value of $165,000. Mr Constantinidis accepted that that represented a fair estimate of the value of the Erowal Property.
16.	Mr Constantinidis submitted there is no equity in the Property. That submission, however, was based on the assertion that Mrs Constantinidis is entitled to an amount in the range of $500,000 to $550,000 from Mr Constantinidis. The basis of her claim, Mr Constantinidis submits, is rights Mrs Constantinidis has under the Family Law Act 1975 (Cth) (FL Act).
17.	I am satisfied it is open to the trustee to reasonably believe there is sufficient equity in the Property to warrant his seeking possession of the Property. I do not accept Mr Constantinidis’ submission. There is no evidence on the basis of which I could reasonably find that Mrs Constantinidis has an interest in the Property, or that she will be entitled to receive an amount in the range of $500,000 to $550,000 from Mr Constantinidis. The more reasonable assumption is that, if Mrs Constantinidis does have any rights under the FL Act, it would be a right to a share of such equity Mr Constantinidis has in the Property. That will still render it reasonable for the trustee to believe there is sufficient equity in the Property to justify his seeking possession of the Property.
Notice to vacate
18.	As I noted earlier in these reasons, Mr Constantinidis claims no notice to vacate had been served on Aspect or on any of the subtenants. Given that I have found Aspect does not hold a lease over the Property, it follows I do not accept Aspect is the sub-lessor of leases granted to sub-lessees. As I have also found, however, there may be persons other than Mr Constantinidis who occupy the Property. The question I must consider, therefore, is whether the possibility of there being occupants on the Property should prevent me from making any of the orders the trustee seeks, and in particular, an order for possession, and if not whether the potential presence of occupants requires me to frame orders I propose to make to take into account the potential presence of such occupants. This requires me to consider the means by which orders of this Court may be enforced.
Enforcement of orders of the Federal Circuit Court of Australia
19.	The starting point is s.78(2) of the Federal Circuit Court of Australia Act 1999 (Cth) which provides:
A person in whose favour a judgment of the Federal Circuit Court of Australia is given is entitled to the same remedies for enforcement of the judgment in a State or Territory, by execution or otherwise, as are allowed in like cases by the laws of that State or Territory to persons in whose favour a judgment of the Supreme Court of that State or Territory is given.
20.	Subsection 78(3) provides that s.78(2) of the FCC Act “has effect subject to the Rules of Court”, that is, subject to the Federal Circuit Court Rules 2001 (Cth) (FCC Rules). The relevant rule is r.29.11, sub rules 1 and 2 of which provide as follows:
(1)	A party may apply to the Court to issue a writ, order or any other means of enforcement of a judgment or order that can be issued or taken in the Supreme Court of the State or Territory in which the judgment or order has been made, as if it were a judgment or order of that Supreme Court.
(2)	An order made under subrule (1) authorises the Sheriff, when executing the orders of the Court, to act in the same manner as a similar officer of the Supreme Court of the State or Territory in which the order is being executed is entitled to act.
21.	There are three observations that may be made about these provisions. First, section 78 of the FCC Act and r.29.11 of the FCC Rules distinguish between, on the one hand, a judgment or order, and, on the other hand, “remedies for enforcement of the judgment” and “a writ, order or any other means of enforcement of a judgment or order”. The word “judgment” is defined in s.5 of the FCC Act to mean, among other things, a “judgment, decree or order, whether final or interlocutory”. In broad terms, the distinction is between, on the one hand, forms of words that reflect the adjudication by this Court of claims for a legal remedy, and on the other hand, processes for the enforcement of what the Court’s words require or imply. 
22.	Second, the only judgments or orders of the Court to which s.78 and r.29.11 can apply are judgments or orders of the sort that a State Supreme Court can make. That follows from s.78 and r.29.11 only permitting such writs, orders, and enforcement proceedings as are available to enforce judgments or orders of the State Supreme Court. If this Court makes an order which could not be enforceable by any of the means of enforcement available in that Supreme Court, s.78 and r.29.11 would not apply. Given, however, the breadth of the definitions of “judgment” contained in the FCC Act and statutes and rules of court that govern the procedures of State Supreme Courts, it is difficult to imagine any judgment or order of this Court not being a judgment or order of the sort a State Supreme Court can make.
23.	Third, the writs, orders, or other means of enforcement of a judgment that can be issued or taken under s.78 of the FCC Act and r.29.11 of the FCC Rules are restricted to those that can be issued or taken by the relevant State Supreme Court. From this it follows that, when issuing writs or orders, or when taking other means to enforce a judgment of this Court under s.78 of the FCC Act and r.29.11 of the FCC Rules, this Court must follow or, at the very least, take into account the rules that apply to the relevant State Supreme Court when that Supreme Court issues writs or orders, or when other means are taken to enforce a judgment in the Supreme Court.
24.	In considering, therefore, whether the possible presence of occupants on the Property should prevent me from making any order or, at least, influence the form of the orders I should make, I must address the following questions:
a)	What is the nature of the principal orders the trustee is seeking?
b)	Are the orders the trustee is seeking in the application before me orders of the type the Supreme Court of New South Wales (SCNSW) has power to make?
c)	If (b) is answered in the affirmative, what writs or orders may be issued by the SCNSW, or what other means are available in the SCNSW to be taken to enforce such orders, and what rules govern the issuing of the writs or orders or the taking of other means to enforce such orders?
Principal orders sought by trustee
25.	The principal orders the trustee seeks is that Mr Constantinidis “deliver up vacant possession of the” Property and that, if he does not do so within fourteen days of the making of such order, a writ of possession issue forthwith. The other orders the trustee seeks are incidental to these orders.
26.	It is clear, therefore, that the principal relief the trustee seeks is an order for possession of the Property.
Are the orders sought by the trustee of the type the SCNSW can make?
27.	The SCNSW has jurisdiction to make an order for possession. It is provided for in s.20 of the Civil Procedure Act 2005 (NSW) (CPA) as follows:
A claim for judgment for possession of land takes the place of a claim in an action for ejectment that could have been brought under the practice of the Supreme Court as it was immediately before 1 July 1972.
28.	The nature of a claim for possession of land referred to in s.20 of the CPA is indirectly, and only partially explained in s.92 of the CPA, which provides:
Judgment for possession of land takes the place of, and, subject to the uniform rules, has the same effect as, a judgment for the claimant in ejectment given under the practice of the Supreme Court as it was immediately before 1 July 1972.
29.	The form of judgment in ejectment was “it is considered, that the said John Doe do recover against the said C.D. his said term yet to come of and in the tenements aforesaid with the appurtenances”; and the effect of such judgment was described in 1846 to be as follows:
By the judgment in ejectment, the plaintiff’s lessor [i.e., the real plaintiff] obtains possession of the lands recovered by the verdict, but does not acquire any title thereto, except such as he previously had. If therefore, he has a freehold interest in them, he is in as a freeholder; if he has a chattel interest [i.e., a lease], he is in as a termor [i.e., a lessee] . . . . Since, then, the claimant has a mere possession given to him by the judgment, it may be asked how he can become seised according to his title if he have more than a chattel interest in the land. This is effected by another fiction. It is a rule of law, that when a man having a title to an estate comes into possession of it by lawful means, he shall be in possession according to his title; and therefore when possession is once given by the sheriff, the possession and title are said to unite, and the plaintiff’s lessor holds the lands according to the nature of his interest in them.
30.	In modern practice, the form of the words of a judgment for possession of land pronounced by the SCNSW is simply “judgment for possession of the land”.  The meaning of that expression does not much matter because, once a judgment in this form is pronounced, section 104(1) of the CPA provides that such judgment “may be enforced by a writ of possession”. The writ of possession is a prescribed form. It is an order directing the Sheriff to enter the land described in the writ and “cause the person entitled to execution of judgment to have possession of it”.
31.	There is no question, therefore, that the principal orders the trustee seeks are orders of the type the SCNSW has power to make.
Rules governing the issuing of writs of possession
32.	Under UCPR r.39.1, a writ for the possession of land (which, for the purposes of Part 39 of the UCPR falls within the broader class of writs of execution in general) may not be issued except by leave of the SCNSW. Such leave may be sought in the notice of motion that must be filed under UCPR r.39.2 when a party applies for a writ of execution. UCPR r.39.3(2) specifies the affidavit evidence that must support an application for a writ for the possession of land. The evidence identified in UCPR r.39.3(2) is also identified in Form 59, being the prescribed form of notice of motion and supporting affidavit that a person applying for a writ for the possession of land may file.
33.	The prescribed form requires the deponent to swear or affirm one of two things. One is that “[n]o persons (other than parties to the proceedings) were in occupation of the whole or part of the land when the statement of claim that sought possession of the land was filed”. The other is:
There were (or may have been) person(s) other than the parties to the proceedings in occupation of the whole or part of the land when the statement of claim that sought possession of the land was filed, namely: [provide names if known, or describe eg “no more than 3 unidentified occupiers”, “4 squatters who refused to name themselves and who could not otherwise be identified” etc] (occupier(s)).
34.	If the deponent is aware of occupiers, Form 59 requires the deponent to specify one or more of the matters identified in the form. One is:
The occupier(s) referred to in the preceding paragraph has/have been served with the statement of claim and a notice to occupier under UCPR 6.8. The time allowed for the occupier(s) to respond to the notice has now passed.
35.	The “notice to occupier” referred to in this passage is that specified in UCPR r.6.8(1). That sub rule provides that if, when proceedings for possession of land are commenced, a person not joined as a defendant is in occupation of the whole or any part of the land, the plaintiff either must state in the originating process that the plaintiff does not seek to disturb the occupier’s occupation of the land, or the plaintiff must serve the originating process on the occupier together with a notice to the effect that the occupier may apply to the court for an order that the occupier be added as a defendant and, if the occupier does not apply within ten days after service, the occupier may be evicted under a judgment entered in the occupier’s absence. The UCPR prescribes a form of the notice that a plaintiff must give to the occupant pursuant to UCPR r.6.8(1).
36.	UCPR r.6.8(2) provides that the documents UCPR r.6.8(1) requires to be served on an occupier may be served on the occupier personally or by leaving the documents on the land concerned addressed to the occupier by name or addressed simply “to the occupier”.
Should an order for possession be made?
37.	There is no evidence the trustee has caused any notice to the effect specified in UCPR r.6.8(1) to be served on any occupier of the Property. Nor has the trustee filed any evidence to the effect that no persons were in occupation of the Property at the time the trustee filed his application in this matter, or at any other time. In those circumstances, if the trustee applied for an order for a writ for possession of the Property in the SCNSW, it is unlikely a writ for the possession of land would have been issued to him because he would not have complied with UCPR r.39.3. 
38.	For that reason, I am not prepared at this stage to make an order for possession of the Property or any other order claimed by the trustee in his application. 
Further conduct of proceedings
39.	The only orders I propose to make is to adjourn the hearing of the trustee’s application to 10.15 am on 19 May 2015 and direct that by 21 April 2015 the trustee serve on the occupiers in the manner specified by UCPR r. 6.8(2) a copy of the application filed on 9 October 2014 attached to a notice substantially in the form of Form 5 of the UCPR. The form of the notice the trustee must serve is set out in Annexure A to the orders I propose to make.
40.	If no person claiming to be an occupant of the Property makes an application to the Court before the day to which the matter will be adjourned, and the trustee files evidence that demonstrates service of the application and notice to occupants, I expect I will make an order for possession of the Property and an order that a writ for the possession of land be issued.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate:  

Date:  14 April 2015