Leslie (Trustee) v White (Bankrupt) - Section 73 Proposal and Vacant Possession

Original Word Document (87.3 KB) Federal Court of Australia

Leslie (Trustee) v White (Bankrupt), in the matter of White [2026] FCA 314

| File number: | QUD 637 of 2025 |
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| Judgment of: | WHEATLEY J |
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| Date of judgment: | 24 March 2026 |
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| Date of Publication of Reasons: | 8 April 2026 |
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| Catchwords: | PRACTICE AND PROCEDURE — Application for adjournment — Section 73 proposal to creditors — Whether the proposal is bona fide — Where proposal insufficient — Whether adjournment should be otherwise allowed — Adjournment application declined

BANKRUPTCY AND INSOLVENCY — Application for delivery of vacant possession of real property and removal of personal property — Whether the Court has power to make orders for possession — Whether orders sought are necessary — Orders made |
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| Legislation: | Bankruptcy Act 1966 (Cth) ss 19, 30, 58, 73, 77

Corporations Act 2001 (Cth) ss 201B, 206B

Federal Court of Australia Act 1976 (Cth) Pt VB

Federal Court (Bankruptcy Rules) 2016 (Cth) r 2.04

Federal Court Rules (2011) (Cth) r 4.03 |
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| Cases cited: | Coshott v Prentice (2014) 221 FCR 450; [2014] FCAFC 88

Hacker v Weston [2015] FCA 363

Mandri v Nicholls as Trustee for the Bankrupt Estate of Mandri (2017) 326 FLR 360; [2017] FCCA 2728

Michell (Trustee) v Sinnott, in the matter of Sinnott [2023] FCA 464

Re Bond; Ex Parte Ramsay (1994) 54 FCR 394; [1994] FCA 1052

Vale v Sutherland (2009) 237 CLR 638; [2009] HCA 26 |
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| Division: | General Division |
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| Registry: | Queensland |
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| National Practice Area: | Commercial and Corporations |
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| Sub-area: | General and Personal Insolvency |
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| Number of paragraphs: | 55 |
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| Date of hearing: | 24 March 2026 |
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| Solicitor for the Applicant: | Mr M Schneider of Hamilton Locke |
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| Solicitor for the Respondent: | Ms C Kennedy of RA Law Group |
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ORDERS

| | | QUD 637 of 2025 |
| IN THE MATTER OF LUKE ANTHONY WHITE | | |
| BETWEEN: | ASHLEY JADE LESLIE AS TRUSTEE OF THE BANKRUPT ESTATE OF LUKE ANTHONY WHITE

Applicant | |
| AND: | LUKE ANTHONY WHITE, A BANKRUPT

Respondent | |

| order made by: | WHEATLEY J |
| DATE OF ORDER: | 24 MARCH 2026 |
THE COURT ORDERS THAT:

1. The Respondent, Luke Anthony White, deliver up vacant possession of the property identified as Lot 108 on RP 185539, Title Reference 16412129, more commonly known as 11-23 Herriman Court, Jimboomba, in the State of Queensland (Jimboomba Property), to the Applicant (the Trustee in bankruptcy) within 56 days of the date of today’s Order (by Tuesday 19 May 2026).

2. The Respondent deliver up all keys for all buildings and improvements of the Jimboomba Property to the Applicant within 56 days of today’s Order.

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

4. The Respondent remove from the Jimboomba Property all personal property, including vehicles, rubbish and other chattels (Personal Property) which are not vested in the Applicant within 56 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 Jimboomba Property as the Applicant sees fit.

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

7. The Applicant serve a copy of this Order on the registered mortgagee of the Jimboomba Property forthwith.

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

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

10. The Applicant’s legal costs of these proceedings be fixed on a lump sum basis, to be determined by a Registrar, unless otherwise agreed.

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

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

WHEATLEY J:

1 Mr White was made bankrupt almost two years ago, on 10 April 2024, pursuant to a sequestration order under the Bankruptcy Act 1966 (Cth) (the Act). Ms Leslie, the Applicant, was appointed the trustee in bankruptcy of Mr White’s estate (the Trustee). An asset in Mr White’s bankrupt estate is a property known as Lot 108 RP185539, more commonly known as 11-23 Herriman Court, Jimboomba in the State of Queensland (Jimboomba Property). At the time of his bankruptcy Mr White was the sole registered owner of the Jimboomba Property. Mr White remains in possession of the Jimboomba Property.

2 The hearing of the Trustee’s originating application for possession of the Jimboomba Property was again listed for hearing today, 24 March 2026. Mr White sought another adjournment of the hearing of this application for possession.

Should the possession application be adjourned?

3 Mr White relies on a particular proposal which was provided to the Trustee late yesterday, 23 March as the basis for his adjournment application. The Trustee quite properly accepts that if that proposal is a proper one, described in the authorities as a bona fide one, then certain obligations arise on the Trustee and, therefore, an adjournment of today’s hearing would be necessary. However, the Trustee submits that the proposal is not a bona fide proposal and, therefore, the adjournment should be refused.

4 Mr White’s solicitor also submitted that if the proposal was not accepted as being bona fide, then an adjournment should still be granted to Mr White. This was because there was, and there will be, sufficient excess equity in the Jimboomba Property to mean that the creditors will be paid and the Trustee’s costs, fees and remuneration will also be paid and there will be an excess amount paid to Mr White.

5 Mr White has earlier deposed to the impacts of providing vacant possession of the Jimboomba Property on him and his family as well as the financial impacts of conducting his sawmill business. That business is conducted from the Jimboomba Property. Mr White submits that he should be provided with an even further opportunity to put forward material to the Court on the Trustee’s possession application.

6 As such, the two issues on the adjournment application to be resolved can be described as follows:

(1) Is the proposal a bona fide proposal?

(2) In any event, should an adjournment be granted?

(1) Is the proposal bona fide?

7 The Act gives a bankrupt in s 73 an avenue to put forward a proposal for his or her creditors for a composition in satisfaction of his or her debts which can be lodged with the trustee in writing. A document which is headed, “Proposal for a Composition Pursuant to Section 73 of the Act” and dated 23 March 2026 has been put before the Court and is submitted to be a proper s 73 proposal (the 73 P roposal). The 73 Proposal refers to and relies on an estimated value of the Jimboomba Property that there is a first registered mortgage with Bank of Queensland, that the current total estimate of secured and unsecured creditors is approximately $740,000, and, what is defined in the 73 Proposal as the “contributor” has received a business loan approval in the sum of $975,000. That is said to be the underlying basis upon which the 73 Proposal is put forward.

8 The Trustee gives evidence that in her view the 73 Proposal is not bona fide for 12 reasons which are described in reasonable detail by the Trustees. It is not necessary to detail all of those reasons. It is sufficient that the document described as a business loan approval made to the “contributor” is a document in the name of L & K Timber and Milling Pty Ltd (the Company). That is a company which has some association with Mr White. It is correct to describe it as having some association with Mr White because it appears he holds 100 shares in that company. Although, that observation is consistent with the ASIC search for the Company, it is unclear on the current state of the evidence, in terms of Mr White’s bankruptcy whether that is his property or that which is vested in the Trustee. In this context it is unnecessary to resolve that issue. More importantly, the Company does not have any company officers.

9 Mr White would be unable to be a director of the Company pursuant to s 201B and s 206B of the Corporations Act 2001 (Cth) as Mr White is an undischarged bankrupt under the law of Australia. In those circumstances, as stated by the Trustee, it is difficult to understand how the Company could have an offer or approve a business loan when it has no officers through which it could act. The document, which is attached to the 73 Proposal refers to the borrower as the Company and the guarantor as the Trustee, although somewhat differently described. It also provides for security to be provided over the Jimboomba Property. The Jimboomba Property vests, pursuant to s 58 of the Act, in the Trustee.

10 The document described as a business loan approval might be better described as a letter of offer. That offer is not executed by anybody and, on reviewing the document headed, “How to Accept this Loan” it requires a signature of the director of the Company. It is understandable in that sense at least why the document has not been executed. On the second page of that, “How to Accept this Loan” document, it seems to be suggested that the Trustee would sign as the director of the Company. The Trustee is not a director of the Company and, furthermore, the Trustee has stated that she is unwilling to be a party to the business loan approval.

11 The Trustee also submits that the 73 Proposal fails to address expected additional costs which are likely to be incurred. There is an updated calculation attached to the 73 Proposal. It is updated from what has been provided previously by way of calculations provided in February. It is updated in the sense of the dates by which the calculations have been undertaken and the figures which are then incorporated into that table.

12 There was some evidence that those updated figures were provided by the Trustee. However, even if that is so, I accept the Trustee’s evidence that not all costs and expenses are included in that calculation.

13 The first decision to be made as to whether or not a proposal is sufficient, that is, whether or not it is bona fide, is a matter for the relevant trustee: Mandri v Nicholls as Trustee for the Bankrupt Estate of Mandri (2017) 326 FLR 360; [2017] FCCA 2728 at 110. Further, it is a matter primarily for the trustee whether that proposal is sufficiently formulated to go to the trustees: Mandri at [111].

14 The Trustee has given evidence that, in her opinion, the proposal is not bona fide, and having considered the document and the description in the authorities, particularly noting the requirement for sufficiency and clarity of terms of the proposal, the offering of sureties and the like, the 73 Proposal does not meet the requirements of s 73 of the Act.

15 In those circumstances, the first issue is not one which supports the application for an adjournment. The 73 Proposal is not a bona fide s 73 proposal under the Act.

(2) Should an adjournment be granted, in any event?

16 Mr White, in any event, submits that he ought be provided with an even further opportunity to either put evidence before the Court and/or to continue negotiations with the Trustee, given that there will be an excess of equity resulting from the sale of the Jimboomba Property. The Trustee accepts that it is likely that there will be an excess of equity from the sale of the Jimboomba Property such that there will be a return to Mr White.

17 This matter, being the Trustee’s application for possession, was first listed for hearing on 7 November 2025, whereupon it was adjourned to 28 November 2025. On that occasion Mr White was represented by RA Law Group, and a grounds of opposition and affidavit were filed on his behalf. The grounds of opposition provided that he would clear the mortgage arrears owed to the Bank of Queensland, and that he had sufficient funds to clear those mortgage arrears. The affidavits provided evidence in relation to the mortgage arrears and other steps taken to pay creditors and annul the bankruptcy. Further evidence was also given regarding his ability to pay what are described as arrears, and seeking the early release of superannuation under the “hardship” circumstances.

18 The Trustee opposed that application for an adjournment in November 2025; however, in those circumstances, and given that Mr White had only recently retained legal representation, I was satisfied to grant the adjournment which was sought. Given the time of year, that was granted until 4 February 2026. Further timetabling orders were also made on 28 November 2025 regarding Mr White providing further material, and for the Trustee to provide material in response and for both parties to provide written submissions.

19 On 30 January 2026, by consent, orders were made for order 4 from 28 November to be extended. That was the order regarding submissions and any notification of cross-examination on the adjourned hearing. On 3 February 2026, the day before the adjourned hearing, orders by consent were made for the hearing to be vacated and listed on 3 March 2026. Orders were also made for the filing of additional evidence by Mr White and the Trustee, together with written submissions.

20 On 2 March 2026, again the day before the adjourned hearing, by consent, orders were made by the Court that the hearing of 3 March be vacated, and the hearing be listed today, 24 March 2026. Again, orders were made for Mr White to file any affidavit material upon which he wished to rely, as well as the Trustee providing any material in response and for submissions to be provided.

21 The Trustee provided written submissions by 20 March 2026, in accordance with the orders of the Court. Mr White did not. Mr White also did not provide any affidavit material in accordance with the 2 March orders. That required affidavits by 13 March 2026.

22 At the hearing today, Mr White’s solicitor filed an affidavit this morning at 9.29 am, which contained evidence of the 73 Proposal. The evidence did not go further by seeking to explain why there had not been compliance with the previous orders of the Court.

23 There has been multiple opportunities for Mr White to put forward evidence upon which he seeks to rely. The steps taken in relation to the 73 Proposal, although I have accepted it not being bona fide, in any event, were only undertaken yesterday.

24 The Trustee gives evidence that she was contacted about the 73 Proposal around 10.12 am yesterday, the day before this hearing. That evidence is consistent with the evidence of Ms Kennedy of RA Law Group for Mr White, who also refers to conversations from yesterday in relation to putting forward the 73 Proposal. The evidence does not establish at this stage any existing funding arrangement or finance arrangement of Mr White. The high point being the business loan document which, as already described, is not actually a loan approval. There has been sufficient opportunity, particularly when consideration is given to the case management principles from Pt VB of the Federal Court of Australia Act 1976 (Cth), in that the overarching purpose of civil practice and procedure is to facilitate the just resolution of disputes according to law, as quickly, inexpensively and efficiently as possible.

25 The continual adjournment and delay of these proceedings does inevitably increase the costs associated with this possession application. Matters involving the Act are usually matters which need to be dealt with promptly, given the issues involved.

26 For all of these reasons, the application for an adjournment will be declined.

The Trustee’s possession application

27 As Mr White’s application for an adjournment was declined it was then necessary to consider the Trustee’s application for possession of the Jimboomba Property. Further argument was heard on the substantive possession application.

28 The evidence is, and Mr White accepted, that he, as well as other members of his family, continue to occupy the Jimboomba Property.

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

(1) Mr White deliver up vacant possession of the Jimboomba Property;

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

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

30 The matter has previously been before the Court in November, and otherwise adjourned by consent.

31 Mr White has sought and did seek additional time to be able to respond to and deal with the Trustee's application for possession of the Jimboomba Property. That includes making an application for an adjournment today, which has already been dealt with.

32 Mr White appeared by his solicitor. That solicitor has previously appeared for Mr White, however, has not filed the required notice of acting or a notice of appearance: see r 4.03 of the Federal Court Rules (2011) (Cth), or r 2.04 of the Federal Court (Bankruptcy Rules) 2016 (Cth). However, she has quite properly undertaken to the Court to provide the required notice by the end of today.

33 Mr White, by his amended grounds of opposition, states that the mortgage arrears owed to the Bank of Queensland have been extinguished on the Jimboomba Property, and that he intends to and has the financial capacity to annul his bankruptcy. Despite various orders amending the time for delivery of material by Mr White to support his grounds of opposition, the evidence of Mr White was limited to two affidavits filed on 28 November 2025 and an affidavit filed on 15 January 2026. Further evidence has been filed this morning by the Trustee and by Mr White’s solicitor in relation to the 73 Proposal.

34 The issues to resolve this matter are as follows:

(1) Is Mr White 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 Jimboomba Property?

(3) Does the Jimboomba Property form part of Mr White’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 Mr White bankrupt?

35 Mr White was made bankrupt on 10 April 2024 and remains bankrupt. There is no evidence before the Court of any annulment of his bankruptcy, nor is there any evidence that Mr White has filed any application in the Court seeking to annul his bankruptcy. There is also no evidence that Mr White has sought review of the original orders of the Registrar making the sequestration order.

36 Mr White submits that he has the financial capacity to annul his bankruptcy and that he can trade out of his bankruptcy. That evidence, or at least in relation to the capacity to pay out his bankruptcy, is based upon a document from Prime Capital in relation to a potential loan. It is proper to describe it as potential because that loan appears to be offered to the Company. That document has not been signed by either the borrower, who is the Company, or the guarantor, who is described as “ the trustee of the property of Luke Anthony White, a bankrupt ”, that is, the loan document refers to the Trustee as being a guarantor for the borrowings of the Company.

37 Second, Mr White submitted that he can trade out of his bankruptcy. Whether or not that is the case is not entirely clear on the basis of the evidence before the Court. However, whether or not Mr White has the financial capacity to annul his bankruptcy or whether or not he can trade out of his bankruptcy in terms of this first issue, is unnecessary to decide. It is clear that Mr White was made bankrupt on 10 April 2024 and remains bankrupt.

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

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

(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.

39 Section 30 is to be generously construed: see Vale v Sutherland (2009) 237 CLR 638; [2009] HCA 26 at 19. 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. Also see the useful summary of these principles in Hacker v Weston [2015] FCA 363 at 148.

40 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.

41 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.

42 The Trustee relies on s 77(1)(g) which requires the bankrupt to “ aid to the utmost of his or her power in the administration of his or her estate ”.

43 In essence, s 77 imposes an obligation on the bankrupt to cooperate with the trustee: see Re Bond; E x P arte 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).

44 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 Jimboomba Property form part of the bankrupt estate?

45 The Trustee has given evidence, including by way of documents and searches from Titles Queensland that the Jimboomba Property was solely in the name of Mr White at the time of his bankruptcy. The Trustee has taken steps to have the Jimboomba Property registered in the name of “The trustee of the property of Luke Anthony White, a bankrupt”.

46 Pursuant to s 58 of the Act, the property of the bankrupt vests in the trustee upon the making of the sequestration order. The Jimboomba Property does form part of Mr White’s bankrupt estate, and the Applicant is trustee of his bankrupt estate.

(4)    Are the orders sought necessary?

47 The sequestration order in this case was made on 10 April 2024. The Trustee issued a notice to vacate the Jimboomba Property towards the end of May 2025. The bankrupt remains in possession of the Jimboomba Property despite that notice to vacate having been issued. The Trustee requires the sale of the Jimboomba 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 seven affidavits which provides evidence of the steps taken and the administration of the estate to date.

48 The Trustee is acting in accordance with her 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.

49 The originating application of the Trustee filed on 9 September 2025 sought that the Jimboomba Property be delivered up by way of vacant possession “forthwith” or by such time as the Court determines. At today’s hearing, the Trustee seeks that vacant possession of the property be made within 35 days. That is said to accommodate the Easter period.

50 It is fair to observe that Mr White has been on notice of this application for some time. By that, Mr White has known since receiving the notice to vacate in May of 2025 that he would be required to leave the Jimboomba Property. He would have earlier been aware on being declared bankrupt in April of 2024 that the Jimboomba Property then vested in his trustee in bankruptcy.

51 The matters referred to by Mr White in his evidence included that he operates a business from the Jimboomba Property and that relocation might be difficult. In these circumstances, then a sufficient and reasonable period of time for which Mr White must provide vacant possession of the Jimboomba Property will be eight weeks, or 56 days from today, that is, by Tuesday 19 May. The Trustee did submit the shorter period was appropriate, but no specific prejudice was submitted would be encountered, and in all the circumstances, a slightly longer period is appropriate.

52 The title search provided by the Trustee, which records the Trustee as the registered owner, continues to have a mortgage to the Bank of Queensland registered on the property and, as such, I will order that the Trustee serve a copy of these orders on the registered mortgagee forthwith.

Costs

53 The Trustee sought an order that the costs of and incidental to this application be fixed in a certain amount and be paid in priority from the bankrupt estate. The Trustee does provide affidavit evidence of the Trustee's solicitors in relation to those costs. However, Mr White’s solicitor submitted that in the circumstances it would be appropriate for those costs to be fixed on a lump-sum basis to be determined by a Registrar in accordance with the court's costs and practice note unless otherwise agreed.

54 I accept that submission.

55 The costs might be otherwise agreed and, if not, then the appropriate form is for those to be fixed by Registrar in accordance with the Court’s practice note. However, having said that, the costs of the Applicant, being the Trustee, will be paid from the bankrupt estate in accordance with the Act.

| I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheatley. |
Associate:

Dated: 8 April 2026

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