Jess v McNiven, in the matter of McNiven (No 2) [2022] FCA 446

Jess v McNiven, in the matter of McNiven (No 2) [2022] FCA 446

The trustees' legal and beneficial rights to the properties vested under the Bankruptcy Act could not be displaced by estoppel or constructive trust; the McNivens failed to establish unequivocal representations or reasonable detrimental reliance, and, in any event, statutory policy prevents such estoppel. Unjust enrichment was not established as any benefit to the trustees from payments or improvements by the McNivens was exceeded by the advantage the McNivens received from exclusive occupation and rental income; thus, no restitution or accounting was due.

Jurisdiction
Australia
Judgment Date
29 April 2022
Procedural Posture
Bankruptcy Proceeding / Final Judgment After Trial
Outcome
Applicants' claim granted; respondents' cross-claim dismissed; costs follow event.
Legal Topics
['bankruptcy Act 1966 (cth) Vesting and Realisation of Property' 'equitable Estoppel' 'constructive Trust' 'unjust Enrichment' 'equitable Accounting']
['bankruptcy' 'equity' 'estoppel' 'restitution'] ['bankruptcy Act 1966 (cth) Vesting and Realisation of Property' 'equitable Estoppel' 'constructive Trust' 'unjust Enrichment' 'equitable Accounting']

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Procedural Posture

Bankruptcy Proceeding / Final Judgment After Trial

Legal Issues

  1. 1 ["Whether trustees are entitled to realise and sell properties vested in them under the Bankruptcy Act after bankrupts' discharge." 'Whether the trustees are estopped (by representations, conduct, or inaction) from exercising their powers over the properties.' 'Whether the bankrupts are entitled to a beneficial interest in the properties via constructive trust or unjust enrichment.' 'What equitable accounting or restitution (if any) is due between the parties for outgoings, improvements, and occupation.']

Ratio Decidendi

The trustees' legal and beneficial rights to the properties vested under the Bankruptcy Act could not be displaced by estoppel or constructive trust; the McNivens failed to establish unequivocal representations or reasonable detrimental reliance, and, in any event, statutory policy prevents such estoppel. Unjust enrichment was not established as any benefit to the trustees from payments or improvements by the McNivens was exceeded by the advantage the McNivens received from exclusive occupation and rental income; thus, no restitution or accounting was due.

Court Disposition

Applicants' claim granted; respondents' cross-claim dismissed; costs follow event.

Orders

  • ['Declaration that the applicants are the legal owners of the Blackburn North Property and Templestowe Property as trustees for the respective bankrupt estates.' 'Applicants entitled to sell both properties and given sale powers per standard Law Institute of Victoria contract.' 'Respondents must withdraw specific...