Weeden v Rambaldi [2013] FCAFC 12

This week the Full Court of the Federal Court released their decision in Weeden v Rambaldi [2013] FCAFC 12, dismissing an appeal of Bromberg J’s decision in Weeden v Rambaldi FCA 552.

The appeal case concerned whether the primary judge erred in finding that creditors had appointed a sole trustee and not two joint trustees in circumstances where there was a degree of ambiguity surrounding the appointment.

The only ground of appeal asserted that the primary judge erred in the treatment of the evidence leading him to wrongly conclude that one trustee had been appointed. The appellant contended that “on any proper assessment of the evidence, his Honour should have determined that the first respondent, Gess Rambaldi, and second respondent, Andrew Yeo were appointed joint trustees.” [1]

A finding that two joint trustees were appointed would have nullified the legal effect of notices of objection to the appellant’s discharge from bankruptcy, which had been signed only by the second respondent, Mr Yeo because they would not have been the act of both trustees acting jointly. As a consequence, pursuant to s 149 of the Bankruptcy Act, Weeden argued that he would have automatically been discharged from bankruptcy on 7 February 2010, the date being three years from which he was (on his own petition) made bankrupt.

The Evidence

1. On 7 February 2007, Weeden, the Applicant, filed a debtor’s petition and statement of affairs, becoming bankrupt. Dennis Anthony Turner a registered trustee in bankruptcy, was appointed as the trustee of Weeden’s bankrupt estate.

2. On 19 March a creditors meeting was held to consider the removal of Mr Turner as Trustee.

3. The duly signed Minutes of Meeting prepared by Ms Margaret Lester, Turner's employee, stated words to the effect that Dennis Turner be removed as Trustee of the bankrupt Estate of Philip Charles Weeden and that Messrs Gess Rambaldi and Andrew Yeo be appointed as joint Trustees of the bankrupt Estate of Philip Charles Weeden.

4. However, the Running Sheet used by Mr Turner to chair the meeting was in the following terms:

"As you are aware, Creditors have requested I convene a meeting to consider a resolution that I be removed and Mr Andrew Yeo be appointed Trustee."

Accordingly creditors are invited to propose the following motion;

 “Dennis Turner be removed as Trustee of the bankrupt Estate of Philip Charles Weeden”

 Passed/not passed

“Andrew Yeo be appointed as Trustee of the bankrupt Estate of Philip Charles Weeden’

Passed/not passed

The primary judge made a finding that both motions were passed.

Primary Judge’s Decision

The primary judge, Bromberg J rejected the appellant's contention that the first respondent, Mr Rambaldi, was a joint trustee whose failure to sign notices of objection to the appellant’s discharge from bankruptcy rendered them invalid. 

His Honour held that the minutes were not a reliable and accurate record of the resolution which appointed a trustee in substitution of Turner and found that the resolution passed by the creditors at the creditors’ meeting entailed that Turner be removed as the trustee of Weeden's bankrupt estate and that Yeo be appointed as the trustee of that estate.

Bromberg J referred to the absence of any reference to Rambaldi in the contemporaneous records of the creditors’ meeting and in the running sheet. He found that the genesis for Rambaldi’s inclusion in the minutes was more likely to be the result of a mistake by Lester, made after the meeting, than anything said or resolved during the meeting. The fact that the preperation of the minutes took place some time after the meeting, the scant notes taken by Lester and the other difficulties with the minutes all suppoted the conclusion.

The Appeal

The Full Court held that, the conclusions reached by Bromberg J were not only without error, but were strongly supported by the evidence.

Their Honours found that the primary judge properly interpreted s 257 of the Bankruptcy Act, treating the meeting minutes as prima facie evidence of the proceedings at the meeting. The minutes on their own would be conclusive; however the nature, quality and combined effect of the contrary evidence entitled his Honour to conclude, as he did that it rebutted the prima facie evidence constituted by the minutes that a resolution was passed for the appointment of Rambaldi and Yeo as joint trustees.

Their Honours concluded that the primary judge did not err in failing to accord greater weight to the evidence of subsequent conduct by Messrs Yeo and Rambaldi which was consistent with their joint appointment. The confusion was, as his Honour observed, explicable by inconsistent communications the respondents had received for which a plausible explanation was advanced and which his Honour was entitled to accept.

Not a subscriber to TimeBase Cases? Click here to find out more about TimeBase Cases.