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Misrepresentation
20
The CBA claimed post sequestration interest
against the estate of Heinrich and intended it as part of the
“Deed of Settlement”
to be paid by Sarabe for Heinrich’s bankruptcy, when CBA knew that post
sequestration interest was unlawful and the amount of its claim was
incorrectly stated to the trustee:
20.1
at no time did CBA or the trustee provide
Heinrich, or the directors of Sarabe, with particulars of the claim by CBA
before executing the
“Deed of Settlement”;
20.2
at no time did the CBA or trustee disclose to
Heinrich, or Sarabe, that the amount Sarabe would pay to settle the
bankruptcy would include
illegalities
that where known by CBA and the trustee for overcharged discounts of
$9,976.77
with interest accrued on those discounts of
$36,175.44
(referred to in paragraphs
9, 16.6
and
16.7
above); or
20.3
the
$94,200.00
costs overstated by CBA and rejected by the trustee (referred to in
paragraphs
16.5,
19
and
19.1
above); or
20.4
that the CBA intended to claim post
sequestration interest of
$360,000.00
(referred in paragraphs
17.4
above and
26, 26.4
and
27
below); or
20.5
that the CBA intended to withhold its
“Proof of Debt”
declaration until the trustee obtained a consent judgment from Sarabe; and
20.6
after the trustee had received the settlement
amount
$1,650,000,00
from Sarabe;
20.7
by nondisclosure of the facts in these
sub-paragraphs
20.1
to
20.6
and that the trustee waited some four and half years before
calling for the CBA
“Proof of Debt”
he clearly intended to take financial advantage of Sarabe.
21
The trustee knew that Heinrich’s estate was
not liable for
misrepresentations
made by CBA to the trustee by including the overstated amount for costs,
overcharged discounts and interest thereto, and post sequestration
interest, as part of the
“Deed of
Settlement”
with Sarabe:
21.1
the trustee had a duty to correct the
illegalities in Heinrich’s account by CBA by virtue of the provisions in
the Bankruptcy Act, and return to the estate the overstated amounts
he has wrongly obtained from Sarabe for amounts which Heinrich was not
liable under the Bankruptcy Act 1966 and its Regulations.
21.2
On
25 May 2005
Heinrich in his letter
[“AGS-9” Trustee Affidavit 11/10/05
SAD 264-05]
to the trustee, Heinrich stated:
21.2.1
..the sum paid to you…. Is a full settlement of my account.
I am therefore no longer bankrupt.
21.3
On
9 June 2005
the trustee’s in his letter
[“AGS-9” Trustee Affidavit 11/10/05 SAD 264-05]
of reply to Heinrich, the trustee stated:
21.3.1
In relation to the payment of
$1,650,000.00,
…was made to me by Sarabe Pty Ltd in satisfaction of the consent judgment
against it… It was not a payment made on your account nor was it a payment
of the kind referred to in section 153A Bankruptcy Act 1966. Your
bankruptcy has not been annulled and remains in full force and effect.
21.4
The trustee represented to the court and
Sarabe that the
$1,650,000.00
was to settle the bankruptcy of Heinrich. The
trustee by his letter [“AGS-9”] dated
9 June 2005
(referred in sub-paragraph
21.3.1
above) clearly shows that the trustee intended to deceive and mislead
Heinrich before Sarabe signed the
“Deed of
Settlement”;
Particulars
21.4.1
at no time did Sarabe ever have any account
with CBA, nor had it ever conducted any business with CBA of its own, or,
in relation to, or, on behalf of Heinrich;
21.4.2
Sarabe is the trustee of the “Heinrich Family
Trust” duly stamped in 1977;
21.4.3
The trustee in bankruptcy alleged that Sarabe
owed a beneficial interests to Heinrich from the “Heinrich Family Trust”,
of some
$300,000.00
or thereabouts;
21.4.4
in the trustee’s action FCA S7014 of 2002
against Sarabe (referred in paragraphs
13
and
14
above), the directors of Sarabe agreed to settle the bankruptcy of
Heinrich in reliance of the representations made by the trustee and CBA
for the amount represented to them and to the court;
21.4.5
Sarabe agreed to pay the total bankruptcy
settlement amount represented by CBA and the trustee against Heinrich for
$1,650,000.00.
Fresh Evidence
audit reconciliation of all monies had and
received between CBA and Heinrich
22
On
5 July 2005
Justice Debelle in the Supreme Court forwarded to Mr Burdett, solicitor
for CBA, documents containing the consolidation of the audit of Heinrich’s
account with CBA for all monies had and received for the period
1985-1992.
The audit was taken from the admitted CBA bank trading and loan statements
and bills of exchange register which prove that the CBA
“Proof of Debt”
(15/4/05)
to the trustee was grossly incorrect. Mr Burdett forwarded the
consolidation audit of Heinrich’s account to the trustee
[“AGS-11” para. 30.3 Trustee affidavit 11/10/05 SAD
264-05].
The CBA has not corrected its account to the trustee, and the trustee has
not yet rejected the grossly incorrect account by CBA that was
misrepresented to Sarabe as part of the
“Deed of Settlement”
executed by the trustee, CBA, and Sarabe on
10/10/03.
23
Irrespective of the audit evidence, on
5 October 2005
Mr Bennett, CBA manager of credit management, by his letter to the trustee
made a claim for post sequestration interest for
$630,998.66
calculated to
1 September 2005
[“AGS-1” para. 8 Trustee affidavit 1/3/06 SAD 264-05],
and in his letter acknowledged that the CBA was not entitled to make a
claim for post sequestration interest pursuant to section 82(3B)
and 107 Bankruptcy Act 1966
[Re:
Vellnagel;
Whiteman v Hanson
SCWA Reports p 80 (1975) Burt J.];
23.1
the CBA and the trustee with knowledge of
illegalities by CBA in the account of Heinrich have continued to pursue
illegalities and unlawful post sequestration interest after they
were advised that the CBA account was incorrect by Chartered Accountant,
Mr Jeffery, on
4 December 2002;
and after
5 July 2005
having been made aware by Justice Debelle of the consolidated audit
proving the account for Heinrich by CBA was grossly incorrect;
23.2
Heinrich is entitled to claim the return of
all monies that have been wrongfully claimed and distributed from his
estate by CBA and the trustee by virtue of section116 (2)(g)(i),(6)
Bankruptcy Act 1966.
Trustee ex parte action SAD 264 of 2005
24
On
11 October 2005
the trustee in his affidavit states that he was withholding from
distributing the balance of Heinrich’s estate approximately
$393,000.00,
in consideration of the CBA indemnifying the trustee for:
24.1
any acts or omissions by the trustee; or
24.2
any other matters arising from the administration of the
estate;
24.3
including reasonable costs (including legal costs on an
indemnity basis) of defending any such actions, proceedings, claims or
demands except to the extent that the same are the result of wilful
default or gross negligence on the part of the trustee;
24.4
on
27 September 2005
the trustee executed a “Deed of Indemnity” with CBA.
25
On
14 December 2005
the trustee paid a Dividend of
$464,718.79
to the CBA when he was aware that the CBA
“Proof of Debt”
was incorrect and knew that the Bankruptcy Act 1966 made no
provision for post sequestration interest.
26
The trustee knew from the evidence in debt
judgement and Order referred in paragraph
16,
and sub-paragraphs16.1
to
16.8
that CBA had wrongfully claimed post sequestration interest in the
“Deed of Settlement”
that was not disclosed to Sarabe for settlement of the bankruptcy which is
now shown after the CBA produced its
“Proof of Debt”
to the trustee;
26.1
the trustee has colluded with CBA to
disadvantage Heinrich when they knew the CBA account was incorrect from
1985
to the present time; and
26.2
the trustee colluded with the CBA to take
advantage of the directors of Sarabe and knew by overstating the amount of
monies for settlement of the bankruptcy they intended to obtain from
Sarabe;
26.3
the trustee failed to return the
$94,200.00
to Heinrich from CBA costs he rejected;
26.4
the trustee failed to return to Heinrich the
$360,000.00
post sequestration interest he wrongfully paid to CBA;
26.5
the trustee failed to correct known
illegalities advised to him of incorrect accounting by CBA claimed in the
“Proof of Debt”
against the estate of Heinrich; and
26.6
failed to notify the court in the trustee’s ex
parte action SAD 264 of 2005 that the CBA
“Proof of Debt”
was known by him to be incorrect.
27
On
25 July 2006
the trustee paid post sequestration interest of
$360,000.00
to CBA as the final dividend
[“GTB-3” para.10 Mr Brown’s affidavit 11/8/06 SAD
146-06]
when he knew that post sequestration interest was in breach of
sections 82(3B) and 107 Bankruptcy Act 1966 and 16.08
sub-regulation (2)(b) Bankruptcy Regulations 1966.
28
These preceding paragraphs show the following material facts:
At all times Heinrich has been a self litigant
or the action has been heard ex parte:
28.1
The responsibility in this case rests on the
legal practitioners present in the court to put all facts before the court
including facts in law that apply to the case
[James Laferla v Birdon Sands Pty Ltd
(1998) SCNT pp7-14 (21 August 1998)];
28.2
that notices and accounts in the trustee’s ex
parte action are incorrect
[Soltheo (1996) 1036 FCA (7 November
1996) pp7-14];
28.3
reliance on incorrect notices and accounts;
28.4
obtain security monies from Sarabe using
incorrect notices and accounts before execution of the Deed of Settlement
28.5
encouraged Sarabe to execute Deed of
Settlement (10/10/03) before calling for the CBA’s Proof of Debt
(15/4/05);
28.6
obtain settlement monies from Sarabe using
incorrect notices and accounts;
28.7
obtain settlement monies using incorrect
notices and accounts to include post sequestration interest;
28.8
ignored accountants evidence and consolidated
audit that the notices and accounts were incorrect;
28.9
rejected Heinrich commercial mediation after
CBA giving an undertaking on oath;
28.10
maintaining Heinrich in bankruptcy after
settlement of the bankruptcy unlawfully;
28.11
trustee and CBA were notified in SASC 822
of 2002 that the CBA account was incorrect at time of those hearings
and they ought to have admitted their mistake and applied for an
application to withdraw the judgments;
28.12
even though the trustee may claim Heinrich was
aware the accounts were incorrect the misuse of incorrect notices and
incorrect accounts is still a fraud
[Rous v Mitchell (1991) 1 WLR at 469];
28.13
an incorrect representation through false
accounting and part of that has been the silence of the trustee through
non disclosure
[Simonovski Anor v Bendigo Bank Limited
(2005) VSCA 125 (19 May 2005)];
28.14
that has unlawfully caused breaches of the
Bankruptcy Act 1966 and its Regulations and any agreement
between Sarabe, the trustee and CBA;
28.15
the money received by the trustee and
unlawfully distributed to the CBA;
28.16
that these monies have been knowingly
receipted by the trustee and dishonestly distributed is to avoid a
dividend to Heinrich; or
28.17
to avoid the bankruptcy being annulled under
153A
of the Bankruptcy Act 1966;
28.18
if the court does not find a misconduct by the
trustee under section 179 Bankruptcy Act 1966 then the account
must be adjusted under section 178
Bankruptcy Act 1966.
29
The trustee by delivery of his solicitors
affidavit of Mr Brown sworn
21 August 2006
in this application (SAD 146 of 2006) has proceeded to change the argument
from the original course of conduct of trial to a different course of
conduct. Heinrich has not been given the opportunity to answer the charges
in the trustees ex parte action SAD 264 of 2005. The new affidavit does
not provide the evidence the trustee acted correctly since the date of
sequestration and subsequent judgment orders to distribute dividends to
CBA. By the trustee’s actions Heinrich has not been granted natural
justice
[Steed v State Government Insurance
Commission HCA].
30
The court should always bear in mind the
duties of the trustee is to save the estate unnecessary expenditure and
money and maximise the return from estate assets
[Freeman v National Australia Bank
(2003) FCA 1233 at 22, 11, and 13 Spender J].
Allen, this was my last submission but unfortunately I was emotionally
distressed and unable to attend the Court, and subsequently withdrew my application. Regards,
Steve
Back to First Page
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