Ambrose (Trustee), in the matter of Peter Athanasas (Bankrupt)
[2008] FCA 462
•28 March 2008
FEDERAL COURT OF AUSTRALIA
Ambrose (Trustee), in the matter of Peter Athanasas (Bankrupt) [2008] FCA 462
COLIN LOUIS AMBROSE AS TRUSTEE OF THE BANKRUPT ESTATE OF PETER ATHANASAS
SAD 102 OF 2007
LANDER J
28 MARCH 2008
ADELAIDE
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
SAD 102 OF 2007
BETWEEN:
COLIN LOUIS AMBROSE AS TRUSTEE OF THE BANKRUPT ESTATE OF PETER ATHANASAS
Applicant
JUDGE:
LANDER J
DATE OF ORDER:
28 MARCH 2008
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.The proceeding be adjourned until Friday, 18 April 2008 at 9.00am.
2.The legal practitioners to the parties not claim any costs from their clients for today’s attendance.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
SAD 102 OF 2007
BETWEEN:
COLIN LOUIS AMBROSE AS TRUSTEE OF THE BANKRUPT ESTATE OF PETER ATHANASAS
Applicant
JUDGE:
LANDER J
DATE:
28 MARCH 2008
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
This is an application by a bankrupt for the adjournment of his examination under s 81 of the Bankruptcy Act 1966 (Cth) (the Act) which was listed for hearing this morning. On 5 July 2007 an examination summons was issued against Peter Athanasas on the application of the trustee of the bankrupt estate. The summons required the examinee to attend before the Court at 10.15 am on 15 August 2007 and from time to time thereafter, and to produce certain documents. Apparently, there was some difficulty in serving the summons and the date for examination specified on the summons was amended to 18 September 2007 at 10.00 am.
The summons was served personally on the examinee on 24 August 2007. On 17 September 2007 the examinee faxed to the Court a statutory declaration advising that he would not be able to attend on 18 September 2007 as the documents to be produced would not be made available until 26 September 2007, but that he would attend some time after that date. On 18 September 2007, at the request of the trustee, the examination was adjourned and the Registry was directed to notify the examinee of the adjourned hearing date which was to be 23 October 2007.
On 23 October 2007, despite written notification from the Registry, the examinee again failed to attend and the examination was adjourned to 27 November 2007. On 27 November 2007 the examinee attended, represented by Mr Kayal of Georgiadis Lawyers and he was examined before the Registrar by Mr Gretsas, who represented the trustee. On more than one occasion the examinee refused to answer questions. He was advised by the Registrar of the provisions of s 264C of the Act.
Mr Gretsas submitted during the examination that the examinee had prevaricated, as that term is used in s 264D of the Act. At one stage the transcript discloses that Mr Gretsas requested that the matter be adjourned before a judge but at that stage the examinee indicated he would attempt to answer further questions and the request was withdrawn. The examinee also indicated he could produce certain documents but needed more time so to do. The answers subsequently given by the examinee were not in their terms fulsome, often being answers to the effect that he could not recall without having the documents with him and that the documents would explain everything.
The examination was adjourned to 19 December 2007 and, on that day, the examinee produced some documents but indicated that he would need until early January to produce the balance of the documents. The examination was adjourned to 5 February 2008 at 10.00 am. On 5 February 2008 the examinee’s counsel advised that, although the examinee was in the vicinity, the examinee did not propose to attend and that the documents to be produced in early January were not yet able to be produced but would be by 21 February 2008.
It was suggested that the reason for non-attendance was that the examinee did not feel well. The matter was adjourned for a short time for the examinee’s legal representative to speak with the examinee and for the examinee to present himself to the Court, which he did at 10.35 am. The examination then proceeded for a short time but, in the absence of the documents which had been sought, could not be completed and the examination was further adjourned until 9.30 am on 6 March 2008. The examinee did not attend that further hearing of the matter although Mr Kayal did.
The trustee’s counsel claimed that virtually no documents had been produced despite the summons and the undertaking given by the examinee to the Court to do so. The trustee’s counsel sought to have the examination adjourned to a judge. The Registrar was advised at that stage by Mr Kayal, who continued to represent the examinee, that it remained the examinee’s intention to produce the documents but it was taking longer than expected. His only explanation for his client not attending was a suggestion that he may be having psychological issues. No medical evidence was then tendered to the Registrar.
Mr Kayal did not oppose the adjournment of the matter to a judge. Mr Gretsas indicated that he would seek to resume the examination on the next occasion and if there was a refusal to answer questions or prevarication on the part of the examinee he would seek to have the judge deal with the examinee for contempt of court. Section 81(4) of the Act empowers a Registrar at any time to adjourn the examination of a person for further hearing before the Court. The Registrar adopted that procedure on the last occasion before her and adjourned the matter for hearing before me.
The matter first came before me on 12 March 2008 when the trustee was again represented by Mr Gretsas and the examinee by Mr Kayal. The examinee then sought a further adjournment of the proceedings for a period of time until 19 or 20 March 2008. There were two grounds for the application. The first was that the examinee intended to put a proposal pursuant to s 73 of the Act to the trustee in order that the creditors might be paid. The second ground was that the examinee had been ill and that there was a medical report which explained his illness.
On that occasion a report dated March 2008 of Mr Homer Zeitz, who is a practising psychologist was produced to the Court. The precise date is not given. The report indicates that the examinee had been examined by Mr Zeitz and had undergone a formal psychological assessment. The report indicates those assessments which were carried out. The report indicates that Mr Zeitz was of the opinion that Mr Athanasas was not presently capable of rational and considered thinking and would require some 16 weeks of treatment. The examiner concluded that Mr Athanasas might not be “capable of giving consistent instructions to his legal representatives or providing instructions consistent with his long term benefit.” The author of the report recommended that the matter be delayed for at least 16 or 29 weeks in order that the examinee undergo that treatment.
The examinee was present at Court but not in Court. I indicated that I would allow a short adjournment in order that the examinee might make the offer which his counsel said was to be made and to allow the examinee to present evidence in support of any further application for adjournment on account of his ill health. At that time I said:
... An application under section 81 requires the party to whom the summons is directed to attend court and to produce to the court any documents which are the subject matter of the summons under section 81. The party to whom the summons is directed is not a volunteer. He or she must comply with the summons in every respect. The evidence would suggest that your client has provided the Registrar on previous occasions with undertakings that he would comply with the summons, but had failed to do so. In the last examination on 5 February, he would have led the court to believe that he would comply with the summons in respect to the production of documents. He has not done that. He ought to understand that under section 264C his failure to comply with the summons is a criminal offence for which he can be fined or imprisoned, but it’s more than that.
If this court takes a view that he has failed to comply with an order of the court, this court has power of its own motion to commit him to prison as a contempt of the court and that power is given to the court by Order 40 of the Federal Court Rules. Now, the court does that – imposes penalties of that kind reluctantly and only in the most serious cases – but if the court concluded that he has been given a number of opportunities and he has failed to comply with his obligations under the summons and he has failed to comply with undertakings given to the court and to the Registrar of the court in relation to those matters, the court may have to take such a step. Sometimes the court orders the person to be imprisoned until such time as they comply with the order.
I will adjourn for a week, but I can make these comments. If the matter has not been compromised within that time, then Mr Athanasas must attend court on the next occasion and comply with the summons in relation to the production of documents and to the giving of evidence unless an application is then made for the adjournment of the inquiry and an adjournment is granted. If, on the next occasion, an application is made for an adjournment, it would be unlikely to succeed if the ground of the adjournment were to be that an offer was to be put to the trustee in bankruptcy. If, on the other hand, the ground of the application for the adjournment would be because of medical problems then facing Mr Athanasas, I would expect the medical practitioner or the psychologist upon whom reliance is put to be in court to be available to be cross-examined in relation to their report. ...
The matter was then adjourned. On 27 March 2008 the trustee’s solicitors wrote to the examinee’s solicitors and said in part:
We inform you that we require that the Court vacate the Public examination of Mr Peter Athanasas, which is scheduled for Friday, 28 March 2008 at 9:00 a.m. as our Counsel is unable to attend due to a conflicting Court schedule. We confirm that we do not intend to cross examine your client’s medical expert at the present moment and therefore consider an adjournment is appropriate in the circumstances.
Two matters can be mentioned in relation to that letter. The first is that it is inappropriate for solicitors to claim that they can require the Court to vacate a public examination. The most that the solicitors for a trustee in those circumstances can do is apply to the Court for an order for the adjournment of the public examination. The type of language used in that solicitor’s letter is inappropriate. Secondly, and more importantly, it is not a ground for an adjournment that counsel is unable to attend due to a conflicting court schedule.
Sometimes the convenience of counsel is a matter to which the Court would have regard. However, in a case such as this where counsel was present at the time that this examination was fixed and advised that he was available, his convenience is a matter to which the Court would have no regard. More particularly, in this case, I have been advised by counsel that in fact the conflict arose by counsel taking a brief subsequent to advising me that he could be present for the purpose of this examination today.
The examinee’s solicitors provided the trustee’s solicitors with a letter from Mr Zeitz, the psychologist, whose report had been handed to me in the previous hearing. In that report Mr Zeitz said that he would be unable to attend Court today, but he would be available on 4 April or 15 April at specific times which he nominated.
The matter was called on at 9 am this morning. The trustee’s solicitor attended ten minutes late. The examinee’s solicitor did not attend at all. The examinee did not attend. The trustee’s solicitor asked that the matter be adjourned. I said that the ground of adjournment, due to the absence of counsel, was not such that I would be prepared to grant the adjournment and I refused it.
I adjourned the matter until 9.45 am, so that inquiries could be made as to counsel’s availability and so that the examinee’s solicitors could be advised. The matter came on again at 9.45 am and, at that stage, counsel for the trustee, who had appeared before me the previous occasion, appeared. A solicitor employed in the firm of solicitors acting for the examinee appeared for the examinee. He was not acquainted with the details of the file. He told me that the person who had conduct of the matter was at the Christies Beach Magistrates Court and the reason that he was not here was that he thought the matter would be adjourned.
I adjourned the matter further until 11.00 am, so that the examinee could be advised that I was proceeding with the matter and that the expert witness, upon whom the examinee might rely for a further application for an adjournment, could be in Court so as to be cross-examined. I resumed at 11.00 am when the trustee was represented by Mr Gretsas and the examinee, by Mr Kayal. The examinee was not in Court. The examinee or his legal adviser or both have not understood what I thought was a plain direction which I gave on the previous occasion.
The examinee is not a volunteer. He is to be here by force of law under the Act. He should have been here today at 9 am; he should have been here at 11 am; and he should have complied in all respects with the summons which has been directed to him. The summons is issued by the Court and it is a summons which must be complied with by the examinee unless he is relieved in some way from the obligation by way of order of this Court. It is entirely unsatisfactory that his legal advisers assumed that there would be an adjournment granted and allowed the examinee to think that he was relieved of any obligation to appear in accordance with his statutory obligations under the Act.
The examinee’s counsel, Mr Kayal, made an application for an adjournment for a period of three weeks so that the examinee could be further examined by the psychologist who had previously reported. I pointed out that the examinee has still not complied with undertakings given to the Court in relation to the production of documents. He has not provided the Court with any evidence of his own as to his stated ill-health.
It was put to me that by reason of his health he was not in a position to comply with the summons or to swear an affidavit in support of an application for an adjournment. The rather curious result of the application which had been made by the examinee would be that if it were granted the matter would be adjourned so that an application could be made for an adjournment. Such a procedure really brings the administration of justice into disrepute, because the procedure by itself shows first, that the examinee has not complied with his obligations to the court and, secondly, that he is relying upon his own non-compliance for a further adjournment.
However, the trustee’s counsel did not object to the application because of the letter which had been written the day before which indicated that the trustee would be seeking an adjournment of the matter. The trustee is not at fault in this matter. I am assured by counsel that the trustee was not responsible for anything that has transpired today. I accept that. That being the case, the trustee’s legal advisers must understand this. They have an obligation to this Court to attend Court whenever a matter is listed for hearing. The obligation is to attend at the time that the matter is listed. They have the further obligation that they must be in a position to proceed at that time.
It is entirely inappropriate that they would require, as they put it, that this Court adjourn a matter to suit the convenience of counsel. They should have been in a position to proceed this morning so that the examination could proceed and proceed to finality. If it be the case that Mr Athanasas is suffering from ill-health, this protracted delay might, one would have thought, only exacerbate it. It is necessary that both the trustee’s legal advisers and Mr Athanasas’ legal advisers attend to their professional responsibilities in relation to this matter so that the matter can be brought to a speedy conclusion one way or the other.
The parties have so behaved themselves that I am left with really no choice but to adjourn the matter for three weeks. I will do so, but I will do so reluctantly. I make this statement as plainly as I can. On the next occasion I expect that the trustee will be in a position to continue with the examination unless an application is made to me at that time by the examinee for an adjournment of the proceeding. If an application is made to me for an adjournment of the proceeding the examinee will need to provide evidence in support of that application.
Ordinarily, that evidence would include his own evidence as to his stated ill-health and evidence supporting his claimed ill-health by a medical practitioner or by a psychologist. If there be supporting evidence of that kind I would expect that the person who has delivered the supporting evidence will be in Court for the purpose of being examined. Of course, I cannot require the expert to be in Court. However, if he is not, then the application will simply not be granted, because there will be no evidence upon which the application could be granted. It would be a matter for the expert himself if he thinks that he should be here if such an application is to be made.
I remind the examinee again, through his counsel, that he remains obliged to comply with the summons under the Act to produce the documents which he has previously undertaken to the Court to produce.
I make an order pursuant to O 62 r 36 of the Federal Court Rules 1979 (Cth) that no costs shall be claimed by the legal practitioners against their clients for today’s attendance.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. Associate:
Dated: 8 April 2008
Counsel for the Applicant: G Gretsas Solicitor for the Applicant: Robert Chrzaszcz & Associates Counsel for the Bankrupt: S Kayal Solicitor for the Bankrupt: Georgiadis Lawyers
Date of Hearing: 28 March 2008 Date of Judgment: 28 March 2008
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