Casella v Prentice
[2002] FMCA 48
•22 March 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CASELLA v PRENTICE | [2002] FMCA 48 |
| BANKRUPTCY – Review of decision of Trustee of a bankrupt refusing release of passport. |
Re Wheeler, Ex parte Wheeler v House (1994) 54 FCR 166
Bankruptcy Act ss 77(a)(ii) and 178
| Applicant: | DOMENIC CASELLA |
| Respondent: | MAXWELL WILLIAM PRENTICE |
| File No: | WZ 49 of 2002 |
| Delivered on: | 22 March 2002 |
| Delivered at: | Melbourne |
| Hearing Date: | 22 March 2002 |
| Judgment of: | McInnis FM |
REPRESENTATION
| Applicant: | Mr D Casella in person |
| Counsel for the Respondent: | Mr Belyea |
| Solicitors for the Respondent: | Clayton Utz |
ORDERS
(1)That the application be dismissed.
(2)The applicant pay the respondent's costs pursuant to Order 62 of the Federal Court Rules to be paid out of the estate of the applicant.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
WZ 49 of 2002
| DOMENIC CASELLA |
Applicant
And
| MAXWELL WILLIAM PRENTICE |
Respondent
REASONS FOR JUDGMENT
This is an application by DOMENIC CASELLA (the applicant) which effectively is raised pursuant to section 178 of the Bankruptcy Act. The complaint which is made by the applicant against MAXWELL WILLIAM PRENTICE (the respondent), in an application filed
21 February 2002, that on 20 February 2002 is the respondent declined to release the applicant's passport to him for the purpose of employment related travel. The applicant claims that the respondent's refusal to release his passport unless the applicant first provides to the respondent precise details of the person the applicant will meet whilst travelling, is unjust and inequitable and further adds in his application that he has provided the respondent with his proposed itinerary which he argues is sufficient in all the circumstances.
The respondent was appointed as trustee by a certificate of appointment dated 27 October 2000.
The applicant relies upon an affidavit sworn by him on 21 February 2002. In his affidavit and in submissions made before me this day, the applicant has made it clear - and there is no evidence to the contrary - that he is not a man who has any criminal convictions or otherwise has committed any offences. He is a man who is, in his submissions and the material, genuinely endeavouring to obtain employment to assist him in gaining income for the purpose of supporting his wife and two teenage children. He is presently receiving unemployment benefits through Centrelink and has indicated in the affidavit material to which I have referred, that he has an offer of employment with a company named Dalpine Pty Ltd of which Mr Angelo Kunievski is a director.
Mr Kunievski, in a letter dated 28 October 2001, addressed to the respondent, advised that he wanted to employ the applicant to assist him with setting up a fishing venture which in that letter he expected to commence within the next four to six weeks. He indicates in that letter initial work would be require involving travel to the United Kingdom and that the applicant would also be required to travel to Singapore and Japan to help market the produce once set up. The venture's main object would require travelling to other countries which he was hoping to keep the trustee fully informed of in due course.
It is said in the letter by Mr Kunievski that his company would cover travelling costs and accommodation expenses incurred and if approved, Mr Casella, if he obtained his passport, would then be able to participate in the business and further information could be given to the trustee from time to time for the trustee's record. Mr Casella would be employed on a full-time basis once the venture commenced and that he had been offered a salary of 37,000 per annum. It is suggested in the same correspondence that the trustee would be kept fully informed of the itinerary. It is further stated that as Mr Casella would be required to travel frequently and at times at very short notice, it was recommended his passport should be in hand to enable flights to be booked without delay and that notice would be given of each such flight.
Further correspondence has been exhibited to Mr Casella's affidavit from the trustee which essentially contains requests from the trustee to Mr Casella for more details in relation to his itinerary. He initially was asked for a copy of return air ticket and dates of departure and return. He was also asked for details of the itinerary from the prospective employer and that those details should relate to business meetings and the like and other details which might otherwise be required by the trustee. In a facsimile transmission dated 15 February 2002, the trustee seeks precise details concerning the names and contact details of persons paying for travel, details of the travel, copies of third party work-related correspondence and the like, together with the return air ticket.
In a detailed hand-written response to the trustee, also attached to the applicant's affidavit, he indicates the nature of the trip, attaches a copy of the airline ticket which provides for flights initially on this material on the trip from Perth to Singapore on 2 March and with a return Singapore, Perth, 27 May 2002. There are other references in that handwritten correspondence to the attempt by the applicant to provide at least some degree of detail for the purpose of assuring the trustee of the genuineness of the travel and the genuine purpose of that travel.
It seems to me that on that material, together with a further handwritten letter from the applicant, that he has endeavoured to bring to the attention of the trustee as best he is able, details which he believes would provide sufficient material to persuade the trustee to exercise his discretion to release the passport and to allow the travel as planned.
The applicant further exhibits a letter dated 20 February 2002 from a director of Dalpine Pty Ltd who it is said is the wife of Mr Kunievski, namely Ms Lena Kunievski. In that letter the author refers to discussions over the phone with the trustee and states that she has been placed in a very difficult situation. She states that when she spoke to the trustee and advised by fax on 28 October 2001 she was led to believe:
“ … there would be no problems as long as we provide as much information as was possible, we have tried to comply with the requirements before employing Mr Casella.
The tickets have been booked and paid for. An itinerary supplied and once I have details for the accommodation, this will be confirmed. Being a small island I'm not sure where they would stay (preferably somewhere low cost)”.
She goes on to refer about the need for urgent assistance as her husband is not Australian born, has difficulty with writing and that's the main reason he needs someone with him. She refers to being in Perth to be contacted at any time.
In response to that document the respondent has indicated that he was not satisfied that sufficient details of the whereabouts while overseas as requested has been provided and he therefore refused to grant permission to travel overseas until compliance exactly with earlier facsimiles has been given by the applicant.
The respondent, by affidavit sworn by Maxwell William Prentice and filed on 26 February 2002, makes reference to the fact that there is currently a plan to conduct a public examination and I am told and accept that the public examination is to occur I nor about June or July this year. He has also stated in that affidavit that as trustee of the bankrupt applicant, the respondent has prepared a list of creditors and that there is a suggestion that Mr and Mrs Casella did not disclose significant assets in the statement of affairs. Investigations are said to be continuing and due to the debt level of their estates and the complexity of the bankrupt's affairs, it is said by the trustee in his affidavit that he's still unable to adequately explain deficiencies in the estates and that he intends, subject to the creditors' support, to publicly examine Mr and Mrs Casella as to those matters.
He refers to the prospect of convening a meeting of creditors by 30 May 2002 to consider the request for funding to undertake these investigations. He refers to the statement of affairs of the applicant and suggests that in that statement of affairs there has been an understatement of the number and debt level of creditors. Only 10 creditors with a debt level of $2,579.452 are referred to whereas the list compiled after investigation shows 254 creditors with a combined debt level of $16,818,228.26. There has bee no assessment made pursuant to sections 139P and 139Q of the Bankruptcy Act. It is significant that the trustee says he is not aware of any pending or anticipated criminal charges against either Mr or Mrs Casella and I accept that to be the fact.
It is also noteworthy, however, that in the affidavit Mr Prentice suggests that he has no information to show the precise role being performed by the applicant for Dalpine, the company to which I have referred, the training received in respect of the role he is to perform overseas and the reasons required to go overseas to perform the role. He then says he has no means of satisfying himself that Mr Casella has been genuinely engaged by Dalpine to perform the role. He expresses concern that the engagement is not a genuine engagement, given that neither Mr Casella nor Dalpine have identified any special contacts that Mr Casella has on the overseas market which are intended to be exploited and queries why Mr Casella rather than another person has to undertake the role and that there are no details about where Mr Casella is to say.
He considers whether the trip would improve the bankrupt's opportunity of earning income or enhancing employment within or outside Australia and concluded that it would not be of benefit to the trustees of the bankrupt estate. He refers to the large accumulation of debt by the bankrupt within Australia and the absence of significant assets together with the lack of detail of itinerary, absence of likely contribution to the estate and the proposed engagement and lack of cooperation leads to concern about the intention to return to Australia.
The applicant for his part very firmly and strenuously denies any suggestion that he would not return. He has demonstrated a clear and strong desire to return for public examination and has stated quite clearly that he intends to return and would not indeed allow his wife to in a sense be examined in his absence at any public examination. He has asserted – and it is not dispute - that he is not the subject of any criminal charges or indeed any anticipated criminal charges. He has further asserted that this is a genuine employment opportunity that would at least enable him to pursue what he regards as a reasonable prospect of earning income and avoiding the prospect of continuing to remain on unemployment benefits.
It is submitted, therefore, on behalf of the applicant, that because this is a genuine endeavour to obtain employment, notwithstanding the lack of detail in the itinerary and the lack of detail in terms of the contacts and other activities that are to be undertaken during the course of the visits and despite the reference to a wide range of countries, he indicates that initially it would in fact be travel to one particular country and indeed one island and then the business would develop from that point onwards which might then necessitate travel to the other countries to which reference has been made in the submissions for and on behalf of the respondent. The respondent of course refers to the potential destinations and Reunion Islands, Madagascar, Seychelles, Brazil, Japan, Singapore, United States. The applicant denies that all of those countries are proposed to be the immediate places to which he should travel in the early stages of this venture.
It is submitted on behalf of the respondent that I should not accept that this is a bona fide employment trip and the proposed trip does not improve the prospects of earning income. I have been referred to Re Wheeler, Ex parte Wheeler v House (1994) 54 FCR 166 at 170. I have further been referred to other authorities in relation to the general power of review which I must undertake in a case of this kind and that they are consistent with the principles set out in the outline provided by the respondent, namely that -
“… a Court should interfere with a Trustee's exercise of discretion only `if it be shown [by the Applicant] that the impugned conduct of the Trustee was incorrect or that other conduct was, or… would be preferable and that justice and equity required the Court's intervention’, Healey v Prentice (No 2) [2000] FCA 1598 at [21]; compare observations re Wheeler; ex parte Wheeler v House (1994) 54 FCR 166.”
I accept that the court should only interfere with the trustee's exercise of discretion if it is shown, as indicated by the applicant, that the impugned conduct of the trustee was incorrect or that other conduct was or would be preferable and that justice and equity require the court's intervention.
In the present case, on the material before me, I accept that the applicant has made at least a genuine indication that he desires to be gainfully employed and that by being gainfully employed, this would be a clear benefit to him in the sense that it would enable him to no longer receive unemployment benefits. As I indicated during discussion, I was minded to determine whether or not the matter could be further adjourned until a time when the applicant was able to provide more precise details of the venture and the employment which may at least be further considered by the respondent. That course, however, does not appear realistic in circumstances where I accept that the travel is to take place on 30 March 2002 and that the requirement for some assistance which has been demonstrated by the prospective employer, Dalpine Pty Ltd, and Mr Kunievski in particular, is assistance with language and other matters of that kind which he requires as a matter of some urgency. Hence, I need to determine this application on the basis of the material presently before me, having regard to those circumstances.
In my view, having regard to those circumstances, it is also important for me to consider the duties and obligations of the trustee in exercising a discretion to withhold the passport, the duty to undertake a public examination in circumstances where the assets and debt position is, as described by the trustee in his affidavit, clearly extensive, complex and significant and that a public examination and indeed investigation leading up to that public examination, requires the presence, at least for a significant period of time, of the bankrupt in order to ensure that the investigation is properly carried out. Combining that role with the lack of specific details in relation to the travel arrangements and employment proposed by the applicant, it is my conclusion that in all the circumstances it is not appropriate that the court should interfere with the trustee's exercise of the discretion based upon – and I emphasise based upon – the material currently before this court and before the trustee and for those reasons the orders of the court will be:
(1)That the application be dismissed.
(2)The applicant pay the respondent's costs pursuant to Order 62 of the Federal Court Rules to be paid out of the estate of the applicant.
I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 22 March 2002
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