Dick v McIntosh - [2002] FCA 1135

FEDERAL COURT OF AUSTRALIA
Dick v McIntosh [2002] FCA 1135
BANKRUPTCY - Respondent declared bankrupt in High Court of Justice of United Kingdom - bankrupt with assets in Australia - application to Court to act in aid of a United Kingdom bankruptcy - whether examination and investigation to identify property of the bankrupt should be permitted.
Bankruptcy Act 1966 (Cth), s 29, s 81, s 116
Radich v Bank of New Zealand (1993) 45 FCR 101 Appl
Ayres; Ex parte Evans (1981) 51 FLR 395 Cited
Galbraith v Grimshaw [1910] AC 508 (HL) Cited
Re Doyle; Ex parte Brien v Doyle (1993) 41 FCR 40 Cited
Australian Mutual Provident Society v Gregory (1908) 5 CLR 615 Cited
ANDREW DICK AS TRUSTEE OF THE PROPERTY OF ANN CAPPER McINTOSH (A BANKRUPT) v ANN CAPPER McINTOSH (A BANKRUPT)
Q7305 OF 2000
COOPER J
BRISBANE
13 SEPTEMBER 2002

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

Q7305 OF 2000

BETWEEN:

ANDREW DICK AS TRUSTEE OF THE PROPERTY OF ANN CAPPER McINTOSH (A BANKRUPT)
APPLICANT

AND:

ANN CAPPER McINTOSH (A BANKRUPT)
RESPONDENT

JUDGE:

COOPER J

DATE OF ORDER:

13 SEPTEMBER 2002

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:
1.The order of the Court made on 31 July 2001 appointing Gregory Michael Moloney Receiver without security of the divisible property of Ann Capper McIntosh in Australia be amended to insert after the words “Bankruptcy Act 1966 (Cth)” the following words: “... and ascertained by reference to the commencement of her bankruptcy in the United Kingdom on 26 April 1999, ...”.
2.The District Registrar of the Queensland District of the Court pursuant to s 81 of the Bankruptcy Act 1966 (Cth) summon Ann Capper McIntosh to attend for examination on oath under s 81 of the said Act before the District Registrar or a Deputy District Registrar about her examinable affairs (as defined in s 5 of the said Act) and that she bring with her to such examination for production thereat such books as are within her possession or control which relate to her said examinable affairs.
3.The applicant may be represented at such examination of Ann Capper McIntosh about her examinable affairs by Gregory Michael Moloney, the Receiver of the divisible property of Ann Capper McIntosh situate within Australia and by counsel and/or by solicitor, and, subject to s 81(10) and (11) of the Bankruptcy Act 1966 (Cth), the applicant, by Gregory Michael Moloney and by counsel and/or solicitor, conduct the examination of the said Ann Capper McIntosh.
4.The applicant and the respondent be at liberty to apply to this Court on seven days notice, such notice to include drafts of any orders sought together with any affidavit material to be relied upon to support the granting of such orders, for any ancillary or consequential orders or directions in this matter as may be necessary.
5.The respondent pay the applicant’s costs of and incidental to the further application, to be taxed if not agreed.
Note:Settlement and entry of orders is dealt with…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dick v McIntosh

Details

AGLC: Dick v McIntosh [2002] FCA 1135
Case: [2002] FCA 1135
Decision Date: 13 SEPTEMBER 2002

CaseChat Overview and Summary

The case of Dick v McIntosh involved a dispute over the scope and validity of orders made under the Bankruptcy Act 1966 (Cth) concerning the respondent's divisible property in Australia. The orders were sought by the applicant, presumably a creditor, and contested by the respondent, Ann Capper McIntosh, who opposed the orders on multiple grounds. McIntosh argued that she had not received proper notice, that the property in question had been disposed of before the appointment of the Receiver, and that the Receiver lacked the authority to inquire into pre-appointment dispositions. Additionally, she contended that the appointment of the Receiver was ineffective as her bankruptcy had not officially commenced in Australia, and that the Receiver did not have the power to set aside dispositions of property.

The central legal issues before the court were whether the Receiver had the authority to inquire into the respondent’s property dispositions prior to his appointment, and whether the orders appointing the Receiver were validly made given the timing of the respondent's bankruptcy. The court had to determine if Australian courts would recognise the bankruptcy order made by the High Court of Justice in London, and if so, how this recognition affects the division of property under Australian law. Furthermore, the court needed to ascertain the effective date of the bankruptcy for the purposes of identifying divisible property under Australian legislation.

The court ruled that the order appointing the Receiver was valid and should be interpreted with reference to the commencement of McIntosh's bankruptcy in the UK on 26 April 1999. It found that Australian courts would recognise the UK bankruptcy order and that the Receiver had the necessary powers to examine the respondent concerning her property. The court also clarified that the commencement date of the bankruptcy for the purposes of determining divisible property was the date of the UK order, not the date of the Receiver's appointment. Consequently, the court amended the order to reflect this commencement date and directed the respondent to attend for examination about her examinable affairs.

The final orders included amendments to the original order regarding the commencement date of the bankruptcy, a summons for McIntosh to attend for examination under oath, and provisions for the applicant to be represented during the examination. Additionally, the respondent was ordered to pay the applicant's costs of the further application.

Orders

Orders of the court

1. The order of the Court made on 31 July 2001 appointing Gregory Michael Moloney Receiver without security of the divisible property of Ann Capper McIntosh in Australia be amended to insert after the words “Bankruptcy Act 1966 (Cth)” the following words: “... and ascertained by reference to the commencement of her bankruptcy in the United Kingdom on 26 April 1999, ...”.

2. The District Registrar of the Queensland District of the Court pursuant to s 81 of the Bankruptcy Act 1966 (Cth) summon Ann Capper McIntosh to attend for examination on oath under s 81 of the said Act before the District Registrar or a Deputy District Registrar about her examinable affairs (as defined in s 5 of the said Act) and that she bring with her to such examination for production thereat such books as are within her possession or control which relate to her said examinable affairs.

3. The applicant may be represented at such examination of Ann Capper McIntosh about her examinable affairs by Gregory Michael Moloney, the Receiver of the divisible property of Ann Capper McIntosh situate within Australia and by counsel and/or by solicitor, and, subject to s 81(10) and (11) of the Bankruptcy Act 1966 (Cth), the applicant, by Gregory Michael Moloney and by counsel and/or solicitor, conduct the examination of the said Ann Capper McIntosh.

4. The applicant and the respondent be at liberty to apply to this Court on seven days notice, such notice to include drafts of any orders sought together with any affidavit material to be relied upon to support the granting of such orders, for any ancillary or consequential orders or directions in this matter as may be necessary.

5. The respondent pay the applicant’s costs of and incidental to the further application, to be taxed if not agreed.

Note:

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

COOPER J

The respondent opposed the making of the orders sought for the following reasons:(a)she had not received notice of the orders sought and she was unclear whether it was the applicant or the Receiver who sought additional orders;(b)the property in respect of which the Receiver seeks information, or to claim, was property disposed of prior to the appointment of the Receiver on 31 July 2001 and therefore the Receiver has no power to make inquiry as to its disposition;(c)she has no obligation to co-operate with the Receiver in respect of his inquiries concerning any property and its disposition prior to the appointment of the Receiver;(d)the order appointing the Receiver over the divisible property of the respondent lacks utility because there is no commencement of the bankruptcy for the purposes of s 116 of the Act;(e)the Receiver has no power to make applications under ss 120, 121 or 122 of the Act to set aside dispositions of property, and, to seek orders to examine the respondent for that purpose, is misconceived.CONCLUSION Order 1 of the orders made on 31 July 2001 was an order made under s 29 of the Act. The order is to be read and operated by reference to two matters of fact and law. The first is that the respondent is bankrupt by virtue of an order made by the High Court of Justice in London on 26 April 1999 and certain legal consequences follow from her being adjudged bankrupt. The second is that her bankruptcy commended on 26 April 1999: s 278 of the Insolvency Act 1986 (UK) (“the UK Act”). Subject to the applicable rules of private international law, the bankruptcy order of the High Court of Justice will be recognised by Australian Courts: see Australian Private International Law 3rd Ed. Sykes & Pryles at pp 791 - 793; Radich v Bank of New Zealand (1993) 45 FCR 101 at 105 - 106. Additionally, Australian Courts exercising jurisdiction under the Act will act in aid of and ancillary to courts of other countries having jurisdiction in bankruptcy: s 29(2) of the Act. One of the main uses of sections such as s 29 of the Act is to enable recourse to be had to a bankrupt’s property in the country to the courts of which the request is made: Ayres; Ex parte Evans (1981) 51 FLR 395 at 407 - 408. The “divisible property within the meaning of s 116 of the Bankruptcy Act 1966 (Cth)” to which order 1 refers is property falling within the description of s 116(1) subject to the limitations contained in s 116(2) of the Act. The commencement of the respondent’s bankruptcy for the purpose of identifying which property is to be divisible amongst the creditors of the respondent in the administration of her bankruptcy is 26 April 1999. No issue of “relation back” arises in respect of the commencement of her bankruptcy. The rule of relation back was abolished in the United Kingdom with the introduction of the UK Act and the date of commencement of a bankruptcy administered under the UK Act is the date upon which the bankruptcy order is made: s 278, s 283; Fletcher The Law of Insolvency Sweet & Maxwell, London (1990) at pp 174 - 176. Further, the local relation back provisions for the purpose of ascertaining the commencement of a bankruptcy under the Act, are inapplicable to a foreign bankruptcy: Sykes & Pryles at pp 792 - 793; Galbraith v Grimshaw [1910] AC 508 (HL) at 510, 512 - 513; Re Doyle; Ex parte Brien v Doyle (1993) 41 FCR 40 at 56.

Ratio Decidendi

Legal Principle Established

Established by: COOPER J

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IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q7305 OF 2000

BETWEEN:	ANDREW DICK AS TRUSTEE OF THE PROPERTY OF ANN CAPPER McINTOSH (A BANKRUPT) APPLICANT
AND:	ANN CAPPER McINTOSH (A BANKRUPT) RESPONDENT
JUDGE:	COOPER J
DATE OF ORDER:	13 SEPTEMBER 2002
WHERE MADE:	BRISBANE