Duncan v Shrestha, in the matter of Shrestha (a bankrupt)
[2022] FCA 1090
•14 September 2022
FEDERAL COURT OF AUSTRALIA
Duncan v Shrestha, in the matter of Shrestha (a bankrupt) [2022] FCA 1090
File number(s): VID 442 of 2022 Judgment of: GOODMAN J Date of judgment: 14 September 2022 Catchwords: BANKRUPTCY AND INSOLVENCY – interim application for orders concerning substituted service – respondent usually resident in Victoria – respondent refuses to provide address for service but has been in regular contact by email with the trustees of his estate – orders for service by email made Legislation: Cross-Border Insolvency Act 2008 (Cth), Schedule 1
Federal Court (Bankruptcy) Rules 2016 (Cth), r 14.03
Federal Court Rules 2011 (Cth), rr 1.34, 1.35, 8.06, 10.01, 10.24
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 10 Date of hearing: 14 September 2022 Counsel for the Applicants: Ms K Petch Solicitor for the Applicants: Gilbert & Tobin Lawyers Counsel for the Respondent: No appearance by the respondent ORDERS
VID 442 of 2022 IN THE MATTER OF SHRESTHA (A BANKRUPT)
BETWEEN: CAMERON LINDSAY DUNCAN AND DAVID DONG-WON KIM IN THEIR CAPACITY AS TRUSTEES OF THE BANKRUPT ESTATE OF ASHISH MAN SHRESTHA
Applicants
AND: ASHISH MAN SHRESTHA (THE BANKRUPT)
Respondent
ORDER MADE BY:
GOODMAN J
DATE OF ORDER:
14 SEPTEMBER 2022
THE COURT ORDERS THAT:
1.Pursuant to rule 10.24 of the Federal Court Rules 2011 (Cth) and for the purposes of r 14.03(3) of the Federal Court (Bankruptcy) Rules 2016 the applicants shall be taken to have effected service on the respondent of the following documents:
(a)the application filed in these proceedings on or about 28 July 2022;
(b)the interim application filed in these proceedings on or about 28 July 2022;
(c)the affidavits of Mr David Dong-Won Kim sworn 28 July 2022 and 12 September 2022;
(d)the affidavit of Mr Peter Andrew Hession affirmed 28 July 2022;
(e)submissions of counsel dated 13 September 2022; and
(f)these orders,
by sending a copy of those documents, marked to the attention of the respondent, to the email address: [email protected].
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Delivered extempore and revised)GOODMAN J
The applicants, who are the trustees of the bankrupt estate of the respondent pursuant to orders made on 12 May 2022 by the High Court of the Republic of Singapore, seek orders in respect of the service of their application for recognition in Australia of the Singaporean proceeding. Such recognition is sought pursuant to the Cross-Border Insolvency Act 2008 (Cth) and the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law, which is in Schedule 1 to that Act.
The application and the affidavits in support thereof have not yet been served on the respondent. By interim application, supported by affidavits made on 28 July 2022 and 12 September 2022 by one of the trustees, Mr David Kim, the trustees seek an order that service of the application; the interim application; affidavit evidence of the applicants; the written submissions in support of the interim application and the order itself will have been effected by sending those documents by email to the email address: [email protected] (marked to the attention of the respondent).
Rule 14.03 of the Federal Court (Bankruptcy) Rules 2016 (Cth) (Bankruptcy Rules) provides:
14.03Application for recognition
(1) An application by a foreign representative for recognition of a foreign proceeding under article 15 of the Model Law must be made by filing an application in accordance with Form B2.
(2) The application must:
(a) be accompanied by the statements mentioned in article 15 of the Model Law and in section 13 of the Cross‑Border Insolvency Act; and
(b) name the foreign representative as the applicant and the debtor as the respondent; and
(c) be accompanied by an affidavit verifying the matters mentioned in paragraphs 2 and 3 of article 15 of the Model Law and in section 13 of the Cross‑Border Insolvency Act.
(3) When filing the application, the foreign representative must file, but need not serve, an interim application seeking directions as to service, and the Court may give any directions about service, and make any incidental orders, that it thinks just.
(4) The applicant must serve a copy of the application and the other documents mentioned in subrule (2):
(a) unless the Court otherwise orders—on each respondent (if any) to the proceeding as soon as practicable after filing an application and, in any case, at least 5 days before the date fixed for hearing; and
(b) on any other persons the Court may direct at the hearing of the interim application.
(5) A person who intends to appear before the Court at the hearing of an application for recognition must file and serve the documents mentioned in rule 2.04.
Thus, the trustees are required to serve the application and supporting documents at least five days before the day fixed for hearing: see r 14.03(4).
The combined effect of rr 8.06 and 10.01 of the Federal Court Rules 2011 (Cth) is that the application (which is an originating application as defined in Schedule 1 to those Rules) must be served personally on the respondent, by leaving it with him. The effect of r 10.24 is that where such service is not practicable, the Court may make an order substituting another method of service or specifying that instead of service, certain steps be taken to bring the application to the respondent’s attention.
There is also power under rr 1.34 and 1.35 of the Federal Court Rules dispensing with compliance with rr 8.06 and 10.01 of those Rules. Rule 14.03(3) of the Bankruptcy Rules also empowers the Court to give any directions about service that the Court thinks just.
I am prepared to make the order sought by the trustees for the following reasons.
First, it is not practicable to effect personal service on the respondent. The evidence establishes that:
(1)whilst the respondent is an Australian citizen, he is presently in India;
(2)whilst the respondent was living in a rental apartment in Southbank, Victoria, he left that residence in June 2021 and lived in a short-term rental property before departing for India;
(3)whilst a title search has shown the respondent’s name on the title of a property in Cranbourne, Victoria, the respondent recently told Mr Kim that he had no connection with that property;
(4)the respondent has indicated to Mr Kim that he proposes to return to Australia in the near future (within two to three weeks of 2 September 2022);
(5)whilst the bankrupt has indicated to the trustees that his usual place of residence is in Melbourne, he has declined invitations made by the trustees in writing and verbally (as recently as 2 September 2022) to provide his current residential address, or an alternate address at which he would accept service; and
(6)as a result, the trustees do not know where to find the respondent so as to effect service upon him.
Secondly, it is likely that service by this method will cause the application (and other documents served in this way) to come to the attention of the respondent. The evidence establishes that the trustees and the respondent have been communicating by email and that the respondent has replied using the email address proposed to be used for service.
CONCLUSION
For the reasons set out above, I will make the orders for service sought by the applicants.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman. Associate:
Dated: 14 September 2022
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