ex parte Charan

[2014] FCA 738

FEDERAL COURT OF AUSTRALIA

Charan, In the Bankrupt Estate of; ex parte Charan [2014] FCA 738

Citation:	Charan, In the Bankrupt Estate of; ex parte Charan [2014] FCA 738
Parties:	USHA WATI CHARAN and PRABHAKAR CHARAN v SCOTT PASCOE and ANDREW SCOTT
File number:	NSD 305 of 2014
Judge:	PERRAM J
Date of judgment:	10 July 2014
Legislation:	Bankruptcy Act 1966 (Cth) s 27, s 81 Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), ss 5(4), 5(9)
Cases cited:	Crawford v Sellars [2000] FCA 162
Date of hearing:	8 July 2014
Place:	Sydney
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	4
Solicitor for the Applicants:	The first applicant appeared in person
Solicitor for the Respondents:	Gillis Delaney Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 305 of 2014

BETWEEN:

USHA WATI CHARAN
First Applicant

PRABHAKAR CHARAN
Second Applicant

AND:

SCOTT PASCOE
First Respondent

ANDREW SCOTT
Second Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	10 JULY 2014
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The interim application be dismissed.

2.The applicants pay the respondents’ costs.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 305 of 2014

BETWEEN:

USHA WATI CHARAN
First Applicant

PRABHAKAR CHARAN
Second Applicant

AND:

SCOTT PASCOE
First Respondent

ANDREW SCOTT
Second Respondent

JUDGE:	PERRAM J
DATE:	10 JULY 2014
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. A sequestration order was made against Mrs Charan on 6 June 2012. The respondents are her trustees in bankruptcy. On 8 April 2014 a registrar of this Court issued a summons for Mrs Charan’s examination in the bankruptcy under s 81 of the Bankruptcy Act 1966 (Cth). She now applies to have that summons set aside.

2. There were two bases for the application:

   1.On 3 July 2014 her husband, Mr Charan, had commenced proceedings in the Supreme Court of New South Wales against the Commonwealth Bank, a Mr Gleeson and the trustees.  It would be convenient for the whole case to be heard in the Supreme Court and it was for that reason that Mrs Charan submitted that the summons to her should be set aside.

   2.The subject matter of the proposed examination overlapped in part with the subject matter of the Supreme Court proceedings.  It would be an abuse of process to permit the examination process to be utilized to assist the trustees in their defence of those proceedings.

3. I do not accept the first argument.  The jurisdiction of this Court in bankruptcy is exclusive of the jurisdiction of the Court of the States:  Bankruptcy Act s 27. Whilst there are differing views about how much of the jurisdiction of the State courts is excluded by the word ‘exclusive’ in s 27 on no view does their jurisdiction extend so as to conduct an examination under s 81. Whilst this Court does have power to transfer a proceeding to a State Supreme Court that power cannot be exercised unless the other Court first has jurisdiction to entertain the suit: Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), ss 5(4), 5(9). In this case, the Supreme Court does not have jurisdiction to conduct an examination in bankruptcy because of s 27 and hence this Court lacks power to transfer the proceeding.

4. I do not accept the second argument either.  There are, no doubt, circumstances in which it would be an abuse of process to permit the examination procedure to be used not as an aid to advance the trustee carrying out of his or her proper duties but instead as an impermissible forensic advantage in civil litigation:  cf. Crawford v Sellars [2000] FCA 162. On the other hand, as Sundberg J explained in the same case, the mere fact that litigation is on foot and that the information sought under the summons could affect the litigation is not sufficient to make out an abuse of process. In this case, that is all the evidence establishes. It follows that the application to set aside the examination summons will itself be dismissed with costs.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate:

Dated:       10 July 2014