Fuller, Michael John v Wily, Hugh Jenner - [1996] FCA 523

CATCHWORDS

BANKRUPTCY - application by bankrupt to remove his trustee - detailed examination of evidence and of primary judge's conclusions - applicable principles.

Bankruptcy Act 1966, ss. 134(4), 178, 179.

MICHAEL JOHN FULLER v HUGH JENNER WILY
No. SG 34 of 1995

CORAM:    SHEPPARD, SPENDER AND HILL JJ
PLACE:    ADELAIDE
DATE:     28 JUNE 1996

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIAN DISTRICT REGISTRY    )    No. SG 34 of 1995
  )
GENERAL DIVISION                 )

On appeal from the judgment of a judge of the
Federal Court of Australia

RE: MICHAEL JOHN FULLER,
A BANKRUPT

BETWEEN:MICHAEL JOHN FULLER
Appellant

AND:HUGH JENNER WILY
Respondent

MINUTES OF ORDER

CORAM: SHEPPARD, SPENDER AND HILL JJ
PLACE: ADELAIDE

DATE: 28 JUNE 1996

THE COURT ORDERS THAT:

The appeal be dismissed.

The appellant pay the respondent's costs of the appeal.

NOTE: Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )
  )
SOUTH AUSTRALIAN DISTRICT REGISTRY    )    No. SG 34 of 1995
  )
GENERAL DIVISION                 )

On appeal from the judgment of a judge of the
Federal Court of Australia

RE: MICHAEL JOHN FULLER,
A BANKRUPT

BETWEEN:MICHAEL JOHN FULLER
Appellant

AND:HUGH JENNER WILY
Respondent

CORAM: SHEPPARD, SPENDER AND HILL JJ

PLACE: ADELAIDE

DATE: 28 JUNE 1996

REASONS FOR JUDGMENT

THE COURT: This is an appeal from a judgment of a judge of this Court (Jenkinson J) delivered on 6 May 1995. The effect of the judgment was to dismiss an application brought by the appellant as applicant in which the appellant sought an order pursuant to s.179 of Bankruptcy Act 1966 ("the Act") that his trustee in bankruptcy, the respondent to the appeal, be removed as such trustee. The sequestration order made against the appellant was made on 20 May 1993. The act of bankruptcy was failure to comply with a bankruptcy notice based on a
final judgment dated 11 September 1992 in which a company, Claremont Petroleum NL ("Claremont"), recovered from two respondents, one of whom was the appellant, judgment in the sum of $493,750.

The respondent had agreed to consent to act as trustee of the estate of the appellant and, by the operation of subsec. 156A(2) of the Act, became trustee on the making of the sequestration order. At the time that the judgment was entered, there was pending in this Court another proceeding in which Claremont was an applicant. Together with another company, Beach Petroleum NL ("Beach"), it had sued a number of respondents one of whom was the appellant. The applicants in the proceedings succeeded on a number of causes of action against numbers of the respondents including the appellant based upon a finding of conspiracy, "gross breaches" of the duties of some of the respondents as directors of Beach and causing that company to enter into certain transactions without, inter alia, undertaking any proper due diligence. The proceedings in which those claims succeeded were heard over…

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.

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Details

Case: [1996] FCA 523
Decision Date: 28 JUNE 1996

CaseChat Overview and Summary

This case is an appeal by Michael John Fuller, the appellant, against the decision of Jenkinson J dismissing his application for the removal of Hugh Jenner Wily, the respondent, as his trustee in bankruptcy. The appeal was heard by Sheppard, Spender, and Hill JJ. The primary issues were whether the respondent had acted improperly in deciding not to appeal a judgment against the appellant and whether his conduct warranted removal as trustee. The evidence showed that the respondent had decided not to appeal based on the lack of funds and the unlikelihood of success. The appellant argued that the respondent had acted under the influence of the creditors and their solicitors, Piper Alderman. However, the Court found that the respondent had made his own decision and sought independent advice. The Court concluded that while the respondent could have approached the Court for a direction and notified other creditors, his decision not to appeal was reasonable given the practical constraints. The appeal was dismissed with costs.

Orders