Gamble as Trustee of the Property of King, a Bankrupt v King

[2017] FCCA 789

FEDERAL CIRCUIT COURT OF AUSTRALIA

GAMBLE AS TRUSTEE OF THE PROPERTY OF KING, A BANKRUPT v KING [2017] FCCA 789

Catchwords:
PRACTICE AND PROCEDURE – application to set aside orders – arrest warrants – failure to sign transcript of examinations – failure to attend adjourned examination.

Legislation:

Bankruptcy Act 1966 (Cth), s.81

Federal Circuit Court (Bankruptcy) Rules 2006 (Cth), r.6.04

Federal Circuit Court Rules 2001 (Cth), r.16.05(2)(e)

Applicant: RONALD DEREK GAMBLE AS TRUSTEE OF THE PROPERTY OF MICHAEL JOHN KING, A BANKRUPT

Respondent: MICHAEL JOHN KING

File Number: PEG 506 of 2015

Judgment of: Judge Lucev

Hearing date: 18 April 2017

Date of Last Submission: 18 April 2017

Delivered at: Perth

Delivered on: 18 April 2017

REPRESENTATION

Counsel for the Applicant: Mr H West

Solicitors for the Applicant: Dentons

For the Respondent: In person

ORDERS (made on 18 April 2017)

1. That order 2 of the Court’s orders of 17 November 2016 be set aside, but otherwise with respect to the respondent’s application in a case filed 10 April 2017 that application in a case be dismissed.

2. That pursuant to r.16.05(2)(e) of the Federal Circuit Court Rules 2001 (Cth) the word “applicant” in line 2 of order 1 of the Court’s orders of 17 November 2016 be amended to read “respondent”.

3. That either party have liberty to apply to a Registrar of the Court for the adjourned examination to be relisted as a matter of urgency.

4. That the respondent bankrupt pay the costs of and incidental to the application in a case filed 10 April 2017.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PERTH

PEG 506 of 2015

RONALD DEREK GAMBLE AS TRUSTEE OF THE PROPERTY OF MICHAEL JOHN KING, A BANKRUPT

Applicant

And

MICHAEL JOHN KING

Respondent

REASONS FOR JUDGMENT

(Delivered ex tempore and edited)

1. This is an application in a case by the respondent, Michael John King (“Mr King”), presently a bankrupt, for an order that the Court effectively set aside arrest warrants issued by it on 17 November 2016, and also that the lawyers for the applicant, the applicant bankrupt’s trustee (“Trustee”), to deliver up certain documents indicating that an application for examination (Bankruptcy Act 1966 (Cth), s.81 (“Bankruptcy Act”)) has been correctly filed.

2. The application is supported by a very brief affidavit by Mr King which was either sworn or affirmed – it is not indicated which – on 10 April 2017 and which the Court will need to return in due course.

3. In relation to the issue of the nature of the proceedings, there was an application filed on 30 October 2015 by the Trustee for a Registrar to issue a summons to examine a relevant or examinable person, namely, Mr King (of 25 Bland Road, York, in the State of Western Australia). That application was supported by an affidavit of the Trustee the terms of which it is not necessary for present purposes to go into. Suffice to note that the application was, however, properly supported by an affidavit.

4. On 4 November 2015, Registrar Stanley of this Court made orders as follows:

   (1) That a Summons for examination under section 81 of the Bankruptcy Act 1966 be issued to Michael John King, of 25 Bland Road, York, Western Australia, in the form of the draft summons filed in these proceedings on 30 October 2015 and addressed to him.

   (2) The summons be returnable before a Registrar on a date and time to be fixed by a Registrar.

   (3) The examination be recorded in writing and the examinee do sign the written transcript of the examination.

5. The summons in bankruptcy for examination about a debtor’s examinable affairs pursuant to r.6.04 of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) issued on 4 November 2015, and is addressed to Michael John King of 25 Bland Road, York, Western Australia, and is issued out of this Court by a Registrar and its terms are as follows:

   (1) You are required to attend before a Registrar at the time, date and place stated above to be examined on oath under section 81 of the Bankruptcy Act 1966 and to give evidence in relation to the examinable affairs of Michael John King.

   (2) You are also required to attend at any time, date and place to which the examination is adjourned if you have been given written notice of that time, date and place.

   (3) You are also required to bring the following books with you and produce them at the examination.

6. The summons then refers to a number of documents in an attached schedule and sets the time and date for the examination as Wednesday, 2 December 2015 at 10.15am.

7. The Court is satisfied that there was a summons in bankruptcy for the examination of Mr King properly issued out of the Registry of this Court by a Registrar of this Court. Various hearings before a Registrar then occurred and were adjourned, but relevant to the current application in a case, on 15 April 2016 there was a hearing before a Registrar which Mr King did not attend, but at which the Registrar made the following orders:

   (1) The examination of Michael John King be adjourned to a date to be fixed.

   (2) In the event that there is no application for examination on or before 31 August 2016, the examination be deemed concluded.

   (3) The examinee sign a copy of the transcript.

8. What then occurred was that on 30 June 2016 – that is some two months before the date required for an application for examination to be made pursuant to the orders of 15 April 2016 – there was a further hearing before a Registrar, and on 30 June 2016 that Registrar made orders as follows:

   (1) The examination be adjourned to a date not before 1 October 2016 by arrangement with the registry.

   (2) Any application for adjournment on medical grounds be filed and served seven days before the proposed adjourned examination.

   (3) Costs be reserved.

9. The Court notes from the reported listing that Mr King attended that hearing before the Registrar. It is plain, and the Court can infer from the terms of that order, that there was, pursuant to the orders of 15 April 2016, an application for the examination to proceed made on or before 31 August 2016 which resulted in the hearing on 30 June 2016, which further resulted in the examination being adjourned to a date not before 1 October 2016. And, in any event, on the usual principles, that a later order supersedes and overrides an earlier order to the extent of any inconsistency, it is plain that there was such an application made to allow the examination to proceed and that application was made on or before 31 August 2016 in accordance with the orders of 15 April 2016.

10. At the adjourned examination on 13 October 2016, there was no appearance by Mr King, and the examination was adjourned to a date to be fixed. There was subsequently an application made by the Trustee for arrest warrants to issue and, for reasons which were given orally by a Judge on 17 November 2016, the Court made orders issuing those warrants in the following terms:

    (1) Pursuant to section 264B of the Bankruptcy Act 1966 (Cth) (“The Bankruptcy Act”), that the applicant [respondent] (“the Bankrupt”), by reason of his failure to attend before the Court to be examined pursuant to s.81 of the Bankruptcy Act on 13 October 2016 be arrested and a warrant for his arrest be issued.

    (2) Pursuant to s.78 of the Bankruptcy Act that the Bankrupt has neglected to comply with an order of this Court to sign the transcript of his examinations held 2 December 2015 and 14 April 2016 and by reason thereof, the Bankrupt be arrested and a warrant for his arrest be issued.

11. Pursuant to those orders, arrest warrants were issued. Mr King then made an application in a case which came before a Judge on 19 December 2016. The Court notes the terms of the orders then made, which are probably properly characterised as notes of undertakings and orders, but which were, in any event, relevantly in the following terms:

    (1) The Court notes the undertaking of the bankrupt that he will attend the offices of the trustee before 12.00pm on Thursday, 22 December 2016 and sign the transcripts of the examinations held on 2 December 2015 and 14 April 2016.

    (2) The Court notes the further undertaking of the bankrupt to attend court on a date to be advised on at least seven days notice for examination pursuant to s.81 of the Bankruptcy Act 1966 (Cth).

    (3) On condition that the first undertaking is met, orders (1) and (2) made by Judge Lucev on 17 November 2016 are vacated.

    (4) If the undertaking in order (1) is not met, orders (1) and (2) made by Judge Lucev on 17 November 2016 remain in effect.

    (5) If the undertaking in order (2) is not met, order (1) made by Judge Lucev on 17 November 2016 is reinstated.

12. The Court notes that the orders of 19 December 2016 did not refer to any undertaking given by the Trustee as is now asserted to be the case by Mr King, and the Court is prepared to infer from the fact that no undertaking was noted by the Court that no undertaking of the type now asserted by Mr King was then given by the Trustee. There is otherwise no transcript of that hearing before the Court (differently constituted) to prove what was said or not said.

13. The Court further notes, having read the emails from the Associate to the Judge concerned, which are annexed to Mr King’s affidavit, that the emails, apart from the assertions made by Mr King, do not give any indication that any undertaking was, in fact, given by the Trustee through his lawyer on 19 December 2016. The Court is of the view that the fact that such an important undertaking is not referred to in either the orders or the Judge’s Associate’s emails in any way, shape or form leads the Court to infer that no such undertaking was, in fact, given. In any event, the examination was adjourned to 17 February 2017, and on that Mr King did not attend the examination, which has now been adjourned to a date to be fixed.

14. In the circumstances, the Court takes the view, as it has already indicated, that the examination summons was properly applied for and properly made by a Registrar of this Court. The Court also takes the view that at some time on or before 31 August 2016, as is evident from the orders of 30 June 2016, that the Trustee did make an application for the examination to continue, and the examination on 30 June 2016 was then adjourned to another date.

15. On those bases, the factual assertions which underpin the application in a case are simply not made out, nor, for the reasons that the Court has otherwise indicated, is there any indication that any form of undertaking was given at the 19 December 2016 hearing by the Trustee’s lawyers which would otherwise assist the application in a case.

16. Treating the application in a case as an application to set aside the orders of this Court made on 17 November 2016, it seems that there is no adequate reason to set those orders aside. As the Court has indicated, the factual underpinning for them has not been made out. There would be and continues to be ongoing prejudice to the Trustee by reason of his not being able to examine Mr King. For the reasons that the Court has otherwise outlined, there is certainly no arguable case to set aside the orders made on 17 November 2016, save for the fact that it now appears to be common ground that Mr King has now signed the transcripts of the examinations on 2 December 2015 and 14 April 2016, and therefore it would not be appropriate that, if Mr King were to be arrested, that he be arrested on a warrant in respect of matters with which he has complied.

17. The Court notes that Mr King has indicated that he is prepared to attend an examination before a Registrar within the next 14 to 21 days. If that can be arranged, and liberty to apply urgently will be granted, then no doubt any extant arrest warrant would probably not be sought to be executed by the Trustee acting as a model litigant. Of course, as the Court has indicated to Mr King, if a further date for examination is set and he does not attend, then one would expect in the normal course of events that any relevant extant arrest warrant would then be acted upon.

18. Given all of the circumstances, the Court is prepared to make an order that order (2) of the orders of 17 November 2016 be set aside in circumstances where it has been complied with. Order (1) of the orders of 17 November 2016 has not been complied with and, pursuant to the orders of 19 December 2016 it remains as an extant order of this Court.

19. The Court also amends pursuant to rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 (Cth) the word “applicant” in the second line of order (1) of the orders of 17 November 2016 which should read “respondent”, and an order amending that will be made.

20. Save as otherwise indicated Mr King’s application in a case filed 10 April 2017 is dismissed, and he is to pay the costs of and incidental to that application in a case.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Judge Lucev

Associate: 

Date:  20 April 2016