Goward R.J. v Wily H.J.

[1992] FCA 735

JUDGMENT No. ..... 7 5 5 , q.l ,...,......, .,.,,.,.,.,.

JN THE FEDERAL COURT OF AUSTRALIA )

GENERAL_D-ms-IQN )

TCY DISTRICT OF ) No. W13 of 1991

STATR OF NEW SOUTH WALES )

RE :	JZUSSET$L JOHN GOWARD
EX PARTE:	HUGH JENNER WITqY

CORAM : HILL J
E~LAG?~: SYDNEY

RA!imi:  27 MAY 1992

MINUTES OF ORDFiR

m COURT ORDERS THAT:

1.    The application be dismissed.

2.    Matter to be remitted to the Registrar to continue the public examination.

3.    Subject to any order of the Full Court, no part of these reasons shall be published before 3.00pm today.

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

JN THR FEDERAL COURT OF AUSTRATbIA ) , ; . . <

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BANKRUPTCY DISTRICT OF THE	)	NO. W13 of 1991
STATE OF NEW SOUTH WALES	)

RE :	RUSSELL JOHN GOWARD
EX PARTE:	BUGH JENNER

CORM : HILL J
W : SYDNEY

Lwm!:  27 MAY 1992

E X A R E A S O N S FOR JUDGMENT

Mr Lyons and Mr Brown have been summonsed pursuant to the provisions of s.81 of the Bankru~tcv Act 1966 to be examined in respect of the affairs of Mr Russell Goward, a bankrupt. Those examinations were scheduled to be heard before a Registrar of the court this morning. The two applicants before me applied to the Registrar for particular relief. In the case of Mr Lyons, the application was that his evidence should be heard in private. In the case of Mr Brown his application was that his name be suppressed. The

Registrar has referred these two applications to me for

decision this morning.

In support of the application made by Mr Lyons a statement was tendered and M r Lyons swore to the correctness of that statement so far as it concerned matters of fact. I acceded to an application by counsel that that evidence, so far as it touched upon para.8 of that affidavit, be heard in private and that initial submissions at least could take place in private, prior to a determination of the matter. In the statement Mr Lyons indicates that he has a number of children, ranging in age from 5 to 19. He adverts to what is common ground between the parties that there has been widespread publicity of the affairs of Mr Goward, arising out of the demise of the public company, Westmex Limited.

Mr Lyons has apparently given certain financial assistance to Mrs Goward, Mr Goward's wife, and expresses his concern that he would be exposed to widespread publicity, particularly with respect to this financial assistance. Paragraph 8 of the affidavit raised what appeared to be a different issue. In it Mr Lyons expressed apprehension that should what he refers to as "material" get into the media the security of his family, and in particular younger members of it, might be put at risk. I assume the material to which he refers is the material that would arise out of the publicity attendant upon the answers which he may give in the

trustee on this paragraph. He said (and no doubt his answers	examination. Mr Lyons was cross-examined by counsel for the
might be echoed by all who are examined under 6.81) that he did not like the sort of publicity which might ensue. He said that he was a private person and he did not wish his privacy to be disturbed; he valued it and his family health and welfare beyond all other things. He said that there had in the past been cases of kidnapping of wealthy persons and he feared a like situation arising. Under cross-examination, however, he conceded that at no time had his house been broken into and at no time had either he or any member of his family been threatened, notwithstanding that his association with Mr and Mrs Goward had already received considerable publicity. For Mr Lyons, senior counsel submitted that I should take into account, in particular, the sort of society in which we now live in which dangers of violence and threats to the security of individuals may result from publicity of an unrestrained kind such as might follow from the examination. While I have no doubt that Mr Lyons may fear a threat to his security, I think that this is a matter which must be balanced against the public interest.
The policy of the bankruptcy legislation is that the affairs of a bankrupt may be examined publicly in two ways. First, the bankrupt himself may be the subject of a public
be examined pursuant to the provisions of 6.81. That examination. Secondly any person, including the bankrupt, may examination may proceed either before a Registrar of the
court, a magistrate, or before a judge of this court and may touch upon the trade dealings, business, and affairs of the bankrupt. In that examination, under 6.81 the person examined is required to answer all questions that are put or allowed to be put to him subject to the requirement that the questions concern some matter or thing connected with the administration of the relevant persons estate.
There is a considerable public interest in permitting such an examination to be open to members of the public, not because they may be sensational but because when a debtor has become bankrupt, persons, particularly those who are creditors, are entitled to know what the circumstances were which led to the bankruptcy as well as to be informed of matters which might ultimately lead to assets of the estate being recovered from the bankrupt or others in proceedings prima facie to be implemented by the trustee.
The fact that the bankrupt is a high profile person whose affairs may attract publicity hardly itself is a reason to require the examination to be held in private. Indeed, perhaps quite to the contrary. The fact that a person examined in this case may be wealthy does not seem to me itself to involve any reason to depart from the normal
position. real risk that the person giving evidence would be in some It may be that in a particular case if there were a danger by so doing, then the public interest might be
displaced.
The situation here has not got to that state. The most that one can say of the evidence before me is that there was an apprehension on the part of Mr Lyons that his security might be affected but there was nothing in the evidence to show that there was any real risk either to him or to members of his family. For these reasons I have no reason to determine the question whether or not power does exist in a court to order the examination to be held in private and I have assumed the existence of such a power.
In the case of Mr Brown, no evidence was put before me as to why his name should be suppressed from publication. It was said that he is presently unemployed and that his name being published might make it more difficult for him to obtain employment. Reference is also made to a potential that the association of his name with that of the bankrupt might in some way lead to a suggestion of guilt by association if his name were revealed.
It seems to me that there is no substance in that at all. It is a matter of public record that Mr Brown has been summonsed to appear. He was a director of the public company with which Mr Goward was associated and his name has been mentioned in the proceedings, I was told from the bar table, on numerous occasions. Might I say that it would seem to me
very wrong for there to be any suggestion of guilt attaching by association merely because a person has been summonsed to give evidence under s.81. Bankruptcy itself is not a criminal offence. No doubt it may turn out that a particular bankrupt may have engaged in activities which are not legal, but if every person who was summonsed to give evidence under s.81 sought suppression of their name, the public would never know what evidence was being given in such examinations. Justice would not, it seems to me, be afforded by such a course. Accordingly, I propose to reject the application. The matter will then be remitted to the Registrar to continue the examination.
I direct that no part of the reasons I delivered orally be published (subject to any order that may be made by the full court) until 3.00pm this afternoon. I do so on the basis that the applicant, if so advised, will make immediate application to the full court.
I certify that this and the
preceding five (5) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Hill.
Associate: ye
Date: 27 May 1992

Counsel and Solicitors	J. Spender QC with
for Applicant:	D.J. Hammerschlag instructed by Barker Gosling
Counsel and Solicitors	J.K. Chippindall
for the Trustee:	instructed by Clayton Utz
Date of Hearing:	27 May 1992
Date Judgment Delivered:	27 May 1992