Gray, N.J. v The Official Trustee in Bankruptcy

JUDGMENT No. 24/ / q! ......

NOT FOR D I S Y 1 3 I 3 U T I O N

IN TFlE FEDERAL COURT OF AUSTRALIA )
1

VICTORIA DISTRICT REGISTRY 1 No. VG 69 of 1988
1
GENERAL DIVISION 1
BETWEEN:

NORMAN JOHN GRAY

Applicant

- and-
OFFICIAL TRUSTEE IN BANKRUPTCY

RECEIVED

First Respondent

13MAY 1991 - and -

FEDERAL COURT OF

AUSTRALIA

PRINCIPAL JEFFREY NORMAN GRAY

REGISTRY Second Respondent

- and -

COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE

Third Respondent

JUDGE : Heerey J.
PLACE : ~elbourne
W: 2 May 1991

EX TEMPORE REASONS FOR .JUDGMENT

I think that MI Ginnane is correct to this extent that the Court cannot force somebody in the Official Trustee's position to take inter-pleader proceedings or to pay money in accordance with a particular view of the matter. But the reality here seems to be that these issues have been the subject of contested litigation in this Court and in particular the question of the ownership of the money by M r Gray Jnr has really not even been raised let alone decided. Without, of course, expressing any concluded view on it I would have considerable doubt whether one could say that payment out to Mr Gray Jnr or to the Deputy Commissioner of Taxation was clearly justified within the terms of

s.243G(l)(b) of the Customs Act.
And, of course, the reality is that there is another party, namely, Mr Gray Snr, who has established in this Court a possessory right to the money which on ordinary principles is good against all the world except the true owner, and one can readily imagine that injunctive proceedings might be taken by
Mr Gray Snr to restrain any disposition of the money without a
determination of the competing rights of himself and the
Deputy Commissioner of Taxation.
It is ultimately, I think, a matter for the Official Trustee to consider, therefore, in the light of the comments I have made. I think the best course to do is to adjourn this hearing which is pursuant to the liberty to apply that was reserved in my judgment delivered yesterday, until Tuesday, 21 May 1991. I can give an indication that in substance a full day's hearing would be available on that day.
In the meantime if the Official Trustee so determines an

-. appropriate inter-pleader motion can be taken out under 0.44.

I cannot give directions, of course, in a proceeding which hasn't yet issued and need not necessarily in fact issue. But as a matter of practicality and common sense if there were to be a hearing on 21 May 1991 any further affidavit material on which the parties wish to rely ought to be filed by Friday, 10

May 1991, and any further affidavit material in reply by the
following Friday, 17 May 1991.
Unless you gentlemen have anything to say to the contrary I propose to reserve the cost of today's proceedings.
I certify that this and the
preceding page are a true copy of the Reasons for Judgment of the Honourable
M r Justice Heerey
\ AB oci te

Counsel for the Applicant: Mr G J Maguire
Solicitors for the Applicant: F W Robson & CO
Solicitors for the First
Respondent: Australian Government
Solicitor
Solicitors for the Second
Respondent: No appearance
Solicitors for the Third
Respondent: Department of Public
Prosecutions
Counsel for the Deputy
Commissioner of Taxation: Mr T J Ginnane
Solicitors for the Deputy
Commissioner of Taxation: Australian Government
Solicitor

CaseChat Overview and Summary

Norman John Gray, the applicant, has brought a proceeding against the Official Trustee in Bankruptcy, the first respondent, Federal Court of Australia, the second respondent, and the Principal Jeffrey Norman Gray, the third respondent, as well as the Commissioner of the Australian Federal Police, the fourth respondent. The case revolves around the ownership and disposition of a sum of money held by the Official Trustee in Bankruptcy. The applicant, Norman John Gray, seeks to determine the rightful ownership of the money and to have it paid out to him, as opposed to the Deputy Commissioner of Taxation. The Official Trustee in Bankruptcy is currently in possession of the money and is responsible for determining how it should be distributed.

The court was required to decide whether the Official Trustee in Bankruptcy should be compelled to take inter-pleader proceedings or to pay the money out in accordance with the applicant's view. Additionally, the court had to consider whether the payment of the money to the Deputy Commissioner of Taxation was justified under section 243G(1)(b) of the Customs Act. The court also had to address the possessory right of the applicant's father, Jeffrey Norman Gray, to the money, and the potential for injunctive proceedings to be taken against any disposition of the money without a determination of the competing rights.

The court held that it could not force the Official Trustee in Bankruptcy to take inter-pleader proceedings or to pay the money out in accordance with the applicant's view. However, the court expressed doubt as to whether payment out to the applicant or to the Deputy Commissioner of Taxation was clearly justified within the terms of section 243G(1)(b) of the Customs Act. The court noted that the possessory right of Jeffrey Norman Gray to the money was good against all the world except the true owner, and that injunctive proceedings might be taken to restrain any disposition of the money without a determination of the competing rights. The court ultimately left it to the Official Trustee in Bankruptcy to consider the matter, but suggested that an inter-pleader motion could be taken out under Order 44 if the Official Trustee so determined. The court also provided timelines for the filing of affidavit material in the event that a hearing was held.

The court reserved the costs of the proceeding, and certified that the provided pages were a true copy of the reasons for judgment. The case highlights the importance of determining the rightful ownership of funds held by the Official Trustee in Bankruptcy, and the need for a fair and transparent process to be followed in making such determinations.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

VICTORIA DISTRICT REGISTRY	1	No. VG 69 of 1988
1
GENERAL DIVISION	1
BETWEEN:

PRINCIPAL	JEFFREY NORMAN GRAY
REGISTRY	Second Respondent

Counsel for the Applicant:	Mr G J Maguire
Solicitors for the Applicant:	F W Robson & CO
Solicitors for the First
Respondent:	Australian Government Solicitor
Solicitors for the Second
Respondent:	No appearance
Solicitors for the Third
Respondent:	Department of Public Prosecutions
Counsel for the Deputy
Commissioner of Taxation:	Mr T J Ginnane
Solicitors for the Deputy
Commissioner of Taxation:	Australian Government Solicitor