Gray v Clout

No judgment structure available for this case.

Re: JOHN ARTHUR NICOL GRAY
And: DAVID LEWIS CLOUT
No. Q G121 of 1990
FED No. 759
Administrative Law - Bankruptcy
27 FCR 141/21 ALD 510

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Administrative Law - reasons sought under s.13 of Administrative Decisions (Judicial Review) Act - trustee of bankrupt's estate discontinued court proceedings and refused to give reasons - whether trustee's decision one to which s.13 applies - whether universal right to reasons under s.13.

Bankruptcy - consideration of Court's broad discretion as to trustee's acts and omissions under Bankruptcy Act - in what circumstances Court will exercise discretion.

Administrative Decisions (Judicial Review) Act 1977, s.13

Bankruptcy Act 1966, s.178

HEARING

BRISBANE

#DATE 29:11:1990

Counsel for the applicant: Mr M. Daubney

Solicitors for the applicant: Lynch and Co.

Counsel for the respondent: Ms E.M. O'Reilly

Solicitors for the respondent: Feez Ruthning

ORDER

The Notice of Motion filed in the Supreme Court of Queensland dated 11 September 1990, and which has come before this Court under the order of the Supreme Court of 14 September 1990, be dismissed.

The oral application made by the applicant's counsel under s.178 of the Bankruptcy Act 1966 be dismissed.

The proceedings commenced by writ and transferred from the Supreme Court of Queensland to this Court, be dismissed.

The costs of the proceedings in this Court and those incurred in the Supreme Court, including the costs of today's hearing, be taxed and paid by John Arthur Nicol Gray.

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

JUDGE1

These proceedings came before this Court as an application for an order, which was to be in substance a mandatory injunction, transferred from the Supreme Court by order of McPherson J. of 14 September 1990. As I shall explain, a further application was made by counsel for the applicant during the course of the hearing here.

On 13 October 1987 the applicant and Joy Gray issued proceedings in the District Court of Queensland claiming damages for breach of contract against one Pastoors, and damages for negligence in breach of contract against a firm of solicitors, Welldon and Zande.
The pleading in that court alleged that Pastoors sold the plaintiffs a boat in 1981, and that it was an implied term that the boat was reasonably fit for the purpose of charter for reward, and that the term was breached. The pleading gives no indication of what was wrong with the boat, merely saying that it was "defective in several respects." It does not appear that any particulars of the alleged defects were given. As against the solicitors, the pleading says that they failed to include in the contract for sale an express term that "the boat was reasonably fit for the purpose aforesaid." That purpose was charter for reward. As was contended by counsel for the respondent, the pleading seems a little unsatisfactory as against the solicitors, for it is difficult to see how the absence of an express term could have mattered if there was, in any event, an implied term.
The applicant became bankrupt on 29 March 1989, according to Exhibit 1, and Joy Gray, according to the same source, became bankrupt on 7 April 1989. The respondent, again according to Exhibit 1, became trustee of the estates.
The present dispute relates to the circumstance that, as is common ground, the respondent elected during the bankruptcy to discontinue the District Court proceedings. The present position of Joy Gray is not absolutely clear; it does appear that the bankruptcy of the applicant was annulled.
The applicant demanded reasons for the trustee having elected to discontinue the District Court proceedings and the respondent has not supplied them. During the course of the argument counsel for the respondent suggested what the reasons might be, but I do not treat that statement as bearing upon the resolution of the dispute before me.
The applicant, as appears from what I have said above, has sued in the Supreme Court, for an order requiring the giving of reasons, and those proceedings have been transferred here, I am informed, on the basis that the Supreme Court was thought to have no jurisdiction. When the matter came on for hearing in this Court, counsel for the applicant explained that he wished the application to be treated as brought, additionally, in reliance on s.178 of the Bankruptcy Act 1966. That is a provision which was argued to give the court a discretion to interfere in circumstances of this kind. It reads:

"If the bankrupt, a creditor or any other person is affected by any act, omission or decision of the trustee, he may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable".

Counsel for the applicant contended that the trustee came under an obligation under s.13 of the Administrative Decisions (Judicial Review) Act 1977, relevant provisions of which are as follows.

s.13(1) "Where a person makes the decision to which this section applies, any person who is entitled to make an application to the Court under section 5 in relation to the decision may, by notice in writing given to the person who made the decision, request him to furnish a statement in writing setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for decision".

Sub-section (2) says:

"Where such a request is made, the person who made the decision shall, subject to this section, as soon as practicable, and in any event within 28 days, after receiving the request, prepare the statement and furnish it to the person who made the request".

The section contains no express provision entitling the Court, in the event of breach of s.13(2) by the decision maker, to require the breach to be remedied. It does make provision for an application to the Court under s.13, but not in any relevant way; I refer to s.13(3) of the Judicial Review Act.
There was considerable debate before me as to whether or not the decision complained of (that is, discontinuing the District Court suit) falls within the description, "decision to which this section applies", which appears in sub-s.(1) and is defined by sub-s.(11) of s.13.
The only aspect of that matter with which I propose to deal is whether the decision is one of the classes set out in Schedule 2 which are excluded by para (c) of s.13(11). Counsel for the respondent relies upon paragraph (f) in Schedule 2, the opening part of which reads as follows:

"decisions in connection with the institution or conduct of proceedings in a civil court, including decisions that relate to, or may result in, the bringing of such proceedings for the recovery of pecuniary penalties arising from contraventions of enactments...".

There are then set out four categories of particular sorts of decisions which counsel for the respondent contends, I think rightly, do not throw much light upon what was contemplated by the opening words. Counsel for the applicant contended that paragraph (f) is irrelevant because, he said, the only material part is the reference to conduct of proceedings, and he suggested that to put an end to proceedings is not to make a decision in connection with their conduct.

Opposing counsel, on the other hand, said that the provision should be read broadly, and relied upon the decision of the Full Court in Burswood Management Limited v. Attorney-General (1990) 94 ALR 220. That was a case in which the Court held that a decision relating to the costs of proceedings, and more particularly financial assistance towards costs of a Trade Practices Act proceeding, was one caught by the part of paragraph (f) to which I am referring. The decision was described as one which was "plainly made in connection with the conduct of the Trade Practices proceeding."
The contention which is put forward by counsel for the applicant in this connection seems to me an arguable one, and some minds might differ as to the proper conclusion. I am influenced by the circumstance that it would seem rather odd if the provision is to be read as excluding decisions about beginning proceedings but not excluding decisions about ending them. More to the point, it is difficult to deny the contention that a decision to, for example, resist or not resist an application to strike proceedings out is one in connection with the conduct of proceedings. I have, in the end, come to the view, not after some fluctuation, that the contention of counsel for the respondent in this connection is correct, and that the decision which was made by the trustee, as set out in Exhibits 1 and 2, falls within paragraph (f) of Schedule 2 to the Judicial Review Act.
I do not propose to decide any point other than that, but it seems desirable to mention that a question of some significance which was discussed was the dictum of the Full Court in an unreported decision, Lloyd v. Costigan (9 May 1983), in which the Court said, speaking of s.13:

"He (that is, a person aggrieved) may request reasons under s.13. We are satisfied that, if the request is refused or not complied with, the Court has power to order reasons to be given, certainly once there are proceedings commenced to review a decision. Such a construction plainly accords with the intent of the legislation". (p 18)

I feel obliged to say, although the matter was not touched on other than lightly in the argument, I would find it difficult to follow that dictum. I do not see any compelling reason to assume that s.13 intended, without saying so, to confer such an important jurisdiction on the Court.

However, for the reasons that I have given, the submission which was made that the exclusion in paragraph (f) of Schedule 2 is inapplicable, must be rejected. It follows that I must hold that there was no right to reasons under s.13 of the Judicial Review Act.
The second aspect of the proceeding is the oral application which was made, under s.178 of the Bankruptcy Act.
The contention, which was advanced by counsel for the applicant and seems to me correct, was that it is unnecessary, for the purpose of enlivening the Court's jurisdiction under s.178, to find that the trustee has done anything wrong. He may not have acted unreasonably. His decision on the material before him may have been quite correct, and it has happened that persons affected by a decision have obtained a reversal of it on material other than that placed before the trustee.
The material placed before me in this case, however, seems to be just what the trustee had, and it is fairly bare. One has the pleading which has the obvious defects alluded to earlier and one has the fact that, so far as the material shows, the matter had proceeded no further between the time of institution of the District Court suit and the bankruptcy. It also appears that, other than for the purposes of perhaps bringing proceedings against the respondent, no current interest of the applicant is served if reasons are ordered. On the argument before me, it seems that the applicant's claim is statute barred. If any reasons given by the respondent are thought by the applicant to be unsatisfactory, no doubt other proceedings may follow. But reversing the decision to discontinue would achieve nothing.
In these circumstances, the question becomes whether or not there is what might be described as a universal right to reasons. I do not think there is. There are circumstances which one can well imagine, in which it would be quite unjust for the bankrupt not to have a statement of reasons and other circumstances in which one could not suggest it to be unjust. It seems to me that the present case is in the latter category.
Unless it were the law - and as I have said, I do not think it is - that uniformly and automatically the bankrupt is entitled to challenge anything the trustee tells him or her, by way of demanding reasons, I do not see any basis for the s.178 application.
The question whether or not reasons should be ordered to be given for a trustee's decision must depend upon the circumstances. However, there is an onus upon the applicant to show that they are necessary, or that it is in the interests of justice that they be given. In this case nothing is placed before me other than the bare facts I have mentioned. With little hesitation, I reject the application under s.178. The consequence is that the foreshadowed further submissions on the s.178 application which were mentioned by counsel for the respondent need not be made.
The result is that the Notice of Motion which was filed in the Supreme Court dated 11 September 1990, and which has come before this Court under the order of the Supreme Court of 14 September 1990, is dismissed. The oral application made by counsel for the applicant under s.178 of the Bankruptcy Act is also dismissed. There are two further matters to be considered.
One is what, if anything, should happen to the proceedings which were transferred from the Supreme Court - whether or not they should be left on foot. Second, there is the question of costs.
I dismiss the proceedings commenced by writ, and I order that the costs of the proceedings in this Court and those incurred in the Supreme Court, including today's costs, be taxed and paid by John Arthur Nicol Gray.