Grujin v Pattison - [2002] FMCA 213

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GRUJIN v PATTISON

[2002] FMCA 213

BANKRUPTCY – Review of decision of trustee in bankruptcy to refuse consent to bankrupt to travel overseas.

Casella v Prentice [2002] FMCA 48
Healey v Prentice (No 2) [2000] FCA 1598
Mayger v Prentice, in the matter of Mayger [2000] FCA 99 (9 February 2000)

Bankruptcy Act 1966 (Cth) s.178

Applicant:

MICHELLE GRUJIN

Respondent:

PAUL ANTHONY PATTISON

File No:

MZ 770 of 2002

Delivered on:

6 August 2002

Delivered at:

Melbourne

Hearing Date:

6 August 2002

Judgment of:

McInnis FM

REPRESENTATION

Solicitor for the Applicant:

Mr Green

Solicitors for the Applicant:

Meltzer Green

Respondent:

In Person

ORDERS

All times be abridged to permit the Application to be heard this day.
The Application be dismissed.
The Applicant pay the Respondent’s costs pursuant to Order 62 of the Federal Court Rules to be paid out of the Estate of the Applicant.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ 770 of 2002

MICHELLE GRUJIN

Applicant

And

PAUL ANTHONY PATTISON

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

This is an application pursuant to section 178 of the Bankruptcy Act 1966 (the Bankruptcy Act) by Michelle Grujin, the applicant, seeking to review as a matter of urgency a decision of Paul Anthony Pattison, the trustee, in relation to the bankrupt estate of the applicant. The applicant was the subject of a sequestration order made on 28 May 1997. In brief terms, it is said that there is a degree of urgency about this matter and the application issued this day was made returnable this day. When the matter was before me this morning I allowed further time within which the respondent could file and serve an affidavit in opposition.
Essentially, the facts are very simple, that the applicant seeks the consent of the trustee to travel overseas to Greece. The purpose, it is claimed in the affidavit in support sworn 6 August 2002, is to enable the applicant at the request of her father to visit the father's sister, that is, the applicant's aunt, who it is said in the affidavit is suffering from a severe heart condition. The applicant's father himself is suffering from a form of chest cancer and is unable to travel to provide appropriate assistance for his sister. It is in those circumstances that it is claimed that the bankrupt has been requested to attend upon the aunt for the purposes of determining the appropriate treatment for the aunt that might be required and, as I understand it, more importantly, determining the cost of that treatment in order to make an assessment of the contributions that may be made towards that treatment by the applicant's father and perhaps others in Australia.
It is the evidence of the applicant on oath in addition to the affidavit to which I have referred that she only became aware of the aunt's heart condition some four and a half weeks ago. The Applicant also gave evidence that the aunt, whose address has now been given to the court, does have children of her own, one aged 40, another aged late 30s and another in the early 30s. The Applicant indicated in her evidence that those children are certainly able to care for the aunt, but not necessarily make a contribution towards the treatment or an assessment of the amount of that treatment or the appropriateness of the treatment.
It is fair to say that the affidavit material currently before me suggests a degree of urgency about the matter to the extent that the applicant had attended the airport on 2 August 2002 and on that occasion had intended to depart from Melbourne for Athens, but when she attempted to depart she was confronted by an officer of the Australia Federal Police. I accept for the purpose of this application that the applicant then frankly responded to questions being asked by the police officer that she was indeed an undischarged bankrupt and in the circumstances required the leave of the trustee or the consent of the trustee to leave Australia.
It would then seem, though not explained in detail, that a further arrangement was made for the applicant to depart on a flight later this day and it would appear that the trustee was requested to consent to that travel and that request was denied. Upon the denial of the request, which was in the form of a letter dated 5 August 2002 in response to a facsimile transmission received that day, the applicant made application to this court as a matter of urgency and in part seeks that this court make an order abridging all times to enable the application to be dealt with and disposed of this day.
It is submitted on behalf of the applicant that there are genuine compassionate grounds which are established sufficiently on the evidence which would persuade me to exercise my discretion under section 178 of the Bankruptcy Act, in particular the circumstances surrounding the need for the applicant to attend upon her aunt who it is said is suffering from a heart condition and in the circumstances that I have described. It seems to me there is some logic in the fact that the applicant has also had arranged a trip for her six year old daughter to accompany her on the visit. I do not think much turns on that issue, save that it might be inferred that there is some element of a vacation in the trip, but I accept for the present purposes what the applicant says that it is her father's wish that that child visit the aunt who, I take it, the child has not seen.
Nevertheless, in those circumstances, accepting that there is at least on the affidavit material evidence of a visit which might appear to be on compassionate grounds, it is submitted on behalf of the respondent that there is not sufficient corroborative evidence of the true nature and extent of the aunt's medical condition and that in any event the aunt has her own children who can care for her in Athens and that there is not on the material currently before the court demonstrated urgency which would persuade the court to abridge times and deal with the application today in a manner favourable to the applicant.
I was referred to a number of authorities, but in particular I was referred to a decision of this court which I delivered on 22 March 2002 in the matter of Casella v Prentice [2002] FMCA 48 where in that case I had to consider the authorities that are relevant in relation to the exercise of the court's discretion under section 178 of the Bankruptcy Act. In that case at paragraph 18 I referred to various authorities, but in particular I referred to the task which the court has in relation to determining whether it should interfere with a trustee's exercise of discretion and in particular the case of Healey v Prentice (No 2) [2000] FCA 1598 where the court states that it should interfere with a Trustees discretion only —
“if it be shown [by the Applicant] that the impugned conduct of the Trustee was incorrect or that other conduct was … or would be preferable and that justice and equity required the Court's intervention.”
In the present case, it is said on behalf of the applicant that the sole purpose of the trustee refusing to grant consent is the trustee's reliance upon the notice of objection to discharge and the breaches which are alleged to have occurred in that notice which I note for the present purposes has not been the subject of challenge and which was forwarded to the applicant by covering letter 6 May 2002. It is said, however, on behalf of the applicant that refusing to grant consent based solely on that ground, the trustee would be effectively seeking to punish the applicant for past misdeeds and/or contraventions of the Bankruptcy Act. It is submitted strongly on behalf of the applicant that that being the sole basis upon which the consent is withheld would be an improper exercise of the discretion by the trustee and that authorities would suggest that in those circumstances, if that is the sole basis upon which the discretion has been exercised, this court should not countenance that conduct if in truth and in fact it is based upon a notion of punishment for past deeds. (See Mayger v Prentice, in the matter of Mayger [2000] FCA 99 (9 February 2000).
Accepting for the present purposes that there is certainly sufficient authority to suggest that reliance upon those grounds or reliance upon any notion of punishment may be sufficient to persuade the court to act pursuant to section 178 of the Bankruptcy Act, it is my view that in the present case it cannot be said as a matter of fact that that is the basis upon which the refusal to provide consent has been withheld. It seems to me in the present case that a significant factor is the lack of corroborative material of a medical nature. I accept in the present case that there has been a degree of urgency, but in my view the urgency has essentially been created by either deliberate or unconscious ignorance of the requirements of the bankrupt in relation to her duty to disclose travel plans and seek the consent of the trustee in relation to those plans, as she is no doubt bound to do as an undischarged bankrupt.
It seems to me on the material before me that the applicant knew or ought reasonably to have known of her obligations in that regard and certainly knew and became aware on 2 August when she attempted to depart Australia. In the circumstances, on the affidavit material before me, it is my view that there is not sufficient urgency which would enable me to necessarily conclude that it is proper to abridge all times to allow the application to proceed. It is my view on the material before me currently that there is insufficient corroborative evidence to establish that the compassionate requirement that is referred to in the application and supporting material is sufficient to enable a proper conclusion to be drawn in favour of the Applicant.
In those circumstances, the trustee, in my view, is within his rights to exercise the discretion in the manner that it has been exercised on the current material available. That does not of course preclude any fresh application based on new material being placed before the trustee and, if necessary, before this court. But on the material before me I do not believe it would be appropriate on the facts that I found for me to exercise my discretion under section 178 of the Bankruptcy Act. Accordingly, as I have indicated although normally I would not be prepared to abridge times I am prepared to abridge time simply for the purpose of disposing the application and having done so would in the circumstances dismiss the application.
Accordingly, I make the following orders:
(1)All times be abridged to permit the Application to be heard this day.
(2)The Application be dismissed.
(3)The Applicant pay the Respondent’s costs pursuant to Order 62 of the Federal Court Rules to be paid out of the Estate of the Applicant.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 6 August 2002