In the matter of an application in which Thomas Barton is applicant and the Official Receiver as trustee of the estate of Thomas Barton is respondent

[1977] FCA 8

P

JN THE FEDERXL COURT O F BAXKRUDTCY

No. 310 of 1974

I n t h e matter of t h e Bal: lkruptcy

A c t 1 9 6 6

and

In t h e matter o f An A p p l i c a t i o n

in which

and

THE	O F F I C I A L	H E C F I V E P	as	l ' r u s t t e
-_--

o f h c E s t a t e cf	Thcnas 3a rzsn
i s Respondent.

REASONS FOR JYDGPiEXT

In t h i s a p p l i c a t i o n , Thomas Bartor , , the bankrupt,

s e e k s o r d e r s t h a t h i s e x a m i n a t i o n urder s.63 of the E a k r u p t c y

A c t 1.966 be pet h e l d or b e p o s t p o n e d , t h a t t h e d e c i s i o n of t h c

R e g i s t r a r maze on February 1 6 , 1 9 7 7 , t ha t he wou ld proceed wirh

the examinat ion be se'; a s i d e a n d t h a t t h e e x a m i n a t i o n be s t r y c d

u n t i l f u r t h e r order.

03 t h a t S a y t h e b a n k r u p t h a d a p p e a r 4 b c f c r e <.he

R e g i s t r a r i n o lxd ience t o a s u m m n s c a l l i n g upcn him t G att.cr.3 to

be examir.ed OR. o a t h - - as - - t o h i s c o n d u c t , t r a & d e s l m g s , p r o p e r t ; .

and a f f a i r s . Pefore the x&n,inntion ccrmenced, counsel ~ L L - the-

bankrupt stGted t h a t h.- 'has v o l u n t a r i l y r e t u r n e d t,? k.l?t? -]].-I \:ith

h i s f a ~ i l y t3 f a c e a series of cLiinir ,sl chargcs broG9ht ?.v2. L S T b.11:

2 .

/'

the S t a t e o f New South Wales. He is p r e s e n t l y i n c u s t o d y a n d

is r e q u i r e d t o face conunjttalproceedings commencing on March 14

next . He r e t u r n e d t o A u s t r a l i a o n J a n u a r y 5 and was immediately

t a k e n i n t o c u s t o d y . S i n c e t h a t time h e h a s b e e n c o n t i n u a l l y

e n g a g e d i n a p p l i c a t i o n s f o r b a i l b e f o r e t h e New South Wales

c o u r t s . ' T h e s e a p r l i c a t i o n s h a v e b e e n u n s u c c e s s f u l a n d t h e

bankrup t r ema ins in cus tody .

The R e g i s t r a r was t o l d by counse l fo r t h e bankrup t

that h i s c l i en t had been informed t h a t f o u r debts were a l l e g e d l y

due by payment of two small debts h im, tha t a r rangements were b e i n g made immedia te ly for the

amount ing t o less than $6000. The

second debt t o the Deputy Commissioner of T a x a t i o n , d e s c r i b e d as

'somewhat less than $ 4 7 , 0 0 0 ' , was to be paid i m m e d i a t e l y , s u b j e c t

t t o a claim t o be made t h a t t h e b a n k r u p t was n o t l i ab l e , a q u e s t l o n

which was said, n o t s u r p r i s i n g l y , t o b e o n e w h i c h it was go ing t o

take some time t o r e s o l v e . I f payment was n o t made cf t h l s amount,

s e c u r i t y would be g iven for its payment. Another alleged debt of

$356,000 c l a i m e d t o b e owed t o I n t e r c o n t i n e n t a l H o l d i n g s L t d . ( i n

l i q u i d a t i o n ) was d i s p u t e d b y t h e b a n k r u p t who would seek t o

e s t a b l i s h i n t h e a n n u l m e n t a p p l i c a t i o n t h a t it was cot owed. Counse

for t h e a p p l i c a n t r e l i e d upon an unde r t ak ing wh ich the so l i c i to r

f for Alexander Bar ton of fered t o t h e R e g i s t r a r ' t o pay i n t o t h e

c o u r t t h e sum of $ 5 0 , 0 0 0 w i t h i n s e v e n d a y s f o r t h e p a y m e n t o u t of

t h e debts c l a i m e d a g a i n s t Thomas B a r t o n , e x c e p t , o f c o u r s e , t h a t

one i n d i s p u t e ' .

Counsel for t h e bankrup t submi t t ed t o t h e R e g i s t r a r

t h a t t he examinat ion of h i s c l i e n t s h o u l d be ad journed pending t h e

h e a r i n g of a n a p p l i c a t i o n t o t h e c o u r t t h a t t h e b a n k r n p t c y be

annu l l ed . The a p p l i c a t i o n h a d b e e n f i l e d o n l y t h a t norning and was

based upon t h e g r o u n d ' t h a t the a p p l i c a n t ' s u n s e c u r e d d e b t s hsve

b e e n p a i d i n f u l l ' . C o u n s e l submitted as f u r t h e r r e a s o n s f o r the

ad journmen t the p ropos i t i ons t h a t t h e b a n k r u p t by r eason of t h e

b a i l a p p l i c a t i o n s h a d n o t h a d s u f f i c i e n t time t o g ive adequa te

c o n s i d e r a t i o n t o or i n s t r u c t h i s p r e s e n t s o l i c i t o r s i n r e l a t i o n t o

the summons, which he received on Fcbruary 4 or 5 , t h a t t h e

bankrup t cou ld be r equ i r ed t o answer ques t ions which w i l l p r e j u d i c -

t h e f a i r t r i a l of t h e c h a r g e s b r o r q h t a g a i n s t h i m in Kew Scut.\ Ws'-r_.

and t h a t t h e b a n k r u p t s h o u l d b e g i v e n ' e v e r y o p p o r t u n i t y to I%vO~C

a l l of h i s a t t e n t i o n t o those p roceed ings ' .

. . /3

,3- .

/

The app l i ca t ion , wh ich was opposed, was r e fused by

t h e Registrar. I n t h e course of g iv ing h i s r e a s o n s , t h e Registrar

said -

I

I have had regard t o the submiss ion on t h e b a s i s of

p r e j u d i c e i n f u t u r e c r i m i n a l p r o c e e d i n g s , b u t I have found

I

t h a t c o u n s e l f o r t h e O f f i c i a l R e c e i v e r o r t h e t rus tee

u s u a l l y d o n o t p r e s s q u e s t i o n s , t h e a n s w e r s t o whlch would

c l e a r l y j e o p a r d i s e t h e b a n k r u p t i n o t h e r p r o c e e d i n g s . T!lis

does n o t mean t h a t t h e y c a n n o t p r e s s t h e n , b u t I c e r t a i n l y

would have regard to e a c h q u e s t i o n a n d t h e p o s s i b l e e f f e c t

of the answer. '

1

Counsel for t h e b a n k r u p t t h e n i n d i c a t e d t h a t h e w i s h e d

t o app ly t o t h e Cour t t h a t t h e e x a m i n a t i o n be postponed, under

S. 69 (10) , which reads :-

l

The Court may d i rec t t h a t a n e x a m i n a t i o n o f a bankrupt

under t h i s s e c t i o n s h a l l n o t b e h e l d o r t h a t t h e anmsmccrrent

of a n e x a m i n a t i o n s h a l l be postponed. '

The Registrar then ad jou rned the p roceed ings before him u n t i l t h e

following morning.

Upon resuming, t h e Registrar was t o l d t h a t t h e

bankrupt had on t h a t m o r n i n g f i l e d a n a p p l i c a t i o n f c r w h i c h a n

e x p e d i t e d h e a r i n g was s o u g h t , s e e k i n g o r d e r s t h a t t h e commencement

of t h e e x a m i n a t i o n b e p o s t p o n e d , a n d t h a t t h e d e c i s i o n of t h e

R e g i s t r a r t ha t he wou ld p roceed wi th the examina t ion be se t a s i d e .

H e had also f i l ed an a p p l i c a t i o n on t h a t m o r n i n g , s e e k i n g a n o r d e r

t ha t the bankrup tcy of t h e a p p l i c a n t b e a n n u l l e d on t h e g r o u n d t h a t

' t h e a p p l i c a n t ' s u n s e c u r e d d e b t s h a v e b e e n p a i d i n f u l l ' . I n t h a t

a p p l i c a t i o n it was s t a t e d t h a t it was i n t e n d e d t o f i l e a n a f f i d a v i t

by the bankrupt . Counsel for t h e b a n k r u p t t o l d t h e Registrar t h a t

an a f f i d a v i t i n s u p p o r t of t h e a p p l i c a t i o n for annulment would be

f i l e d by February 2 4 . An a p p l i c a t i o n for annulment was f i l e d in

the F e d e r a l Cour t of Aus t ra l ia and a n i d e n t i c a l a p p l i c a t i o n was

. f i l e d i n t h e F e d e r a l Cour t of Bankruptcy.

The Registrar then ad journed the examinat ion of the

bankrupt t o a d a t e t o be f i x e d . The a p p l i c a t i o n s o f t h e b a n k r a p t

were made r e t u r n a b l e o n

March

- 1. . . _ . - . - _ - .

. .. - - - - ----

On February 23, colmsel f o r t h e b a n k r u p t g a v e n o t i c e

t h a t l e a v e w o u l d be sough t t o w i t h d r a w t h e a p p l i c a t i o n f o r d l n u l m n t .

No a f f i d a v i t by t h e b a n k r u p t h a s b e e n f i l ed and no paymept L!:?; c o u r t

has been sousht t o be made. When t h e a p p l i c a t i o n came on for hmrinLr! ,

it was withdrcwn by leave. . ./4

4 .

~ ./

S.19 of the Bankruptcy Act p r o v i d e s t h a t w h e r e a

person becomes a bankrup t it i s t h e d u t y o€ t h e o f f i c i a l receiver,

a m o n g s t o t h e r t h i n g s , t o ascer ta in t h e a s s e t s a n d l i a b i l i t i e s o f

t h e b a n k r u p t ( s u b - s e c t i o n (1) ( b ) ) , t o i n v e s t i g a t e t h e c o n d u c t ,

d e a l i n g s a n d t r a n s a c t i o n s of t h e b a n k r u p t , t h e cause of bankruptcy

and the books , accoun t s and r eco rds kep t by the bankrup t , ( sub -

s e c t i o n (1) ( c ) ) , t o take s u c h p a r t a s h e t h i n k s f i t i n t h e p u b l i c

examinat ion of the bankrupt ( sub-sec t ion ( l ) ( f ) ) , and t o f i l e from

time to time s u c h s u p p l e m e n t a r y r e p o r t s i n r e l a t i o n t o t h e mattcrs

s p e c i f i e d i n sub - sec t ion (1) (c) as he cons ide r s necessa ry .

By s .54 i t is p r o v i d e d t h a t a p e r s o n a g a i n s t whom a

s e q u e s t r a t i o n o r d e r i s made s h a l l make o u t a n d f i l e i n t h e o f f i c e

1

of t h e Registrar w i t h i n 14 days from t h e d a t e of t h e s e q u e s t r a t i o n

o r d e r a s t a t e m e n t o f h i s a f f a i r s i n a c c o r d a n c e w i t h t h e p r e s c r i b e d

form a n d v e r i f i e d b y a f f i d a v i t .

S.69 p r o v i d e s t h a t , s u b j e c t t o t h e sect ion, a

b a n k r u p t s h a l l b e examined i n p u b l i c o n o a t h as to h i s c o ~ ~ d u c t ,

t r a d e d e a l i n g s , p r o p e r t y a n d a f f a i r s , zs soon as c o n v e n i e n t l y may

be a f t e r t h e f i l i n g of t h e b a n k r u p t ' s s t a t e m e n t o f a f f a i r s , or where

t h e b a n k r u p t became a bankrupt on a c r e d i t o r ' s p e t i t i o n and the

R e g i s t r a r so d i r e c t s , b e f o r e t h e f i l i n g o f t h e s t a t e m e n c o f a f f a i r s .

The Cour t , t h e R e g i s t r a r o r t h e magistrate n a y p u t t o t h e b a n k r u p t ,

or allow t o b e p u t t o t h e b a n k r u p t , s u c h q u e s t i o n s as t h e C o u r t , t h e

Registrar or t h e m a g i s t r a t e t h i n k s p r o p e r ( s u b - s e c t i o n 7 ) . The

b a n k r u p t s h a l l answer a l l q u e s t i o n s t h a t t h e C o u r t , t h e R e g i s t r a r

or t h e m a g i s t r a t e p u t s or allows t o b e p u t a n d , u n l e s s t h e C o u r t , t k e

R e g i s t r a r o r t h e magistrate o t h e r w i s e d i r e c t s , i s n o t excused from

answering any such quest ion by reason only of the f ac t t h a t t h e

answer t o it may r e n d e r him l i a b l e t o p u n i s h m e n t ( s u b - s e c t i o n e ) .

The Court may d i r e c t t h a t a n e x a m i n a t i o n o f a bankrup t u r .de r t h i s

S e c t i o n s h a l l n o t b e h e l d o r t h a t t h e commencement of an examinat ion

sha l l be pos tponed ( sub - sec t ion 1 0 ) . I n dec id inq whe the r S? t o

d i r e c t t h e C o u r t s h a l l t a k e i n t o a c c o u n t t h e r e p o r t o f t h e o f f i c i a l

r ece ive r unde r pa rag raph (c) of sub - sec t ion 1 of s . 1 9 anc! any

r e s o l u t i o n of t h e c r e d i t o r s on t h e m a t t e r . N o t e s of t h e e x a r l n a t i o b

o f t h e b a n k r u p t o r a c e r t i f i e d , s e a l e d or s i g n e d t r a n s c r i T t of

evidence g iven a t an examinat ion may be u s e d i n e v i d e n c e i n A T ~ Y

I proceed ings unde r the A c t aga ins t t he bankrup t ( sub - secClon 1 4 ) .

. ./5

I n re Atherton (1912 K B 251) was a c a s e a r i s i n g

o u t o f t h e p u b l i c e x a m i n a t i o n of a debtor under the Bankruptcy A c t

1883, who h a d b e e n a r r e s t e d i n London unde r the Fuq i t ive Of fende r s

A c t , on a criminal charge by his former employers and was under

remand pending proceedings before a v a g i s t r a t e f o r h i s e x t r a d i t i o n

t o Canada, on charges of fo rg ing s iqna tu res on cheques and pos t a l .

o r d e r s a n d c o n v e r t i n g t h e p r o c e e d s t o h i s own use . The o f f i c i a l

receiver proposed t o p u t t h e f o l l o w i n g q u e s t l o n t o t h e d e b t o r -

'Were you e n t r u s t e d b y t h e Dorninion Express Company o n y o u r l a s t

voyage t o England with a large q u a n t i t y o f money o rde r s and

cheques? ' The r eg i s t r a r a l l owed t he ques t ion bu t t he deb to r r e fusec

t o answer it o n t h e g r o u n d t h a t h e was under remand i n r e s p e c t o f

e x t r a d i t i o n p r o c e e d i n g s w h i c h r e l a t e d t o h i s c o n n e c t i o n w i t h t h e

company. The registrar ad jou rned t he examina t ion and r epor t ed t he

d e b t o r ' s r e f u s a l t o t h e j u d g e , s t a t i n g t h a t t h e p r a c t i c e in London

was, when a bankrupt was i n c u s t o d y or under remand on R c r i m i n a l

c h a r g e , n o t t o p r e s s s u c h q u e s t i o n s w h i l e t h e c h a r g e was hanging

over h im, but t o a d j o u r n t h e p u b l i c e x a m i n a t i o c u n t i l e f t e r t h e

t r i a l , b u t t h e p r a c t i c e c o u l d n o t b e f o l l o w e d i n t h e p r c s c n t case

because o f t h e p o s s i b i l i t y of t h e b a n k r a p t b e i n g removed t o Canada.

P h i l l i m o r e , J. h e l d t h a t t h e o f f i c i a l r e c e i v e r was e n t i t l e d t o p u t

q u e s t i o n s t o t h e d e b t o r w i t h r e g a r d t o t r a c i n g a n y o f t h e assets

of t h e d e b t o r a c q u i r e d by conversion and t o e l i c i t any matters

a f f e c t i n g h i s c o n d u c t t h a t n a y b e r e l e v a n t a n d o r d e r e d t h e d e b t o r t:

answer them. He r e f e r r e d t o t h e London p r a c t i c e a n d s a i d fat . p.251

'But such a r u l e may, as h a s b e e n p o i n t e d o u t , l e a d t o n i s c h l c f

where it m i g h t b e n e c e s s a r y t o examine a t o n c e i n o r d e r t o t race

assets which might be l o s t i f prompt measures were n o t t a k e n . It

is, anyhow, on ly a r u l e of convenience and tenderness and though I

hope it w i l l b e f o l l o w e d g e n e r a l l y b o t h i n London and the coun t ry ,

t h e r e may be occas ions when it w i l l b e d e s i r a b l e n o t t o f o l l o w It.

i

Such an occas ion would occur where the bankrupt i s l i k e l y t o b e

e x t r a d i t e d or t o be handed over t o t h e c o l o n i a l a u t h o r i t i e s m d c r

t h e F u g i t i v e O f f e n d e r s A c t . I n s u c h a case t he bankrup t r r i qh t

. - I- . - .

leave the coun t ry and pe rhaps n o t come w i t h i n t h e j u r i s d i c t i c n

again. There it would be the duty c;f t h e o f f i c i a l recejvcr t o

examine him b e f o r e h e leaves t h e c o u n t r y .

. , /B

6.

I n re N o r t h A u s t r a l i a n T e r r i t o r y Company (18?0)

4 5 Ch. D. 87 t h e l i q u i d a t o r i n t h e v o l u n t a r y w i n d i n g u p o f a

company brought an ac t ion aqa ins t another company, in which hc

obta ined an order for a f f idavt : : o f documents , bu t the Cour t

re fused to order the pro5uc 'c lon of documents , o r t h e e x a m i n a t i o n

of the company ' s s ec re t a ry on i n t e r r o g a t o r i e s , on t h e g r o u n d t h a t

t h e d i s c o v e r y was p r e n a t u r e a t t h a t s t a g e o f t h e a c t i o n , n o

de fence hav ing been pu t i n . The l i q u i d a t o r t h e n o b t a i n e d a n o r d e r

under SS. 115 and 138 of the Companies A c t 1862 f o r t h e e x a m i n a t i o n

of t h e s e c r e t a r y before an examiner . The secre ta ry when examined

refused to answer a q u e s t i o n r e l a t i n g t o t h e matters i n j-ssue i n

t h e ac t ion . H i s r e f u s a l was u p h e l d i n t h e Cour t of Appeal.

Cotton L. J. s a i d a t p. 9 1 -

I I n my o p i n i o n , i t would be wrong t o a l l o w t h c

l i q u i d a t o r b y means of s.115 t o g e t DY a s ide-win3

d i scove ry and in spec t ion wh ich Mr. Jus t ice Kay (and h i s

o rde r s have n o t b e e n a p p e a l e d a g a l n s t ) h a s s a l d it would

1 be p rema tu re t o give. I d o n o t a t a i l s a y t h a t

c i r cums tances may n o t h e r e a f t e r o c c u r when it nay be

r i g h t f o r t h e l i q u i d a t o r t o p u t t h i s q u e s t i o n . '

Bowen L. J. p o i n t e d o u t ( a t p . 9 2 ) t h a t t h e s e c t i o n u n d e r

co f i s ide ra t ion

'places t h e d e c i s i o n a s t o a n e x a n i n a t i o n a n d a s t o i t s

limits w i t h i n t h e d i s c r e t i o n o f t h e C o u r t . T h a t b e i n g

so, I d o n o t t h i n k t h a t we o u g h t t o a t t e m p t b e f o r e h a n d

to c l a s s i f y a l l t h e o c c a s i o n s upcn which it may be proper

t o make such an o rde r , no r t o c l a s s i f y o r c a t e g o r i s e a l l

t h e occasions on which It may be unwise to make such an

o r d e r . We have no b u s i n e s s t o f e t t e r t h e d i s c r e t i o n o f

t h e Court i n t h e f u t u r e . B u t it d o e s n o t f o l l o w f r o n

t h a t t h a t n o t h i n g can b e s a i d on t h e s u b ~ e c t w o r t h y t h e

a t t e n t i o n o f t h o s e who have t o p u t i n m o t i o n t h i s s e c t i o n

I n t h e f i r s t p l a c e , i t must be observed tha t

it is a n e x t r a o r d i n a r y s e c t i o n . I t is a n e x t r a o r d i n a r y

power; it is a power of an i n q u i s i t o r i a l k i n d w h i c h e n a b l e s

t h e C o u r t t o d i r e c t t o b e e x a m i n c d - n c t rr .erely before

i t s e l f , b u t b e f o r e t h e e x a m i n e r a p p o i n t e d by the Cour t ,

some t h i r d p e r s o n who i s no pa r ty t o a l i t i g a t i o n . T h i s i s

an i n q u i s i t o r i a l p o w e r , w h i c h nay work w j t h g r e a t s e v e r l t y . . _

a g a i n s t t h i r d p e r s o n s , a n d it seems t o me t o be ob7;ious

t h a t s u c h a s e c t i o n o u g h t t o b e u s e d w i t h t h e q r e a t e s t

care, so as n o t u n n e c e s s a r i l y t o p u t i r : mot ion the

machinery of j u s t i c e when it is no t wan ted , o r t o p u t

. . /7

it i n motion a t a s t a g e when it is n o t c l e a r t h a t it is

w a n t e d , a n d c e r t a i n l y n o t t o p u t It I n m o t i o n i f u n n e c e s s a r y

mischief is going t o be done o r h a r d s h l p i n f l i c t e d u p o n t h e

t h i r d p e r s o n who is c a l l e d upon t o a p p e a r a n d give i n f o r m a t l o n .

- Having regard t o t h o s e c h a r a c t e r i s t i c s o f t h i s s e c t i o n v h i c h

I have touched upon, I c e r t a i n l y s h o u l d b e l o t h t o c o n c l u d e t h a t

t h e w i t n e s s - i f I may c a l l him a w i t n e s s - t he examinee , t he

person who is to be examined and aga ins t whom o r upon whom t h e

order has been served - h a s n o t a l o c u s s t a n d i t o c o m p l a l n t h a t

t h a t o r d e r i s oppres s ive o r ha rd upon him: and though it 1s n o t

necessa ry t o dec ide one way or t h e o t h e r i n t h i s c a s c , i t seems

to me t h a t t h e p o i n t o u g h t t o b e l e f t o p e n ; b e c a u s e , as a t

present a d v i s e d , t h e r e are some e x p r e s s i o n s of t h e l a t e Master

of t h e Rolls and Lord J u s t i c e Baggal lay i n t h e c a s e o f I n re

Gold Company ( 1 2 Ch. D. 7 7 ) , which seem t o me a t t h e f l r s t

b lush t o go too f a r , and wh ich seem to me indeed t o b e c o n t r a r y

t o t h e d e c i s i o n i n H e i r o n ' s C a s e (15 Ch. D. 139) . Rut I l e a v e

t h e p o i n t p e r f e c t l y o p c n , b e c a u s e it is n o t n e c e s s a r y t o d e c l d e

it now, and it i s much b e t t e r n o t t o f e t t e r t h e C o u r t ir. t h e

f u t u r e by d e c i d i n g t h a t w h i c h i s unnecessary: and f o r t h e same

r eason I a b s t a i n , l i k e t h e Lord J u s t i c e who h a s p r e c d e d me,

from a t t e m p t i n g t o l a y down h a r d - a n d - f a s t r u l e s a s t o w h a t o u g h t

t o b e t h e c h a r a c t e r o f t h e o c c a s i o n s on w h i c h j u d i c l a l d i s c r c t l o n

shou ld be exe rc i sed t o r a k e a n o r e e r f o r t h e e x a m i n a t i o n o f

f

w i t n e s s e s u n d e r t h i s s e c t i o n . I d o n o t , as f a r a s I an conce rned ,

l a y down a s a h a r d - a n d - f a s t l i n e t h a t t h e c o n c u r r e n c e o f an

a c t i o n is a n e c e s s a r y b a r t o t h e e x e r c i s e of t h e d i s c r e t i o n of

t h e Cour t u n d e r t h i s s e c t i o n , t h o u q h o n e c a n n o t h u t see t h a t t h e

concur rence o f an ac t ion begun by the l i qu ida to r i s a matter

which ought t o b e c a r e f u l l y c o n s i s e r e d b y t h e C o u r t i n e x e r c i s i n g

i t s d i s c r e t i c n o n t h e subject. '

Fry L. J. a t p . 97 s a i d -

l L i k e my l e a r n e d b r e t h r e n , I d o n o t p r o p o s e t o l a y down,

a n d d e s i r e e n t i r e l y t o a b s t a i n f r o m l a y i n g down, any p ropos i t i on

w h i c h s h a l l f e t t e r t h e d i s c r e t i o n o f t h e C o u r t w h i c h may be

exe rc i sed f rom time t o time unde r the 115 th and 117 th sec t lons

of t h e Act. I h a v e n o r i g h t t o f e t t e r t h e d i s c r e t i o n o f t h e

Court i n t h o s e c a s e s : b u t o n e c a n see t h i s p l a i n l y , t h a t t h e

ques t ion whe the r a man may be twice vexed wi th the same q u e s t i o n

may o f t e n b e m a t e r i a l , a n d t h e q u e s t i o n w h e t h e r t h e p u t t i r g to

him t h e i n t e r r o g a t o r y unde r the 1 1 5 t h s e c t l o n would be inccnststfnt

w i t h some order which hac? been previously made i n t h e 1itlc;at:on

between the same p a r t i e s may a g a i n b e m a t c r l a l : a n d , t h e r e f o r e ,

i n t h i s case I t h i n k t h a t t h e right d l s c r e t i o n w o u i d b e n o t t o

allow t h i s q u e s t i o n t o be p u t . Thc w i t n e s s , t h e r e f o r e , h a v l n g

r e fused to answer , he ough t n o t CO b e d i r e c t e d t o a t t e n d . '

'I

The judgments i n t h i s c a s e t h u s make it p l a i n t h a t

t h e d e t e r m i n i n g f a c t o r was t h e ea r l i e r r e f u s a l of t h e C o u r t t o r a k e

a n o r d e r f o r d i s c o v e r y o r i n t e r r o g a t o r i e s , o n t h e g r o u n d t h a t it woulr

have been premature t o do so, and the Court of Appeal was u n w i l l i n g

i n a proceeding under the Companies Act t o e x c r c i s e i t s d i s c r e t i o n

. I . . . . -

' i n a manner e n t i r e l y a t v a r i a n c e w i t h t h e e x e r c i s e o f a l i k e

d i s c r e t i o n by Mr. J u s t i c e Xay i n t h e a c t i o n 1 ( p . 9 7 ) . The C o u r t ' s

r e f u s a l t o f e t t e r t h e exercise of d i s c r e t i o n b y j u d g e s i n f u t u r e

c a s e s i s a l so t o be noted .

. ./ 8

a.

I t is h e l p f u l t o c o n s i d e r t h e p r e s e n t a p p l i c a t i o n i n

t h e l i g h t of t h e h i s t o r y of t h i s b a n k r u p t c y . On A p r i l 1 7 , 1973,

the bankrupt , an Aus t ra l ian c i t i z e n who had f o r many y e a r s l i v e d

in Aust ra l ia , l e f t t h e c o u n t r y s u d d e n l y b y a i r i n t h e company of

h i s wife, h i s f a t h e r , A l e x a n d e r B a r t o n , a n d h i s w i f e .

On Augus t 28 , 1973, the pe t i t ion on which the order

of s e q u e s t r a t i o n came t o b e made was presented and on October 2 9 ,

1973, the Deputy Commissioner of Taxa t ion was subs t i t u t ed as

p e t i t i o n i n g c r e d i t o r , r e l y l n g on a debt of $77,392.17 which counsel

fo r both par t ies agreed accrued due to the Deputy Commiss ioner of

Taxat ion on Ju ly 23 , 1973. The bankrup t was l ega l ly r ep resen ted

on October 29, 1973, and a t s u b s e q u e n t a d j o u r n m e n t s o f t h e p e t i t i o n

on February 26 and May 7, 1974, and a t t h e h e a r i n g o f t h e p e t i t i o n

on August L4 and 15, 1974.

On August 2 6 , 1 9 7 4 , a n a p p e a l a g a i n s t t h e o r d e r o f

s e q u e s t r a t i o n was f i l e d i n t h e High Court of Australia and a t t h e

hear ing on October 7 , 1 9 7 4 , counse l for t h e b a n k r u p t a t t a c k e d o n l y

t h e f i n d i n g i n r e l a t i o n t o t h e i n t e n t of t h e b a n k r u p t i n remaining

o u t of A u s t r a l i a , a r g u i n g t h a t t h e e v i d e n c e was more c o n s i s t e n t

w i t h h i s a b s e n c e b e i n g a t t r i b u t a b l e t o a c o n c e r n t o a v o i d l i k e l y

c r i m i n a l c h a r g e s i n Aus t ra l ia t h a n w i t h a n i n t e n t i o n t o d e f e a t t h e

Commissioner. The appeal was dismissed on October 30 , 1 9 7 4 (sec

131 C.L.R.	370) .	The bankrupt was n o t p r e s e n t	a t any	o	f	t hese
h e a r i n g s .

M r . Wall , who a p p e a r e d f o r t h e b a n k r u p t o n t h i s

a p p l i c a t i o n , b u t n o t b e f o r e t h e R e g i s t r a r , s a i d t h a t h e d i d n o t t a k e

issue w i t h t h e t rus tee when he con tended tha t s . 6 9 ( 1 ) anc? ( 2 ) r e q u i r e

tha t t he bankrup t be examined on oa th as t o h i s c o n d u c t , t r a d e

d e a l i n g s , p r o p e r t y a n d a f f a i r s ; t h a t t h i s e x a m i n a t i o n s h a l l he h e l d

i n p u b l i c b e f o r e t h e R e g i s t r a r as soon a s conven ien t ly may b e a f t e r

t h e f i l i n g of t h e b a n k r u p t ' s statement o f a f f a i r s . Nor d i d h e s?ek

t o deny t h a t i t is i n t h e p u b l i c i n t e r e s t a n d t h e i n t s r e s t s 3f the

c r e d i t o r s who have lodged p roof s o f deb t t ha t t he exammat ion shou ld

p roceed fo r thwi th .

. , - - .-_ . - - ..

What Mr. Wall d i d s u b n i t was t h a t t h e r e was a com?cti::g

matter of p u b l i c in te res t , namely t h a t as a matter o f p u b l i c po l ic l -

i n the a d m i n i s t r a t i o n of c r i m i n a l jGstlcc no th ing shou ld IJC done

which would be calculated or like3.y t o a f f e c t t h e f a i r t r i a l of ail

accused person faced ,as the bankrupt i s , w i t h c r i m l n a l c h a r q e s .

. . /9

9.

J

C o u n s e l r e f e r r e c ! t o < h e d e t a i l s of t h e c h a r g e s a g a i n s t

t he bankrup t , some of which a l leged conspi racy wi th Alexander Bar ton .

Mr. Wall c o n t e n d e d t h a t i f h i s examinat ion began it would be widely

p u b l i c i s e d i n t h e news media i n a way t h a t would p r e ~ u d i c e h i s f a i r

t r i a l , c o n t e n d i n g t h a t e v e n i f c e r t a i n q u e s t i o n s were no t a l lowed

t o b e p u t t o t h e b a n k r u p t , t h e p u b l i c a t i o n o f t h a t fac t would be

damaging t o him. The p u b l i c i n t e r e s t i n t h e d u e a d m i n i s t r a t i o n of

t h e c r i m i n a l law was, it was urged, predominant and the Court shou1.d

d i r e c t u n d e r s.69(10) t h a t t h e commencerent of the examina t ion o f

t h e b a n k r u p t s h o u l d b e p o s t p o n e d u n t i l f u r t h e r o r d e r .

It is now well over two y e a r s s ince t h e d i s m i s s a l of

t h e b a n k r u p t ’ s a p p e a l a g a i n s t t h e o r d e r o f s e q u e s t r a t i o n . Through no

f a u l t o f t h e t rus tee of h i s es ta te , b u t by r eacon o f t he bankrup t ’ s

absence from Aust ra l ia , it was n o t p o s s i b l e b e f o r e 1 9 7 7 t o b e g i n h i s

publ ic examinat ion , a v i t a l s t e p i n t h e a d m i n i s t r d t i o n o f h i s e s t a t e .

i

The effect of the orders sought by the hankzupt would

?

be t o e n s u r e t h a t n o q u e s t i o n s c o u l d b e p u t t o h i m u n d e r s.60 f o r a

f u r t h e r c o n s i d e r a b l e p e r i o d , w h i l e	t h e c r i m i n a l p r o c e e d i n g s	take
t h e i r course.

I t may be t h a t i n t h e c o u r s e of h i s e x a m i n a t i o n , q u e s t m x

w i l l be tendered of such a n a t u r e t h a t t h e R e g i s t r a r w i l l have t o

dec ide whether o r n o t h e w i l l permit them, i n view of p o s s i b l e

p r e j u d i c e t o t h e f a i r t r i a l o f t he bankrup t . However, it does n o t

f o l l o w t h a t t h e C o u r t s h o u l d p u t t h e b a n k r u p t i n t h e p o s i t i o n t h a t

he i s p r o t e c t e d from being asked any ques t ions a t a l l , hosever c lear

it may b e t h a t some of them place him in no jeopardy. The bankrupt

s e e k s a n o r d e r t h a t t h e	commencement	o f h i s examina t ion shou ld be
p o s t p o n e d i n z e f i n i t e l y .

I n my o p i n i o n , t h e Court should n o t make an order which

would produce such a r e s u l t b u t it should allow the examinat ion t o

proceed , leav ing it t o t h e Registrar t o e x e r c i s e t h e d i s c r e t i o n

committed t o him by t h e A c t i n respect o f any ques t i cns invo lv ing

p o s s i b l e p r c ~ u d i c e t o a f a i r tr ial . ApFrehension as to t h e way i n

which an examinati0.n ,gay be. r e p o r t e d i n t h e news media does not,, . -. ~.

a f f o r d a s u f f i c i e n t r e a s o n f o r t h e C o u r t t o ac t t o b a r t h e c o ~ ~ n c n c e s c ! ~

of the examinat ion .

10.

/

So f a r f r o m t h i n k i n g t h a t t h e R e g i s t r a r e r r e d ir-

i

r e f u s i n g t h e b a n k r u p t ' s a p p l i c a t i o n , I am of op in ion t h a t h i s

! d e c i s i o n was c o r r e c t . I d o n o t c o n s i d e r t h a t a n y r e a s o n h a s been

made o u t t o j u s t i f y t h e C c u r t i n g i v i n g t h e d i r e c t i o n s o u g h t u a r l c r

s.69(10).

When a bankrup t i s f a c i n g criminal p roceed ings , i t

may be d i f f i c u l t t o d e c l d e w h e t h e r t o p e r m i t a p a r t i c u l a r q u e s t i o n

t o b e p u t t o him. The Couri s ! lould not seek to lay down p r o p c s i t i o n s

t o fe t ter t h e d i s c r e t i o n w h i c h t h e section confers on the Regi9trc .a-

or a t t e m p t t o s t a t e a n y h a r d a n d f a s t r u l e s t o b e f o l l o w c d b y kin. i n

t h e exercise of t h a t d i s c r e t i o n . The A c t does n o t a t t e m p t t o p r o v i d e

any de ta i l ed code by which the Registrar should de te rmine whether a

p a r t i c u l a r q u e s t i o n s h o u l d b e p u t , o r a l l o w e d t o b e p u t , a n d i t

would be wrung f o r t h e Cour t t o a t t e m p t t o d o C O . I t i s f a i r t o

Mr. Wall, who has ab ly conducted a d i f f i c u l t case, t o say thdC he

d i d n o t s u b m i t t h a t a n y s u c h course should be fo l lowed.

The a p p l i c a t i o n o f t h e b a n k r u p t i s d i s m i s s e s . I t i s

o r d e r e d t h a t h e p a y t h e t a x e d costs of t h e r e s p o n d e n t t r u s t c c , of

a n d i n c i d e n t a l t o t h e a p p l i c a t i o n .

* .:. . .- . F- . -.

. . . L _ . . .

.. . . ..