In the matter of Robalino, Carlos & Anor A W Butterell

[1998] FCA 1503

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 7633 of 1998

A.W. BUTTERELL (IN THE MATTER OF CARLOS ROBALINO AND ANAIR NOEMI ROBALINO)
Applicant

JUDGE:	EMMETT J
DATE:	22 SEPTEMBER 1998
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

HIS HONOUR: I have before me an application to set aside a summons issued under section 81 of the Bankruptcy Act 1966 (Cth). The summons was issued at the request of the trustee of the estates of Carlos Robalino and Anair Robalino (“the Bankrupts”). Both Bankrupts were the subject of sequestration orders made by Beaumont J on 19 December 1997. The petitioner was Kernville Pty Limited. The summons under section 81 is addressed to Mr Jose Louis Mendoza who is a principal of Kernville Pty Limited.

The act of bankruptcy relied on by Beaumont J was apparently failure to comply with a bankruptcy notice.  The bankruptcy notice was based on a default judgment in the Local Court at Fairfield.  The circumstances which gave rise to the alleged debt are not totally clear on the evidence before me but it appears to have arisen out of a real property transaction involving the Bankrupts and Kernville Pty Limited. 

The Bankrupts have apparently filed a notice of appeal against the order of Beaumont J.  So much appears from the affidavit which was filed in support of the application for the issue of the summons.  That affidavit was filed by a solicitor who no longer has instructions to act in relation to the matter.  The affidavit said that the appeal was against the determination of Beaumont J and that:

3.The appeal is to “go behind” a default judgment entered up at first instance in the Fairfield Local Court against the appellants by the respondent.

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10.In order to properly prepare the appellant's evidence and their submissions, it is necessary to summons Mr Mendoza to attend and give evidence pursuant to sec. 81 so that his evidence may be certified and provided to the Full Court in the appeal papers.

There is no indication in the affidavit that the trustee required to examine Mr Mendoza in connection with the affairs of the Bankrupts and it appears that the sole purpose for the summons at the time when it was issued was to endeavour to obtain evidence in support of the proposed appeal. That does not seem to me to be an appropriate basis for obtaining an order under section 81.

Certainly, the width of section 81 is considerable and power is given to examine a relevant person with respect to the examinable affairs of a relevant person. It may well be that the matters which were intended to be the subject of any investigation pursuant to an examination under section 81 would be within section 81. However, at present there is no evidence before me that the trustee in fact wished to exercise the powers given by section 81 for the purpose of the administration of the estate.

In the circumstances, I consider that the summons ought to be set aside.  However, I should make it clear that if a further application is made on behalf of the trustee for the issue of the summons, for the purposes of examining Mr Mendoza in relation to the affairs of the Bankrupts, then my having set aside the order should not be taken as any indication that there should be any reluctance to issue a further summons.  Further, since the basis upon which the application was made is not the basis upon which I have intervened, it seems to me that there ought to be no order as to the costs of this application.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett

Associate:

Dated:            22 September 1998

Date of Hearing:	22 September 1998
Date of Judgment:	22 September 1998