Maher, D. v Official Trustee in Bankruptcy

[1992] FCA 638

.DC . b38 j92

JUDGMENT NO. .....o*w....w .m-

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BETWEEN:	PENIS HAHER
EX PARTE:	THE OFFICIAL TRUSTEE IN
BANKRUPTCY (as Trustee of
the bankrupt estate of Denis Maher)

(Respondent)

m:  Ryan J

Place: Melbourne

Date:  26 August 1992

EX TEMPORE REASONS FOR JUDGMENT

man a: In this matter the bankrupt seeks a review of orders

made by a registrar in bankruptcy that a warrant be issued for the arrest of the bankrupt and that the examination of the bankrupt pursuant to s.81 of the Bankru~tcv Act 1966 be adjourned sine die. It has been contended by Mr Francis QC, who appears with Mr Trapnell for the bankrupt, that the examination under s.81 should be adjourned until the outcome is known of two proceedings in the County Court of Victoria. The hearing of the first of those proceedings has been completed and judgment has been reserved. Those proceedings comprise an action by the wife of the bankrupt claiming equitable interests in the matrimonial home and a farm property at Buchan, of both of which the bankrupt is the sole registered proprietor. A claim is made in the same

a forgery.

proceedings that a mortgage allegedly granted over the properties in favour of the National Australia Bank should be set aside as

The second proceeding is an application to set aside the judgment in favour of American Express International Inc. ("American Express") against the bankrupt for approximately $54,800 which

is the judgment debt on which the sequestration order against the bankrupt is founded. An agreement enabling that application to be made has now been concluded whereby an indemnity against the costs of that application in a form acceptable to the Official Trustee has been provided by the bankrupt's wife. However, a further delay has arisen, as I am informed from the Bar table, because the relevant file has been mislaid in the County Court.

I am not persuaded that the existence of either or both the

proceedings in the Country Court compels the deferral of the examination under s.81. If the Official Trustee considers such an examination to be timely, the proceedings by the wife, if wholly or partly successful, will not obviate the need for administration of the bankrupt's estate. A judgment in favour of the wife against the bankrupt estate of her husband will, as

I understand it, merely reduce the extent of his divisible

do no more than convert that company from a secured to an	property while success against the National Australia Bank will
unsecured creditor.
In the second place, if the judgment in favour of American Express be set aside, it is by no means axiomatic that the court will make an order annulling the bankruptcy. The jurisdiction under s.153B of the Bankruvtcv Acc is clearlydiscretionary. The nature and the extent of debts other than the judgment debt presumptively set aside, the existence of assets from which those
debts can be satisfied and other matters which may be revealed
by an examination under s.81 could all be relevant to that
exercise of discretion. Moreover, the evidence discloses considerable delay by the bankrupt in filing a statement of affairs. As well, the examination under s.81 did commence on 2 June 1992 and it was adjourned on 15 July 1992 on the bankrupt's
application, then on the grounds of his ill-health. It was subsequently adjourned on two further occasions when the bankrupt was represented by his solicitor or Counsel before he was arrested in the precincts of the court and further briefly examined on 7 August 1992.
I therefore decline to order that the bankrupt's examination be
deferred. However, I agree with the submission of Mr Francis QC that the bankrupt's ability to give instructions in relation to the proceedings in the County Court, and, indeed, in relation to the examination under s.81 itself, will be seriously compromised if he remains under threat of apprehension pursuant to the second warrant which, I gather, remains extant. I am therefore disposed
to order, on the bankrupt's undertaking to the Court that he will attend on the date fixed for the resumption of his examination,
that the execution of the second warrant be stayed until some appropriate time on the date fixed for the resumption of the examination. I shall adjourn both the application by the Official Trustee dated 21 August 1992 and the application by the bankrupt dated 30 July 1992 to 16 September 1992. I shall
reserve the costs of both parties of this day in respect of those applications. I further direct that the examination of the bankrupt pursuant to s.81 of the Bankru~tcv Act be resumed on 9
September 1992 before Mr Registrar Morris.
[After further discussion with Counsel, his Honour continued:]
I consider that the costs of the application of 12 August 1992,
although in a sense in respect of a matter which has been resolved by the orders which I have made today, should be considered in the context of the overall application. Accordingly, I reserve those costs to 16 September 1992.

I certify that this and the

preceding three (3) pages are a true copy of the Reasons for Judgment of the Honourable Mr Justice Ryan

Solicitor for the Bankrupt:  Alwyn Samuel

Counsel for the Bankrupt:	Mr C H Francis QC and Mr D A Trapnell
Solicitor for the Official Trustee:	Australian  Government
Solicitor
Counsel for the Official Trustee:	Mr J Lenczner