Mahoney v CP White of HLB Mann Judd
[2005] FMCA 1380
•15 September 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MAHONEY v CP WHITE OF HLB MANN JUDD | [2005] FMCA 1380 |
| BANKRUPTCY – Application pursuant to s.178 of the Bankruptcy Act 1966 – whether ‘act, omission or decision’ – letter from Trustee in response to request to travel – general principles to be considered – role of Trustee – alleged statement in telephone conversation not sufficient to constitute ‘act, omission or decision’. |
| Bankruptcy Act 1966, ss.30, 30(2), 178 |
| El-Maghraby v Pattison [2003] FMCA 103 Re Wong; ex parte Wong v Donnelly (1995) 63 FCR 426 Willoughby v Official Trustee in Bankruptcy (WA) (2000) 102 FCR 261 |
| Applicant: | ROSS MAHONEY |
| Respondent: | CP WHITE OF HLB MANN JUDD |
| File Number: | MLG 1147 of 2005 |
| Judgment of: | McInnis FM |
| Hearing date: | 15 September 2005 |
| Delivered at: | Melbourne |
| Delivered on: | 15 September 2005 |
REPRESENTATION
| Solicitor for the Applicant: | Mr G. Webster |
| Solicitors for the Applicant: | Grant Webster |
| Solicitor for the Respondent: | Ms C. Dwyer |
| Solicitors for the Respondent: | Wisewoulds |
ORDERS
The Application filed 15 September 2005 be dismissed.
That the issue of costs shall be the subject of submissions in writing with the Respondent filing and serving submissions by 4 pm on 22 September 2005 and the Applicant filing and serving submissions in reply by 4 pm on 29 September 2005, and thereafter the issue of costs will be determined by the Court upon the written submissions.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1147 of 2005
| ROSS MAHONEY |
Applicant
And
| CP WHITE OF HLB MANN JUDD |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
This is an application pursuant to s.178 of the Bankruptcy Act 1966 (the Act) by Ross Mahoney (the bankrupt) seeking an order before this court that a purported decision claimed to constitute an "act, omission or decision" of the Respondent who is the Trustee of the bankrupt's estate, purportedly refusing permission to the bankrupt to travel overseas, should be reviewed by this Court.
The application is an unusual one in the sense that the application itself simply refers to orders that are sought, and in the application the following appears:
“1. THAT the Applicant/bankrupt, Ross Mahoney, be permitted to leave Australia on Saturday 17 September 2005 to undertake the trip described in the affidavit of Jenny-Louise Mahoney of 14 September 2005.
2. THAT the Respondent/trustee release funds and present claims on the bank account described as Bendigo Bank account number 105703946, in the name of Ross Mahoney.”
The application has been listed this day as a matter of urgency, having only been filed with the court earlier today, and is supported by the affidavit not of the bankrupt but rather of his wife, Jenny Louise Mahoney. When the application was called on for hearing, as a preliminary issue counsel for the respondent trustee submitted that in this instance there has been no decision made by the trustee which is capable of an appeal to this court pursuant to s.178 of the Act.
Relevant law in relation to s.178 has been referred to by me in the decision of El-Maghraby v Pattison [2003] FMCA 103 at paragraphs 11, 12, 13 and 14 as follows:-
“11.It is appropriate to refer to s.178 of the Bankruptcy Act which provides:-
“If the bankrupt, a creditor or any other person is affected by an 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.”
12.In re Tyndall ex parte Official Receiver (1977) 17 ALR 182 the Court said,
“An application by a bankrupt for permission to travel overseas requires careful consideration of all relevant circumstances for the reason that is ordinarily related to the freedom of a subject who is neither a criminal nor under criminal restraint to travel to pursue his legitimate commercial or personal desires”.
13.In Re Hicks: Ex parte Lamb (Heerey J 4 March 1994 VB 1473 of 1993) the Court said,
“I suggested to counsel for the trustee in argument that the following issues were, while not necessarily conclusive, nevertheless at the forefront of the matters to be considered in exercising my discretion:
(i)Is the proposed visit genuine?
(ii))Is the bankrupt likely to return to Australia as promised?
(iii)Will the visit hamper the administration of the estate?”
14.In the matter of Casella v Prentice [2002] FMCA 48 I stated the following:
“I accept that the court should only interfere with the trustee's exercise of discretion if it is shown, as indicated 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 require the court's intervention.”
In the present case, however, a threshold issue which emerges at the outset is the issue of whether or not there has indeed been an ‘act, omission or decision’ by the Trustee.
To understand whether there has been an ‘act, omission or decision’ it is necessary to note that in this instance the sequestration order was made on 6 September 2005. The affidavit in support does not exhibit any documentary evidence which may of itself be properly regarded as an ‘act, omission or decision’, though reference is made to a disputed telephone conversation where a response was purportedly given by a person purportedly being the trustee.
I note in passing that it is denied that there was ever a conversation with the trustee and/or that the contents of the alleged conversation occurred. For present purposes that is of no importance given that in any event, even if I was satisfied a conversation of a kind occurred - that is, a statement made that "There is no way you will be going on that trip," or even any other statement made as deposed to - I am not satisfied that that conversation itself would properly form the basis of what could be described as an act, omission or decision.
As the case progressed, given the urgency of the matter I was prepared to receive into evidence two items of correspondence, the first a facsimile transmission dated 12 September 2005 from the applicant's solicitors addressed to the Trustee. In that letter reference is made to an intention of the bankrupt to travel to Thailand for a period of 10 days on 17 September 2005. It is claimed the trip "has been planned for some time". Further reference is made to the purpose of the trip.
That correspondence was the subject of a facsimile transmission from the Trustee to the applicant's solicitors dated 13 September 2005. In that correspondence the following appears:
“A member of my staff was to meet with the bankrupt on Friday, 9 September 2005. However the bankrupt cancelled this meeting and advised that he may reschedule for 12th September 2005. The bankrupt has since advised that he is in Mildura and will not be back for, perhaps, three days.
Given the above, I am not in a position to consider your request for the bankrupt to travel outside of Australia. To consider this matter further, I require the following:
· A completed Statement of Affairs including full disclosure of all assets and liabilities
· All of the bankrupt's books and records
· An opportunity to interview the bankrupt
· An opportunity to assess whether the bankrupt is required to make compulsory income contributions to his estate
· A copy of the bankrupt's travel itinerary
· Details of the party who is paying all travel and accommodation costs and evidence of same
· Details of the exact dates the bankrupt intends to be outside Australia and his address whilst overseas.
· A copy of the bankrupt's aeroplane ticket
· The bankrupt's passport
· An explanation as to how the bankrupt intends to support himself and his family whilst overseas.”
It seems clear given the current time frame that it would be virtually impossible for the bankrupt to comply with the request to provide the information set out in the letter from the Trustee dated 13 September 2005.
For the present purposes I am satisfied that that letter could not be interpreted as constituting a decision for the purposes of s.178 of the Act. It may theoretically - simply because it is a letter - include anything done or performed by a trustee and I accept that for the purpose of s.178 a reply in writing by a Trustee to a formal request by a bankrupt as to any course of action to be followed by the trustee may amount to an act of the trustee in the meaning of the section (See Re Wong; ex parte Wong v Donnelly (1995) 63 FCR 426).
However in my view, whilst theoretically that letter which I have referred to earlier in this judgment might properly be regarded as an ‘act’ for the purpose of s.178, it is difficult to interpret it as anything other than a request for information. It cannot be regarded as an ‘act’ conclusive to the applicant's request but rather of itself a request for further information.
Even if I were minded to consider it an ‘act’ of a kind which would attract the court's jurisdiction pursuant to s.178 of the Act, it needs to be remembered that that section has to be considered in the context of s.30 of the Act, including the court's powers under s.30(2) to make such orders as are necessary for the purposes of carrying out or giving effect to the Act (See Willoughby v Official Trustee in Bankruptcy (WA) (2000) 102 FCR 261 at 265).
In my view even if I were to interpret the letter of 13 September 2005 as constituting an act for the purposes of s.178 - contrary to the finding I have made - then in the circumstances of this case, having regard to the contents of that letter, it is my concluded view that the matters requested in that letter themselves are matters quite properly the subject of a request, and are matters which could properly be regarded as information necessary for the purpose of the trustee carrying out his duties under the Act.
Even if I am wrong in relation to the question of jurisdiction and even if in this instance I were minded to consider exercising the jurisdiction under s.178, I further find that the affidavit purportedly in support of this application sworn by the applicant's wife and not by the applicant himself is not material upon which this court should properly act. When a bankrupt person - albeit one recently made bankrupt, as in this case - seeks to obtain an order from the court pursuant to s.178 of the Act, it is incumbent on the bankrupt to provide appropriate material upon which this court can make a decision.
The affidavit relied upon, sworn by the applicant's wife this day, simply refers to the bankrupt working in Mildura during the week. No attempt is made to explain why in this modern age of communication there has been little attempt by the bankrupt to activate this application on an earlier date.
Given the bankruptcy decision was made on 6 September 2005 and that the planned trip to Thailand, according to the applicant's wife's affidavit appears to have been one arranged ‘some months ago’, it is my view that a reasonable opportunity has been given to the bankrupt himself to provide proper instructions to his solicitor who in turn could at least have attempted to provide proper information to the trustee who then in turn may have made a decision which truly could be regarded as an ‘act, omission or decision’ for the purposes of s.178 of the Act.
I accept that the time frame may have made that difficult if not highly improbable, but nevertheless one would normally expect some attempt to be made to at least obtain so much of the information requested by the trustee as would enable the trustee to exercise a discretion and make a decision one way or the other. In this case no such attempt has been made to either gather information or seek a decision on an earlier date. The earliest date upon which it appears that the attitude of the trustee is sought is by a telephone conversation, albeit disputed, allegedly occurring on 12 September, followed by a letter of the same date.
In my view the circumstances of this application therefore, albeit unfortunate, are really circumstances that arise as a result of the time frame; that is, the Sequestration Order occurring on 6 September and the planned trip scheduled to occur on 17 September. I cannot see any fault on the part of the Trustee in the response given to this request which appears to be prompt and which appears to raise appropriate and relevant material in terms of the items requested; that is, the information requested, set out earlier in this judgment.
In any event, in my view the affidavit material is hopelessly inadequate. The deponent herself quite properly indicates that she is not in a position to provide details of any other of the bankrupt's creditors or whether there is any other creditor at all and otherwise sets out material which, whilst it might in part be relevant to the administration of the estate, certainly provides little or no evidence of the kind sought by the Trustee acting in accordance with the Trustee's duties under the Act.
It needs to be remembered that trustees in these circumstances, when they act in relation to the administration of the estate, must act with due diligence according to statutory duty. That statutory duty involves a duty not simply in the fair administration of the estate from the bankrupt's point of view but also a fair administration of the estate in relation the petitioning creditor and indeed other creditors who may become apparent after due investigation.
In my view it follows for the reasons I have given that the application should be dismissed with costs.
It is noted that the orders sought in the application this day include reference to the release of funds from the ‘Bendigo Bank account’. That issue has not been agitated before this court and the court has not made a decision in relation to that issue of a kind which ought to present any difficulty to the applicant, if he chooses to do so, making a further application in relation to that issue.
So there be no doubt, there should not be any suggestion that res judicata would apply specifically in relation to that issue. As a matter of convenience it is appropriate that the application filed this day be dismissed. It should not prejudice the rights of the applicant to make a fresh application seeking the release of the funds from the Bendigo Bank if he chooses to do so at some future date.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 15 September 2005
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