Nasr v Dixon (Trustee), in the matter of Nasr (Bankrupt)
[2018] FCA 1039
•6 July 2018
FEDERAL COURT OF AUSTRALIA
Nasr v Dixon (Trustee), in the matter of Nasr (Bankrupt) [2018] FCA 1039
File number: NSD 1206 of 2018 Judge: THAWLEY J Date of judgment: 6 July 2018 Catchwords: BANKRUPTCY AND INSOLVENCY – where applicant (a bankrupt) seeks orders requiring joint trustees in bankruptcy to consent to applicant travelling overseas – where trustees refuse consent and oppose applicant leaving Australia – whether Court should direct trustees to give consent, and if so, on what terms Legislation: Bankruptcy Act1966 (Cth) ss 77(1)(a)(ii), 178 (repealed), 272(1)(c); sch 2 ss 90-15, 90-20 Cases cited: Macchia v Nilant (2001) 110 FCR 10
Re Hicks; Ex parte Lamb (1994) 217 ALR 195
Re Tyndall; Ex parte Official Receiver (1977) 17 ALR 182
Date of hearing: 6 July 2018 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 18 Solicitor for the Applicant: Mr J Arraj of Forward Legal Counsel for the Respondent: Mr R A Parsons Solicitor for the Respondent: SLF Lawyers ORDERS
NSD 1206 of 2018 IN THE MATTER OF THE BANKRUPT ESTATE OF ROSTOM NASR
BETWEEN: ROSTOM NASR
Applicant
AND: STEPHEN ROBERT DIXON AND NICK MELLOS AS JOINT AND SEVERAL TRUSTEES OF THE BANKRUPT ESTATE OF ROSTOM NASR
Respondent
JUDGE:
THAWLEY J
DATE OF ORDER:
6 JULY 2018
THE COURT NOTES THAT:
1.Upon the applicant by his solicitor undertaking to the Court that in the event the applicant travels to Lebanon pursuant to any consent given in accordance with these orders:
(a)he will return to Australia by no later than 9 August 2018 and, as soon as practicable thereafter, return his passport to the respondent;
(b)he will during the period in which he is absent from Australia provide to the respondent such information as the respondent may reasonably require in connection with the administration of the applicant’s bankrupt estate;
(c)he will attend a meeting with the trustee on his return within a reasonable period as requested by the trustee;
(d)he will provide security of $20,000 before his departure, which is currently scheduled for 8:00pm this evening, such security to be paid by electronic funds transfer to the following account:
HAMILTON MURPHY TRUST
BSB: 063-142
Account Number: 10436007
and to be repayable within 14 days of the applicant’s return to Australia;
(e)he will disclose to the Court his current passport number; and
2.Upon the applicant’s solicitor undertaking to the Court:
(a)that he will, on the instructions he has been given, accept service on behalf of the bankrupt of examination summonses if issued whilst the bankrupt is overseas; and
(b)to pay the filing fee in this matter of $1,565:
THE COURT ORDERS THAT:
1.The respondent give to the applicant, by email to the applicant’s sister, consent in writing to travel to Lebanon on the condition that the applicant shall return to Australia by no later than 9 August 2018.
2.Each party have liberty to apply on 24 hours’ notice.
3.Costs reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THAWLEY J:
This proceeding was commenced orally this evening, shortly after 5 pm. The applicant is booked on a flight departing Australia at 8 pm. The application was for an order that the joint trustees in bankruptcy of the applicant’s bankrupt estate give the applicant consent in writing for him to depart Australia. There was no formal evidence given on the application. There was no formal originating process. The applicant did not indicate what power this Court had to make the order or refer to any relevant authorities. The reason for this was that the matter arose urgently.
For convenience, I refer to the joint trustees in bankruptcy as the trustee.
It was said from the bar table, and I accept, that the applicant’s grandfather was gravely ill. The applicant’s grandfather lives in Lebanon. The applicant, together with his ex-wife and two children, attended the airport with return tickets to Lebanon yesterday evening. The applicant, as a bankrupt, was not allowed to board the flight. The applicant sought the consent of the trustee for his departure from Australia. The trustee declined to give that consent. Over the course of today there were apparently communications between the applicant and the trustee which did not result in such consent being forthcoming.
It was said that the applicant had a passport which had expired on 1 January 2016. He had obtained, but not informed the trustee that he had so obtained, a new passport. He had not surrendered that new passport to the trustee. That passport should probably have been given to the trustee: see ss 77(1)(a)(ii) and 272(1)(c) of the Bankruptcy Act1966 (Cth). The flights to Lebanon were booked on 20 June 2018.
It was said from the trustee’s side of the bar table that the applicant had been requested, but had refused, to attend interviews with the trustee. On the other hand, it was said from the other side of the bar table that the applicant had been fully cooperative. I have not found it possible to make a finding as to which of those versions is correct and I do not regard it as necessary to reach a conclusion in that regard in the context of this application.
It is evident from the submissions that were made that there is a significant degree of distrust on the part of the trustee. This arises from the relationship between the parties and in particular as a consequence of asserted dealings between the applicant and his ex-wife. The relationship with his ex-wife has been described as “on-again, off-again” and, as I understand what was put from the bar table, the ex-wife holds a significant amount of the financial assets which may have once belonged to the applicant. The trustee has indicated that it will shortly issue examination summonses and that those examination summonses may currently be before the Registrar with a view to being issued.
The background events appear to be relatively complex but were not the subject of evidence. The trustee opposed the application that it provide consent in writing for the applicant to leave Australia on a number of bases, including:
(1)the historical lack of cooperation on the part of the applicant;
(2)an asserted materially incomplete provision of information;
(3)the fact that the applicant had obtained a new passport but had not surrendered it;
(4)that the applicant had been requested to attend a meeting with the trustee but had refused;
(5)that the applicant had asserted he had no interest in real estate, which was not accepted by the trustee;
(6)that the circumstances of this application, in effect, “smacked of ambush”.
There is no doubt that the application has unusual features and there is no doubt that the application will have taken the trustee by surprise. However, I am not prepared to find in the particular circumstances and the way in which the application was made, that the applicant’s grandfather is not ill and that there is not a genuine reason for the applicant to wish to depart Australia.
Section 90-15(1) of Schedule 2 to the Bankruptcy Act provides:
The Court may make such orders as it thinks fit in relation to the administration of a regulated debtor’s estate.
Subsection (2) of s 90-15 provides:
The Court may exercise the power under subsection (1):
(a) on its own initiative, during proceedings before the Court; or
(b) on application under section 90‑20.
Although no written application was made to the Court, and no reliance was placed by the applicant on any specific provision of the Bankruptcy Act or otherwise, I have treated the present application as an application made under section 90-20.
Previously, s 178(1) of the Bankruptcy Act provided as follows:
If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable.
That provision has been considered in numerous cases. Time does not permit an examination of those in detail. However, I have had particular regard to the following: Macchia v Nilant (2001) 110 FCR 101 at [38], per French J; Re Tyndall; Ex parte Official Receiver (1977) 17 ALR 182 at 187, 190-191, per Deane J.
In Re Hicks; Ex parte Lamb (1994) 217 ALR 195, Heerey J suggested at 198 that the following three matters are at the forefront of the relevant considerations in an application such as the present:
(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?
Having considered the submissions advanced by the parties and the facts as stated from the bar table, I have concluded as follows.
First, I accept that the proposed visit is genuine.
Secondly, it seems to me that the applicant is likely to return to Australia as promised. I have had particular regard to the fact that the applicant was prepared to make an undertaking to that effect and has further given, through his solicitor, an undertaking to pay the amount of $20,000 by electronic funds transfer to an account nominated by the trustee prior to his departure, scheduled this evening at 8 pm.
Thirdly, it seems to me, in all the circumstances, that the absence of the applicant from Australia until 9 August 2018 is unlikely to hamper the administration of the estate. In that regard, I have also taken into account the fact that the applicant, by his solicitor, has undertaken to attend a meeting with the trustee as soon as the applicant returns.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley. Associate:
Dated: 6 July 2018
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