Official Trustee in Bankruptcy v Baker, J.A.

[1992] FCA 776

JUDGMENT No. .22.& .... I ..2&

IN THE FEDERAL COURT OF AUSTRALIA	1	No. NB 72 of 1990
GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF	1
THE STATE OF OUEENSLAND	)

BETWEEN: OFFICIAL TRUSTEE IN BANKRUPTCY

Applicant

AND :  JAMES ANDREW BAKER

First Respondent

AND:  ART HOLDINGS PTY. LTD. as trustee for the
Contemporary Art Trust

Second Respondent

AND:  GOODGLINT PTY. LTD.

Third Respondent

AND:  VESTOS PTY. LTD.

Fourth Respondent

AND :  SERVICE AND PROPERTY PTY. LTD.

Fifth Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:	Drummond J
DATE OF ORDER:	12 October. 1992
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

under S. 77C of the Bankruptcv Act 1966 for the purpose of obtaining access to invoice books now in

1.        The costs of today are reserved.

THE COURT DIRECTS THAT:

1.        The applicant is at liberty to exercise his powers

the possession of various art dealers with whom the first respondent has dealt and purchased artworks so that he can produce the best list of artworks in the third respondent's collection as at 23 November, 1983.

NOTE :  Settlement and entry of orders is dealt with in Rule
124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA	)	No. NB 72 of 1990
GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF	)
THE STATE OF OUEENSLAND	1

BETWEEN: OFFICIAL TRUSTEE IN BANKRUPTCY

Applicant

AND:  JAMES ANDREW BAKER

First Respondent

AND :  ART HOLDINGS PTY. LTD. as trustee for the
Contemporary Art Trust

Second Respondent

AND:  GOODGLINT PTY. LTD.

Third Respondent

AND :  VESTOS PTY. LTD.

Fourth Respondent

AND:  SERVICE AND PROPERTY PTY. LTD.

Fifth Respondent

CORAM: Drummond J

PLACE: Brisbane

W: 12 October, 1992

EX TEMPORE REASONS FOR JUDGMENT

This is an application by the Official Trustee who is the applicant in proceedings which were heard before me over a period of three weeks in July this year. Judgment is reserved. The application is for directions in respect of a list of artworks, which was the subject of discussion in the course of the hearing. The discussion arose during counsels' final addresses. I in effect directed the applicant and the second to fifth respondents (those respondents then being represented by . McMurdo and Mr. Pestorius of counsel, briefed by Messrs. Q.D. George and Co. ) to agree on a list of artworks that were in Goodglint Pty. Ltd.'s (the third respondent) collection as at 23 November, 1983. I gave that direction because it is possible that a conclusion that I may come to might make it necessary to know precisely what works were in the collection as at that date. I have formed no view even now on whether that matter will be a live issue. However, it remains possible that it may be an issue and so the question of formulating such a list still needs to be considered.

The parties have proceeded a considerable distance along the path of achieving an agreed list. However, there appears to be a total of some 62 pictures against which a question mark exists as to whether they were in the collection as at 23 November, 1983. Mr. Murphy, counsel for the applicant in the proceedings before me today, says that if the

be in the possession of various art dealers with whom the	Official Trustee could have access to invoice books known to
first respondent, Mr. Baker, dealt and purchased artworks, then the number of paintings against which this question mark exists could be expected to be very substantially reduced.
Since the question of what works were in the collection as at 23 November, 1983 might not turn out to be a live issue once I have come to a view on what is to be done in the main action, it seems to me that I should not give any directions now which might put the parties to unnecessary expense. The course I propose to follow is to publish my reasons when I have formulated them and to then indicate the orders I propose to make. If a knowledge of what works were in the collection as at 23 November, 1983 turns out to be important in view of the conclusions I come to, I will then give directions designed to ensure that the Official Trustee will produce on oath the best list of works in the collection at that date he is able to prepare and I will also give directions which will afford to each of the respondents, including Mr. Baker, an opportunity to contest that list and, if necessary, unfortunate though it may be, I will conduct a further hearing and, in effect, settle the definitive list.
Mr. Young, of Messrs. Hogan & Young, the solicitors now on the record for Goodglint, says he has instructions to oppose the re-opening of the case on the ground that it would be oppressive to his client. When asked to indicate the
could advance and that he was merely stating his instructions, reasons for that submission, he said there were no reasons he
although he did mention that the previous solicitors for Goodglint are claiming a llen over that respondent's file, including all the material that has come into existence in the course of the trial. Such a lien could not, I think, stand in the way of Messrs. Hogan & Young obtaining access to the material held by Goodglint's former solicitors for the purposes I have mentioned which would involve participation in proceedings designed to identify the artworks in Goodglint's
collection as at 23 November, 1983.
So far as the suggestion that re-opening the case for that purpose would be oppressive to Goodglint is concerned, I reject that submission. The facts are that in the course of argument, without objection, the representatives for Goodglint indicated willingness to participate in the compiling of an agreed list of artworks, or at least raised no objection and, in fact, subsequently participated in an attempt to produce the agreed list. I do not think there is any injustice at all in permitting the case to be re-opened in order to allow that list to be settled in these circumstances.
Notwithstanding my desire not to impose any further expense on the parties in settling this list should it turn out once I have decided what I should do in the main proceedings that a knowledge of the collection as at 23 November, 1983 is irrelevant, the Official Trustee persists in
the risk of any contention that it is acting in contempt of its submission that I should allow it, without exposing it to
court or acting in abuse of the process of the court, to use its powers under S. 77C of the Bankruptcy Act 1966 (Cthl to obtain access to the art dealers' invoices that I have referred to, in order to complete the work, so far as it can, of finalising the list. Goodglint's solicitor raises no objection. Mr. Baker's only concern is whether the provision is retrospective. It appears to me that S. 77C is available to the Official Trustee now. It is a procedural provision and is available to the Official Trustee in any bankruptcy irrespective of whether the bankruptcy commenced prior to the commencement of the Bankruptcy Amendment Act 1991, the amending Act by which S. 77C was inserted.
It is not appropriate in the absence of the art dealers in question who would thereby be affected, to make an order declaring that the exercise by the Official Trustee of its powers under S. 77C for the purpose of gathering information in order to settle this list now would not be a contempt or would not be an abuse of process. However, from the material available to me (and I emphasise it is a position I am in without the dealers in question who would be affected by any such declaration having the opportunity to be heard), it is difficult to see how the invoking of this statutory power by the Official Trustee for the purpose in question could be objectionable, although I must concede the possibility that it may be.
At the request of counsel for the Official Trustee, I propose to give the Official Trustee liberty to exercise his powers under S. 77C for the purpose of obtaining the invoice books from the dealers in question. I do that solely to record my view, and I emphasise that it is a view formed in the absence of any opportunity by the dealers who may be affected by the exercise of that power to put submissions to the contrary, that the invoking of those powers would not be

objectionable, while leaving it to any of the dealers to raise
that point should they wish to do so.

I certify that this and the preceding five pages is a true copy of the reasons for judgment herein of the Honourable M r . Justice Drurnmond.

Associate:	p W y +
Date:	12 October, 1992

5 -

. ,
, .

I .      .

'I'
,	I
% . ,.