Official Trustee in Bankruptcy v Gobert, S.V.

[1993] FCA 935

9 3 5 , 4 3

JUDGMENT NO. .n..... .o.... .a. . . .m.oo*.e.*..

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No NG 803 of 1993
)
GENERAL DIVlSION	)

BETWEEN:	O F F I C I A L	T R U S T E E	IN
BANKRUPTCY

Applicant

AND	STEPHEN VALENTINE GOBERT
& ANOR

Respondent

IN THE FEDERAL COURT OF AUSTRALIA	)
I
NEW SOUTH WALES DISTRICT REGISTRY	j NO. NB 114 of 1993
)
BANKRUPTCY DlVISlON	) )

SUZANNE MAREE GOBERT

O F F I C I A L	T R U S T E E	IN
BANKRUPTCY

Apphcant

Note Settlement and entry of orders is dealt with ~n Order 36 of the Federal Court Rules.

STEPHEN VALENTINE GOBERT

m:	Danes J.
Date:	6 December 1993
Place:	Sydney

MINUTES OF ORDER

THE COURT ORDERS THAT.

Withm 7 dayb the partlcs br~ng in mmute~ of the orders wh~ch they propose.

IN THE FEDERAL COURT OF AUSTRALIA

)

NEW SOUTH WALES DISTRICT REGISTRY	) No NG 803 of 1993
GENERAL DIVISION

BETWEEN:  OFFICIAL TRUSTEE IN

BANKRUPTCY

Applicant

AND:  STEPHEN VALENTINE

GOBERT & ANOR

Respondent

IN THE FEDERAL COURT OF AUSTRALIA	1
NEW SOUTH WALES DISTRICT REGISTRY	) No. NB 114 of 1993
BANKRUPTCY DIVISION

RE:	S U Z A N N E	M A R E E
-

GOBERT

EX PARTE:  OFFICIAL TRUSTEE IN
BANKRUPTCY

Applicant

STEPHEN VALENTINE

GOBERT

Respondent

m:	Davies J.
Date:	6 December 1993
Place:	Sydney

REASONS FOR JUDGMENT

Mrs S.M. Gobert was made bankrupt on 27 January 1993. The O£ficial

Trustee 1s her trustee m bankruptcy. Mr S.V. Gobert and Mrs S.M. Gobert are

husband and wife.

In the bankruptcy, the Official Trustee has brought proceedings seeking a

declaration that Mr S.V. Gobert holds a one-half Interest in the property known as

220 New Jerusalem Road, Oakdale, on trust for the Official Trustee or, alternahvely,

a declaration pursuant to s.121 of the Bankruntcv Act 1966 (Cth) that the disposihon of one-half of the proceeds of sale of a property at Illawong from Mrs S.M. Gobert to Mr S.V. Gobert, on or about 10 December 1987, is void. Alternat~vely, an order is

sought under s.37A of the Convevancine. Act 1919 (NSW) setting aslde the alienation

of one-half of the proceeds of sale of the Illawong property.

As can be seen from the orders sought, it 1s claimed that, when the matrimonial home at Illawong, which was jointly owned by Mr and Mrs Gobert, was sold in or about December 1987 and a new home was purchased at 220 New Jerusalem Road, Oakdale, there was a transaction in respect of which orders may be
made under s.121 of the Bankruntcv Act or under s.37A of the Convevanclne	- Act.

The Official Trustee also instituted proceedings in the Family Court of

Australia seeking orders setting asrde for fraud orders made by consent in proceedings

between Mr and Mrs Gobert under the Famllv Law Act 1975 (Cth). The orders were made at the Local Court at Sutherland on 14 December 1989 in accordance with terms of settlement which read:-

"1.

That the wfe transfer to the husband or hls nomlnec all her r~ght trtle and Interest in her shareholdlng belng 5% of lssued shares m the company,

Production Panel Beatlug & Spray Paint~ng Pty Lunlted.

2

That the wtfe transfer to the husband all her rlght tltle and rnterest m the property known as 31 Treacy Street, Hurshrllle be~ng the whole of the property contained m

Cert~ficate of mtle Volume 15407 Foho 32.

3

The husband will lndemn~fy and keep lndemn~fied the wfe m respect of any clam

agalnst hcr by the mortgagee of the property referred to m the preced~ng paragraph.

4.

The husband and the wfe respcctlvcly 5hall have sole owncrship of each particular Item of thc raldue of pcrsonal property wli~ch 1s a1 thc date of approval of these Terms of Settlement in then solc possession.

5

The husband 1s to have sole custody of the children of the marriage, namely:

(a)	Anthony Stcphen Gobert born 5th March. 1975
(b)	Aaron Danlel Gobert born 7th November. 1980
(c)	Alexander Mark Gober1 born 12th August, 1983

The husband agrees to glve the wfe reasonable access to the three chlldrcn of the marnagc."

Having regard to s.79A of the Familv Law Act, those orders w~ll stand unless

set asrde for fraud. The Off~cial Trustee's apphcation to have the orders set aside on that ground was inltizlted m the Famrly Court of Australia, but was transferred to this Court by order of the Honourable Justrce B.E. Ross-Jones made on 7 October 1993.

That proceed~ng 1s numbered NG 803 in thrs Court.

It was submltted by Mr G. Johnston, counsel for Mr Gobert, that the consent orders dealt with all issues of property as between Mr and Mrs Gobert and therefore covered the sale of the lllawong property and the acquisition of the Oakdale property with the result that those transactions are also protected unless the order of the Local Court at Sutherland is set aside for fraud. However, my tentative view on this point,

and I need not finally determine it, n that the orders of the Local Court at Sutherland
dealt only with such matters as were specifically mentioned therein.

That brings me to the present lssue which IS that a summons has issued under s.81 of the Bankru~tcv Act for the exam~natlon of Mr S.V. Gobert in relation to the bankruptcy. Mr Johnston moved to have the examination adjourned pending the determination of the proceedlngs I have mentioned, particularly the proceedmgs

transferred from the Family Court. The Official Trustee seeks to have such an

examlnatlon conducted prior to the trial of the proceedings I have discussed.

Mr Johnston submltted, first, that the Court would not have jurisdiction to deal with any of the matters the subject of the orders made by the Local Court at	Sutherland prlor to the settlng aslde of those orders. Secondly, he submitted that, to
permit the Offic~al Trustee to exercise his power of examination at this polnt of time,
would be to glve the Officlal Trustee an unfalr advantage as a litlgant in proceedings which are now on foot before the Court.

On the first point, Mr Johnston relied upon the decis~on of Northrop J. in &

Baater. Ex Dartc The Official Recelver v.-	(1986) 10 F.C.R. 398. His Honour
declined to consider an application for orders under the Bankru~tcv	Act in respect of

property which had been the subject of an order made in the Family Court. But his Honour did so, not on the basis that there was any lack of jurisdiction, but on the basis that an exercise of the jurisdiction could lead to Inconsistent orders. His Honour said at 401:

"If the Federal Court proceeded to hear and dclcrmlne the application, of necessity,

confl~cting orders would be made ... The Federal Court has no jurisd~ction or power to

set as~de the order of the Family Court."

In my opinion, there is nothing in that case that bears upon the matters now under conslderation. The Official Trustee has on foot a proceeding to set aside the orders made in the Local Court at Sutherland. This Court has jurisdiction to make such an order for the application, instituted in the Family Court, has been transferred to this Court by order of the Fam~ly Court. Therefore, matters relating to the property the subject of those orders, and to the circumstances surrounding the obtaining of the orders are relevant matters Into which a trustee may mquire. They are matters relating to the bankruptcy.

On the second polnt, it was submitted by Mr Kieran Tapsell, solicitor for the

Officlal Trustee, that the Trustee was entitled as of r~ght to an examination of Mr

S.V. Gobert unless it was shown that the examination was to be used for an improper purpose, such as to enable the Official Trustee to obtain a forensic advantage which

would disadvantage Mr Gobert and would advantage the Official Trustee as litigants in the proceedings which are on foot. Mr Tapsell submitted that there was no proof

of any such improper purpose and that the application for the summons set out reasons why Mr Gobert should be examined generally concernlng his knowledge of and h s association with Mrs Gobert's affa~rs.

Mr Tapsell relied upon the oft-quoted remarks of Street J. in Re Hueh J.

Roberts Ptv Ltd (In Lia) and the Cumoan~es Act (1970) 91 WN (NSW) 537 at 541:-

"A l~qu~dator needs lnformat~on concernlng h e company lust as much in connectlon

wth current or contemplated llt~gatlon as in connectlon w ~ t h	other aspects of its
affalrs In uslng the statutory mach~nery	of prlvate examlnatlon he will m many cases
be gathering evidence as an ord~nary	and legitmate use of this procedure. Those

conversant w~th advlslng l~qu~dators on contemplated l~t~gatlon customanly observe

the r~tual of warnlng the l~qu~dator not to commence the proceedings until all the

necessary pnvate examlnauons have been held	The purpose of such warnlngs is to
avo~d	any rlsk of the very objection whlch has been taken m the appllcatlon now

before the court. Thls r~tual 1s distasteful to counsel and sol~c~tors, but nevertheless

they qulte properly feel that prudence requlres its observance	I descnbe it as
datasteful because it has about 11 an alr of non-disclosure	I see no reason m

pr~nc~plc to justify l~qu~dators belng thus placed in a posltlon of hawng almost, as it were, to dissemble regardrng thelr future intentions lest the court deny them the rlght to use the statutory machnery of prlvate exammation."

Other relevant cases which have examined llke ~ssues in this country are

Kimberlev Carpet Mills (Aust) Ptv Ltd (1979) 4 ACLR 50; Re John Arnold's Surf Shoo Ptv Ltd (In Liq) (1979) 4 ACLR 663; Re Nalanda Ptv Ltd (In Liq) (1983) 1 ACLC 1000; Re Rothwells Ltd (Prov liq apptd) (1989) 15 ACLR 168; Kotan Hold~nes

Pty Ltd v. Trade Practices Commlsslon (1991) 102 A.L.R. 51; Hone Kone Bank of

Australia Ltd v. Murphy (1992) 28 NSWLR 512 at 516-20.

Cases in the Unlted Kmgdom include Re North Australian Territorv CO

(1890) 45 Ch.D. 87; Re kindon and Northern Bank: Ex oarte Archer (1901) 85 LT

698; Re Rolls Razor Ltd [l9681 3 All ER 698; Re Castle New Homes Ltd [l9791 1 WLR 1075; Re S~lrafllte Ltd [l9791 1 WLR 1096; Cloverbav Ltd (Joint Administrators) v. Bank of Credlt and Commerce International SA [l9911 Ch 90.

In my opin~on, the position is that, as the issue of a summons is a

discretionary matter for the Court, the Court must necessarily take into account the

whole of the circumstances before authorising an exarmnation. Therefore, if there are legal proceedings on foot, the Court must consider whether the proposed examination

would prejudice the fair conduct of the proceedings. I therefore give weight to the points of prejudice discussed in the English authorit~es. However, an examination which is proposed for the elucidation of issues arising in the administration in bankruptcy is unlikely to prejudice other proceedings in any unfair way. On the other hand, an examination calculated to achieve a forensic advantage in proceedings on

foot would be likely to do so.

As no evldence has been adduced as to the purpose of the examination as

sought, I have thought it proper to peruse the bankruptcy file and the file transferred from the Family Court. As a result of this consideration, I have come to the view

that Mr Gobert was so involved with ~mportant aspects of Mrs Gobert's affairs that he should be examined generally with respect to those affairs. Mr Gobert has refused to

questions, are matters which it 1s the duty of the Official Trustee to ask of Mr Gobert.	answer written questions whlch the Official Trustee has put to him. Those and like
As Mr Gobert has not been prepared to answer them voluntarily, an examination is
required. Mr Gobert had a substantial involvement m Mrs Gobert's affairs and in the affairs of a company which carried on a business in whlch she was involved.

I take Into account the fact that proceedings have been instituted but it

does not seem to me that the Trustee 1s yet in the possession of all relevant facts. The institution of the two proceedings, the one in the Bankruptcy Court and the other

in the Family Court, does not establish that the Trustee had made all due and proper

inquiries. The Institution of the proceedings was precipitated by the necessity to take

action with respect to a caveat. That Mr Gobert may be prejudiced by the examlnatlon I take into account. Nevertheless, it seems to me that the matters of which the Official Trustee wishes to inquire are all matters in respect of which, as a trustee m bankruptcy, he has a duty to inquire at this stage.

In all the circumstances, I am of the view that the summons should not be

stayed pending the determination of the two proceedlngs, but rather that the trial of the two proceed~ngs should be delayed until that exammation 1s held. The parties

should bring in w~thin	7 days mlnutes of the orders whch they propose to gve effect
to these reasons.
I certify that this and the 7 preced~ng	pages

are a true copy of the reasons for judgment herein of

the Honourable Mr Justice Davies.

Associate: . L O 7

Date:	6 December 1993
Solicitor for the applicant:	Mr K. Tapsell of Messrs Watkins, Tapsell & Nolan
Counsel for the respondents:	Mr G. Johnston
Solicltors for the respondents:	Messrs Paltos & Cumming
Date of hearing:	25 October 1993
Date of judgment:	6 December 1993