Park (Trustee) v Tschannen (Bankrupt) - [2016] FCA 137

FEDERAL COURT OF AUSTRALIA
Park (Trustee) v Tschannen (Bankrupt) [2016] FCA 137

File number: QUD 1053 of 2015

Judge: EDELMAN J

Date of judgment: 10 March 2016

Catchwords: PRACTICE AND PROCEDURE – service outside the jurisdiction – substituted service – application for examination of bankrupt – need to attempt service in foreign jurisdiction before substituted service possible

Legislation:
Federal Court Rules 2011 (Cth) rr 10.24, 10.44, 10.49

Bankruptcy Act 1966 (Cth) s 81

Agreement on Judicial Assistance in Civil and Commercial Matters and Co-operation in Arbitration between Australia and the Kingdom of Thailand. Signed 2 October 1997. Australia–Thailand. [1998] ATS 18 (entered into force 29 July 1998)

Cases cited:
Clifton (Liquidator), in the matter of Solar Shop Australia Pty Ltd (In Liquidation) [2014] FCA 891

Deputy Commissioner of Taxation v McManus [2015] FCA 959

Laurie v Carroll [1958] HCA 4; (1958) 98 CLR 310

Re Deposit Investment Co Ltd (1991) 30 FCR 463

Re Skase (1991) 32 FCR 212

Southwell v Maladina [2002] FCA 802; (2002) 194 ALR 51

Wilding v Bean [1891] 1 QB 100

Commissioner of Taxation v Zeitouni [2013] FCA 1011

Date of hearing: 10 March 2016

Registry: Queensland

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: General and Personal Insolvency

Category: Catchwords

Number of paragraphs: 19

Counsel for the Applicant Ms S D Anderson

Solicitor for the Applicant: JHK Legal

Solicitor for the First Respondent: The First Respondent did not appear

Solicitor for the Second Respondent: The Second Respondent did not appear

ORDERS

QUD 1053 of 2015

BETWEEN:
JOHN RICHARD PARK AS TRUSTEE OF THE BANKRUPT ESTATE OF WARREN ERIC TSCHANNEN

Applicant

AND:
AND:

WARREN ERIC TSCHANNEN

First Respondent

HELEN MARGARET RANDELL
Second Respondent

JUDGE:

EDELMAN J

DATE OF ORDER:

23 FEBRUARY 2016

THE COURT ORDERS THAT:
1.The applicant be granted leave pursuant to rule 10.44 of the Federal Court Rules 2011 (Cth) to serve upon the first respondent by registered mail, to the Hotel Indigo, Bangkok or other address in the Kingdom of Thailand, the Form 9 Summons for Examination pursuant to section 81 of the Bankruptcy Act 1966 (Cth) attached together with the Notice of Filing and Hearing dated 20 November 2015.
2.This application otherwise be adjourned.
3.The date for examination of the first respondent be amended to 7 April 2016 at 10.00am, to be conducted at the Federal Court, Level 6, Commonwealth Law Courts, 119 North Quay, Brisbane, in the State of Queensland.
4.The adjourned part of this application be provisionally listed for hearing at 10.45am on 15 April 2016.
5.Costs of and incidental to this application be reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
EDELMAN J:
Introduction

The applicant, the Trustee, seeks the leave of the Court to serve documents, including a summons for examination, on the first respondent, Mr Tschannen, in the Kingdom of Thailand. The Trustee also seeks orders that the summons be served by substituted service. Orders for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] FCA 137
Decision Date: 10 March 2016

CaseChat Overview and Summary

Park, acting as the trustee for a bankrupt estate, sought leave to serve a summons for examination on Tschannen, the bankrupt, who was believed to be residing in Thailand. The Federal Court was tasked with determining whether Tschannen could be served by registered mail in Thailand and, if so, whether substituted service should be granted if direct service proved unsuccessful. The central legal issues revolved around the application of the Hague Service Convention, specifically whether the court should grant leave for service out of jurisdiction and, if so, whether substituted service should be allowed without prior attempts to serve in the foreign jurisdiction.

The court considered whether Tschannen could be served by registered mail in Thailand under the Hague Service Convention, which generally requires an attempt at service in the foreign jurisdiction before resorting to substituted service. The court concluded that, while an attempt at service in Thailand was warranted, Tschannen's presence in Thailand was not definitively established, and there was no clear evidence of his address. The court also examined the potential to exercise the power under rule 1.34 to dispense with compliance with the implied requirement in rule 10.49 that an attempt be made at service, but found that the circumstances did not justify such an exception. The urgency of the bankruptcy process did not override the need for an attempt at service in the foreign jurisdiction.

In light of the above, the court granted leave for service out of jurisdiction but denied the application for substituted service. The court reasoned that, without sufficient evidence of Tschannen's presence in Thailand, an attempt at service should be made before resorting to substituted service. The application for substituted service was provisionally adjourned for further consideration. The court also set a new date for the examination of Tschannen and reserved costs of and incidental to the application.

ORDERS:
1. The applicant be granted leave pursuant to rule 10.44 of the Federal Court Rules 2011 (Cth) to serve upon the first respondent by registered mail, to the Hotel Indigo, Bangkok or other address in the Kingdom of Thailand, the Form 9 Summons for Examination pursuant to section 81 of the Bankruptcy Act 1966 (Cth) attached together with the Notice of Filing and Hearing dated 20 November 2015.
2. This application otherwise be adjourned.
3. The date for examination of the first respondent be amended to 7 April 2016 at 10.00am, to be conducted at the Federal Court, Level 6, Commonwealth Law Courts, 119 North Quay, Brisbane, in the State of Queensland.
4. The adjourned part of this application be provisionally listed for hearing at 10.45am on 15 April 2016.
5. Costs of and incidental to this application be reserved.

Orders

Orders of the court

1. The applicant be granted leave pursuant to rule 10.44 of the Federal Court Rules 2011 (Cth) to serve upon the first respondent by registered mail, to the Hotel Indigo, Bangkok or other address in the Kingdom of Thailand, the Form 9 Summons for Examination pursuant to section 81 of the Bankruptcy Act 1966 (Cth) attached together with the Notice of Filing and Hearing dated 20 November 2015.

2. This application otherwise be adjourned.

3. The date for examination of the first respondent be amended to 7 April 2016 at 10.00am, to be conducted at the Federal Court, Level 6, Commonwealth Law Courts, 119 North Quay, Brisbane, in the State of Queensland.

4. The adjourned part of this application be provisionally listed for hearing at 10.45am on 15 April 2016.

5. Costs of and incidental to this application be reserved.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In reaching this conclusion, I have also considered whether a power might be exercised under r 1.34 to dispense with compliance with the implied requirement in r 10.49 that an attempt be made at service. I proceed on the basis that there might be instances where the power in r 1.34 could be exercised: see Deputy Commissioner of Taxation v McManus [2015] FCA 959 [13] (Pagone J). But, for the reasons I have explained, those instances are likely to be rare. One rare example might be a case where there is real urgency for service and where the evidence suggests an impossibility or serious impracticability in service by the means contemplated in the Convention. This is not such a case, even taking into account the need for the Trustee to commence the bankruptcy process and the commencement, but current delay, in the public examination.Conclusion For these reasons, although I will make an order for service out of the jurisdiction, I will not make an order for substituted service. That part of the application will, instead, be provisionally adjourned to 15 April 2016 at 10.45am. If the issue still requires determination then it may be convenient for it to be determined on the papers, including any orders sought to adjourn further the date for the examination.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	QUD 1053 of 2015
Judge:	EDELMAN J
Date of judgment:	10 March 2016
Catchwords:	PRACTICE AND PROCEDURE – service outside the jurisdiction – substituted service – application for examination of bankrupt – need to attempt service in foreign jurisdiction before substituted service possible
Legislation:	Federal Court Rules 2011 (Cth) rr 10.24, 10.44, 10.49 Bankruptcy Act 1966 (Cth) s 81 Agreement on Judicial Assistance in Civil and Commercial Matters and Co-operation in Arbitration between Australia and the Kingdom of Thailand. Signed 2 October 1997. Australia–Thailand. [1998] ATS 18 (entered into force 29 July 1998)
Cases cited:	Clifton (Liquidator), in the matter of Solar Shop Australia Pty Ltd (In Liquidation) [2014] FCA 891 Deputy Commissioner of Taxation v McManus [2015] FCA 959 Laurie v Carroll [1958] HCA 4; (1958) 98 CLR 310 Re Deposit Investment Co Ltd (1991) 30 FCR 463 Re Skase (1991) 32 FCR 212 Southwell v Maladina [2002] FCA 802; (2002) 194 ALR 51 Wilding v Bean [1891] 1 QB 100 Commissioner of Taxation v Zeitouni [2013] FCA 1011
Date of hearing:	10 March 2016
Registry:	Queensland
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	General and Personal Insolvency
Category:	Catchwords
Number of paragraphs:	19
Counsel for the Applicant	Ms S D Anderson
Solicitor for the Applicant:	JHK Legal
Solicitor for the First Respondent:	The First Respondent did not appear
Solicitor for the Second Respondent:	The Second Respondent did not appear

JUDGE:	EDELMAN J
DATE OF ORDER:	23 FEBRUARY 2016