Re Abrahams; ex parte Thomas
[1985] FCA 266
•23 Apr 1985
CATCHWORDS
Bankruptcy - public examination - appllcation to set aside summons to
| attend for public examination - practice in relation to statements | of |
| reasons grounding the issue | of summons under | s s . 69 | and 81 | of the |
| Bankruptcv Act 1966 - nature of | the power conferred by S. 81 of the |
| Act - costs. |
| Bankruptcv Act 1966: | ss. 69, 81. |
| Companies (New South Wales) Code: | S. 364. |
| RE: | STEPHEN ABRAHAMS EX PARTE: HUGH CHARLES THOMAS |
W290 of 1982
Lockhart J.
23 Aprll 1985
Sydney
| IN THE FEDERAL COURT OF AUSTRALIA | ) | ||
| ) | |||
| BANKRUPTCY DISTRICT OF THE STATE |
| ||
| ) |
| OF NEW SOUTH | WALES AND THE | ) ) |
| AUSTRALIAN | CAPITAL | TERRITORY | ) |
| - | RE | : | STWHEN ABRAHAMS |
| EX PARTE: | HUGH CHARLES THOMAS |
MINUTE OF ORDER
Upon John Arthur Bush personally undertaking to the Court that neither
he nor hls firm, Messrs. Bush Burke and Co., will hereafter act for the trustee in the bankruptcy of Stephen Abrahams:
| THE COURT ORDERS THAT: | - |
| 1. | The relief | sought | in | paragraph | (1) of | the | application. |
| namely, that the summons under | S . | 81 of the BankruDtcv Act |
| 1966 be set aslde, be refused. |
| 2. | The | s a d | summons be otherwlse stood over generally with |
| liberty to any party to restore to the llst | on | two days |
| notlce. |
| 3. | The trustee pay one-third | of the costs of the appllcant. |
George Ivan Fuzi, of this appllcatlon.
| NOTE: Settlement and entry of orders is dealt | with in Order |
| 36 of the Federal Court Rules. |
| IN THE FEDERAL | COURT OF AUSTRALIA ) |
)
| BANKRUPTCY DISTRICT OF THE STATE | ) | NO. W290 of 1982 |
- ..
)
| OF NEM SOUTH WALES .W THE | ) ) |
| AUSTRALIAN CAPITAL TERRITORY | 1 |
| - | RE | : | STEPHEN | ABRAHAMS |
| M PARE: | HUGH CHARLES THOMAS |
23 APRIL 1985
REASONS FOR JUDGMENT
LOCKHART J.
| I propose to qlve judgment now | as I have reached a firm view |
| as to the result of this matter. | I realise that in takinq thls course |
In a-rather complicated matter I may do less than lustice to the final and careful arguments of counsel.
This is an application by Georqe Ivan Fuzi to set aside a
summons dlrected to hlm to attend for public examlnatlon pursuant to
| S. | 81 of the Bankruptcy Act | 1966 ( "the Act") In relation to the |
property and affairs of Stephen Abrahams, the bankrupt.
| A | sequestration order was made against the estate of the |
| bankrupt on | 10 May | 1982 upon the petition of | APD Snack Foods Pty. |
| Limited, a creditor claiming to be owed | $95,751.23. | Hugh Charles |
| Thomas, a reqlstered trustee, was appolnted trustee | of the bankrupt's |
.
L .
estate. Summonses were issued on behalf of the trustee for the public
examination of the bankrupt pursuant to S. 69 of the Act and for the
public examination of various persons lncludlng Mr. Fuzi pursuant to
S. 81 of the Act.
| The | public examination of the bankrupt commenced before | a |
| Deputy Reglstrar in Bankruptcy on | 6 February 1985 when It was stood |
| over generally. | The examination of Mr. Fuzi was also stood over |
generally to abide the result of this appllcatlon which was then
foreshadowed by counsel for Mr. Fuzi.
The relevant facts are rather complicated and do not emerge very clearly from the evidence at this stage, but the princlpal
| matters appear sufficiently clearly and may | be stated briefly. |
The bankrupt was a confectionery wholesaler and the managing
| director | of | two | companies, | Quality | Confectlons | Pty. | Limited |
| ("Confections") and | Quality | Confections | Imports | (Australia) | Pty. |
| Limited ( "Imports" | ) . |
Confections manufactured and sold confectionery. It is not
| entirely clear what Imports | did, but I assume Its | busmess had |
| something | to do with | the | manufacture, | sale | or | importation | of |
confectlonery.
| In 1979 | a | company, | Balfour | Willlamson | (Australia) | Pty. |
Limited ("Balfour") agreed to provide confirming finance facilities to
| Confections. By agreement dated 30 June 1979, Mr. | Fuzi agreed with |
| Balfour that, in consideration of Balfour acting and continuing | to act |
| as a confirming house for Confections, Mr. Fuzi would pay on demand all sums including interest, costs and expenses | whlch may at any time |
| become due by Confectlons to Balfour. |
In 1980 Balfour agreed to provide slmllar facllitles to
| Imports. | By | agreement dated 28 April 1980 Mr. | Fuzi agreed with |
| Balfour | to pay on demand all | sums | lncludlng Interest, costs and |
expenses which may at any tune become due by Imports to Balfour. In
| addltion to Mr. | Fuzi, other persons and companies guaranteed the |
payment of the same obligations of Confections and Imports. One of
| these was | a company, Pronto Trading Co. Pty. Llmited | ("Pronto"), | a |
| company | controlled | by | Mr. | Fuzi. | Balfour | made | confirmlng | finance |
facilities available to Confectlons and Imports pursuant to the sald
arrangements.
| Both | Confections | and | Imports | experienced | financlal |
| difficulties. On 3 June 1981 Balfour appolnted | a recelver and manager |
of Confectlons and Imports pursuant to Deeds of Charge taken by
Balfour over the assets of those companies.
| On 17 | Jtlrle | 1981 Balfour demanded payment from Mr. Fuzi as |
| guarantor, of the sum of | $569,101.51 which it claimed was due and |
payable to it following the failure by Confections to pay that debt.
| In 1983 Balfour commenced proceedings | In the Supreme Court | of |
4.
| New South Wales, Common | Law Division, Commerclal List, Number 15554 | of |
| 1983 | seeking | to | recover | payment | from | Mr. Fuzi of | the | sum | of |
$569,101.51 together with interest.
| In | November 1984 | the solicitors for Balfour wrote to the |
| solicitors for Mr. | Fuzi stating that Balfour proposed to discontinue |
| those proceedlngs. | The solicitors for Mr. Fuzl replled early In 1985 |
suggesting that it would be more appropriate for judgment to be
| entered for Mr. Fuzl. | There the matter stands. |
| However, | it seems plaln from the evidence before me that |
Balfour does not intend to prosecute action 15554 of 1983 further;
probably because It was held by the Supreme Court of New South Wales,
| in litigation to which | I shall refer in | a moment, that | as the |
| liabillty of the | prmcipal debtor had not arisen at the relevant |
| times, the secondary liability | of Mr. Fuzl as guarantor could not have |
| arisen. |
| A notice pursuant to | S. 364 of the Companies | (New South |
| Wales) Code | ("the Code") was served on Pronto on | 11 January 1'984 |
| requlring payment to Balfour of $569,101.51 and stating that | If, at |
the expiration of 21 days from the dace of service of the notlce, Pronto falled to comply with the terms of the notice, Pronto would,
| pursuant to | S . 364(2)(a) of the | Code, be deemed to be unable to pay |
its debts as and when they fell due and that proceedings might
| thereafter be commenced to | wmd-up Pronto pursuant to the Code. |
5.
| Pronto then instituted proceedings in the Supreme Court | of |
| New South Wales Equity Division (No. 1167 | of 1984) to restrain Balfour |
| presenting a | petition for the wlnding-up of Pronto. | The proceedlngs |
| were heard by Helsham J., Chief Judge in Equity, who, | on 3 February |
| 1984, found in favour | of Pronto and restrained Balfour from presenting |
the threatened petition.
I have already briefly summarised what seems to me to be the
| primary ground relied upon by His Honour | f r the making of that | order, |
| namely, that the liability of | the princlpal debtor did not arise at |
the relevant tlme. There were, of course, other grounds.
.
A further notice under S. 364 of the Code dated 16 February
1984 was served by Balfour on Pronto again requiring Pronto to pay $569,101.51 and alleging that Pronto was indebted to Balfour In that
| sum | as guarantor of the obligations of Confections pursuant to the |
guarantee of 30 June 1979.
| Pronto then commenced fresh proceedings | in the Supreme Court |
| of New South Wales Equity Divislon against Balfour | (No. 1449 of 1984) |
| to restrain It from presenting the petition. | The | proceedings came |
| before Powell J., | who, on 8 March 1984, noted that Pronto had that day |
pald to Balfour th- sum of $255,459.55 and ordered, amongst other
| things, that Balfour be restrained from presenting | a petition to |
| wind-up Pronto upon the notice | of 16 February 1984 to which | I have |
referred. His Honour noted that Balfour would commence proceedlngs
| against Pronto in the Commerclal List | of the Supreme Court of New |
6.
South Wales for the balance of the amount of $569,101.51 unpald,
namely, $419,101.51, together with other sums. His Honour also noted
| that It was agreed between Balfour and | Pronto | that until those |
| proceedings in the Commercial List to which | I have referred were |
| resolved by judgment | or settlement Balfour would not serve on Pronto |
| any further notice of demand pursuant | to s.364(2)(a) of the Code | or |
| present any summons to wind It up. |
| On 8 May 1984 notices dated 3 May | 1984 were served by Balfour |
| upon Mr. Fuzi and Pronto demanding payment | of the sums of $419.101.51 |
and $309,900.80 belng the amounts of the alleged indebtedness of
| Confections to Balfour and $61,860.02 interest due by Imports on | an |
| alleged principal debt of Imports to Balfour of $116,459.55. |
| On 11 | May 1984 the solicitors for Mr. Fuzi and Pronto wrote |
| to Balfour disputing | thew indebtedness to it, but in 1980 Confections |
entered into a factorinq agreement with AGC Factors Pty. Limited
| ("Factors") pursuant to which Confectlons assigned lts debts to | it. |
| It appears, although the evidence is by no means clear | or |
| complete on the pomt, that by June l981 | Factors was concerned about |
the amount of the factored debts still outstanding and whether they were collectable. The bankrupt had guaranteed Factors repayment n* the assigned debts. Factors threatened to sue the bankrupt under his
guarantee.
The bankrupt lodged a statement of affalrs dated 9 June 1983
.
. r
7.
| in hls bankruptcy in which he declared that he owed | debts | of |
| $2,149,912 and that he had assets | of $1,000 | and therefore, had | an |
excess of liabilitles over assets of $2,148,912.
- .
| He disclosed two unsecured creditors | - namely Balfour, In the |
| sum of $908,041, and the petltloning creditor, In the | sum of $95,192. |
He also referred In his statement of affalrs to three companles In the
| AGC group, including Factors, whose debts were said | to be secured over |
| two parcels of real estate in | which the bankrupt apparently has | an |
Interest at Rose Bay and Fairfield; but after estimatlng the value of
| their securities, the bankrupt stated that there was | an estlmated |
| deficiency to those secured creditors of $113,179. There is some |
| internal lnconsistency | In the statement of affairs because elsewhere |
| m | that document the bankrupt showed the deflciency to the secured |
| credltors as $143,179 | - but nothlnq turns on this for the purposes of |
the matter before me.
| Factors has lodged | a proof of debt | In tne bankruptcy clalming |
| to be a creditor in the | sum of $626,956.99; and Balfour claims to | be a |
credltor In the sum of $908,041. Neither proof has yet been admltted by the trustee. The principal assets In the bankrupt's estate appear
| to be his lnterest In the two propertles at Rose Bay and Fairfield; but they are subject | +g various mortgages. |
The bankrupt was the admlnlstrator of the estate of hls late
wife, Claire Abrahams. The late Mrs. Abrahams was formerly marrled to
| Alexander Fuzi. Mr. Fuzi is | a son of | a former marriage | of | Mr. |
8.
| Alexander Fuzi. It seems, therefore, that he | was | the stepson of the |
| late Mrs. Claire Abrahams. | The late Mrs. | Claire Abrahams was the |
| daughter of Ilona Vertes. | The applicant appears to assert some claim |
- -
| of entitlement | to an Interest in the estate of the late Mrs. Clair |
| Abrahams. | The | nature and extent of that interest is not known to me |
wlth any degree of clarity.
June 1981 a deed of family arrangement was executed by the bankrupt as administrator of his late wife's estate. Mrs. Vertes
On 2
| was described as beneficiary and Mr. Fuzl was described | as | ~oint |
| tenant. | The deed purports to deal with certain assets | of | the late |
| Mrs. Clair Abrahams In favour of Mr. | Fuzi or his chlldren. It is not |
| necessary for me to refer in any detail to the contents | of the deed. |
| On the day following the execution | of the deed a receiver | and manager |
| was appointed | of both Confections and Imports. |
The trustee applied to the Registrar in Bankruptcy for the
| examination of varlous persons, including Mr. | Fuzi, pursuant to S . | 81 |
| of the Act. | I | propose to state | In brief the grounds given in that |
application by the trustee for seeking to examine Mr. Fuzl. Normally
I would not take this course; but, in fact, the form of appllcation
| made by the trustee under | S. 81 to examine Mr. Fuzi and, Indeed, other |
| applications to | examine other persons under | S. 81 and the bankrupt |
| under S. 69, | appear in the file of the bankrupt openly, in the sense |
| that they have | not been placed in a sealed envelope and are open for |
| inspection by any person who | lo ks at the flle. |
9.
| It is, | I thmk, timely to comment that whether the document |
| be called an application for the issue | of a summons under S. 69 or S. |
| 81 or a statement of reasons to ground the issue | of such a summons or |
| otherwise, It should | be sealed In an envelope by the Registrar | with a |
notation that it is not to be opened wlthout the order of a Judge, the
| Reglstrar or a Deputy Reglstrar. This is the practice that | has been |
| followed in courts accustomed to deal wlth matters | of insolvency for |
| as long as I can remember, and it is | a practlce approved by authority: |
| see, for example, Re Stlrlinq Henrv Ltd. | (in Liq.) and The ComDanles |
| & | A | (1972) 1 N.S.W.L.R. | 497 per Street J. at p. 498. |
| Although | many | of | the | reported | cases | that | touched | thls |
| question | were | deallng | with | what | are | generally | called | private |
| examinations | under | the | Companies | Code | or | its | predecessors, | the |
| Companies Acts of the various states of Australia and of | the Unlted |
Kingdom, it seems to me that the rationale which underlies the
requirement of secrecy is as true now as it ever was; and whether It
| be a private examination | under | the | Companles | leglslation | or | an |
| examination | of | bankrupt | a | or | other | person | under | Bankruptcy |
| practice, but it is sufflclent to state one of them. namely, that prima facie those who are to be examlned should not have access to the statement of the liquidstor or the trustee given to the Court or the | legislatlon. There are varlous reasons supporting the wlsdom of thls on what matters it is proposed to examme them. |
| The grounds | mentioned | in | the | trustee's | applicatlon | for |
| . | " | . | . . |
10.
| examlnatlon of Mr. Fuzi under | S . | 81 in this case | are, amongst others, |
| (i) that it is said | he entered into the deed | of family arrangement of |
| 2 June 1981 to | whlch I have | referred | affecting | the | bankrupt's |
| entitlements in the intestate estate of | h15 late wife Mrs. Clair |
| Abrahams; (ii) | that the bankrupt caused two caveats | to be reglstered |
| against the real estate, one parcel of which | 1 s the Rose Bay property |
| m whlch the bankrupt may have | an Interest; and (iii) that by vlrtue |
| of Mr. Fuzi's relatlonship to the bankrupt he would be expected | to |
| have knowledge | of the bankrupt's property and affalrs. Reference is |
| also made to a deed of | facllity and guarantee | of | 1 May 1980 between |
| Pronto, Mr. | Fuzi and others to which the bankrupt was also | a party. |
| The summons that was subsequently issued under | S . | 81 reflects those |
| grounds. |
| Counsel for | Mr. Fuzi argued that the summons should be set |
| aside. | I wlll briefly summarise counsel's arguments. | ||||||||
| 1. |
|
| trustee and Balfour | In the bankruptcy of the bankrupt is a Mr. Bush |
and his firm Bush, Burke and Company. It was submitted that Mr. Bush
and his firm have a conflict of inte5est; that they cannot act for the
| largest creditor in the estate, Balfour, whose debt | 1s the subject of |
| dispute, at least by Mr. Fuzl | and Pronto, especially in | a case like |
the present where the affairs of the bankrupt and varlous companies are Inextricably Interwoven. The confllct 1 s said to be hlghliqhted by the fact that Mr. Bush earlier this year was appointed to the board
of dlrectors of Balfour.
| 2 . | The | proceedings in the Commercial List of the Supreme Court |
between Pronto and Balfour are still on foot, hence any attempt to
| examine Mr. Fuzi or Pronto under S. 81 is a fishing expedltion for | an |
| improper purpose. Section 81, it was said, | may be resorted to for the |
| purpose of obtaining information | to enable the trustee to decide |
| whether to sue | or not, but it cannot be used where the trustees | or the |
principal credltor In the bankruptcy who is underwrlting the trustee's
costs has already decided to sue and, therefore, proposes to use the
| public examination procedure for | an impermissible purpose. |
3 . It is plain that Balfour proposes to enforce its guarantees
| against |
|
| llabllity as guarantors should not be the | sub~ect | of exammatlon under |
| the compulsory processes of | S . | 81. |
| The prlnciples governlnq applications | of this nature are well |
| established, and I | do not propose to refer to them in any detail. | I |
| considered this questlon | in | an earlier case of Re Csidel; ex parte |
| Andrew (1980) 39 F.L.R. 387, and there | renewed the authorities |
| bearing | on the relevant questions. | They establish, amongst other |
| things, that extraordlnary power, that it must | the | power | prescrlbed | by | S. 81 of the | Act | is | an |
| be | carefully exerclsed, that the |
| power given to the Court | 0' | a Reglstrar to Issue | a summons under | S . | 81 |
| is a dlscretionary one, and that no rlgid rules should be laid down for the proper exercise of the dlscretion by the Court | or | the |
Registrar. but that it must be borne in mind at all times that In the exercise of that discretion the Court or the Reglstrar must not lend
| aid to an unfair or oppresslve | use of this compulsory process. |
| It is clear that Balfour intends to sue | Mr. Fuzi pursuant to |
| the guarantees given by him in respect | of the indebtedness of |
| Confections and Imports. It | IS also clear that the affairs of the |
| bankrupt, | Mr. | Fuzl, Pronto, Confections, Imports and Balfour are |
inextricably intertwined through various transactions including those
mentloned by me earlier.
| As I | said earlier, in all relevant matters Mr. Bush and hls |
| flrm have acted | as solicitors for both Balfour and the trustee. | Also, |
| Mr. Bush has been a director of Balfour since | 25 | February 1985. | It |
| seems likely that any examination of Mr. Fuzl under | S . | 81 will touch |
matters relating to the various inter-related company transactions, some of which I have mentloned, as well as the deed of famlly settlement.
| The principle that justlce must not only | be done but must |
| appear to be done is still very | much allve. | I think that Mr. Fuzl and |
| Pronto or | any outside observer would at this stage be lustifled in |
thinking that the trustee could not conduct the examlnatlon of Mr.
| Fuzi or Pronto Impartially if he retams the same solicitor who acts for the major creditor, Balfour, especially 15 | that solicitor 1 5 , In |
| addition, a member of its board of directors. |
On the other hand, I am conscious of the practical problems which concern the trustee in his administration of the estate of the
13
| bankrupt. | The only creditor interested in spending money to recover |
| anything | in | the bankruptcy is Balfour, and it appears from the |
evidence that Balfour is funding the Trustee in this appllcation and
| In | the investlgation of various persons, including Mr. | Fuzi, under |
| S . 81 of the Act, and of the bankrupt under | S . 69 of the Act. Indeed, |
| it seems there | 1s no other source of funds available to the Trustee. |
In an estate where there is a very large deficiency, it is in
| the public interest | as well as the interests | of the creditors that |
| persons are examined under the Act to ascertain available | funds, |
| whether settlements are void or voldable, whether preferences have |
| been glven, why such | a large deficiency exists, and whether any |
| offences have been commltted. | I thlnk it would be regrettable if |
| Balfour was to be dissuaded from pursuing the course | on which It has |
| already embarked. |
On balance, however, I have come to the conclusion that the summons should not be set aside provlded Mr. Bush undertakes to the
| Court that he | and hls firm shall cease to act for the Trustee in the |
| bankruptcy of the bankrupt, including the examlnation of Mr. | Fuzi, the |
bankrupt, Pronto or other persons, whether under S . 69 or S. 81 or otherwise. This wlll enable the summons to stay on foot and obviate the necesslty for applications by the trustee for the issue of fresh
| summonses | wlth the necessary attendant delay and expense. If the |
| Undertaking is not forthcoming then | I shall set aside the summons, but |
| I | have been informed by counsel for the trustee that Mr. Bush | 1s |
| prepared to give an undertaking along the lines to | whlch I | have |
14.
referred.
| I should add that nothing | I have said is intended In any way |
| as a criticism of Mr. Bush | or his firm. | I have the impresslon that |
| the feeling on both sides In this application has been a llttle | h gh, |
| but that the solicitors for | the trustee have acted in good | faith |
| throughout. |
If the trustee retains a different solicitor for the purpose
of this bankruptcy I do not thlnk that the trustee should be prevented
| by the Court from examining | Mr. Fuzi or others under | S. 81 in relation |
| to the deed of family arrangement, or the guarantees to which I have referred, or the arrangements and deallngs between the bankrupt | Mr. |
| Fuzi or any other guarantors or any other persons or companles whose affairs are interwoven In the matrix | of | facts which I | have already |
| summarised. |
| It particularlty the matters which may be the subject of legitimate | is | not | desirable | that | I seek | to defme wlth | any |
.
| - - | exammation by the trustee. To do so may be oppresslve to the trustee | |||
| ||||
| ||||
| ||||
| Equity, and they still are, though dormant, in the Commercial List of the Supreme Court. Those guarantees will be the sublect of further | ||||
| ||||
| interrogating any wltness under S . 81 that: |
15.
| - | the | power | conferred | by | S . | 81 1 s "an extraordinary | power of |
Inquisitorial nature": see In re North Australian Territorv Company
| (1890) 45 Ch.-87 per Bowen | L.J. at p. | 93 - the examlnee 1 s not a |
witness in the ordinary sense,
| - | the | ordinary | ules | p ocedures | or | do not | govern | the |
examination, and
| - | that | lust | as the | Court | or | the | Registrar | must | "be astute to |
prevent any oppresslve, vexatious or unfair use of this extraordinary
| process", so | must the Trustee and his advisers bear that cautionary |
| note in mind when examining witnesses under | S . 81: Re: Csidel (supra) |
| at pp. 391 and 392. |
| A | fine | llne exlsts between legitimate and | mpermissible |
| examination of persons under | the compulsory process | of S . 81. | It |
| would be examinatlon In this case, but it must be remembered that "the purpose of the section is to ellcit information that may be relevant for the | wrong | for me | to seek | to | specify | the | limits | of | that |
| proper conduct | of | the bankruptcy and that may aid the process | of |
flndlng and recoverlng assets available for dlstribution": Re Csldei
(supra) 390.
| I | certalnly do | not think that the subject of Mr. | Fuzl's |
| guarantees | or | the guarantees given by Pronto and the circumstances |
| surrounding them execution or the existence of liablllty | wlth respect |
| thereto | or the liabllity of the principal debtor or debtors fall |
16.
| outside the legitimate ambit of that inquiry. Much depends | on the |
| particular questions put to the witness | at the tune during the conduct |
of the examination. The trustee should remember that the legitimate
areas of inquiry are not only Mr. Fuzi's liability to Balfour and the
liabillty of others to Balfour but whether Balfour's proof of debt
| itself should be admitted | in whole | or in part. |
It would be regrettable, I think, if future examinatlon of
| any witness under S . 81 | or S . 69 | in this matter were to be studded |
| wlth the taking of constant | ob~ections | which may have the effect of |
| hampering | or, indeed, rendering the examination nugatory, but of |
| course If | such a course should occur then it is always open for the |
Reqlstrar to refer the matter to the Court for it to conduct the
| examination pursuant to the powers under | S. 81(4). |
It was submitted by counsel for Mr. Fuzi that in this case
the summons should be set aside; and that it was a proper case for
| matters to be | first submltted by the trustee to Mr. Fuzi | n the form |
| of written interrogatories. | I | did refer to the posslbility of thls |
| course being followed | In | certain cases (in Re Csidei (supra) at p . |
| 394) but I | emphasised there that each case must be | determmed on its |
| merits. That, of course, | was | a | special | case | involvlng, | as the |
| prospectlve | wltness, an officlal | llquidator | who | had | been | duly |
appointed llquldator of the company in question by the Supreme Court
of New South Wales. It is a very dlfferent case from the present one.
| As at present advised, | I do | not think that such a course would be |
| desirable or necessary. |
It was also submitted to the Court as a ground for setting
| aside the | S. | 81 | summons that, in the light of what was put to the |
| bankrupt in | his | S . 69 | examination, thls Court should hold that it |
| would be lmpermissible to put questlons | of a llke nature to Mr. Fuzi |
| during h1s | exammation under | S. 81. | Although I do not wish to be |
| taken as | approving or | disapproving any particular question | or the |
| form which it took directed to the bankrupt, I see nothing | in those |
| questions that went beyond the field | of permissible inquiry. It | 1 s |
| essentially for the Reglstrar, when hearlng the | exammation | of Mr. |
| Fuzl, to determlne the questions to be allowed | or rejected. |
On the assumption that the undertaking referred to by me and
| by counsel for the trustee wlll be | given, I am of the oplnion that the |
| summons should not be set aside. However, | I am also | of the opmion |
| that the summons | to | set aside the | S. | 81 | summons should not be |
dismissed but should stand over generally with leave to either party
| to restore it | on two days notice. |
| There remains the questlon | of costs. | Counsel for Mr. Fuzi |
| submitted that in substance his client has succeeded and that | in those |
| circumstances the trustee should pay hls costs. Counsel for the |
| trustee submitted that In all the circumstances | Mr. | Fuzi should pay |
the trustee S costs of the application. Although the suggestlon arose
| In the course of argument | that it would be desirable for the trustee's |
| sollcltor to step down, the assertion of conflict was raised | a |
| conslderable tlme ago by the sollcitor | for Mr. Fuzl In correspondence |
| with the sollcitors for the trustee | so that the problem has been |
| present | in the trustee's mind | for some time and, indeed, at all |
relevant tlmes.
I think the proper order for costs is that the trustee should
pay one-third of the costs of Mr. Fuzi of this application.
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