Re Brooks, W.H. Ex parte Australia & New Zeland Banking Group Ltd & ors

[1992] FCA 400

IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF THE	No NP 4828 of 1991

1

Re:  WALLACE HENRY BROOKS

Ex Parte: AUSTRALIA AND NEW

ZEALAND BANKING GROUP

LIMITED & OTHERS

EX TEMPORE JUDGMENT

EINFELD J SYDNEY 26 MAY 1992

This is a most extraordinary circumstance that has descended upon the Court unexpectedly today in the bankruptcy list. The judgment creditor presents a petition for the bankruptcy of the debtor over the non-payment of a sum of $11,000 and some hundreds in respect of indemnity costs ordered in proceedings in the Court by Justice Hill on 26 June 1990. Although I have not heard the evidence in support of the making of a sequestration order, I assume for the purposes of what I am about to say that that evidence would make out the entitlement of the creditor to have the debtor declared bankrupt.

There has been filed in these proceedings three affidavits apparently prepared by a solicitor named John Goldsworthy Poynten of Coffs Harbour. They are not, so far as the file reveals at least, accompanied by any application and it is not possible for me to understand - and Mr Brooks, who is present these affidavits are said to be relevant. They have all been in court in person, is not able to explain - the way in which

prepared by a solicitor and were filed on 13 May, less than two weeks ago. In substance, the affidavits seek to establish that the debtor is not the person against whom this action by the creditors should have been brought. The only problem is that, so far as I can understand the affidavit material, the affidavits do not generally seem to relate to the subject matter of the petition or the bankruptcy notice upon which it is based, as they deal with the ownership and sale of a block of land that seem to have nothing to do with Justice Hill's order for costs.

One of the three affidavits filed by Mr Poynten is by the debtor himself. In it he says, inter alia, that he was not properly served with the bankruptcy notice or the creditor's petition. The affidavit has annexed to it two pages from his passport, introduced by the sentence in the affidavit:

Annexed and marked A is a true copy of pages of my passport with periods that I was absent from Australia.

Those pages are explained by Mr Brooks today as being	supportive of a case that he was not in Australia when the
bankruptcy notice is said to have been served. In fact the pages establish no such thing so that without expansion the annexation of those present pages would be of absolutely no relevance at all in the case.
The affidavit of service of the bankruptcy notice upon which,
no doubt, the creditor will be relying at the hearing, asserts that the notice was served on the debtor at the place which the debtor admits is and has at relevant times always been his home, namely, Lot 1, Plunkett Avenue, Middle Boambee, a town just out of Coffs Harbour.
The service is said to have taken place on 19 October 1991 at 11.45 am. Mr Brooks says today that he does not remember the service of this document. Although given many opportunities to do so through a number of questions by me, he is unable expressly to deny receiving the document, but he does not recall it and says that he did not know about these bankruptcy proceedings at all until about two weeks ago.
The file shows that on 2 April 1992 an order for substituted service of the petition was obtained from a Registrar. There are affidavits covering at least three separate efforts to serve the petition at the address stated, but on each occasion the process server was told by a person purporting to be Mrs
when he was returning. That is a summary of the evidence, not Brooks, that her husband was not there and she did not know
a comprehensive account of it. That is the substance of what is said.
The order for substituted service was that personal service be dispensed with and that in lieu an official copy of the petition and the relevant affidavits, together with the trustee's consent and a sealed copy of the order for substituted service itself, be served on any adult person at the Plunkett Avenue or Crescent address. The file does not contain, at the present time, an affidavit that service has been effected as ordered, but I am prepared to assume for present purposes that it has. Certainly Mr Brooks knows about the proceedings and he must have found out, even on his own evidence, by the receipt of some documents. He has in fact admitted to having received notice of the proceedings by this method but he says that it was only quite recently.
It appears that subsequent to becoming aware of the material, Mr Brooks apparently had Mr Poynten obtain an agent in Sydney for the purpose of making an application for legal aid on behalf of Mr Brooks. There has been exhibited to me a letter from the Legal Aid Commission of New South Wales dated 25 May, which is yesterday, acknowledging receipt of the application for legal aid and requiring a number of questions and particulars to be supplied. There is no indication, as there could not have been, as to whether legal aid would be granted
are asked in the letter to which I have referred, it seems and, if so, in what time frame. Judged by the questions that
that the solicitors who submitted the application were not able to tell the Legal Aid Commission, even in general outline, what case was sought to be advanced, even for what application legal aid was being sought.
During the course of argument today, Mr Brooks repeated his affidavit's assertion that the bankruptcy notice was not, or was probably not, served on him personally. The Court adjourned twice to enable him to get more than the two pages of his passport which were annexed to the af f idavit and there has now been presented what purports to be a full photocopy of his passport. It shows that he has, over at least the last four years, been travelling the world extensively. Mr Brooks' affidavit describes his occupation as invalid pensioner and he has repeated that statement of his occupation today on a number of occasions. It is certainly difficult to understand how an invalid pensioner without funds, without even the funds to pay an $11,000 debt, could travel the world with this frequency. According to his passport, he has been to China on a number of occasions, Hong Kong on many occasions and to London on several occasions, as well as on single occasions to places like Sweden and the Cote dlAzur in France.
The explanation for this travel is given by Mr Brooks as being that he is negotiating or seeking to negotiate on behalf of a number of people in foreign countries for various commercial
enterprises and activities in Australia. He says that he has a particular skill at being able to organise finance and
advise people on financial matters. In particular, he draws attention to the fact that he has on the bar table a faxed copy of an agreement which he says is signed, which he needs to go to Hong Kong almost immediately to secure, and which he expects to be completed very shortly. He says that this is a deal worth $120 million and represents a purchase by four overseas entrepreneurs of an Australian business that has recently gone into receivership. Mr Brooks says that if and when this deal is solemnised, he will be entitled to one per cent of the amount of the contract, in other words, $1.2 million.
He says that he lives with his wife at the Plunkett Crescent address. He has three grown children, who live with him as well, and says that they are a close family and that he has absolutely no motive at all in staying away from Australia if he should be allowed to on this trip to Hong Kong to secure this deal. This would be unlikely to be permitted if he was made bankrupt today.
The question that arises for the Court is whether, assuming the evidence supporting a sequestration order is produced, and accepted, the order ought to be made today or Mr Brooks given a short period of time to go to Hong Kong to conclude this deal so that he could pay the money owing, or to organise to borrow the money so that the amount of the debt can be paid.
The creditor says that the amount of the debt for costs
contained in the bankruptcy notice, is in fact only a fraction
of the amount that is actually owing for costs and that the debtor owes much more than the amount contained in the bankruptcy notice.
I do not think that I should allow that assertion to enter into my considerations at the moment. It seems to me that if the debtor is able to offer to the creditor payment of the amount sought in the bankruptcy notice, it is likely that the amount will be accepted even though, as I am assuming, he will have committed an act of bankruptcy. In any event, the creditor will certainly be better off in those circumstances than they would be if Mr Brooks is put into bankruptcy today and therefore loses, for whatever length of time, his passport and capacity to travel to Hong Kong.
He says that he does not own any property in Australia and his total income is the invalid or age pension. He tells the Court that he is a returned serviceman, that he has fought for Australia and that he has every wish to live here and every intention of returning to his family.
This provides for the Court an anomalous ,and not particularly simple situation. Much of what Mr Brooks has said appears to be, to say the least, stretching the imagination. It is quite clear that on the occasions when the service of the petition was attempted, no assistance was given by the debtor's wife or
members of his family who spoke to the process server in relation to the service. It is simply stretching the
imagination that what is described as a close family would be telling the truth if they answered that they had no idea when he was returning. They may not have known the precise day, but I have no doubt that people attempting to co-operate could have taken the number of the process server and advised him when Mr Brooks would be available for service.
That means, of course, that the proper conclusion to be drawn is that there was an effort to frustrate the service of these proceedings, Certainly Mr Brooks must have become aware that bankruptcy proceedings were on foot much earlier than in fact he says he did, even if the bankruptcy notice itself was not served. Those matters, together with the nature of his current enterprise which he has sought to explain, means that the Court should be very sceptical about things that he has said during the course of proceedings today.
In particular, it is necessary to be sceptical about a proposition that the bankruptcy notice was not served when the evidence tendered to prove non-service, the passport, was at first not relevantly provided at all in an affidavit apparently drawn by a solicitor. He must have known that the annexed small section of the passport did not show what was sought to be shown. Then, when the whole of the passport came to hand today, because the debtor appeared in person, I went painstakingly through every page to try to see what total
conclusion should be drawn from the many, many stamps
contained in it. As it turns out, that was a completely
wasted exercise as Mr Brooks must have known, because he was in Australia at the time. He then put forward the proposition that he was in a hotel on a particular night and that he would have receipts to prove it.
It is stretching the imagination beyond all reasonable limits, that a man who supposedly can successfully negotiate and
organise a $120 million financial deal and travel the world as if on safari, would not be able to understand that this type of pretence and shuffling from foot to foot is hardly likely to be persuasive with the Court. I often wonder how foolish people think courts are, putting up a statement that two pages of a passport prove someone was out of the country when it is perfectly clear that they prove no such thing, and then putting up a passport, as if to show that the person was outside the country when he must have known that he was not and then substituting an excuse that he was actually at a hotel, the receipt for which he has somewhere but accidentally did not bring to court. Playing games like this with the Court is, to say the least, extremely stupid and reflects particularly adversely on the credit of the person who indulges in it.
It seems to me that the only thing that I can usefully do in the proceedings is to hear the evidence of the petitioning creditor to see whether a case is made out for a sequestration
whether to pronounce or to delay the pronouncement of the order and if and when a case is made out, I shall then decide sequestration order. What is your evidence M r Aldridge?
RECORDED NOT TRANSCRIBED
I am satisfied that the debtor has committed the act of bankruptcy alleged in the petition and with the proof of the other matters of which section 52(1) requires proof. I make a

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sequestration order against the estate of the debtor but suspend its coming into operation until 4 pm on Tuesday, 2 June. The matter will be listed for hearing part heard at 9.15 on that day. If by then the debtor is able to satisfy me that he has either paid or is in a position to pay the debt, I will entertain an order for further suspension of the sequestration order or for its annulment or other appropriate order. Costs will be reserved until that time.