Re Donovan, P.J.

[1988] FCA 722

' C

IN THE FEDERAL COURT OF AUSTRALIA ) )

DIVISION	GENERAL	)
)

BANKRUPTCY DISTRICT	OF THE STATE OF	)	No. W1250 of 1986
)

NEW SOUTH WALES AND 1 1

THE AUSTRALIAN CAPITAL TERRITORY 1

RE :	PAUL	JAI-IES DONOVAN
-
Bankrupt

EX PARTE:  THE OFFICIAL TRUSTEE

CORAM:	Davies J.
-	DATE :	12 April 1988
PLACE:	Sydney

REASONS FOR JUDGNENT

EX TEMPORE

I am of the opinion that the application should be

refused. The application is to strike out paragraphs (a) and (b)

!	of a summons directed to the bankrupt's wife to attend for
examination. The two paragraphs in question relate to the
transfer of the bankrupt's interest in the matrimonial home to
his wife which was made pursuant to an order of the Family Court
of Australia. The order was sought by the bankrupt's wife and was not contested by the bankrupt
i

I -, '

I

It can, however, at a time when the bankrupt was In

financial dlfficulties and not many months before his bankruptcy.
In my opinion, it is proper that in many of these cases in whlch
orders are made In the Family Court, the registrar should examine
the parties involved in the proceedings in the Family Court to
ascertain whether the order was obtained in the Family Court in

fraud of the creditors of the person who subsequently becomes a

bankrupt and whether, if that is so, any step should be made to

obtain the setting aside of the order of the Family Court and a

restoration of the property so that it becomes available for the

creditors. As to whether such an order to set aside can be made,

I make no comment, save to say that I think that it is	a proper
matter for investigation.

I am also of the opinion that in a matter in which there

is proximity of dates between the transfer pursuant to the Family

Court proceedings and the insolvency of the person who

subsequently becomes bankrupt, it may be proper to hold an

examination of the parties involved in the Family Court
proceedings, if only to quell any public disquiet about the

transaction.

In the present case, I thlnk that there is such

proximity of dates that there could be public dlsquiet, and I

think it is of particular importance to make all proper

investigations because the bankrupt is a person who was a

solicitor of the Supreme Court of New South Wales and in the

course of his practice trust funds were lost. This is a matter,

therefore, in which stringent efforts should be made to see that

all proper steps have been taken to protect the creditors and the

public.

Mlss blurre11 submitted a number of interesting

arguments, but it does not appear to me that the examination of

the wife of the bankrupt would be harsh or oppressive. In

particular she is a person who has direct knowledge of specific

property, property which belonged to	he bankrupt and was
transferred to her and subsequently in part to	her mother after

the time when the bankrupt got into financial difficulties.

It seems to me that the questions which ought to be

asked cannot be categorized simply as "fishing" questions There

is a sufficient proximity between the dates of the financial

troubles and the events in the Family Court to indicate that
there may be some connection. The chronology which has been

given to me also shows that, subsequent to the making of the

orders in the Family Court, the bankrupt gave	his address as the
address of the previous matrimonial	home, and that

notwithstanding that the material which was before the Family

Court stated that the parties had separated some considerable

time before the Family Court proceedings. ! '

I do not make any of those comments to indicate that I

have formed any view that there was an impropriety in the matter.

This is simply a case in which I think it would be proper for the

registrar to ask questions In	an examination. There is to be an
examination with respect to certain other matters, and it is	no
great hardship for l4rs Donovan to attend that examination and	to

l ..

answer the questions wlth respect to thls transaction. For those	i-
reasons I will dismiss the application.
I certify that this and the	3

preceding pages are a true copy of the

Reasons for Judgment herein of

the Honourable Mr Justke Davies.	l .,
Associate:

Date :  A p A 9 8 8