Re Foster, J.L

[1993] FCA 295

do\< / \Oiq3

JUDGMENT No. ........ ........ .. ........ ....

No. 0B368 of 1993

RE JOI-IN L,EWIS FOSI'ER Estate No. 368 of 1993 ot Lot 21 11nd;lh Road. Tlnona 111 the State ot Queenrli~nd

JUDGE MAKLNG ORDER

WHERE MADE:

DATE OF OKIIEK.

1'HE COURT ORDERS

I llpon the ;~ppl~c:unt undert:~klng t o tllr Court to return to Australia hy

27 Apr11, 1993, 1 DIRECI' t l ~ : ~ t	the trustee take srlcll steps as mily be
nrcessary to erl;~hlc tllc app11~;int	to ol7taln possession of 111s passport

i~nd	the p:lssport	(11 111s w~fe. RIG\ Mary Foster, togetl~er w~ th	ally vlsa
clocu~netits	rel:~tir~g	to 111s 11rol7oscd tr:~vel	I grant perml\slon to John

1,ewis I'oster I O trilrel o\lorse;ls trc1111 2 Apr~l, 1003 to return to Australl:~

on 26 A[)rll, l093

1. rll:lt any procew to hc served upoll the nppllcant, includlllg any

   i~pplici~tlon unclcr sectlon 78 ol lllc Barlkruotcv Act, Inay he served upon

tllc i~pplici~nt hy le :~v~l~g 11 at 111s F:IILI address f o ~ scrvlce in

Rr~lcs

Mi~ryOororigh.

3	TI1i1t the tr~~stee 's costs of ;lpl1rilllrlg i(~tl; ly hr the tru\tce's costs in the
; ~ d n l ~ n ~ s t r ; ~ t ~ o ~ ~ ol the h;~llkrupt's cst;lle

Settlcmcllt ; ~ r ~ t l entry ot orcler\ 1s de;llt w~th 111 Itule 121 ot the Bar~kruptcy

IN THE FEDERAL COURT OF AUSTRALIA

BANKRUY? CY DISTRICT OF 'I'HE SI'ATE

OF OUEENSLAND

GENERAL DIVISION No. QB368 of 1993

RE: JOHN 1,EWIS FOSrER Estate No. 368 of 1993 of Lot 21 lindah Road. Tlnana In the State of Oueenslarld

CORAM:	Cooper J
PLACE:	Brish:~nc-
=E:	l April, l993

EXl'DMPOKE REASONS FOR JUDGMENT

'I'his IS :In appllc:~ttori hy the 1,:lrikrupt for :I direction that h ~ s passport

be hatided up to h ~ m In order to enable hlni to leave Austrillia tomorrow for a period

endlng on 26 April 1993 to travel in Europe and to attend a confe~ence. The travel was a prize won by a company whlcli etnploys hlni and the purpose of the travel IS to

attend the conterencc in part, to travel and to take his wife w~th him on the trlp.

The bankrupt was origin:llly granted permlsslon to undertake the travel

by the original trustee. That trrlstee w;is removed on 18 March, I993 at a meeting of
cred~tors. Thc origlli:~l trustee was removed on thc bas~s	that he had glven the
bankrupt approviil to t~rldertiike	the tr;ivel.

7'11c present trustee was appointed at the meetlng of 18 March, 1993,

but the appotntlnent was only formalised on 25 March. 1993. On 30 March, 1993, the

present trustee \erved a notlce to contribute under Section 139P of the Bankru~tcy

Act. The Ilankrnpt d~sputes	tlie valltl~ty ot tlie notlce In the sense that he says the
-
calculat~ons	are wrong hut until such time as the notice 15 reviewed by the Inspector
General in b;~r~kruptcy	ancl set aslde. it rem;llns 111 force. The bankrupt has paid the

requis~te contribution, including contr~hutionq for the period of time when he would be away. The trustee hiis indicated that the admrnistratlon would not he interfered

w~th by the bankrupt's absence. Ilowever, because of the service of the notice, the

bankrupt now falls withln the operation of Sect~on 139ZU of the Bankruntcv Act.

Sectlon I3YZU requlres that the hankrupt not leave Australia without

the leave of the Court and prohllxts the Court granting permission unless it is satisfied as to one of the cond~tlons in paragraph (a) ot subsection (2). The two cond~t~ons are

.-

either that i t 1s necessary for the hi~nkrupt to leave Australia in order to

0 )

contlnue to derive Income; or

(19 ~t IS appropriate for compassionate reasons relat~ng to the death or serious lllness of a close relatlve of the bankrupt to allow the bankrupt to leave Australl;~.

Although the bankrupt would henef~t from attending the conference, I

cannot be satisfied that it 1s necessary for h ~ m to leave Austral~a in order to continue

to derlve InLorne The appllci~nt theretore falls to make out the f~rst ground.

There remalrls the second ground. The bankrupt's wife underwent

major surgery for the remov:il of it brain tumour i n in~d	to late 1992. As a result of
the d~sease	and surgery slie now has lelt slde palsy wlth slgnlt~cant sequela. 'I'he

bankrupt give evldence that $he 1s havlng some d~fflculty in comrng to terms w ~ t h her

condition, particularly her appearance before fr~ends	in Maryborough, and that he has
been ndv~sed hy her nenro-surgeon that the trlp would he benefic~al	to her as part of
her recuperat~on	in order to raise her self-esteem.

Sect~on 139ZU came into operation on 1 July, 1992. I was not referred

to any author~ty where the construction of the sectlon has been cons~dered by the Court. I have caused a search of the database ~na~nta ined by the Court to sec if the

sectlon had been previously considered. That search revealed noth~ng.

The sectlon clearly conlprehends the situation where the close relat~ve

who d ~ e s or is seriously 111 is outs~dc Australia. Is the section lnnited to such a srtuetion? In my vlew it is not intended to be so limited. Having regard to the multi-

cultural nature of Austral~;l, it IS easy to envlsage a situation where a close relat~ve

dies and for compasslonate reasons a hankrupt may wlsh to take the renlains of that

person back to his or her country of origin for disposal. Similarly, a bankrupt may,

for simllar leasons, w~sh back to his or her country of origin to see remaining family members rn that country to take a ser~ously 111 close relative who cannot travel alone

or to d ~ e and he buried there One can also envisage a situation where medical

treatment of a pilrtlculi~r type rnay not be avtlilable 111 Australle and the bankrupt Inay

wish to take the close relatlve overseas to receive such treatment.

In my vlew the section should not he given a narrow and restr~cted

nlearilng arid should not be read as applying only to close relatives outside Australia. The safeguards in the sect~on impose a real I~mltat~on on the power to grant

permission. Flrstly, there must be a close relative who has d ~ e d or is seriously ill.

Secondly. ~t must he ;Ipproprlate tor Lomptlwlonilte reasons relt~tlng	to the death or
serious illness of a close relative t o grant permission t o travel overseas.	Addit~onally,

the requ~renient of pi~r;~gri~pli (h) of subsection (2) t t i i ~ t contrlhutions he paid or

arrangements made tor payment dur~ng the ahscnce of tlie bankrupt overseas before permission may be granted operates to provide a further llm~tation on the power.

The existence of these safeguards and llmltations mil~tate a g i ~ n s t importing into the

subsections any further lirnitat~ons. This is so where the ordinary meaning of the words in the context will allow an operation of the section to sensibly accommodate circumstances which may arlse in relation to a close relative res~dent in Australia where to allow travel overseas by a bankrupt would be seen to he reasonable on compassionate grounds.

The condition ot the bankrupt's wlfe, In niy opinion. 1s a serious illness

within tlie me;lnlng of the second grot~ntl, Iiav~ng, as it does, certain seqnela and

question 1s whether or not tt IS approprlatc for compassionate reasons relating to that bear~ng in mind that the recuperation process appears not yet to be complete. The ~llness for the hankrupt to be allowed to leave tor the period 2 - 26 April, 1993.

The bi~nkrupt arid h ~ s wife are due to leave tomorrow rnornlng. They

have for some t l~ne	now been seeklng to 11;lve the matter resolved. The bankrupt
orlg~rially	had permission to leave and until 30 March, 1993 was not sul>ject to any of

the stringent conditlcim ~mposed hy Sect~on 1397.U They have arranged their affairs

on the assurnptlon that they would be given permission to leave provided that they satisfied the trustee that the bankrupt would return to Australia and that the administration ot the bankruptcy would not he ~nterfered with.

In ill1 of the circumstances, l am satisfied that the second ground, that is

compass~onate	reasons, has been made out in this case having regard to the health of
the bankrupt's	w ~ f e and the medical advice which he has sworn to in the witness box.

1 am satisfied that he will return The bankrupt and his wife have a

four year-old daughter who is to rem;un in Austral~a w ~ t h relatives. The ht~nkrupt's

wife owns the fiinl~ly home in Mt~ryborough and there 1s nothing in the material to indicate that there 1s any real risk that the hankrupt will flee the jur~sdiction and not

return. The btinkrupt is will~rig to give undertakings to the Court that he will return to Australia by 27 April, 1993. So far ns the further orders sought by the trustee are concerned, I consider it is ;~ppropriate that an address to servlce be glven and that

certain cori~eql~ential orders be made in that regard.

Before I deal wrth that, there IS one further matter. It was submitted

that the provisions of sub-section 139ZU(3) apply. namely that the Court must not grant permission II it 1s sat~sfiecl that any of the grounds of olljection to a discharge

from hankruptcy referred to in paragrtlphs 149D(l)(b)-(n) exist whcther or not a notice of object~on has been tlled. The relevant ground of objectlon is section 149Dl(b), namely that the bankrupt after the date ot 111s bankrriptcy continued to manage a corporation as mentioned in section 91A of the Coroorations Law without

h

having heel1 given leave under section 229 ol that Law.

In this caqe i t was submitted that I would be satisfied that the bankrupt

IS engaged in the management ot Ay1esh;lm Pty. Ltd., the company which employs

him. There was p1;icecl before tlie Court a return from the Australian Securit~es

Commiss~on in relat~on to the company. The company shows the directors as being a

Mr. Ross James Manglesdorf and the bankrupt. 'There was additioiially an affidavit of

Geoffrey Davld McWilliam and Margaret Ann McWill~am filed by leave. Mr. and

Mrs McWllliarn deposed that they are the major creditor of the estate, that they have seen the bankrupt attentling at the premises of Aylesham Pty. Ltd. in Maryborough on a dally basis, and that the har ikr~~pt iippears to be the princ~pal person in attendance at the place of Rusinesq. They deposed that in their view the bankrupt appeared to he the person in charge of or managlng the said bus~ness conducted at the premises.

The hankrupt gave ev~dence that the company has as its directors his

wife and his accountant and that he and Mr Manglesdorf are no longer, and have riot
been for some time, d~rectors	of the company and that the ASC extract does not

represent the true posi t io~~ Interentially he says that the necessary return of directors has not beeri filed to bring those matters up to date. I-Ie also says on oath that he

does not sigri cheques, that he divested h~mselt from the management and affairs of

the company and that his sole ~nterest	and concern is as an employee writing life
insurance lx~siness	for the company as his einployer.

Mr. and Mrs. McWill~am were instrurnentel, so far as the minutes of the

creditors' meeting sliow, in having the prevlous trustee removed because he gave permission for the bankrupt to travel overse:is 'I'hc affidavit from the McWilliams is

a facsimile which was providecl to the bankrupt in Court this morning, and needless to say Mr. arid Mis. McWilliani were not available for cross-exaininatlon on that

affidavit.

Hav~ng regard to the sworn evidence ot the hankrupt, I would not b e

prepared to make a finding or1 the whole of the evitlence that I was satislied that a

ground of objection had heen made out. Accordingly section 139ZU(3) has no

oper;~tion In my tleliberatioris.

I'HE COURT ORDERS:

1. IJpon the applicant undertaking t o thc Court to return to Australin by

   27 April. 1993, 1 DlREC1' that the trustee take such steps as may be

necessary to enable the applicant to obtain possession v1 his passport and the passport of h ~ s wife, Rita Mary Foster, together with any visa documents relatrng to his proposed travel I grant permrssion to John

Lewis Foster to travel overseas l ~ o m 2 April, 1993 to return to Australia

or1 26 April, 1993

7'11at any process to he served upon the applicant, includ~ng any

sppllcation under section 78 of the Bankruotcv Act, may be served upon the appl~cant by leaving it at his said address for service in

Tllat the trustee's costs ot appearing tclday be the trustee's costs in the

1 certify that this and the preceding seven (7) pages are a

true copy of the reasons for judgment herein of his

klofl(~ur Mr. Justice cooper.

Associate

Applicant in Person:	John Lew~s	Foster
Solicitors for the Respondent:	Mr I. Beale o f M~nter	Ellison Morris
Fletcher
Date of Hearing:	I April, 1993
Place of Hearing:	BI ~sbane