Re Maurici, U. Ex Parte Official Receiver for Official Trustee

[1992] FCA 126

NOT FOR CIRCULATION

IN THE FEDERAL COURT OF AUSTRALIA	)
I
SOUTH AUSTRALIA DISTRICT REGISTRY j	No. B 744 of 1989
GENERAL DIVISION
OF SOUTH AUSTRALIA	j

Re : UMBERTO WiURICI

A Bankrupt

BETWEEN	OFFICIAL RECEIVER for and on behalf of
THE OFFICIAt TRUSTEE
Trustee of the estate of Umberto Maurici a bankrupt

Applicant

ANTONIA WiURICI

Respondent

EX TEMPORE-REASONS FOR JUDGMENT

CORAM: von Doussa J.

: 9 March 1992

The respondent seeks an order for third party discovery against Westpac Banking Corporation ("Westpac") and a landbroker, M r George Charles Mortimer.

creditor under a District Court judgment that had been entered in proceedings that had been served upon the bankrupt at the

It is necessary to recite briefly the background of this matter. A sequestration order was made against Umberto Maurici ("the bankrupt") on 17 July 1989. The act of bankruptcy was the failure to comply with a bankruptcy notice. The bankruptcy notice was issued by Westpac as the judgment

end of 1985. The claim by Westpac in the District Court was for moneys lent by Westpac to Mauro Gagliardi and Umberto Maurici trading as Polar Bear Company.

The trustee of the bankrupt estate made application to this Court on 18 January 1991 for declarations and consequential relief against the wife of the bankrupt, the abovenamed respondent, in respect of settlements or dispositions of property which had been made by the bankrupt in her favour. The property concerned was two allotments of real estate in which interests had been transferred to the respondent. Those proceedings came on for trial before me on 13 September 1991. There was no appearance by or on behalf of the respondent at the hearing, although there had been communications between the respondent and the Court over the weeks preceding the hearing. After hearing evidence, orders were made in relation to one of the properties. In particular a declaration was made that the transfer by the bankrupt of his interest in the property at 64 Frogmore Road, Kidman Park,

on about 4 April 1986 was a settlement within the meaning of s.120 of the Bankruptcv Act 1966 and was void as against the	trustee.
An order was made on that occasion for the payment by the respondent to the trustee of $58,192.43. The matter was stood over for further consideration. The outstanding issue at that time was as to the further amount required by the trustee to discharge the debts of the estate. The result of the

declaration under s.120 was to set aside the settlement only insofar as it was necessary to do so to pay the debts of the bankrupt and the costs of the administration. The determination of the amount required for this purpose remains outstanding. However, the making of that order on 13 September 1991 has prompted further activity by the respondent and that activity includes the present application.

M r Van Dissel now acts for the respondent, and it seems

from an affidavit filed by him in support of this application for third party discovery that he also acts for the bankrupt. The third party discovery is sought in an effort to obtain evidence which would support the proposition that the bankrupt did not enter into a customer relationship with Westpac, and that he at no time owed any amount to Westpac. In short, the information is sought to establish the proposition that at no time was the bankrupt indebted to Westpac. That involves going behind the judgment of the District Court, and, indeed, denying the basis for the sequestration order which was the judgment debt in favour of Westpac.

The affidavit in support of the application exhibits what purports to be a file note dated 30 April 1985, obviously prepared by a bank officer from Westpac. The initials that appear at the top of the file note identifying the author are "PCR". The file note refers to a meeting on 30 April 1985 between the author of the note, presumably the manager of the branch of the bank, Mr Gagliardi and the bankrupt. The note

records that Mr Gagliardi "called again today with Mr Maurici to seek $15,000 to assist with the purchase of a property at 233 Henley Beach Road, Torrensville, for $205,000". Some further explanation is given. The note continues, "Manager inspected the building which comprises a modern two-storey

warehouse/factory/office at the rear and a brick house

fronting Henley Beach Road. It appears to be a bargain for the purchase price. Partners propose to transfer their liquor manufacturing and wholesale business to the warehouse and convert the house to a retail outlet. They will bank with us as we are nearest to them and state that they are not associated with any one particular bank".

Then details are given of the asset position of the bankrupt, and M and E Gagliardi. The note records that two certificates of title were left with the bank, along with discharge of mortgage number 5360226 which was registered over the two titles. The note concludes, "Action: Manager arranged for the issue of bank cheque for $15,000 in favour of George

Mortimer Trust Account". Another exhibit to the affidavit in support is an	application to Westpac dated 30 April 1985 purporting to be
signed by Mauro Gagliardi and Umberto Maurici, the bankrupt. The document appears to be perfectly regular. It also contains specimen signatures from those two people and a note that the document was received on 30 April 1985 by P Regan, presumably "PCR" previously referred to as the author of the

bank file note.

It is asserted by the respondent in the affidavit supporting the application, that the bankrupt presently says that it is not his signature on the application to the bank, rather it is a forgery, and that he did not attend Westpac on 30 April 1985 nor did he authorise the issue of a bank cheque for $15,000 in favour of George Mortimer Trust Account. All this is, of course, hearsay and is not strictly admissible as evidence. It is argued that these matters require investigation because they raise a suspicion about the underlying debt.

It is submitted that the discharge of mortgage number 5360226, the third exhibit to the affidavit in support, lends weight to the fact that there are suspicious circumstances that require investigation. Mr Van Dissel asserts that the discharge of mortgage is dated 24 May 1985, that is, 24 days after the bank note records that it was given to Mr Regan.

However, if the discharge of mortgage is read in its entirety, it shows that the party executing the discharge of mortgage did so before Mr Mortimer, the landbroker, and that

M r Mortimer appeared before a Justice of the Peace to complete

the appearance clause on the discharge of mortgage on 23 April 1985. The discharge was therefore executed in advance of 30 April 1985 and nothing at all suspicious arises from that document.

The assertion that the bankrupt has never been indebted to Westpac, if it were true, is a mater that would have been well known to the bankrupt the moment the special summons from the District Court was served on him in late 1985. He therefore had a long period of time before the bankruptcy proceedings were commenced in this Court to explore the matter, and further time to do so thereafter. In my view, it is simply too late to come along at this point in the proceedings and seek to go behind the judgment re-agitating the question of whether a debt ever existed.

Apart from that, there is also annexed to the supporting affidavit, a letter which was written by Mangan, Ey and Associates Pty Limited to the bankrupt dated 13 June 1989. That letter precedes the making of the sequestration order by approximately one month. It is clear from the content of the letter that it was written by solicitors who were acting for the bankrupt, who at that time had been instructed to investigate the possibility of setting aside the District Court judgment, and of defending the bankruptcy petition.

The information disclosed in that letter is quite inconsistent with the case that is now being advanced on hearsay evidence to the effect that the bankrupt was not indebted to Westpac. I read a few paragraphs from it:

"We enclose a copy of the request for the opening of a joint loan account in the names of yourself and Maur (sic) Gagliardi styled Polar Bear Company. This request renders you liable for all withdrawals from the account whether made by yourself or Mauro Gagliardi. Accordingly, we confirm our advice to you in paragraph 5 of our letter dated 19th April, 1989. [That letter has not been made available to the Court].

We confirm your instructions that you at no stage informed Westpac of the sale of your interests in the business trading as Polar Bear Company to Chiara Gagliardi, but rather relied on Mauro Gagliardi to communicate this. We confirm that accordingly, at no stage did you take steps to cancel the joint loan account.

We confirm your instructions that the reason no such steps were taken was that you believed the indemnity contained in the agreement between yourself, Bella Rosa Pty Ltd and Chiara Gagliardi dated 23rd July, 1985 together with the indemnity given to you by Chiara Gagliardi dated 5th August, 1985 protected you from any liability in relation to the joint account.

We are of the opinion that you personally are legally liable to Westpac for the overdraft on the account number 750600 styled "Polar Bear Company". Chiara Gagliardi is liable pursuant to the indemnity dated 5th August, 1985 to indemnify you for your above-mentioned liability to Westpac ..."

I need read no more of the letter. The agreement between the bankrupt, Bella Rosa Pty Ltd and Chiara Gagliardi, and the indemnity given to the bankrupt by Chiara Gagliardi, have not been produced to the Court. It is clear, however, from the

contents of that letter, that the position is quite different	from that now being asserted. In my view, no foundation has
been laid to raise even a possibility that the debt to Westpac did not in truth exist.

I agree with the submission that has been made by Mr

Geyer on behalf of Westpac today, that the order now sought by way of third party discovery against Westpac is in the nature of a fishing expedition. That is so, because no proper basis has been laid to suggest that there is any real issue to be explored. I refuse the application for third party discovery against Westpac and Mr Mortimer.

The application is dismissed with costs in favour of Westpac, to be taxed or agreed. There will be no order as to the costs of the Official Receiver.

I certify that this and the
;F preceding pages are a

true copy of the Reasons for Judgment of Mr Justice von Doussa

Associate: d /7-

Dated: 7F/92

Counsel for the applicant	: Mr J Van-Dissel
Solicitor for the applicant	: Jacob Van-Dissel & Co.
Counsel for the respondent	: Mr I U Martirous
Solicitor for the respondent	: Martirous & Co.
Date of hearing	: 9 March 1992