Re O'Neill, P. Ex parte Emma Page Holdings P/L

[1992] FCA 861

JUDGMENT No. ..g6.! ....... I ..%&

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JUDGZ f?XST:sIG O?&EX:	Cooper J.
WIaZE mini:	Brisbane
DATE C? GXDZR:	1 0 Novenber, i992
'Em COUX!? CK?:?Xs:

I refuse leave CO the controlilng trnsLees LO file a

notice of intention to appear and op9ose the 2ecitlon.

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.Tudment C r e d ~ t o i

Cooper J.

Brisbane

10 November, i 9 9 2

EXTEiWGLV HEASOXS EGR .XcTZ:,XXT

Enma Page Holdinqs P ty . L t d . has f i l e d a p e t i t l o n

seek ing a sequestration of t h e e s t a t e of P e t e r O ' N e i l l . The

p e t i t i o n was due f o r hea r ing today. When it came b e f o r e t h e

D i s t r i c t R e g i s t r a r leclve w a s sought by t h e d a b t o r and by h i s

c o n t r o l l i n g t r u s t e e s f o f i l e a i l o t i c s of i n t e n ~ i o n t o appezr

and oppose t o t h e makirig of a s e q ~ i ~ a t r a t i o n o r d e r . it would

a?pear t h a t H r . O r N a l l l , pursuant t o s e c t l o n 188 of t h e

Bankruotcv Act , has execuced an assignrcent i n favour of

Plessrs. Adcock end Sweeney a s h i s c o n t r o l i i n g t r u s t e e s . I t

a l s o appears	t h a t	a	mee t ins	of	c r e d i t o r s	has	becn	c a l l e d	by
t h e	t r u s t e e s	f o r	Fr iday ,	13 November	1 9 9 2 .	I	.	Wilson,	on

beha l f of t he p e t i t i o n i n g c r e d i t o r , hzs objoctc i i t o t h e l o c u s

s t a n d i of t h e c o n t r o l l l n q t r u s t e e s t o appca: and f i i e a n o t l c e

of i n t e n t i o n t o oppose t h e p e t i t i o n . The m a t t e r wns re fe r red

by t h e D i s t r i c t R e g ~ s t r a r f o r d e t o r m i n ~ t l o i ~ by m e .

The Bar.::ruptcy Rule which S e d r ~ dlri.ct1.y upsr, r:;e

filrng of a Notlce oi Inten'ilon to AFpenZ and oppose the petition is Rule 20. That rule in terms is lixlred to a debtor who :.ntends to appear and oppose flliirg a rsl.eva~~:

noticc. There is, so Ear as I have been advised, no o~her
relevant rule whlch deals with the position of any other
creditor of the debtor or of the poslrlon of a controlling or
other trustee appointed prlor to the determination 05 a

petition seeking sequestration.

It was submitted by I . Rodgers on 'DehaiT of the

contrglling f rustena t h a t t h e yowor t o appoar and cqpoLa could

be inferred from sections i90 aad 189A of the Ean:crl;atcy Act. Section 190 of the Rankruntcv Act provldes in sub-section (4) that:

"The trustee may, for the prir9ose o i exercising h i s powsrs under L-h~s sub- section, act i n the name of the debtor as

if he had been duly appointed by the
debtor to be h i s lawful zttorney to

exercl se those powers.

Tie powers referred to in sectlon 190(4) are set ont

in subsection i90(2).	Those powers s r e :
(a)	to take innmediate coiitrol of rhe debtor's property and affairs;
(b)	to make such inquiries anci ini.esticja~lons in
connection with the debtor's property and e x i s , i n ~ A l e
a£ Ealrs as the trus cee cons tders necesszr:T;
(C)	to cayry on a bua;ness of L debtor 1 , ~n t:ie opinjon of che trustee, it would bb in the interesis of che cieditors to do so; and
(d)	to deal with the debtor's property in any way that will, in the opinion of the trustee, be in he interests o: the creditors.

It was submitted by Fir. Rogers that there >.S power under at least phragraph (L) of silbsection 2 to oppose the creditor's petition, the controll~ng trustees having formed the view that it is in the interests of the creditors generally that they consider, at the meeciny of creditors, the proposal whlch is presently in contenplatlon. Tliat is, he submits that once a controlling trustee t-akes control of the property, the controlli~lg trustee ought to be able to do all such things as, in the opin~on of the controlling trustee, are

reasonable and necessary having regard to the interests o:	all
o f the creditors.	Indeed, he subnrts that. that is the on!.y
reason the controlling trustses wish to appesr today. Section l 8 9 A provides for a repoyt CO ba prepared by

trustees. In particular, section 1 8 9 A ( 3 ) requires "the reLaort shall s tate whether or not, i n the trr:stee's opinion, i t would

be i n the interests o f the debtor's c red~ tor s to deal ~inder

th is Part, with the debtor's a f f a i r s in the manner indicated

i n t h a stntenrent given under subparaqraph 188(2) ( c ) ( j i ) " . I n

t.his ressecc, the csbnlssion is L h a t sbch a report hfis Lic.27

p repared and, on t h e b a s i s of t h a t r e p o r t i f l e a v e i s g iven t o

appear and oppose he p e t j t i o n i t will be contcnZed Se:ore m e

t h a t it i s i n t h e i n t e r e s t s of t h e c r c d i t o c a g~;..ei:zl!y r k s i

t h e m a t t e r be d e ~ l t wit:^ on Fr iday i 3 November, i992 by t h e

c r e d i t o r s g e n e r a l l y and t h a t no s i :quest ra t ion o rdo r o'z9k.t t a

be made u n t i l t h e views 02 t h e c r e d i t o r s v..ere lin01~11.

M r . Wilson, on beha l f of t h e ps t i -c ion ing c r e < r t o r ,

submits t h a t t h e o n l y p r o v i s i o n i n r e l a e l o n t o o p 2 o s i t i o n provided f o r under t h e Bankrxptcy Rules is Ruie 20 and t h z t ru3.e covers t h e p o s i t i o n of a d e b t o r and t h e c i rcumstances i n

which t h e d e b t o r can appear and oppose t h e rnhking of a

s e q u e s t r a t i o n o r d e r . Where t h e d e b t o r appears i n o p p o s i t i o n ,

t h e r e is no room, a s a p r a c t i c a l m a t t e r , f o r t h e t r u s t e e t o

appear and a c t a s a t t o r n e y f o r che d e h t o r . :ie a l s o submits

t h a t t h e onus under s e c t i o n 52(2)(b) t o s a t i s f y r h e c o u r t t h a t

f o r any s u f f i c i e n t reasor1 a s e q u e s t r a t i o n o r d e r ouqht nos t o

be made, f a l l s upon che d e b t o r and upon i>o o t h e r pezson. A s a

consequence, he submits t h a t t h e r e l e v a n t p a r t j e s t o a rgue f o r

and agains-c t h e m a k i ~ ~ g of a sequest ra-c ion o r d e r , a s

contemplated by t h e Dankruptcv Acr;, a r e t h e petitioning

c r e d i t o r and t h e debcor . I n s o f a r a s o t h e r c r e d i t o r s a r e

concerned, he submits t h a t t h e y a r e al lowed t o a2pear and

i n d i c a t e a view p u r e l y f o r t h e purpose of being z v a i l a b l e

should a subs t i tu -ced p e t i t i o n i n g c r e d i t o r be r e q u i r e d ciue t o

t h e withdrawal of t h e o r i g ~ n a l p e t i t i o n i r i g c r e d i t o r .

The pOSitiOil of a c o n - ~ r o l l ~ n g t r u s t e e , oace

sppointed and prior to a meetlny be;ng held, is ssseaiia7.ly one of gett~ng in and protecting the p,-oparty of the aebtor for the benefit of the credj tors generzlly, end p:+parinq the report required by section 189A(3). In an analogo~~s way, a controll~ng trustee, prior co a meeting or crec!l.cors, is in the same position as a provis~onal lrquldator. In khat position, the duty of the controlling trustee is, in my view, to do no more than get in the relevnnt property, to take such step3 as are necessary to protect it, to prepare the report requlred by section 189A(3) and to call such statctorg meetings as are requlred to be called under the provisions of the Eankruptcv Act.Eeyond that, there is not, in my vlevr, a wider duty or scope for a controll~ng truscee to appear and oppose the making of a sequestration order. There is notl~ing

ln the Bankru~tc~ Act which specifically allows such a course

to be undertaken and, in my view, in the sectlons to which ;
was referred, there is nothlng inherent in them which would

justify such a coursa.

controlling trustees to f ~ l e a notice of interition to appear In all the clrcuinstances, J rezuse leave to the and oppose the petition. To the extent that the controlling trustees have material whlch the debtor may wlsh to frle on the hearing of the petition I am sure that the material wouid be made available to the debtor.

I certify that this and the four ( 4 ) preceding pages are z true copy of the

reasons for j u d ~ ~ ~ e 3 t hzrein of t:;e

Honourable Fi. Jsstice Coa;;o-r.	,
Date: 24 Xove~~bsr,	1992

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Counsel f o r the Applicent:	K .	Wllson
Sol i c i k o r s for t h e A,>$icant:	B e l l s ,	S o l ~ c i y s r s

S o l i c i t o r s f o r the F i r s t Respondant: S. W n i t i n ~ , Snlici'c.or

S o 3 i citors for	the Seccad Respondc~n;-.:	E n y l 1 s s	R o a g e r s ,
Sol i c i t o r s
Date of	Iieari ng:	i O Novsmber,	1 9 9 2 a t Rr;sbane.