Re Zivanovic & Ors Ex parte Koenig

[1995] FCA 203

FOR LIMITED DISTRIBUTION

CATCHWORDS

BANKRUPTCY - trustees - application for adjournment of examination under s 81 of the Bankruptcy Act 1966 - application to set examination summons aside - adequacy of affidavit supporting an application for the issue of a summons under s 81.

Re Huybrechts; Ex parte Huybrechts v Knight (1991) 31 FCR 394

RE LOU ZIVANOVIC & ORS; EX PARTE MARGARET KOENIG & ANOR
v HUGH JENNER WILY as trustee of the bankrupt estate of LOU ZIVANOVIC

No NB 3073 of 1992

Lindgren J
Sydney
22 March 1995

FOR LIMITED DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA )
GENERAL DIVISION                 )
BANKRUPTCY DISTRICT OF THE       )       No NB 3073 of 1992
STATE OF NEW SOUTH WALES             )

Re:LOU ZIVANOVIC, BRIAN BAKER, GEOFFREY BANKS AND RICHARD BRENNAN

Ex parte:MARGARET KOENIG

First Applicant

MATTHEW THOMAS ZIVANOVIC
                   Second Applicant

HUGH JENNER WILY as trustee of the bankrupt estate of LOU ZIVANOVIC

Respondent

CORAM:Lindgren J

PLACE:Sydney

DATE:22 March 1995

MINUTE OF ORDERS

THE COURT ORDERS:

1. That the two examination summonses, filed on 22 April 1994 and dated 5 May 1994, addressed to the first and second applicant be set aside.

1. That the costs of the applicants' applications be paid by the trustee as a cost of the administration of the bankruptcy of Lou Zivanovic.

NOTE:     Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

FOR LIMITED DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA )
GENERAL DIVISION                 )
BANKRUPTCY DISTRICT OF THE       )       No NB 3073 of 1992
STATE OF NEW SOUTH WALES             )

Re:LOU ZIVANOVIC, BRIAN BAKER, GEOFFREY BANKS AND RICHARD BRENNAN

Ex parte:MARGARET KOENIG

First Applicant

MATTHEW THOMAS ZIVANOVIC
                   Second Applicant

HUGH JENNER WILY as trustee of the bankrupt estate of LOU ZIVANOVIC

Respondent

CORAM:Lindgren J

PLACE:Sydney

DATE:22 March 1995

REASONS FOR JUDGMENT

There are before the Court applications by Margaret Koenig (first applicant) and Matthew Thomas Zivanovic (second applicant) for review of a decision of Registrar Wilson a short while ago (today). The decision was a refusal of their applications for adjournment of their examinations under s 81 of the Bankruptcy Act 1966 pursuant to summonses filed on 22 April 1994 and dated 5 May 1994 in connection with the bankruptcy of Lou Zivanovic. Their applications for review of the Registrar's decision have come before me as Duty Judge.

Examinations of various individuals are in the course of being heard before the Registrar at the present time.  The examination of the two applicants has not yet commenced.  I am informed that if the applications for adjournment should not be reviewed by me in a way favourable to the applicants, they will be examined before the Registrar almost immediately.  At present, apparently, the bankrupt himself is in the course of being examined and his examination is coming to an end.

I have granted leave to the applicants to file their applications in Court and have ordered that they be made returnable instanter. 

Each application seeks, in addition to review of the Registrar's decision on the adjournment application, an order setting aside the examination summons.  The ground of the applications for adjournment is, of course, that the applicants wish to apply to set aside the examination summonses. 

The applicants' case for setting aside is that there was a non-compliance with rule 129(1)(d)(ii) of the Bankruptcy Rules.  Relevantly that provision is as follows:

"129(1)Unless the person to be examined is a relevant person within the meaning of section 81 of the Act, an application to the Court or Registrar for a summons under section 81(1) of the Act must:

(a) ...(b) ...     (c) ...

(d)be supported by an affidavit setting out:

(i) ...

(ii)details of the request made to the person to provide the required information and, where applicable, to produce the books or classes of books for inspection, and the result or, where no request has been made, the reason; ... " (emphasis supplied)

There are two affidavits relied upon by the trustee in bankruptcy as satisfying the rule.  They are both affidavits dated 16 March 1994 of Lisa Margit Collin, an accountant in the employ of Mr H J Wiley, the trustee of the bankrupt estate of Lou Zivanovic.  There is one affidavit in respect of each of the two applicants. 

Mr J Field, solicitor, who appears for the trustee, virtually concedes that in the case of the first applicant, Margaret Koenig, the affidavit does not satisfy the rule. 

In relation to the second applicant, Matthew Thomas Zivanovic, the affidavit of Ms Collin is expressed in brief general terms.  It is as follows:

"I have made a number of attempts to contact Mr Mathew Thomas Zivanovic by telephone to ask him questions with respect to the bankrupt estate of Lou Zivanovic, the last attempt being on 9 March 1994.  On each occasion he has been unavailable and I have left a message for him to return my call.  Mr Mathew Thomas Zivanovic has not returned any of my telephone calls."

From that slender evidence I am asked to infer that the second applicant has been evading contact (and to conclude that the absence of a request by the trustee for the desired information is thus adequately explained).  It may be that the second applicant has been evading contact but I would not draw that inference on such slender evidence.

At the very least it is arguable that the rule has not been complied with.  I think that it has not been, but since I have only a few minutes in which to reach a decision, I will not so decide on a final basis.  Suffice it to say that there is a strongly arguable case for the setting aside of the examination summonses and that therefore clearly there should be an adjournment of the examinations in order to permit the applications to set aside to be determined in the meanwhile on a final basis. 

I was referred by Mr P Walsh of counsel, who appeared for the applicants, to Re Huybrechts; Ex parte Huybrechts v Knight (1991) 31 FCR 394, in which Pincus J dealt with a somewhat similar situation. With respect, I agree with his Honour (at 396) that the rule has the purpose of ensuring that there is a genuine attempt to obtain required information privately, prior to resort to the procedure of an examination summons. I do not think that, at least on a prima facie basis, the affidavits here satisfy the rule construed in the light of this purpose.
I would have stood over the applications to set aside the examination summonses to a date for final hearing but Mr Field has taken instructions and prefers, in the light of the preliminary view which I have expressed, that the two summonses be set aside now on the basis that the trustee will cause fresh summonses to be issued.  That will save the parties a further attendance.  

Accordingly, I order that the two examination summonses, filed on 22 April 1994 and dated 5 May 1994, addressed to the first applicant and the second applicant be set aside.  I order that the costs of the applicants be paid by the trustee as a cost of the administration of the bankruptcy of Lou Zivanovic.

I certify that this and the preceding 4 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

Associate:

Dated:6 April 1995.

Heard:          22 March 1995

Place:          Sydney

Decision:       22 March 1995

Appearances:     Mr P Walsh of counsel instructed by Brown and Partners appeared for the applicants.

Mr J Field, solicitor of Webeck Farland Pender, solicitors appeared for the respondent trustee in bankruptcy.