Rumpf, Re B.J. Ex Parte The Official Trustee in Bankruptcy

[1986] FCA 507

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(Not for publication or dlstribution)

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50-7

IN T I E FED= COURT OF AUSTRALIA )

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VICTORIA	DISTRICT	REGISTRY	)	NU. 533 of l g a g
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BANKRUPTCY DISTRICT OF THE STATE	1
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OF VICTOI~IA	) )
EX TEMPORE JUDGMENT
Re: BARHTI JMIES RUMF'F

Ex parte: THE OFFICIAL TRUSTEE IN

BANKRUPTCY (as trustee of

the bankrupt estate	of
Barry James Rumpf)

(Applicant)

(Respondents)

Coram: Ryan J.

W: 16 October 1986

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EX TEMPORE REASONS FOR JUDGMENT

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This application is made on behalf of the Official

trustee as trustee of the bankrupt estate of Barry James

Rumpf. By the application, the Official Trustee seeks

declarations and consequgntial orders in respect of certain

assets which have been effectively used in and generated by

the conduct of two businesses carried on respectlvely under

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the names of R. J. Kirwan and Associates and Combined Group

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Services. I.

I am satisfied on all of the evidence before the court.

that all of the assets comprised in the businesses

respectively carried on under those registered business names

are property of which the bankrupt, Barry James Rumpf, is the

beneficial owner, or	over whxch he has a general power of
appointment.

As such, in my view, those assets are "property" as

defined in 5.5 of the Bankruptcv Act 1966 and are "property

of the bankrupt" as defined in the same section.

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I am led to the conclusion which I have just indicated,

by the following facts and events which I consider have been

clearly established by the evidence. However, the recital

which I am about to give should not be taken as exhaustive of

all of the facts which lead to, or tend to support, the

conclusion to which I have come.

In 1980 the two businesses which, for the sake of

brevity I shall hereafter call "the cleaning business" and

"the security business", were sold on terms which provided : .

that Mr. and Mrs. Kirwan and Mr. and Mrs. Eddy as vendors

should receive a consideration amounting in all to $50,000

per couple per year for the next 10 years. 1:'

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The purchaser of the cleanmg business was Tanavent

Nominees Pty. Limited and the purchaser of the securlty

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business-was Tertiary Nominees Pty Limited. Both of those

companies had common directors, Mr. Rumpf and two otherwise

unidentified gentlemen with Chinese names, Ng Kim Ling and

Chan Wai Chung. By 1 July 1983 the company controlling the

cleaning business and the security business changed to Peter respectively.

Peter Brian Pty. Limited had the same directors as

Tanavent Nominees Pty. Limited and Tertiary Nominees Pty.

Limited, being Mr. Rumpf and the two other, presumably

Chinese, gentlemen. The directors of Burra dnna Nominees

Pty. Limited were Mr. Rumpf and Fifth Minrip Pty. Limited.

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On 18 June 1985 Tenth Cantenae Pty. Limited resolved	to	> -	..
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purchase the cleaning business and the security business	as

trustee for the Anzac No. l1 Trust. The minute which

embodies that resolution recited in part;

"Resolve that as at 1 July 1985 the company

acquire, as trustee, a group of businesses

carried on under the following names:-

R.J. Kirwan & Associates

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Combined Group Services

Kirwan Security Services

Kirwan Group Services

from Peter Brian Pty. Ltd. and Burra Anna

Nominees Pty. Ltd.

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Further resolved that the basis of the purchase shall be the net tangible assets as set out in

the accounts at 30th June, 1985 plus a further

I amount for goodwill of one million dollars."

It is a-strong inference from the facts disclosed to the-

court that a trustee actlng in the best interests of its

beneficiaries would not have regarded $1 million as an appropriate price to pay for the goodwill of the businesses which Tenth Cantenae Pty. Limited resolved to acquire.

Previously, it seems, Tenth Cantenae Pty. Limited had

been a shelf company and, until 30 June 1984 had been a

vehicle for the conduct of a newly founded-business of a Mr.

Torrance and a Mr. Teal who were clients of Mr. Rumpf in his

capacity as a chartered accountant. Even at that time, Tenth

Cantenae Pty. Limited was purportedly the trustee for the

Anzac No. 11 Trust. That trust was constituted by a deed of

trust dated 2 September 1981. According to Mr. Teal, the

trust remained dormant because the business founded by him

and Mr. Torrance did not generate any profits in the early

years of its existence which could be impressed with the

character of trust funds of the Anzac No. 11 Trust.

It appears that, when Messrs Torrance and Teal no

longer wlshed to use T nth Cantenae Pty. Limited as a vehicle

for their business venture, they arranged with Mr. Rumpf for

their business to be sold by Tenth Cantenae Pty. Limited.

Presumably, that company and its still dormant Anzac No. 11

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Trust simply went back on to the shelf. At a l l events, there

is no evldence of any injection of funds into either Tenth

Cantenae Pty. Llmited or the Anzac No. 11 Trust to enable the

purchase-in June 1985 of either the cleanlng business	or the-
security business.

It seems that from 1980 onwards all major decisions n

respect of both the cleaning business and the security

business were taken by Mr. Rumpf. Employees of the cleaning

business and the security business were paid through one or

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other of two Queensland-based firms, Southern Labour Pool and S I

West Coast Labour Pool, by means of cheques drawn on

Queensland banks.

The bank accounts of those firms were kept in funds by

periodic advances from the cleaning business and the security

business. Also, from time to time, moneys were drawn on the

Queensland account of either Southern Labour Pool or West

Coast Labour Pool and paid either to Mr. Rumpf as director's

or consultant's fees or paid at his direction; for example,

to an account at the Bendigo building Society standing in the

name of Edwin Ross Irwin from whom, if he exists, Mr. Rumpf

holds a power of attorney. The proprietor of both of the

business names "Southern Labour Pool" and "West Coast Labour

Pool" is Welsh Investments Pty. Limited of which the

directors are Mr. Rumpf and Tenth Wakool Pty. Limited of

which company Mr. Rumpf is, in turn, a director.

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6.

Mr. Rumpf has admitted that he controls Welsh

Investments Fty. Limited. Substantial sums of between $1500

and $3000 a fortnight were drawn in cash by Mr. Todd, an-

employee of the cleaning business and the security business,

on Mr. Rumpf's instructions from both of those businesses.

The money was placed in sealed envelopes and put in the

firm's safe and thereafter collected by somebody unknown to

Mr. Todd, but clearly believed by hlm to have been Mr. Rumpf.

Moreover, although Mr. Rumpf this morning disputed the

inference that he had, in fact, received that money, as Mr.

Meagher reminded me, he showed no reaction to the evidence

given by Mr. Todd yesterday and took no advantage of the

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opportunity to cross-examine Mr. Todd or otherwise to suggest

that those very substantial sums had been misappropriated.

It is significant, in my view, that none of the other

natural persons whose identity has been established by

reference to such documents as have been able to be found,

has made any claim to a beneficial interest	in any of	the	..
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assets of the cleaning business or the security business or

otherwise in the trust property presumptively vested in Tenth

Cantenae Pty. Limited.

I raised with Mr. Meagher this mornlng the concededly

remote possibility that somebody other than Mr. Rumpf may

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have acquired a vested interest in some part or other of the

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trust estate of which Tenth Cantenae Pty. Limited is the

trustee. Such a person could still be entitled to funds in

the hands of the Official Trustee if his claim could be

substantgated. Indeed, it might be to the benefit of that-

person for the remaining assets of the businesses to be

vested in the Official Trustee rather than be simply allowed

to waste.

It must also be remembered that the identity of any

such person can be presumed to be within the knowledge of Mr.

Rumpf. If such a person exists, Mr. Rumpf has apparently

made the judgment that the interests of that person are

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better served by preserving his or her anonymity than by	I
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disclosing the identity of that person and by substantiating

that person's beneficial interest in any of the assets	in
question in this application.

Accordingly, I propose to make orders in terms of the

application in this matter. I will make a declaration in

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terms of paragraph 1 of the application; an order in

accordance with paragraph 2; a declaration in the form of

paragraph 4 and an order in respect of the shares of Welsh

Investments Pty. Limited in the form of paragraph 5.

I understand that there may be some small amounts of

money still standing to the credit of Southern Labour Pool or

West Coast Labour Pool or both of those firms. Accordingly,

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I	I make a declaration in terms of paragraph 6 , and I order that the costs of this application be taxed and paid out of
the estate of the bankrupt. I reserve liberty to any party
to apply-for further orders or directions in this matter and-
I include in that reservation a right in any person not a
party to the applicatian who may wish to claim beneficial
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I	interest in any of the assets with which this application has
i	been concerned, to pursue that claim.
l	MR. BRE'IT: If your Honour pleases.
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I	MR. MEAGHER: If your Honour pleases. Your Honour, in
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paragraph 6 of the application, there is an error. It

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refers to the Western Labour Pool. All the evidence -

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it is the West Coast Labour Pool. Yes.

I HIS HONOUR: West Coast, yes. The order should be amended to

reflect that correction.

MR. MEAGHEX: If your Honour pleases.

HIS HONOUR: In paragraph 7, I think the word, "state",

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should read "estate" too, Mr. Meagher. Is there

1	anything else that	you wish to be included.
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MR. MFAGHEX: No, your Honour, that is all we need trouble

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l	your	Honour	about	today.	Would	your	Honour	o der	the	i
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release of the exhibits? ~

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HIS HONOUR: Yes, the exhibits will be - they all came, I

think from your client, did they not, Mr. Meagher? - I

will order that the exhibits be released into the

custody of the Official Trustee.

MR. MFAGHER:	If your Honour pleases.	I .
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I certify that this and 1 -

the preceding eight ( 8 ) 1 :

pages are a true copy of the Reasons for Judgment herein of the Honourable

Mr. Justice Ryan.

i Dated: k- /,- 1986

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