Stewart Brown v Cooper

[2010] FMCA 823

FEDERAL MAGISTRATES COURT OF AUSTRALIA

STEWART BROWN v COOPER [2010] FMCA 823

BANKRUPTCY – Application to review decision of a registrar – refusal to issue summons for public examination of the bankrupt – bankrupt previously publicly examined – whether a further examination would serve any useful purpose considered.

Bankruptcy Act 1966 (Cth), s.81

Applicant: FIONA STEWART BROWN

Respondent: DAVID COOPER

File Number: SYG2022 of 2010

Judgment of: Driver FM

Hearing date: 27 October 2010

Delivered at: Sydney

Delivered on: 27 October 2010

REPRESENTATION

The Applicant appeared in person

No appearance by or on behalf of the Respondent

Solicitors for the Official Trustee: Mr M McNally

ORDERS

1. The application for review filed on 14 September 2010 be dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG2022/10

FIONA STEWART BROWN

Applicant

And

DAVID COOPER

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. I have before me an application filed on 14 September 2010 to review a decision of a registrar refusing to make orders for the examination of the bankrupt, David Cooper, under s.81 of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”). Annexed to the application is a letter dated 19 August 2010 from the registrar giving reasons for that decision. The reasons refer to the failure to provide an address for service and the fact that there had previously been an examination over three days in 2007 and 2008. The application for review is supported by the affidavit of Fiona Stewart Brown filed on 14 September 2010. In that affidavit, she refers to the previous examination, which she regards as unsatisfactory, and inquiries she has made which support her view that a further examination should be undertaken.

2. When the matter came before me on 5 October 2010, I adjourned the review application for hearing today and required the Official Trustee to be served so that a representative could attend the Court to assist the Court.  That occurred today.  Mr McNally appeared on behalf of the trustee and provided me with information concerning the administration of the bankrupt estate. 

3. The bankrupt was bankrupted on the petition of Ms Brown, who is a creditor in the sum of $14,013.42.  The only other proof of debt lodged with the trustee is from QBE Insurance in the sum of $8,396.60.  The trustee conducted investigations as to the property of the bankrupt that might be recovered and identified no real property in Australia.  A search of ASIC records provided a negative response.  The bankrupt provided a statement of affairs to the trustee dated 30 June 2006.  That statement provided scant detail concerning the bankrupt’s affairs.  However, it came to light that the bankrupt’s mother had died and that the bankrupt appeared to be a beneficiary of her estate.  It was no doubt with these factors in mind that the bankrupt was subjected to the previous public examination.  It appears that that examination was not productive, both in terms of the answers provided by the bankrupt and his non-attendance in the latter stages. 

4. I have before me a translation of a declaration by the bankrupt, which is unsigned but apparently made in Israel on 11 February 2004, in which the bankrupt declares that he has surrendered to his sister, Ester Nisim, his share in his deceased mother’s estate.  I also have before me a letter, apparently written by the bankrupt and signed on 20 February 2009, which says, in effect, that he has arranged for his sister to look after his share of the estate in Israel because of his inability to manage money.  The circumstances suggest the possibility that money might be available to the bankrupt estate in Israel from the deceased estate of the bankrupt’s mother.  That is a matter of interest to Ms Brown as a creditor.

5. Ms Brown is also concerned that the bankrupt did not give a proper account of his financial affairs in his statement of affairs given to the trustee, in particular in that he made no mention that he was a beneficiary under his mother’s estate.  The trustee provided a brief of evidence to the Director of Public Prosecutions in order to determine whether criminal proceedings should be taken against the bankrupt.  The Director of Public Prosecutions decided that no prosecution should be instituted because there was insufficient evidence that the bankrupt intended to provide a false statement of his affairs to the trustee. 

6. Mr McNally, for the trustee, provided me with further information concerning the possible whereabouts of the bankrupt.  He has in the past travelled to Israel, but he returned to Australia and surrendered his Australian passport to the trustee.  That passport has expired and there is no information that the bankrupt has any other passport.  In all probability, he is in Australia.  The trustee is aware of several past addresses for the bankrupt.  In April 2008, he informed the trustee that he was of no fixed abode and was living in his car.  However, more recently, the trustee objected to the discharge of the bankrupt from bankruptcy and delivered notice of that objection to an address of 7/11 Black Street, Vaucluse, where the trustee believed the bankrupt was living as at 24 June 2009.  There is no other address known at which it is likely that the bankrupt is currently located.  I was also provided by the representative of the trustee with two telephone numbers which the bankrupt has in the past used. 

7. The first objection by the registrar to making orders for the further public examination of the bankrupt could, in my view, be overcome on the basis of the additional information now provided. 

8. The second objection relating to the previous public examination is more substantial.  I understand that the bankrupt’s answers to questions at the previous public examination were not illuminating.  On critical matters, he denied any knowledge.  In my view, there is no reason to believe that his answers at a further public examination would be any more illuminating.  The trustee has offered to undertake inquiries as to the existence of a will by the bankrupt’s late mother and other information that might assist in identifying and recovering property for the benefit of creditors.  That would not be a simple matter if assets are located in Israel.  The trustee, however, has no funds to undertake further inquiries and has requested Ms Brown to provide those funds.  She has declined on the basis that she is dissatisfied with the administration of the estate by the official trustee.  However, she has no intention of seeking to appoint a registered trustee to conduct further inquiries and to further administer the bankrupt estate. 

9. I am not satisfied that, if orders were made for a further public examination, the bankrupt, if he could be served and attended the examination, would provide further useful information.  The better course would be to conduct inquiries, in particular in Israel, about the status of the deceased estate and the possibility of locating and securing assets for the benefit of creditors.  Those inquiries are properly the responsibility of the official trustee or any registered trustee who might be appointed. 

10. In all the circumstances, I am not satisfied that sufficient reason has been shown why the decision by the registrar should be disturbed. 

11. I will therefore order that the application for review filed on 14 September 2010 be dismissed. 

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate: 

Date:  1 November 2010