Sutton v AJ Thompson Pty Ltd (In liq)

[1987] FCA 167

LIMITED DISTRIBUTION

.~

IN TEE FEDERAL COURT OF AUSTRALIA	1
)
GENERAL DIVISION	1
1 No P 1999 of 1986
BANKRUPTCY DISTRICT OF THE	)

STATE OF NEW SOUTE WALES AND )

TEE AUSTRALIAN CAPITAL TERRITORY 1

Re : JOHN WORTHY BAWN

Judgment Debtor

Respondent

Ex parte: TRADE CREDITS LTD.

CORAM : Einfeld J.

- DATE : 17 March 1987

FEDERAL CC'JRT OE

t . AUSTRALIA

EX-TEMPORE JUDGMENT

This 1s an application by the creditor presenting a

bankruptcy of the respondent that a notice of discovery dated 23

February 1987 (exhibit C) be set aside or, alternatively, that the

discovery should be limited In some way.

The notice of discovery was issued pursuant to rule 146 of the

Bankruptcy Rules in accordance, as that rule provides, with form 50.

Form 50 makes two alternative schemes available for discovery. One is

precisely in the terms of rule 146 that documents be dlscovered

"relating to the matters that are in question in the proceeding"; the

other is a provision that documents be discovered relating to "the

following matters that are in question in the proceeding". If the

second alternatlve were adopted, the suggested matters would obvlously

be listed by the applicant for the discovery. In this case, the

applicant f o r discovery being the alleged debtor has chosen the first

and most general provlslon, whlch strictly accords wlth the words of

rule 146.

- 2 -

Rule 147 makes provision for the mechanism of discovery by an affidavit,

and also provides for the form and content of the affidavlt. Rule 148

makes provlsion for an application to be made to the court by a party in

relation to discovery without limiting the potential applicants only to

those who would seek discovery. In other words, It would seem that the

court may be approached by any party to a proceeding In relation to

discovery matters, including the recipient of a requisition for

discovery.

Rule 148 goes on to provide that on such application, the court may make

such order for the "flling of an affldavlt of discovery or a further

affidavit of discovery as the court considers necessary in order to

dispose fairly of the matters in question or to save costs in the

proceeding." Thls provision presumably implles that the court may not

only make such order but decline to make such order.

In this case, It does not appear to me to be appropriate to decline to

make an order for the filing of an affidavit of discovery, because the

proposed contested bankruptcy petition, which is set down for hearing

next month, may very well raise issues for which dlscovery 1s

appropriate and in relation to which the respondent may be entitled to

documents in the possession f the applicant.

The question in this case is therefore whether there ought to be made an order pursuant to rule 148 of a limited kind in terms of confining the affidavit of discovery.

- 3 -

In the course of argument, Mr. Newton for the respondent outlined a

serles of issues which he says will arise at the hearlng of the

petltlon. I do not take him to have attempted today to provlde a

comprehensive list of such lssues, but that the seven or eight that he

outllned were mere examples of some of the issues that would be proposed

to be raised in defence of the petition.

Some of the issues which he raised go to the very basis upon whlch the

bankruptcy notice which preceded the petition was issued, lncludlng the

validity In the sense of the appropriateness and correctness of the

ludgment of the Supreme Court of Queensland on which the bankruptcy

notice was based. I asked counsel in argument whether there was a case

In which the bankruptcy ~urisdiction has been energised in these

circumstances for the purpose of relitigating and re-examining the basls

of the ludgment preceding a bankruptcy notice and neither party was able

to refer me to to any such decision. Because of the urgency of this

matter, I am not able to search for authority myself.

In any event, it is not necessary to decide the question now nor does it

seem to me to be appropriate that I should prejudge the issue when the

matter is still to be litigated. The problem is that if all of the

matters that led up to the proceedings in the Supreme Court of would be no end of documents that might be produceable on dlscovery. On the evidence before me this would not only be tlme consuming, but

apparently very costly and inconvenient, because, as I am informed, most

if not all of these documents are	in Queensland, and are belng used in
other proceedings.

- 4 -

In the clrcumstances, it seems to me that I should order that the

respondent should supply to the applicant a list of what It considers

are the matters in question in the contested bankruptcy proceedlng and

that an affidavit of discovery should then be filed by the applicant in

respect of those matters in questlon.

In the event that there 1 s a dispute about any or all of those matters

in question as deflned by the respondent, that matter wlll have to be

determined at the hearlng, and the discovery will have to be determined

at that time as well. In order to protect the interests of the parties

as best I can, I shall make orders at the hearing as may seem

appropriate in order to ensure that the minimum mj stice is done to the

parties because of the delay, but I see no way at the moment, on an

interlocutory proceeding of this kind, of conflning the issues which would finally determine the matters in respect of which discovery can legitimately be required.

I therefore order that within seven days the respondent serve upon the

applicant a list of the matters whlch he alleges are in question In the

contested bankruptcy proceeding. I order that the respondent then file

within fourteen days thereof an affidavit of discovery in respect of

those matters. I grant liberty to apply to the parties on 24 hours'

notlce to my assoclate in respect of disputes whlch arise n relation to

these dlscovery proceedings. I stand over such other matters arlslng

under the application as have not been dealt with, including the

question of costs, to the hearing of the bankruptcy petition.