Westpac Banking Corp v Bagshaw

[2001] FCA 1847

FEDERAL COURT OF AUSTRALIA

Westpac Banking Corp v Bagshaw [2001] FCA 1847

WESTPAC BANKING CORP v JUDITH HAMPTON BAGSHAW

N 7351 of 2001

EMMETT J
11 SEPTEMBER 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 7351 OF 2001

IN THE MATTER OF JUDITH HAMPTON BAGSHAW

BETWEEN:	WESTPAC BANKING CORPORATION (ARBN 007 457 141) APPLICANT
AND:	JUDITH HAMPTON BAGSHAW RESPONDENT
JUDGE:	EMMETT J
DATE OF ORDER:	11 SEPTEMBER 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.        The application to be dismissed.

2.        The applicant pay the respondent’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 7351 OF 2001

IN THE MATTER OF JUDITH HAMPTON BAGSHAW

BETWEEN:	WESTPAC BANKING CORPORATION (ARBN 007 457 141) APPLICANT
AND:	JUDITH HAMPTON BAGSHAW RESPONDENT

JUDGE:	EMMETT J
DATE:	11 SEPTEMBER 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 20 March 2001 Katz J made a sequestration order against the estate of Judith Hampton Bagshaw. His Honour noted that an act of bankruptcy had occurred on 17 October 2000 and that Maxwell Christopher Donnelly had been appointed to act as trustee. On 30 July 2001 Mrs Bagshaw applied to the Court pursuant to s 179(1) of the Bankruptcy Act 1966 for an order that Mr Donnelly be removed as trustee of her bankrupt estate on the grounds stated in the accompanying affidavit. 

2. The accompanying affidavit, sworn on 30 July 2001 by Mrs Bagshaw, referred to proceeding G684 of 1994 before Whitlam J.  Mrs Bagshaw is a party to that proceeding, which was brought against Mrs Bagshaw and her husband by Mr John Joseph Scott.  In the affidavit Mrs Bagshaw said that Mr Scott was claiming title to two properties registered in the joint names of Mr and Mrs Bagshaw.  Mrs Bagshaw alleged in the affidavit that Mr Scott had given sworn evidence in the proceeding before Whitlam J that his claims were made as agent of one Kenneth Robert Livingstone.  Mrs Bagshaw asserted in her affidavit that Mr Livingstone is an undischarged bankrupt whose estate is vested in Mr Donnelly as trustee. 

3. Mrs Bagshaw refuted the claims that the properties were owned by Mr Scott and Mr Livingstone and said that she required Mr Donnelly to contest the allegations.  She also said in her affidavit that she believed that Mr Scott and Mr Livingstone, who were previously her accountants, had failed to account to her for monies totalling “$ 2,960,000,00”.  She said that she had been attempting to recover the monies and that she would require Mr Donnelly to continue attempts to recover the monies.  The affidavit ended by an assertion that her requirement that Mr Donnelly should contest these matters created a conflict of interest between Mr Donnelly and her husband and herself. 

4. The conflict asserted was that, insofar as there were claims that would be made on behalf of Mrs Bagshaw’s estate that were inconsistent with the position of Mr Donnelly as trustee of the Livingstone estate, a situation would arise where his duty to one estate was in conflict with his duty to the other estate.  At the time when Mr Donnelly was appointed trustee of Mrs Bagshaw’s estate, he was in fact the trustee of Mr Livingstone's estate.  However, at a meeting of the creditors of Mr Livingstone's estate held on 26 July 2001, Mr Donnelly was removed as trustee of the estate of Kenneth Robert Livingstone.

5. When the matter was called on for hearing today, counsel for Mrs Bagshaw sought an adjournment of the proceeding to enable different claims to be made against Mr Donnelly.  Counsel for Mrs Bagshaw was able to formulate those claims only by reference to a letter dated 3 September 2001 written by Mrs Bagshaw’s husband to Mr Donnelly.  The letter contains a number of assertions that are by no means clear.  I shall quote it verbatim:

   “I hereby spell out the Syd Duncan case the way I see it. 

   1. It is quite clear that the Syd Duncan matter is a conflict of interest with Mrs Bagshaw beyond all reasonable doubt.

   2. It is quite clear that when the report on behalf of Scott Slattery and Lawena Pty Limited went to Court there was a major conflict of interest between Ferrier Hodgson and you, Scott, Church & Grace and Livingstone.  It is quite evident certain calculations were not taken into account, it is quite evident that Scott walked away with $1.2 million of Sid Duncan’s and Lawena’s money.  Why wasn’t $500,000 of Sid Duncan’s money brought back into Lawena Pty Limited which you had not accounted for.  If one takes into account the property and the money the estate would be solvent. You allowed Scott to walk away with $1.2 million in cash.  You failed to administer the company correctly according to the Companies Act.  It is still under investigation, how the properties were sold through a circle of properties back to Scott.  It is quite evident that you had no money in the estate of Syd Duncan.  Scott put up the funds through Church & Grace to activate the properties.

   3. It is quite evident that Scott was behind Livingstone’s estate when you agreed to handle it.  It is quite evident that Lyn Thomas was mixed up in money laundering and you totally refused to examine him in May 2001.  Your barrister, Skinner wrote to you that you cannot take the Livingstone properties or the Scott properties.  It is now evident that the Livingstone have caveats and Mareva injunctions on them.  It is quite evident that the new trustee will seek caveats over 52 of Scott's properties.  So therefore it is quite evident to me, it was not only a cover up with Westpac laundering the drug money through Ophix Finance and Ophix International, why would you not issue a summons to Lyn Thomas. Why is it that the new trustee agrees that the money has been sent overseas or are his contacts different to yours through the same channels. 

   I am afraid to say that I said to Angela Mantas over the telephone these are not allegations, they are facts. 

   It is quite clear to other accountants that you owe the estate of Syd Duncan, therefore Robyn Steele, a large amount of money because you allowed Scott to get away with it.”

6. It is said that in some way those assertions constitute a complaint about the conduct of Mr Donnelly as trustee of Mrs Bagshaw’s estate.  I do not comprehend how they do.  It appears to me that the basis upon which this application was brought is misconceived.  There is no clear formulation of any complaint against Mr Donnelly at present.  In the circumstances the appropriate course is to refuse the application for an adjournment.  The application as it is presently constituted is misconceived.  Accordingly it should be dismissed.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett .

Associate:

Dated:             20 December 2001

Counsel for the Applicant:	R W Cameron
Solicitor for the Applicant:	Richard A Licardy & Co
Counsel for the Trustee:	S A Gregory
Solicitor for the Trustee:	Henry Davis York
Date of Hearing:	11 September 2001
Date of Judgment:	11 September 2001