Zachary and Zachary and Ors - [2008] FMCAfam 1209

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ZACHARY & ZACHARY & ORS

[2008] FMCAfam 1209

FAMILY LAW – Property – jurisdiction – bankruptcy – vested property – maintenance – dismissal of proceedings against Trustee in Bankruptcy – discharge of injunctive orders.

Family Law Act 1975 (Cth), ss.74, 75, 79
Bankruptcy Act 1966 (Cth), ss.5, 19, 58, 59, 82, 109, 115, 116, 139, 149, Division 4B
Bankruptcy and Family Law Legislation Amending Act (Cth) Item 60, Part 2 Schedule 1

Re Gillies; Ex-parte Official Trustee in Bankruptcy Re Gillies (1993) 42 FCR 571
Re Sharpe; Ex-parte Donnelly (1998) 80 FCR 536

Applicant:

MS ZACHARY

First Respondent:

MR ZACHARY

Second Respondent:

MR K, THE TRUSTEE OF THE PROPERTY OF MR ZACHARY, A BANKRUPT

Third Respondent:

[H] PTY LTD
ACN [0]

File Number:

SYC 8432 of 2007

Judgment of:

Kemp FM

Hearing date:

29 October 2008

Date of Last Submission:

29 October 2008

Delivered at:

Sydney

Delivered on:

13 November 2008

REPRESENTATION

Counsel for the Applicant:

Mr Thomas

Solicitors for the Applicant:

David Lardner Solicitor

Solicitor for the First Respondent:

Reid Family Lawyers

Counsel for the Second Respondent:

Mr Johnson

Solicitors for the Second Respondent:

Dobinson Davey Clifford Simpson

Solicitors for the Third Respondent:

No appearance by or for Third Respondent

ORDERS

The application filed 18 September 2008 (including any claim for urgent, lump sum or continuing spousal maintenance) (save as to costs) be dismissed as against the second respondent.
The injunctive orders made as against the second respondent on

19 September 2008
and extended on 24 September 2008 and

29 October 2008
, be discharged.
Injunctive Order 2 made on 19 September 2008 as against the first respondent and extended on 24 September 2008 and 29 October 2008, be discharged.
The orders otherwise made on 19 September 2008 as varied by orders made on 24 September 2008 and extended by orders made on 24 September 2008 and 29 October 2008, continue pending further order.
The matter be listed for mention on 29 January 2009.

IT IS NOTED that publication of this judgment under the pseudonym Zachary & Zachary is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYC 8432 of 2007

MS ZACHARY

Applicant

And

MR ZACHARY

First Respondent

MR K, THE TRUSTEE OF THE PROPERTY OF MR ZACHARY, A BANKRUPT

Second Respondent

[H] PTY LTD
ACN [0]

Third Respondent

REASONS FOR JUDGMENT

The applicant wife seeks orders as set out in her initiating Application filed 18 September 2008. She seeks final orders that she receive by way of a property settlement pursuant to the Family Law Act 1975 (Cth), (“the Family Law Act”) the proceeds of the sale of the husband’s estate or entitlement in shares in the third respondent. The applicant seeks the following orders by way of interim or procedural relief:
(1)On an ex parte basis and until further order, the first respondent be restrained from taking any steps to determine his employment with or involvement in the company known as [H] Pty Ltd ACN [0] (the third respondent).
(2)On an ex parte basis and until further order, the first respondent be restrained from entering into any agreement with the second respondent of and concerning the annulment or discharge of his bankruptcy.
(3)On an ex parte basis and until further order, the first respondent be restrained from giving any directions to the third respondent of and concerning the distribution of any funds due and owing to him by the third respondent and in particular monies due and owing to him by way of commissions as a result of his business/employment relationship with the third respondent.
(4)On an ex parte basis and until further order, the first respondent be restrained from negotiating or otherwise converting any monies given to him by the third respondent otherwise than to forthwith pay such monies to the Registrar of the Federal Magistrates Court of Australia, Sydney Registry.
(5)On an ex parte basis and until further order, the first respondent be restrained from withdrawing, transferring or otherwise dealing with any funds held by him in any banking or similar account save for the purpose of paying rent and/or lease commitments on his principal motor vehicle normally used by him in the conduct of his affairs.
(6)On an ex parte basis and until further order, the first respondent be restrained from selling, transferring, encumbering all his shares held by him in the third respondent and/or any other company whether public or private.
(7)Until further order, the second respondent be restrained from taking any steps, or entering any agreement for or on behalf of the first respondent in relation to his bankruptcy, or the discharge of his bankruptcy without giving the wife 28 days notice of his notice so to do.
(8)Until further order, the third respondent be restrained from paying to the first respondent any monies due and owing by it to the first respondent without giving the applicant seven days notice of its intention so to do.
(9)The first respondent forthwith pay to the applicant the sum of Thirty Thousand Dollars ($30,000.00) by way of interim property settlement.
(10)That the first respondent forthwith provide to the solicitors for the applicant a copy of his Contract of Employment with the third respondent.
(11)The third respondent forthwith provide to the solicitors for the applicant copies of all: letters, documents and contracts concerning the business relationship existing between the first respondent and itself, including but not limited to, any contract of employment, any ledger records of payments made to or on behalf of the first respondent from 1 July 1997 to the date hereof.
(12)The third respondent forthwith provide to the Court copies of all Minutes of Meetings of the said company which deal with the company’s employment of, and all business relationships with the first respondent as and from 1 July 2002 to date.
(13)The first respondent forthwith provide to the solicitors for the applicant copies of his group certificates and/or income tax returns for the years ended 30 June 2000 to 30 June 2008 inclusive.
(14)The first respondent forthwith provide to the solicitors for the applicant copies of any and all correspondence with the Child Support Agency since 1 July 2003 to the date hereof.
(15)
That the applicant have liberty to issue a subpoena to the Westpac Banking Corporation Limited seeking production of any or all records concerning the purchase and/or sale of properties in the Australian Capital Territory and/or New South Wales and/or any applications for finance sought by the first respondent from

1 January 2000 to the date hereof, and such further all other subpoenas as may become necessary upon production of the material in compliance with the orders herein.
(16)The applicant be at liberty to amend her Application for Final Orders within fourteen (14) days of the parties herein providing the information sought in these orders.
(17)That the question of costs of this application be reserved.
(18)Such further order or orders as the Court thinks fit.
On 19 September 2008, the proceedings came before His Honour Federal Magistrate Altobelli, where the following orders were made, on an ex parte basis and pending further order:
(1)The first respondent be restrained from taking any steps to determine his employment with or involvement in the third respondent.
(2)The first respondent be restrained from entering into any agreement with the second respondent of and concerning the annulment or discharge of his bankruptcy.
(3)The first respondent be restrained from giving any directions to the third respondent of and concerning the distribution of any funds due and owing to him by the third respondent and in particular monies due and owing to him by way of commissions as a result of his business/employment relationship with the third respondent.
(4)The first respondent be restrained from negotiating or otherwise converting any monies given to him by the third respondent otherwise than to forthwith pay such monies to the Registrar of the Federal Magistrates Court of Australia, Sydney Registry.
(5)The first respondent be restrained from selling, transferring, encumbering all his shares held by him in the third respondent and/or any other company whether public or private.
(6)The second respondent be restrained from taking any steps, or entering any agreement for or on behalf of the first respondent in relation to his bankruptcy, or the discharge of his bankruptcy without giving the applicant 28 days notice of his notice so to do.
(7)The third respondent be restrained from paying to the first respondent any moneys monies due and owing by it to the first respondent whether by way of salary, unpaid commission and/or fees due and owing to the first respondent without giving the applicant seven days notice of its intention so to do.
(8)Orders 1 to 7 inclusive expire at 5.00pm on 24 September 2008.
(9)The respondents be notified by 12 noon today of these Orders, with a sealed copy to be provided to the respondents by 12 noon on 22 September 2008.
(10)The matter be adjourned to 24 September 2008 at 2.15pm for mention.
On 24 September 2008, the proceedings came before me and the following orders were made:
(1)The proceedings, including the wife’s urgent application for maintenance, be adjourned to 29 October 2008 at 9.30am for mention.
(2)Leave be given to the applicant to orally amend her Application filed 18 September 2008 to seek the orders set out in paragraphs 2-6 of a document entitled ‘Short Minutes of Proposed Order’ submitted in Court today, with the written form of the Amendment to be filed within 7 days of today’s date.
(3)The first respondent file and serve any Response, Affidavit and Financial Statement by 4pm today.
(4)The second respondent file and serve any affidavits in support of the second respondent’s Response, within 7 days.
(5)Pending further order, and on the continued undertaking as to damages provided by the applicant:
a. The injunctions made by the Court on 19 September 2008 in Orders 1-6 be continued to 5pm on 29 October 2008, and
b. The injunction made by the Court on 19 September 2008 in Order 7, be varied by the deletion of the word ‘salary’ and otherwise continue to 5pm on 29 October 2008.
(6)Leave be granted to Ms Reid to make oral submissions on behalf of the first respondent on today’s appearance.
(7)The parties forward to my Associate by 5pm on 17 October 2008, submissions referrable to the issue of Ms Reid’s standing to continue to make submissions on behalf of the first respondent, the effect of the amendments to the Bankruptcy Act and the Family Law Act and as to whether they would affect bankruptcies existent prior to 2005 and in particular this matter.
The wife’s application as amended, pursuant to paragraph 3(2) above, sought the following further orders:
a)That the first and/or second respondent pay to the applicant urgent spouse maintenance pursuant to s.77 of the Family Law Act, an amount of $20,000.00.
b)That the first and/or second respondent pay to the wife, lump sum spouse maintenance in a sum and for a period to be determined after production of the first respondent’s income tax returns for the years 2000-2007.
c)In the alternative to b) above, that the first and/or second respondent pay continuing spouse maintenance to the applicant on a weekly basis in a sum and for a period to be determined after production of the first respondent’s income tax returns for the years 2000-2007.
d)That the applicant’s application for property settlement be adjourned pursuant to the provisions of s.78(5) of the Act to a date after the first respondent’s discharge from bankruptcy;
e)That the first and/or second respondent pay the applicant’s costs on an indemnity basis.
The first respondent has appeared represented by his solicitor, Ms Reid and has filed a formal Response on 24 September 2008, seeking an order that the wife’s application be dismissed.
The second respondent as the Trustee of the property of the first respondent’s bankrupt estate has by his Response filed 24 September 2008, sought orders, that the proceedings as against him be dismissed with the applicant to pay his costs.
The applicant relies on her affidavit sworn 17 September 2008 and filed on 18 September 2008.
By consent of the parties, the Court allowed a further amendment to the wife’s application to properly describe the second respondent as “The Trustee of the Property of Mr Zachary, a Bankrupt”.

Background facts

The husband was born in August 1957 and is now aged 51 years.
The wife was born in December 1958 and is now aged 49 years.
The parties commenced living together in late 1981, married in January 1984 and ultimately separated on 3 July 2000.
The parties have four children, namely, [W] now aged 24; [X] now aged 22; [Y] now aged 18; and [Z] now aged 16.
On 23 November 2000 the wife commenced property proceedings in the Canberra Registry of the Family Court of Australia proceedings number 1712/2000. These proceedings were not finalised and interim orders in respect of property were made on 8 December 2000. At the time of making the interim orders, a notation was made to the following effect:
“The interim financial arrangements made as part of these Orders are agreed to be without prejudice to the parties' final positions in relation to property and maintenance issues.”
On 8 October 2003, the first respondent presented a Debtor’s Petition to the Official Receiver for the Bankruptcy District for the State of New South Wales which was accepted, pursuant to s.55 of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”), on that day. At that time Mr R became Trustee of the property of the first respondent, a bankrupt. The first respondent’s date of bankruptcy being 8 October 2003.
On 25 August 2006, a Notice of Objection to Discharge of the first respondent from his bankruptcy was lodged pursuant to s.149B(1) of the Bankruptcy Act and as a result, the period of time before which the bankruptcy of the husband would end was extended from 6 October 2006 (when he would have been, in the normal course of events, discharged from his bankruptcy) until 9 October 2011.
On 6 March 2008, the parties were divorced.
On 14 July 2008 Mr K was appointed Trustee of the property of the first respondent in the place of Mr R.
On 18 September 2008, the applicant filed an application in this Court seeking property relief. This application now seeks, as set out above, orders with respect to both property and maintenance.

Submissions

The second respondent submits that no basis has been shown as to why he should be restrained from fulfilling his statutory duties and functions as Trustee pursuant to s.19 of the Bankruptcy Act. The second respondent seeks that the orders made on 24 September 2008 not be further extended and that they be allowed to expire at 5pm today.
Further, the second respondent submits that this Court lacks jurisdiction to make the orders sought by the applicant as against him.
By operation of s.58 of the Bankruptcy Act (subject to s.59A of that Act), “property”, vests forthwith in the Trustee of the property of the bankrupt (in this case, the second respondent), in effect, retrospectively to the date of commencement of the bankruptcy. At that time, the rights of all creditors are regulated in accordance with the provisions of the Bankruptcy Act and the entitlement of unsecured creditors (except in certain instances not relevant here) are converted from a right to recover against the first respondent into a right to prove in the administration under s.82 of the Bankruptcy Act and to share in any distribution out of the divisible property of the first respondent within the terms of s.116(1) of the Bankruptcy Act rateably with each other in accordance with the priorities set out in s.109 of the Bankruptcy Act.
The date of commencement of bankruptcy, having regard to the provisions of s.115(2) of the Bankruptcy Act is the date of the first available act of bankruptcy before the date of bankruptcy or the date of bankruptcy, if there was no other relevant date.
The first respondent’s shares in the third respondent vested either upon the date of the bankruptcy of the first respondent or as after acquired property upon their acquisition by him or issue to him. The second respondent’s investigations have not identified when such shares were so acquired or issued. However, some 342,958 ordinary fully paid shares were beneficially owned as at the time of the ASIC search of the third respondent on 27 June 2008, which at that time still records ownership in the name of the first respondent.
Any amount due to the first respondent as assessed income contributions arising during the period of bankruptcy, however, is not property vested in the second respondent as Trustee.
The second respondent has submitted that he does not seek to participate in these proceedings:
a)To the extent that they involve disputes as to parenting, custody and /or maintenance;
b)To the extent that they involve non-divisible property.
The first respondent does not wish to be heard in relation to the second respondent’s jurisdictional argument.

The Law

By virtue of the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth) (“the Amending Act”), the Court was given jurisdiction to make orders with respect to vested bankruptcy property in relation to a party to the marriage who was bankrupt.
Item 60 of Part 2 of Schedule 1 to the Amending Act states as follows:
60 Application of amendments
(1) Subject to sub-items (2) and (3), the amendments of the Family Law Act 1975 made by this Schedule , to the extent to which they relate to bankruptcies or personal insolvency agreements, apply in relation to:
(a)bankruptcies for which the date of the bankruptcy is after the commencement of this item; and
(b) personal insolvency agreements executed before, at or after the commencement of this item.
(2) The following provisions:
(a) subsections 74(2), (3) and (4) of the Family Law Act 1975 as amended by this Schedule;
(b) subsection 74(8) of the Family Law Act 1975 as amended by this Schedule, to the extent to which that subsection relates to subsection 74(2) of the Family Law Act 1975 as amended by this Schedule;
(c) the definitions inserted in subsection 4(1) of the Family Law Act 1975 by this Schedule, to the extent to which those definitions relate to subsections 74(2), (3) and (4) of the Family Law Act 1975 as amended by this Schedule;
apply to proceedings instituted after the commencement of this item, whether the date of the bankruptcy is before, on or after the date of commencement of this item.
(3) The following provisions:
(a) subsections 79(11), (12) and (13) of the Family Law Act 1975 as amended by this Schedule;
(b) subsection 79(17) of the Family Law Act 1975 as amended by this Schedule, to the extent to which that subsection relates to subsection 79(11) of the Family Law Act 1975 as amended by this Schedule;
(c) the definitions inserted in subsection 4(1) of the Family Law Act 1975 by this Schedule, to the extent to which those definitions relate to subsections 79(11), (12) and (13) of the Family Law Act 1975 as amended by this Schedule;
apply to proceedings instituted after the commencement of this item, whether the date of the bankruptcy is before, on or after the date of commencement of this item.
It is clear that in respect of a bankruptcy entered before the commencement date of the Amending Act being 18 September 2005, there was no jurisdiction in the Court to deal with the vested bankruptcy property of a bankrupt party to the marriage. In those circumstances, the Court would adjourn the proceedings until after the bankrupt party was discharged, when the Court could then deal with whatever assets the former bankrupt possessed. The power to adjourn being conferred under s.79(5) of the Family Law Act.

The Amending Act did not, in any event, give the Court jurisdiction to deal with property other than “vested bankruptcy property”. Accordingly, property coming to the possession of the second respondent as a result of the operation of other provisions of the Bankruptcy Act (such as the income contribution scheme or as a result of proceedings under the anti-avoidance provisions) which moneys do not fall within the concept of “vested property” for the purposes of the Bankruptcy Act and are held solely for the purposes of distribution amongst creditors and not for the benefit of the bankrupt would not be within the Court’s jurisdiction to deal with.

Findings

The Court accepts the submissions of Mr Johnson that the applicant’s present application seeks relief only under the provisions of the Family Law Act and accordingly, this Court’s original jurisdiction under the Bankruptcy Act is not engaged.
The Court further accepts the submissions of Mr Johnson that this Court does not have jurisdiction over the second respondent under the Family Law Act for the following reasons:
a)The Transitional provisions contained in Item 60 of Part 2 Schedule 1 of the Amending Act, as set out above, make it clear that the operative provisions of s.79(1)-(10) of the Family Law Act do not operate where the date of bankruptcy, as here, is prior to 18 September 2005.
b)The Court does not accept Mr Thomas’ submission that the extension of the life of the bankruptcy on 25 August 2006 in effect creates a further or new act of bankruptcy, in this case, after the date of amendment of the Family Law Act, so as to give the Court the power to deal with the vested estate of the first respondent in this case.
c)The said Transitional provisions make it clear that the operative provisions relating to maintenance of s.74 (2), (3), (4) and (8) and relating to property of s.79(11), (12), (13) and (17) of the Family Law Act which apply to bankruptcies existing both before and after 18 September 2005 do so on the basis that it is the second respondent who must apply “to be joined as a party to the proceedings”. The second respondent has not applied in these proceedings. The Court does not accept Mr Thomas’ submission that there is no significant difference between the Trustee making an application to be joined and the applicant in this case, joining the Trustee.
d)There is little factual evidence before the Court for it to determine the nature of the unpaid commissions, (save Mr Johnson’s submission that the amount is about $70,000.00) in terms of whether they are characterised as property which vests in the Trustee or as income which would be exempted property. Whilst the definition of property in s.5 of the Bankruptcy Act is wide enough to encompass income, see Re Gillies; Ex-parte Official Trustee in Bankruptcy Re Gillies (1993) 42 FCR 571 (French J. as he then was). Division 4B of the Act establishes a comprehensive scheme and accordingly where it is inconsistent with ss.58 and 116, Division 4B applies rather than those last mentioned sections. Accordingly if the relevant item has an income nature, it will not vest in the Trustee, see Re Sharpe; Ex-parte Donnelly (1998) 80 FCR 536 (Lockhart J.). The Court is of the view that if the loan account in the third respondent is property it has been derived out of income and would not be divisible under s.116 of the Bankruptcy Act.
e)Section 139P of the Bankruptcy Act states, subject to s.139Q of that Act, that if the income that a bankrupt is likely to derive during a contribution assessment period as assessed by the Trustee under an original assessment exceeds the actual income threshold amount applicable in relation to the bankrupt when that assessment is made, then the bankrupt is liable to pay to the Trustee a contribution in respect of that period. Income over and above the amount the bankrupt is required to pay to the Trustee and which is accumulated is not after acquired property which vests in the Trustee. The bankrupt is entitled to deal with that surplus income for example by way of an offer to creditors when proposing a composition in satisfaction of debts see Re Gilles (supra). The contribution payable by a bankrupt is determined by the application of the formula set out in s.139S. Any assessments made by the Trustee may be the subject of review by the Inspector General and then the Administrative Appeals Tribunal. The contributions that a bankrupt is liable to pay may be payable at such times as the Trustee determines and the Trustee may permit such sums to be paid by instalments. The total of any contributions or instalments that are not paid by the bankrupt are recoverable by the Trustee as a debt due to the estate of the bankrupt. The Trustee under s.139ZG may sign a Certificate setting out the nature and the amount of the debt and file such certificate in the Court in which proceedings have been instituted and that Certificate will be prima facie evidence of the existence and the amount the debt. The Certificate so issued essentially shifts the onus of proof from the Trustee to the bankrupt. However, the bankrupt still has standing to contest the debt and adduce evidence to show why such an assessment should not be accepted and to attack the validity of any underlying certificate.
f)The second respondent has certain rights under the Bankruptcy Act, to have the Official Receiver issue, in effect, a statutory garnishee notice to the third respondent to pay the outstanding debt towards the income contribution, creating in effect a statutory charge in favour of the second respondent.
g)To the extent that the applicant seeks relief under s.79 and/or s.74 of the Family Law Act in respect of:
i)vested property within s.58 of the Bankruptcy Act (s.59A of the Bankruptcy Act having no application) and the Court accepts the shares in the third respondent are in this category as are any dividends received on those shares; and/or
ii)monies (being the commission income that the first respondent has received from the third respondent deposited into a loan account in his name) which become payable to the second respondent on account (relevantly) of assessed Income Contributions which have accrued or which will accrue during the period of the bankruptcy, being a debt due by the first respondent to the second respondent, held for the benefit of the Trustee’s remuneration and the creditors entitled to participate in the bankruptcy under his administration,
they are beyond power. This is so, notwithstanding any agreement by the Trustee, as jurisdiction cannot be conferred on the Court simply by the consent of the parties.
Accordingly, property and maintenance proceedings can only be maintained against the first respondent in respect of the property not vested in the second respondent. While the Court accepts Mr Thomas’ submission that the Court must under s.75(2)(b) of the Family Law Act take into account the income property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment, the lack of any awareness by the applicant of such matters can be remedied by a subpoena to the second respondent rather than seeking to join the Trustee.
It is the Court’s view that the proceedings should be dismissed as against the second respondent. The Court, in these circumstances, does not need to consider the arguments raised by Mr Johnson that the Court should discharge the injunctions on the basis of being satisfied that the applicant could not meet any undertaking as to damages.
In light of the above, the Court is also of the view that the first respondent will otherwise remain a party and in such circumstances, Ms Reid would be entitled to make submissions on his behalf as any submissions to the Court would necessarily relate to non vested bankruptcy property (that is exempt property including income, superannuation or financial resources). In those circumstances,

Ms Reid would not need leave under ss.79(12) and (13) and ss.74(3) and (4) of the Family Law Act which provide as follows:
s.79(12) If a bankruptcy trustee is a party to property settlement proceedings, then, except with the leave of the court, the bankrupt party to the marriage is not entitled to make a submission to the court in connection with any vested bankruptcy property in relation to the bankrupt party.
s. 79(13) The court must not grant leave under subsection (12) unless the court is satisfied that there are exceptional circumstances.
s.74(3) If a bankruptcy trustee is a party to proceedings with respect to the maintenance of a party to a marriage, then, except with the leave of the court, the bankrupt party to the marriage is not entitled to make a submission to the court in connection with any vested property in relation to the bankrupt party.
s.74(4) The court must not grant leave under subsection (3) unless the court is satisfied that there are exceptional circumstances.
In any event, even if the Court was required to find exceptional circumstances, the Court is satisfied that such exceptional circumstances exist here, based on the need to afford the first respondent procedural fairness in being able to make submissions referrable to the impact of the injunctions on him and in respect of any orders seeking periodic and urgent spousal maintenance and costs as these would otherwise have a direct impact on him in:
a)being able to financially support his children;
b)being able to meet his day to day living expenses;
c)being able to meet his obligations to his creditors and the Trustee in bankruptcy;
d)being able to discharge his bankruptcy.
In light of the above, Ms Reid’s submissions referrable to the applicant’s alleged failure to fully inform the Court of material circumstances relating to her application for ex-parte injunctive relief do not need to be considered in support of her application for leave to make submissions. Those matters go, however, to whether the injunctions granted ex-parte should be continued as against her client. As this matter was not argued at this stage of the proceedings, this issue will be dealt with on the next occasion when the applicant will be given an opportunity to respond.
Mr Johnson further submitted that his client’s instructions were to withdraw the objection to the first respondent’s discharge from bankruptcy, the first respondent having now provided information previously sought by the second respondent and his failure to provide that information being the basis for the second respondent’s objection to the first respondent’s discharge. Pursuant to s.149A(3)(b) of the Bankruptcy Act, the discharge occurs immediately the objection is withdrawn upon its formal lodgement. This then would enable the first respondent to participate, as much as he wishes, in the current proceedings.
Further, as there is no indication of any intention by the second respondent to take action of the type sought to be injuncted, the injunction should be discharged.
As the Court is of the view that the injunctions against the second respondent should be discharged, similarly, injunctive order 2 as against the first respondent must also be discharged. The injunctions against the third respondent will remain. If the second respondent wishes to do something about that, then that is a matter for the second respondent. If the second respondent withdraws his objection to the first respondent’s discharge, then the second respondent will have no further statutory role in relation to any income contributions as the Court understands there has been no formal assessment, in any event.
Further, the applicant in seeking to maintain an injunction against the second respondent does so in circumstances where the second respondent says he is unable to fulfil his statutory obligations. The Court is of the view that in such circumstances, leaving aside the question of jurisdiction, the Court should not exercise its discretion to further restrain the second respondent.

I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of Kemp FM

Associate: Joanne Balson

Date: 13 November 2008