Re Christopher Charles Skase Ex Parte: Max Christopher Donnelly [1992] FCA 429; (1992) 37 FCR 509 (1992) 114 ALR 303 (4 September 1992)

FEDERAL COURT OF AUSTRALIA

Re: CHRISTOPHER CHARLES SKASE
Ex parte: MAX CHRISTOPHER DONNELLY
No. Q B1253 of 1991
FED No. 660
Bankruptcy - Practice and Procedure - Costs
[1992] FCA 429; (1992) 37 FCR 509
(1992) 114 ALR 303

COURT

IN THE FEDERAL COURT OF AUSTRALIA
BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND
GENERAL DIVISION
Drummond J.(1)

CATCHWORDS

Bankruptcy - application under s. 264B(1)(a) of Bankruptcy Act 1966 (Cth) for issue of warrants for arrest of bankrupt and his wife for non-compliance with s. 81(1) summons - respondents both outside jurisdiction - applicant conceded no power to execute warrants if issued - discussion of elements of s. 264B(1) - finding that court had power to issue - futile exercise to issue - application for warrants dismissed

Practice and Procedure - application for transfer of records and documents relating to bankrupt's estate to New South Wales Registry - no express power of transfer contained in Bankruptcy Act or Bankruptcy Rules - transfer order made pursuant to s. 30(1)(b) of the Bankruptcy Act and rule 113(1) of the Bankruptcy Rules.

Costs - no order as to costs in relation to application for warrant for bankrupt's arrest - detailed consideration of bankrupt's misconduct leading up to making of application and prior to hearing - successful bankrupt deprived of his costs even though trustee brought futile application

Bankruptcy Act 1966 (Cth) - ss. 30(1)(b), 32, 81, 264A and 264B

Bankruptcy Rules - rr. 113 and 115

Cummings v Lewis (unreported) (NG 668 of 1989, 29 May, 1992: Wilcox J

Gold Star Publications Ltd v Director of Public Prosecutions (1981) 1 WLR 732

Re Skase (1991) 104 ALR 229

HEARING

BRISBANE
4:9:1992

Counsel for the trustee: S.G. Finch

Solicitors for the trustee: Allen Allen and Hemsley

Counsel for the bankrupt: A.J.H. Morris

Solicitors for the bankrupt: Kenny and Loel

ORDER

THE COURT ORDERS THAT:

1. The application for the issue of warrants for the arrest of
Mr and Mrs Skase is dismissed.
2. In relation to the application for the issue of a warrant
for the arrest of Mr Skase, there will be no order as to
costs.
3. The Registrar in Bankruptcy for the Bankruptcy District of
the State of Queensland ("the Queensland Registrar")
transmit to the Registrar in Bankruptcy for the Bankruptcy
District of the State of New South Wales ("the New South
Wales Registrar") the records and documents relating to the
estate of Christopher Charles Skase No. QB 1253 of 1991
which are within the custody of the Queensland Registrar.
4. Upon the transmission of the records and documents referred
to in order 3, the administration of the estate of
Christopher Charles Skase pursuant to the filing and
acceptance of debtor's petition dated 13 June, 1991 and all
proceedings connected therewith continue in all respects as
if the said debtor's petition had been filed and accepted in
the Bankruptcy District of the State of New South Wales.
5. Upon receipt of the said records and documents the New South
Wales Registrar take all such steps as may be necessary or
appropriate to give effect to order 4 hereof, including,
without limiting the generality of the foregoing, the
assignment of such number and/or heading to be used in the
entitlement of documents as may be convenient.
6. The costs of the application for transfer are the trustee's
costs in the administration of the estate of Christopher
Charles Skase.

NOTE: Settlement and entry of orders is dealt with in Rule 124 of

the Bankruptcy Rules.

DECISION

This is an application by the trustee in the bankruptcy of Christopher Skase for the issue of a warrant for his arrest based upon Mr Skase's failure to attend for examination in relation to his bankruptcy before the Registrar.

2. The trustee also seeks the issue of a warrant for the arrest of Mr Skase's wife, based upon her own failure to attend for examination in relation to her husband's bankruptcy. Unlike her husband, she was not represented in the proceedings before me.

3. The Registrar issued a summons under s. 81(1) of the Bankruptcy Act 1966 requiring Mr Skase's attendance before the Registrar on 11 November, 1991 for public examination concerning his bankruptcy. On 20 September, 1991 Pincus J ordered that this summons be served on Mr Skase by service of it on Brisbane solicitors with respect to whom Mr Skase had earlier given certain undertakings to the Court.

4. The Registrar also issued a summons requiring Mrs Skase's attendance on 3 December, 1991 for examination in relation to her husband's bankruptcy; Pincus J, on 3 October, 1991, ordered that substituted service of this summons be effected on Mrs Skase in accordance with the directions he then gave.

5. Mr and Mrs Skase were ordered to be served by these procedures because they are outside the jurisdiction: both live on the island of Majorca.

6. Neither, however, attended before the Registrar as required by the summons directed to each of them.

7. On 11 November last, the Registrar adjourned the matter to 3 December, on which date he adjourned the examination of Mr Skase to the Court under s. 81(4) of the Bankruptcy Act. He did this because of doubts about whether warrants could be issued for their arrest under s. 264B(1) of the Bankruptcy Act, given that both Mr and Mrs Skase are outside the jurisdiction. On 3 December he made a similar order following the non-appearance of Mrs Skase.

8. It quickly emerged at the hearing before me that the question the trustee seeks to have determined is a very narrow one: his counsel conceded that there was no basis upon which any warrant that might be issued for the arrest of either Mr or Mrs Skase could be executed on them, unless they first returned from Spain to Australia. He submitted, however, that a warrant can still issue under s. 264B(1) for the arrest of a person who at the time is resident outside Australia, although it cannot be executed unless and until that person enters the country.

9. Counsel for the trustee said "there is marginal utility at best" in having warrants issued against Mr and Mrs Skase when the warrants cannot be executed in Majorca, but he nevertheless pressed his application. Counsel submitted that the evidence showed a deliberate reluctance on the part of Mr Skase to state clearly whether he would return for his examination and a similar reluctance to expose the precise nature of any reason that there may be preventing his return. The trustee apparently has in mind that if Mr or Mrs Skase were ever to return to Australia, they could be arrested immediately.

10. By his application, the trustee is really asking the Court to make a gesture of disapproval of Mr Skase's conduct in refusing to meet the trustee's requests for his return to the country for his public examination. If made, the gesture sought by way of the issue of a warrant will be an empty one, since the warrant cannot be executed unless and until Mr Skase chooses to return to the country. Only then could a warrant of the kind the trustee here seeks be effectual to authorise his arrest and his being brought before this Court. It seems to me that the issue of the warrant sought would not only be an empty gesture, for the reason I have mentioned, but an unnecessary one too. Mr Skase knows that the trustee now has an intention to seek to arrest him if he returns to Australia; if Mr Skase were to decide to return to Australia, it is likely that he would only do that if he had also decided to co-operate with his trustee and submit to an examination in his bankruptcy. It is unlikely in the extreme that the issue of a warrant that cannot be executed on Mr Skase will generate co-operation on his part with the trustee that would not otherwise be forthcoming.

11. Assuming I have power to issue such a warrant, I would not be prepared, as a matter of discretion, to exercise that power because the issue of a warrant for the arrest of Mr Skase will not, in my view, serve any useful purpose.

12. There is nothing on the material before me to suggest that the return to Australia of Mr Skase may be imminent or that a situation is likely to arise in the future in circumstances in which Mr Skase may have to return to the country for compelling reasons and irrespective of whether or not there is a warrant in existence here available for execution on him immediately upon his re-entry. In short, there is no evidence to suggest that the trustee has any reason to think that Mr Skase has any plans to return to the country in circumstances in which those plans will be unaffected by the existence of a warrant for their arrest here.

13. The same considerations lead me to refuse to issue the warrant sought for the arrest of Mrs Skase.

14. In addition to submitting that there were good discretionary reasons for rejecting the trustee's application, counsel for Mr Skase submitted, for a number of other reasons, that the warrant should not issue.

15. He submitted that s. 264B(1), on its proper construction, did not empower the issue of a warrant, when the person whose arrest was sought was outside Australia at the time.

16. Section 264B(1) to (4) provides:

"(1) Subject to sub-section (2), where a person who is
served, whether before or after the commencement of
this section, with a summons referred to in
sub-section 264A(1) -
(a) fails to attend before the Court, the Registrar
or the magistrate, as the case may be, as
required by the summons; or
(b) fails to appear and report himself from day to
day as required by the Court, the Registrar or
magistrate, as the case may be,
the Court, the Registrar or the magistrate, as the
case may be, may, on proof by affidavit of the service
of the summons, issue a warrant for the apprehension
of the person.
(2) The Court, the Registrar or the magistrate shall not
issue a warrant under sub-section (1) for the
apprehension of a person mentioned in paragraph
264A(1)(a) or (b) who has failed to attend for
examination under a provision of this Act, or to
appear as a witness before the Court, as required by a
summons under this Act unless the Court, the Registrar
or the magistrate, as the case may be, is satisfied,
on proof by affidavit, that the person was tendered a
reasonable sum for expenses.
(3) A warrant issued under sub-section (1) authorizes the
apprehension of the person and his being brought
before the Court, the Registrar or the magistrate, as
the case may be, and his detention in custody until he
is released by order of the Court, the Registrar or
the magistrate, as the case may be.
(4) A warrant issued under sub-section (1) may be executed
by a constable and a constable executing the warrant
has the power to break and enter any place or building
for the purpose of executing the warrant."

17. The submissions by counsel for the trustee on this issue were brief: power to issue a warrant under the section is conditioned in terms of s. 264B(1) only upon the failure of the bankrupt to attend for examination after service on him of a summons under s. 81. There is no reason to read down the section by implying a further condition that the bankrupt must be within the jurisdiction before a warrant can issue following his non-attendance, even though it cannot be executed until the bankrupt enters Australia.

18. Counsel for Mr Skase submits that this implication should be made, because the machinery for dealing with a bankrupt who fails to comply with a summons issued under s. 81(1) and which is contained in s. 264B is inappropriate in the case of a person who is outside Australia, for the following reasons:

(a) The warrant, by s. 264B(1), is for "the apprehension
of the person" who has failed to answer the summons
and such a warrant cannot authorise the apprehension
of a person anywhere outside Australia;
(b) The warrant, by s. 264B(3), identifies the purpose of
the apprehension of the person authorised by the
warrant as "his being brought before the Court ... and
his detention in custody until he is released by order
of the Court ...". Since a warrant cannot be executed
on a person outside the jurisdiction, the purpose
which the statute intends the warrant to achieve
cannot be satisfied.
(c) By s. 264B(4), it is provided that a warrant "may be
executed by a constable and a constable executing the
warrant has the power to break and enter any place or
building for the purpose of executing the warrant."
The term "constable" is defined in s. 5(1) to mean "a
member or special member of the Australian Federal
Police or a member of the Police Force of a State or
Territory". Such a warrant can confer no authority on
the police officer charged with executing it to break
buildings outside the jurisdiction.

19. It was common ground, as I have said, that the warrants sought here cannot be executed in Majorca. These considerations, so it was said, reinforced the appropriateness of applying to the construction of s. 264B the presumption against extra-territorial operation. There is a presumption that Parliament does not intend, in the absence of clear words, to enact legislation that has an extra-territorial operation. Lord Simon in Gold Star Publications Ltd. v Director of Public Prosecutions (1981) 1 WLR 732 at 737 said, of this presumption:

"... two concepts lie behind this rule. First, that
Parliament does not legislate where it has no effective
power of enforcement ... the rule is also based on
international comity. Other than quite exceptionally,
sovereigns do not meddle with the subjects of foreign
sovereigns within the jurisdiction of those foreign
sovereigns ..."

20. Insofar as this presumption is based upon international comity: "Since s. 7(1) expressly extends the Bankruptcy Act (and not by way of presumption) to 'persons who are not Australian citizens', there would not appear to be much room left for the operation of the presumption against parliament's purporting to govern foreigners": Re Skase (1991) 104 ALR 229 at page 232. The presumption is founded upon the notion that Parliament does not ordinarily pass a law that it cannot effectively enforce that there is room for its application here.

21. However, the Bankruptcy Act contains a number of indications that the Court can exercise powers in relation to persons who are not physically present within the jurisdiction. For example, s. 43(1)(b)(iii) and (iv) empower the making of a sequestration order against the estate of persons who are not at the time in the jurisdiction and whether or not they are domiciled in Australia. See Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR 256, 260 and Re Trimbole; Ex parte Deputy Commissioner of Taxation (1984) 4 FCR 586. A debtor outside the jurisdiction can be effectively served with a summons under s. 81(1) and with a creditor's petition pursuant to s. 309(2) and rule 113(1) of the Bankruptcy Rules: see Re Mendonca and Re Skase at page 233.

22. In Re Skase the question for Pincus J was whether a summons could be issued under s. 81(1) of the Bankruptcy Act to Mrs Skase requiring her attendance before the Court for examination in relation to her husband's bankruptcy; Mrs Skase at the time was residing in Majorca. His Honour held that a summons could issue although he recognised that there could be difficulties about enforcement if Mrs Skase did not comply with the summons, as has in fact happened. He said, at pages 232-3:

"A distinction must be drawn between the power to issue the
summons and the question of service and enforcement ... In
the absence of decisive authority, I propose to follow the
example set in the Seagull Manufacturing Co. case, and to
read the expression 'examinable person' in s. 81 of the Act
literally, without any implication that the person must be
present within the jurisdiction at the time of issue of the
summons."

23. His Honour's comments, with which I respectfully agree, are equally applicable to s. 264B(1). Since a summons can be issued under s. 81(1) directed to a person outside the jurisdiction to attend for examination at a place in Australia and effectively served on that person, there is good reason for drawing a distinction between the power to issue a warrant where such a summons is not obeyed and the question of execution of that warrant.

24. Given that Re Skase establishes that a summons issued under s. 81(1) of the Bankruptcy Act can be effectively served on a person outside Australia requiring his attendance for examination at a place within Australia, I can see no reason, against the statutory background to which I have referred, for finding by a process of implication an impediment to the exercise of the power conferred by s. 264B(1) where there is non-compliance with such a summons.

25. The power to issue the warrant is conditioned only on the failure of the person in question to attend for examination after he has been served with the summons. There is no reason to apply to the construction of the provision empowering the issue of a warrant, s. 264B(1), the presumption against extra-territoriality, even though it is clear from the rest of that section that Parliament did not intend that such a warrant would be executed outside Australia.

26. I hold that there is power under s. 264B(1) to issue a warrant for the arrest of a person who at the time of the issue of the warrant is outside the jurisdiction, even though such a warrant cannot be executed unless and until the person comes into the jurisdiction.

27. Once it is concluded that s. 264B(1) authorises the issue of a warrant even though the person whose arrest it authorises is outside Australia, the next question is whether, in terms of s. 264B(1), there is "proof by affidavit of the service of the summons" issued under s. 81(1) of the Bankruptcy Act on Mr and Mrs Skase.

28. It was submitted that, since it is an offence against s. 264A(1A) if there is a failure to attend as required by a summons, and since s. 264B(1) empowers the issue of a warrant where there is a failure to attend as required by a summons, these two provisions are relevantly identical: each requires proof that a person has failed to attend as required by the summons served on the person. Because proof of an offence under s. 264A(1A), it was submitted, must require proof of personal service of the summons, so s. 264B(1) must also require proof of personal service of the summons, before the power to issue a warrant can arise.

29. I reject this submission. In view of s. 309(2) and rule 113(1) and the decision in Re Skase, I doubt that where a summons issued under s. 81(1) is served on a person, not personally, but pursuant to directions made by the Court under these provisions it can be said that that is not good service for the purpose of s. 264A(1A)(a) although proof by the person served in accordance with such directions that he did not become aware of the existence of the summons might well be "reasonable excuse", within the sub-section, for his non-attendance. None of these considerations, however, is relevant to the construction of s. 264B(1).

30. While it is an offence under s. 264A(1A) for a person summoned for examination under s. 81(1) to fail to attend as required by the summons without reasonable excuse, s. 264B(1) does not condition the power to issue a warrant on the Court being satisfied that there is no lawful excuse for the person's non-attendance: the power to issue the warrant is conditioned only upon proof of the service of the summons issued under s. 81(1) and the failure of the person to attend as required by the summons.

31. The submission would have had substance if made in relation to the precursor of s. 264B(1), s. 81(2) in the form in which it stood at the time Re Wyatt (1969) 15 FLR 374 was decided. However, s. 264B(1) is quite different from the old s. 81(2).

32. As to Mr Skase, an order was made by Pincus J on 20 September, 1991 for the service on him of the summons issued under s. 81(1) by delivering a copy of the summons to certain Brisbane solicitors. That order has not been appealed. There is evidence that it was complied with. I am satisfied there is "proof by affidavit of the service of the summons" on Mr Skase sufficient for the purposes of s. 264B(1). On 3 October, 1991 Pincus J also made an order for the substituted service of the summons issued under s. 81(1) on Mrs Skase. That order, too, has not been attacked by way of appeal. There is evidence before me to show that it was complied with. I am similarly satisfied that there is proper proof of service of the summons issued under s. 81(1) on Mrs Skase.

33. However, the power to issue a warrant under s. 264B(1) is discretionary and acceptable evidence showing that a person has failed to attend as required by a summons because he is unable to travel would be a powerful discretionary factor telling against the issue of a warrant.

34. Because I have decided that, as a matter of discretion, the warrants should not issue because that would involve a futile exercise, futile for ever so long as Mr and Mrs Skase decline to return voluntarily to Australia, it is not necessary to consider whether the warrant sought with respect to Mr Skase should not issue, as a matter of discretion, in view of the medical evidence as to Mr Skase's incapacity to travel to Australia.

35. But there remains the question of the order that should be made as to the costs of the proceedings so far as they involve Mr Skase. No question arises in relation to Mrs Skase, although I have refused the trustee's application for a warrant for her arrest, because she did not take any part in the proceedings.

36. While I will hear from the parties on costs, it is appropriate, so far as the costs of the proceedings for the issue of the warrant is concerned, that the parties know the views I have formed on the material before me on the way Mr Skase has conducted things on his side and which are relevant to that matter. Because of these views, I do not think it will automatically follow that Mr Skase, as the successful party, should have the benefit of the general rule that costs follow the event. What is to be done about costs will depend upon the submissions made to me.

37. Mr Skase has conducted himself in a way designed to give the appearance of willingness to attend for public examination in his bankruptcy when, in truth, he had no such intention.

38. Whether or not there was a medical reason which might have justified his non-attendance for public examination at the request of his trustee, and thus the refusal to the trustee of a warrant for his arrest, Mr Skase has also acted so as to ensure that the medical opinions upon which he relied in the proceedings before me as a ground for submitting that no warrant should issue could not be tested by the trustee.

39. It was also submitted by counsel for Mr Skase that "the issue of a warrant will achieve nothing for the estate, but may be seriously detrimental to Mr Skase's personal reputation, including his ability ever to rehabilitate himself financially after his discharge from bankruptcy." This is a surprising submission insofar as it raises a matter which really does call for an explanation of his concerns from Mr Skase personally. Yet none is forthcoming. It is apparent that while Mr Skase has no intention of returning to Australia to co-operate with his trustee in the administration of his estate unless and until it suits him to do so, he has reasons, not disclosed to the Court, for very much wanting to avoid the issue of a warrant for his arrest. This I think explains much of his conduct in connection with his proposed public examination to which I will refer and which I think was designed to create the impression that he is eager to co-operate.

40. My reasons for coming to these conclusions follow.

(a) On 27 June, 1991 Mr Skase, by his solicitor, gave a
written undertaking to Mr Pocock, his original
trustee in bankruptcy, who returned Mr Skase's
passport to him, to return to Australia on 4
September, 1991. The applicant trustee was appointed
in place of Mr Pocock on 2 August, 1991; he wrote
that same day to Mr Skase advising that he was
holding him to his undertaking and sought confirmation
by 6 August that he would be back in Australia by 4
September, 1991. The reply came on 12 August from Mr
Skase's London solicitors: they asserted 4 September
was "no more than a provisional date" suggested by Mr
Pocock for Mr Skase's possible return and was subject
to the unlikely event of being able to be fitted in to
Mr Skase's itinerary.
(b) From 12 August to 3 September, Mr Skase's London
solicitors, the trustee's solicitors and the trustee
himself engaged in quite protracted correspondence in
which Mr Skase's solicitors pressed for an increasing
range of information from the trustee, but never
responded to the request from the trustee for
confirmation that Mr Skase would be in Australia by 4
September. The consequence of this was that on 4
September, 1991, the trustee informed Mr Skase's
solicitors that, because of the absence of
confirmation of his return to Australia, the trustee
had had to cancel the public examination originally
planned to take place on 9 and 10 September, but had
obtained alternative dates from the Court, 18 to 20
September; this was a course which a perusal of the
correspondence shows was forced on the trustee. The
trustee sought confirmation that Mr Skase would
attend in Brisbane on the later occasion. Mr Skase's
solicitors, in their reply, asserted his willingness
to return to Australia, declined to give the
confirmation sought as to Mr Skase's attendance at
the postponed public examination and observed: "Both
we and our client are disappointed that your clients
arbitrarily 'vacated' the possible examination dates
of the 9th and 10th September, without consultation."
(c) The trustee's request for advice as to just when Mr
Skase intended to return to Australia so that he could
ask the Court to provide an examination date that
would fit in with Mr Skase's schedule produced a
response from Mr Skase's solicitors on 6 September
reaffirming Mr Skase's willingness to return to
Australia and asserting that he was at all times
prepared to meet the undertaking he gave to Mr Pocock
to return to Australia and was in fact willing to be
in Australia on 4 September. That date having passed,
they no longer asserted, as they originally had, that
it was but a provisional date.
(d) There was further correspondence between the parties
in the period from 9 to 13 September, in which the
trustee met various demands by Mr Skase for
information and for commitments in relation to his
travel arrangements, in the hope that the public
examination postponed to 18 September would be able to
proceed and in which the trustee unsuccessfully sought
confirmation yet again from Mr Skase's solicitors
that he would then be in attendance. On 9 September,
1991, Mr Skase's solicitors stated that he was
prepared to attend the examination on 20 September,
but subject to his being satisfied on certain matters
that had been the subject of earlier exchanges. They
added: "However, he informs us that he has suffered a
fall ... resulting in the aggravation of a previous
spinal injury." They mentioned Mr Skase was
receiving laser treatment, added that a full medical
report would be forwarded within the next few days
(none was, in fact, ever sent by them to the trustee).
They did not, however, make any suggestion that Mr
Skase had suffered an injury which might prevent him
travelling to Australia later that month.
(e) That assertion was made on 16 September: Mr Skase's
solicitors said he had received medical advice that he
should not undertake long distance travel because of
his bad back; they added "our client is therefore
precluded from departing on Wednesday 18th September
which was his scheduled departure date subject to
resolution of the outstanding matters in respect of
which we await your response" - despite requests for
just such confirmation, the trustee had never
previously been told that Mr Skase had apparently at
one stage planned to depart on that date for Australia
- and the solicitors went on to say that Mr Skase had
further indicated that "he will provide us with that
medical advice as soon as it is available." The
trustee sought evidence of Mr Skase's medical
disability and was told by facsimile of 22 September,
1991 that that material "just issued by our client's
doctor in Spain" was enclosed; a postscript noted that
this material was not available to Mr Skase's
solicitors but "it will follow tomorrow".
Notwithstanding this, the trustee never saw this
material until he appeared before the Registrar on 11
November when the Registrar told him about it.
(f) Mr Skase's solicitors wrote on 24 September to advise
that they had received the medical report and that
"this states quite clearly that our client is not fit
to travel to Australia". However, they also said that
Mr Skase had instructed them not to provide the
trustee with a copy of the report. This course they
sought to justify by reference to publicity in
Australia that was said to give Mr Skase concern that
the trustee would not keep the medical report
confidential. They did leave open the possibility of
revealing the medical report, saying:
"When, and if, it becomes appropriate to
disclose its contents to the court, and subject
to proper reassurances as to its remaining
confidential, the court will be provided with a
copy. Until then you must simply accept this
fax as confirmation that the report is to the
effect referred to above."
(g) The report, which as I have said only emerged at the
proceedings on 11 November, was dated 20 September:
Mr Skase's solicitors had it by 24 September. In
addition to reporting on Mr Skase's back problems, it
mentioned that he was being treated for an attack of
acute bronchial asthma and the reporting doctor, Dr.
Bengt Johnsson, concluded: "In his present stage I
have advised him that there will be no possibility to
undertake any type of travelling that lasts more than
maximum 1-2 hours, for at least the next 2 to 2 1/2
month." After receiving a copy of the summons
requiring Mr Skase's attendance in Brisbane on 11
November, 1991, his solicitors on 7 October advised
the trustee that, for medical reasons, Mr Skase's
attendance in Brisbane on 11 November "seemed highly
unlikely". They promised an affidavit "as soon as
possible".
(h) Since they got Dr. Johnsson's report on 24 September,
Mr Skase's solicitors must, if the doctor's
assessment of his condition was thought by them to be
reliable, have known that there was little chance that
Mr Skase could travel to Australia before early
December, i.e., that there was little chance he could
attend before the Registrar on 11 November. But after
7 October, Mr Skase's medical problems did not
receive any mention in the correspondence that ensued
between his solicitors and the trustee: instead, his
solicitors continued to pursue the trustee for
undertakings which would be acceptable to Mr Skase to
ensure his return to Australia for the planned
examination. In large part, the trustee met these
demands and agreed, among other things, to provide Mr
Skase with a return air ticket between Brisbane and
Majorca; in the course of a letter on 31 October, he
expressed concern about the short period of time
remaining until the public examination on 11 November
and sought Mr Skase's "immediate and unequivocal
statement" as to whether he would appear in Brisbane
on that day in answer to the summons. This produced
no confirmation, only advice that "As to the hearing
on 11th November, our client's duty is now to the
Court and he is not obliged to react to every
peremptory demand from the trustee" and yet another
request for clarification as to the arrangements the
trustee was prepared to make to meet Mr Skase's
requirements should he return and a warning that Mr
Skase's solicitors "as a creditor of the estate"
reserved for themselves, just as they also reserved on
behalf of Mr Skase, the right to raise at some future
stage the propriety of the charges made against the
estate by the solicitors acting for the trustee.
(i) On 4 November, the trustee once again attempted to get
confirmation that Mr Skase would attend the public
examination then fixed for 11 November; he complained
about not being afforded opportunity to test any
medical evidence that Mr Skase might rely on at the
examination to justify his non-attendance. All this
produced from Mr Skase's solicitors was the
observation that they noted what was said and that
they were still awaiting a proper explanation as to
the level of the costs charged by the solicitors for
the trustee in regard to the estate.
(j) Unbeknown to the trustee until 11 November when the
matter came before the Registrar, on 19 September Mr
Skase, through his London solicitors, engaged Messrs.
Kenny and Loel, solicitors of Brisbane, to act for him
in the matter (in addition to his London solicitors
with whom the trustee and his solicitors continued to
correspond). The first the trustee knew of this
arrangement was when he was told at the hearing on 11
November by the Registrar that Messrs. Kenny and Loel
had in fact filed an affidavit by Mr Skase's Majorcan
medical practitioner, Dr. Johnsson. There was no
appearance on that occasion for Mr Skase (or for Mrs
Skase), nor was there any written request to the
trustee or to the Court for an adjournment of the
examination. Mr Skase's conduct in retaining
Brisbane solicitors to file this affidavit, but not to
give any notice of it to the trustee and then not to
be represented on 11 November, can fairly be described
as extraordinary. When such a suggestion was made to
Messrs. Kenny and Loel by the trustee's solicitors, it
produced no explanation why this course was followed,
merely advice that they should "keep such gratuitous

aspersions to" themselves. No explanation has ever
been offered.
(k) On 11 November, the Registrar adjourned the
examination and the trustee's application for the
issue of a warrant to 3 December, 1991; the Registrar
also directed that, if Mr Skase intended to appear on
3 December, either to oppose the issue of a warrant or
to seek a further adjournment of the examination or if
he intended to file any material, then he was to
advise the solicitors for the trustee of that
intention and to serve them with copies of any
additional material by 22 November, 1991.
(l) Dr. Johnsson's report that emerged on 11 November
placed considerable emphasis on Mr Skase's back
condition as disabling him, although it did, as I have
said, refer to the asthma attack. On 20 November, the
trustee in correspondence with Mr Skase's solicitors
referred to certain opinions expressed by a medical
practitioner the trustee had recently engaged to
review Dr. Johnsson's report and sought advice whether
Mr Skase intended to file any further affidavit
evidence by 22 November in conformity with the
Registrar's directions. The only response this
produced was the observation that the comments made by
the trustee's medical adviser were made without the
opportunity of inspecting the relevant x-rays or
examining Mr Skase and that such opinions must
therefore be treated "with some reservation".
Undeterred, the trustee on 22 November sought access
to Dr. Johnsson's x-rays. The response this time was
that Mr Skase's London solicitors were unable to make
contact with Mr Skase "at the moment", although they
did promise to get back as quickly as they could. The
same request they sent to Messrs. Kenny and Loel
received an even more unhelpful response. On 25
November they pressed Mr Skase's London and Brisbane
solicitors for further information about the opinions
of medical practitioners who were treating him, but
the only response they got on 28 November from Mr
Skase's Brisbane solicitors was that they were taking
instructions from their London principals. A further
request to the London solicitors on 12 December for
access to the x-rays produced the response that they
had "no instructions to address this issue in advance
of the hearing next week".
(m) On 22 November, the trustee's solicitors received a
copy of an affidavit sworn by Mr McAvoy, a member of
Mr Skase's Brisbane solicitors, to which was annexed
a supplementary report by Dr. Johnsson dated 18
November. This made no mention of Mr Skase
continuing to suffer any back problems, but focussed
on his lung condition and mentioned that Mr Skase was
to be examined in Zurich by Dr. Medici on 20 November.
The trustee's request for access to any report
prepared by Dr. Medici to both Mr Skase's Brisbane
and London solicitors produced only advice from his
Brisbane solicitors that they were taking instructions
from the London solicitors. The trustee did get a
copy of Dr. Medici's report of 2 December, 1991, but
only when counsel who appeared for Mr Skase (but not
Mrs Skase) on 17 December sought leave to file and
read an affidavit from Mr Skase's London solicitor
sworn on 2 December. This affidavit exhibited a copy
of Dr. Medici's brief report following an examination
of Mr Skase on 21 November in which he expressed the
opinion that, because of what he described as the
serious nature of Mr Skase's lung disease, he had
made various recommendations to Mr Skase, which
included no long distance air travel before at least
the end of March 1992.
(n) On 3 December, the Registrar adjourned the
examinations of both Mr Skase and Mrs Skase,
including the applications for the warrants, to a
Judge on 17 December, 1991.
(o) On 17 December, Mr Skase was given leave to file and
read a further affidavit by his London solicitor
exhibiting another report from Dr. Medici, this time
of his examination of Mr Skase on 13 December in
Zurich. He said that Mr Skase's lungs and pulmonary
function could be further seriously damaged by long
distance air travel which he should not undertake
before at least the end of March 1992.
(p) I have already referred to Mr Skase's failure to go
on oath to lay a foundation for the submission that a
warrant should not issue because of the damage it
would do to his reputation. Other issues were
canvassed before me in relation to which Mr Skase
could be expected to have put in his own affidavit.
However, none was forthcoming. In support of a
submission that as a matter of discretion a warrant
should not issue, I was told that "Mr Skase has
indicated his willingness to co-operate in" a
procedure available for his examination by the trustee
in Majorca; but Mr Skase himself was silent on the
matter. On 17 December, the trustee read before me
affidavits from three persons who had travelled to
Majorca on 28 September and 18 November and who had
made observations of Mr Skase moving about without
any difficulty. Mr Skase answered this material by
producing through his counsel an affidavit by a
Majorcan acquaintance, Larkins, who dealt with what he
said he had observed of Mr Skase's deteriorating
condition and with what Mr Skase had told him about
his dealings with one of the three people who had
observed Mr Skase in Majorca. Mr Skase has not
himself gone on oath to depose to his intentions to
return to Australia before it is suggested he became
disabled from doing so or to depose to his intentions
to return to Australia once he has overcome his
medical problems. Concern that in his absence his own
affidavit might not be able to be relied on in view of
rule 135(2) of the Bankruptcy Rules might perhaps be
an explanation for his reticence; there may be other
explanations. In any event, I was not told why Mr
Skase had not himself gone on oath when it is to be
expected that his own testimony would have been of
direct relevance to a number of matters raised before me.

41. The trustee also applies for an order that the Registrar in Bankruptcy for the Bankruptcy District of the State of Queensland transmit to the Registrar in Bankruptcy for the Bankruptcy District of the State of New South Wales the records and documents that are in his custody and which relate to the estate of Mr Skase and for an order that upon the transmission of such records and documents, the administration of Mr Skase's estate that commenced upon acceptance of his own petition filed in June 1991 in the Brisbane Registry continue as if that petition had been filed and accepted in the Bankruptcy District of the State of New South Wales.

42. The reason for this application is that it will be more convenient and significantly less costly for the future administration of Mr Skase's estate if the records are transferred to the New South Wales District Registry. The sole trustee, Mr Donnelly, lives and practices in Sydney, the other joint trustee, Mr Knight of Brisbane, having now resigned; legal representatives all resident in Sydney have long acted for Mr Donnelly. Five major creditors of Mr Skase are funding the trustee for various purposes in connection with the administration; they comprise the Committee of Inspection appointed under s. 70 of the Bankruptcy Act. In four cases, these creditors act through officers of their Sydney branches; in the fifth case, the creditor is a Tokyo company, but it acts through its Sydney solicitor. They represent 75% of the proofs of all debts lodged in the estate. Another major creditor is Qintex Australia Limited, whose receiver, Mr Allpass of Brisbane, supports the move to the New South Wales Bankruptcy District; the claims of the five major creditors and Qintex Australia Limited make up almost 95% of the proofs of debt lodged in the estate.

43. Save for the public examination of Mr and Mrs Skase, little remains to be done by way of further administration of the estate, although the trustee says there is the possibility that further court proceedings might need to be taken if further information about Mr Skase's affairs comes to light. The five funding creditors, no doubt out of concern to keep the expenses of the administration to a minimum, desire that any future proceedings be taken in Sydney.

44. Mr Skase opposes the transfer: once again, he has not himself gone on oath to explain the grounds for his opposition, but his Brisbane solicitor, Mr Londy, deposes to having done a lot of work which must involve a very substantial amount indeed by way of legal costs in connection with the proceedings brought before the Registrar and before the Court by the trustee; Mr Londy has taken his instructions from Mr Skase's London solicitors. He says that he is informed by Mr Skase's London solicitors that funds to pay for Mr Skase's representation in Brisbane are "extremely limited" and come from "supporters of Mr Skase upon whose generosity Mr Skase is reliant". It was initially submitted that the trustee's delay in making this transfer application had resulted in a situation where Mr Skase's limited financial resources have been invested in having Brisbane-based representation.

45. However, as debate proceeded, it emerged that Mr Skase would not oppose the trustee's application for transfer upon the trustee's undertaking to conduct any public examination of Mr Skase (and Mrs Skase, for that matter also) that may take place in Brisbane.

46. By rule 115 of the Bankruptcy Rules, a Registrar has the custody of relevant records of the Court and documents filed with the Registrar; such records and documents must not, without the permission of the Registrar, be removed from the Registrar's custody except when proceedings under the Bankruptcy Act or any application in such proceedings are transferred from one court having jurisdiction in bankruptcy to another court having such jurisdiction pursuant to s. 35(2) of the Bankruptcy Act - a provision of no present relevance - or except for use by the court, a judge or an officer of the court.

47. Bankruptcy Districts are constituted by proclamation pursuant to s. 13 of the Bankruptcy Act and s. 14 declares that for each District there is to be a Registrar in Bankruptcy. Although it is not expressly stated anywhere in the Act or the Rules, rule 115(1) would require the relevant records to be kept in the custody of the Registrar in the District in which the creditor's petition was filed pursuant to rule 12 or in which the debtor's petition was presented pursuant to s. 55 of the Bankruptcy Act.

48. In my opinion, s. 30(1)(b) of the Bankruptcy Act and rule 113(1) of the Bankruptcy Rules empower this Court to give a direction that the documents and records in the custody of the Registrar for one District should be removed from the custody of that Registrar into the custody of another Registrar, if good cause is shown.

49. I am satisfied that it will be more convenient and less costly to the administration of Mr Skase's estate for the transfer sought by the trustee to take place. I note the trustee's undertaking to conduct the public examination of both Mr and Mrs Skase in Brisbane, should they ever take place. I also note that, pursuant to rule 101(3) of the Bankruptcy Rules, Mr Skase has an address for service within the Brisbane district. That will, unless and until he changes it, remain his address for service.

50. I am prepared to make orders in terms of paragraphs 1, 2 and 3 of the trustee's application.
THE FOLLOWING IS HIS HONOUR'S RULING ON COSTS

51. I sought submissions from the parties on costs because, given the views I formed on the conduct of Mr Skase leading up to the making of the application by the trustee for the warrant and on his conduct subsequent to 11 November, when the application was made and which are set out in my reasons, I was not prepared to apply the general rule that costs should follow the event without hearing from the parties.

52. In Cummings v Lewis (NG 668 of 1989, unreported) Wilcox J, on 29 May, 1992, deprived successful respondents of a substantial part of their costs. He reviewed the authorities and stated the following propositions:

(a) The Court has an unfettered discretion as to its costs
order: here see s. 32 of the Bankruptcy Act.
(b) But, because of the usual practice of the Court, a
successful respondent has a reasonable expectation of
recovering costs, in the absence of special
circumstances.
(c) In considering the matter of costs, the Court is
entitled to look beyond the actual conduct of the case
and have regard to the circumstances out of which it
arose.
(d) However, there must be a limitation on the weight to
be put on pre-litigation conduct, less the exception
overwhelm the rule. If too much emphasis is placed
upon the circumstance that the litigation would not
have arisen but for an action of the defendant, few
successful defendants would recover their costs.
(e) The Court may take into account the conduct of the
litigation by the successful party. Where a
successful party has put the opposing party to
significant expense in connection with an issue on
which that party failed, it may be reasonable to take
that matter into account by awarding something less
than full party-party costs.
(f) There is no difference in principle between the case
of a successful plaintiff and that of a successful
defendant.

53. Counsel for Mr Skase submitted that he should have the costs of the application for the warrant for a number of reasons.

54. First, it was submitted that Mr Skase was the successful party. This masks somewhat the true position. Mr Skase failed on the question of power to issue a warrant and his case for the exercise of the discretion not to issue the warrant because he was physically unable to travel to Australia for the examination also failed. It was his submission that the warrant should not issue as a matter of discretion, because it would be futile, that was successful.

55. Next, it was submitted that these are not ordinary proceedings inter-partes, that the trustee, as an officer of the Court, has a duty to preserve the assets of the estate and not to put the bankrupt, Mr Skase, to unnecessary expense in litigation in the course of the administration. The evidence before me indicates that the trustee has been put in funds by five major creditors of Mr Skase; it is by no means certain that the costs of this litigation will fall on the estate. I do not think there is much room to criticise the trustee on the ground that he has put Mr Skase to unnecessary expense by bringing this application. I think Mr Skase must himself bear a large part of the responsibility for creating a situation in which the trustee decided to make the application for the warrant and a large part of the responsibility for the costs subsequently incurred.

56. It was next submitted in reliance on my finding that by bringing the application the trustee sought an empty gesture from the Court, that the proceedings were not brought bona fide to advance the administration of the estate: it was submitted that they were really embarked upon by the trustee as a public relations exercise. If there were evidence that suggested that that was a fair description of the trustee's motive for bringing the application for the warrant, that would show quite inappropriate conduct on the part of the trustee and he could expect to attract a costs order against him to mark the Court's disapproval of bringing proceedings for such a purpose. An allegation that the trustee in pressing for Mr Skase's return to Australia for examination had embarked on a publicity campaign was made by Mr Skase's solicitors in their letter of 24 September to justify non-production to the trustee of a medical report; Pincus J, in his decision in Re Skase, expressed some concerns about press publicity which was, as he put it, "correctly or otherwise, attributed to a trustee": (page 234). But there is no evidence upon which I could be satisfied that the trustee brought this application for an improper motive of the kind suggested. I do not think that the trustee's conduct in bringing this application should result in a person who has engineered a situation in which the trustee was forced to incur considerable costs by having to engage in unnecessarily protracted correspondence with Mr Skase's solicitors, by being denied access to Mr Skase's medical information and by being forced to engage a medical expert of his own should be visited with a costs order in favour of Mr Skase, even though it is clear that the trustee's application could never have achieved much. In this regard I mention again that it appears unlikely that any costs burden has fallen on the estate as a result of the bringing of this application.

57. It is true that a trustee cannot expect to avoid costs orders where he puts the bankrupt to unnecessary expense defending applications. But that is not this case. In large part, Mr Skase brought his costs upon himself.

58. It was also submitted that I should receive medical evidence concerning recent problems that Mr Skase has encountered which it is said will demonstrate that there were substantial grounds for Mr Skase to take the stand he did in saying he could not travel to Australia and that, for that reason, a warrant should not issue. I declined to receive such evidence since it is, in my view, irrelevant to any of the matters that govern the order for costs that should be made here. I think the trustee was fully entitled to be sceptical of the claims made on behalf of Mr Skase in the proceedings before me that there were good medical reasons why he could not attend for public examination and thus good reasons why a warrant should not issue. I have not found it necessary to make any finding upon whether such reasons in fact existed at the time. But Mr Skase's conduct and that of his solicitors to which I have earlier referred in connection with the non-provision of medical information to the trustee was such as to deserve strong criticism. I do not think that evidence showing that Mr Skase may now have some serious medical problem is in any way relevant as going to justify the course of conduct Mr Skase and his advisers deliberately embarked upon in the period leading up to the proceedings before me or in any way relevant to show that the trustee's attitude at that time was unreasonable or unfounded. For present purposes, Mr Skase must be judged on the behaviour of himself and his advisers in the period leading up to the hearing before me.

59. I have regard to the number of issues which were litigated but which Mr Skase lost. I have kept in mind Wilcox J's caution, but I think in the circumstances of this case it is appropriate to have regard to the conduct of Mr Skase leading up to the making of the application for the issue of the warrant (in which conduct I include that of his London and Brisbane solicitors which attracts further criticism to Mr Skase). I also take into account Mr Skase's conduct after 11 November, 1991 and, in particular, the attitude taken by him by his solicitors to requests by the trustee for access to medical information upon which Mr Skase intended to rely to defeat the application for the warrant.

60. For these reasons I think this is one of those special cases in which a respondent who has, in the end result, successfully resisted the making of an order sought against him should nevertheless be denied his costs. In coming to this conclusion, I should say that the one matter that has concerned me as to the propriety of making no order as to costs is the action of the trustee in bringing an application which he himself acknowledged would achieve little. For the reasons given, I do not, however, think this requires an order awarding Mr Skase the whole or any part of his costs of the proceedings relating to the application for the warrant.