Re Australian Securities Commission v Christopher Charles Skase [1993] FCA 4 (13 January 1993)

FEDERAL COURT OF AUSTRALIA

Re: AUSTRALIAN SECURITIES COMMISSION
And: CHRISTOPHER CHARLES SKASE
No. Q G3008 of 1991
FED No. 2
Number of pages - 26
Contempt of Court

COURT

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

CATCHWORDS

Contempt of Court - application for contempt constituted by breach of undertaking - no contempt having regard to construction of undertaking - application dismissed.

Bankruptcy Rules - rr. 101 and 106.

Federal Court Rules - O. 4 r. 4, O. 7 r. 6, O. 9 r. 4 and O. 45 rr. 6, 7 and 8.

Australian Energy Limited v. Lennard Oil N.L. (No. 2) (1988) 2 Qd R 230.

Kwikspan Purlin System Pty Ltd v. Federal Commissioner of Taxation 86 ATC 4602.

HEARING

BRISBANE
13:1:1993

Counsel for the Applicant: J.S. Douglas QC and R.G. Atkinson

Solicitors for the Applicant: Australian Securities Commission

Counsel for the Respondent: S.E. Herbert

Solicitors for the Respondent: Gilshenan and Luton

ORDER

THE COURT ORDERS THAT:
1. The application is dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

DRUMMOND J. The Australian Securities Commission ("the ASC") moves for an order that Mr Skase be adjudged guilty of contempt of court on the ground that he has breached an undertaking which he gave to this Court on 30 May, 1991.

2. The proceedings in which the undertaking was given were begun by an application by the ASC under s. 573 of the Companies Code. Mr Skase attended the hearing although he was then resident in Spain (where he is still living); the ASC sought to continue an order which had been made for the delivery up by Mr Skase of his passports and to continue another order prohibiting him from leaving Australia without the consent of the Court. The application was dismissed by Pincus J. upon Mr Skase giving seven undertakings to the Court.

3. The complaint now made against Mr Skase is that he breached the fourth of these undertakings incorporated in the order of 30 May, 1991, which undertaking is as follows:

" To instruct Messrs Henderson Trout to accept service on
behalf of the respondent of any Court process (initiating or
otherwise) and not to withdraw those instructions unless the
same instruction is given to another firm of solicitors in
Australia in substitution for Messrs Henderson Trout and to
instruct Messrs Henderson Trout to inform the Australian
Securities Commission of the identity of that other firm of
solicitors."

4. The statement of charge filed with the amended notice of motion alleges in paragraph 1 that Mr Skase breached this undertaking in that he failed to instruct Messrs Henderson Trout "to accept service (on his behalf) of the following Court process", namely:

"(a) In Application No. QB 1253 (in the bankruptcy
jurisdiction of this Court) wherein there is no address
for service of the respondent, or alternatively, where
the address for service of the respondent is the
address of the solicitors representing the respondent
being Messrs Kenny and Loel now known as Smits Leslie
Barwick;
(b) in the application brought by the respondent herein on
6 February, 1992 in Application No. QB 1253 of
1991...wherein Messrs Kenny and Loel were the addressees
for service of the respondent;
(c) in the Application filed by Greg Abbott and Sun
Newspapers Pty. Ltd. on 7 April, 1992 for security for
costs in respect of the application (brought by the
respondent on 6 February, 1992 in application number QB
1253 of 1991)...wherein Messrs Kenny and Loel have
sought leave to withdraw as solicitors for the
respondent and the respondent has failed to file any
address for service in substitution thereof;
(d) in Writ No. 2017 of 1991 filed by the respondent in the
Supreme Court of Queensland on 26 November, 1991
wherein Messrs Kenny and Loel and subsequently Messrs
Gilshenan and Luton were the addressees for service of
the respondent; "

5. Paragraph 2 of the statement of charge as I read it goes on to allege that, by nominating as his address for service in these various proceedings the addresses of the two firms of solicitors who represented him, Kenny and Loel and Gilshenan and Luton, Mr Skase "withdrew instructions from Messrs Henderson Trout to accept service on (his) behalf of any Court process (initiating or otherwise) without giving the same instruction to another firm of solicitors in Australia in substitution for Messrs Henderson Trout". The statement of charge further alleges in paragraph 3 that Mr Skase breached the undertaking by not instructing Messrs Henderson Trout to inform the Australian Securities Commission of the identity of the firms of solicitors whose addresses he nominated as his various addresses for service in the particular proceedings I have already referred to.

6. It is appropriate to say at once that Mr Skase cannot be in breach of the undertaking in both the respects set out in paragraphs 2 and 3 of the statement of charge. There can only be a breach of the undertaking by Mr Skase to inform the ASC of the identity of solicitors engaged in substitution for Messrs Henderson Trout, as alleged in paragraph 3 of the statement of charge, if the other solicitors have been given instructions to accept service on his behalf "of any Court process". Paragraph 2 of the statement of charge, however, is framed on the basis that the special retainers of the other firms of solicitors to act for him in the particular proceedings referred to in the statement of charge did not amount to the giving to those other solicitors of a general instruction to accept service on his behalf "of any Court process".

7. Application No. QB 1253 of 1991, the proceeding referred to in paragraph 1(a) of the statement of charge, is the proceeding instituted by the filing by Mr Skase of his own bankruptcy petition, upon the acceptance of which he became bankrupt in June 1991.

8. By the application which is referred to in paragraph 1(b) of the statement of charge and which Mr Skase brought in his bankruptcy on 6 February, 1992, he sought orders that a journalist, Greg Abbott, and his newspaper, Sun Newspapers Pty. Ltd., be adjudged guilty of contempt of court in respect of publication in the newspaper of an article that related to an application brought before me in December 1991, in Mr Skase's bankruptcy by his trustee for a warrant for his arrest, following his failure to answer a summons calling on him to attend for public examination. This contempt application was in Form 45 and was filed on Mr Skase's behalf by Messrs Kenny and Loel; as required by the form, his address for service endorsed on the application was the address of those solicitors.

9. The application referred to in paragraph 1(c) of the statement of charge was filed by Mr Abbott and Sun Newspapers Pty. Ltd. on 7 April, 1992. By it, they sought security for their costs of Mr Skase's application to have them dealt with for contempt. It is the subject of a decision by Cooper J given on 30 July, 1992.

10. Writ No. 2017 of 1991, which is referred to in paragraph 1(d) of the statement of charge, is the originating proceeding by which Mr Skase commenced an action in the Supreme Court of Queensland in November 1991 against his trustee in bankruptcy, Mr Donnelly, wherein Mr Skase claims damages from Mr Donnelly for defamation.

11. It is common ground that Messrs Henderson Trout (or Messrs Clayton Utz as that firm has now become) has not informed the ASC that the various solicitors acting for Mr Skase in the particular proceedings referred to in the statement of charge were so retained by Mr Skase. Mr Harley is the partner in Messrs Henderson Trout who had the carriage of Mr Skase's defence to the ASC application in which the undertakings were given and who was retained by Mr Skase until July or early August 1991 to act as his solicitor in connection with his bankruptcy. His firm continues to act for Mr Skase in criminal proceedings that the ASC has brought against him which have not yet come to trial. His uncontradicted evidence was that the instructions Messrs Henderson Trout received from Mr Skase to accept service in compliance with the undertaking in question have never been withdrawn. Mr Harley also said that he remains in frequent contact with Mr Skase, the last occasion being a couple of days before the hearing before me.

12. There is no suggestion that any person (other than Mr Whiting, the solicitor acting for Mr Abbott and his newspaper in the proceeding referred to in paragraph 1(c) of the statement of charge) who has either instituted proceedings against Mr Skase or who is a respondent to proceedings brought by Mr Skase has experienced any difficulty in serving Mr Skase with court process of any kind. Although there were said to be difficulties in serving process on Mr Skase in connection with the security application brought by Mr Abbott and Sun Newspapers, Mr Whiting acknowledged that it was only recently, i.e., after the application for security for costs in which he was involved was finalised by Cooper's J judgment, that he became aware of the undertaking given by Mr Skase on 30 May, 1991. There is a large volume of evidence which counsel for the ASC submitted shows that various people, including his trustee in bankruptcy and those involved in litigation with Mr Skase, have experienced difficulties in communicating with him and in receiving responses to correspondence they have directed to him. Counsel for Mr Skase objected to the reception of this material as irrelevant. However, I am prepared to admit it on the limited basis contended for by counsel for the ASC: counsel submitted that while none of this evidence is relevant to the question whether Mr Skase has breached the undertaking, it is relevant as going to show that Mr Skase had a motive for making it as difficult as possible for the ASC to keep track of him, so that it should be inferred from this evidence that any breach of the undertaking that may be proved against him by other evidence was a deliberate one.

13. The critical matter in order to decide whether Mr Skase has breached his undertaking is to determine the proper construction of the undertaking.

14. The ASC submits that whether Mr Skase commences proceedings (initiating or otherwise) or whether he is a respondent to proceedings (initiating or otherwise) commenced by others, he will be in breach of the undertaking unless he has the address of Messrs Henderson Trout, now Messrs Clayton Utz (or his substitute for that firm), as his address for service in all such proceedings. For the respondent, it is contended that all the undertaking requires of Mr Skase is that he at all times maintain a solicitor in Australia with authority to accept service on his behalf of any court process that anyone may wish to serve on him, and that he is not deprived of the right to engage any other solicitor he chooses to act for him as his solicitor on the record in particular proceedings, once they have been commenced by service on Messrs Henderson Trout.

15. Although counsel for the ASC was not prepared to accept that the interpretation of the undertaking that he advances involves reading it as an undertaking by Mr Skase to retain Messrs Henderson Trout, at least initially, to act as his solicitors in all proceedings in which he might be involved, he did submit that the undertaking obliged Mr Skase to instruct Messrs Henderson Trout to act as his address for service in any proceedings in which he might become involved, until he instructed some other firm to so act in place of that firm. While the fifth undertaking given by Mr Skase on 30 May, 1991 lends some support to the argument, this is not what the undertaking says and there is no need to attempt to read it in that way.

16. That the undertaking does not have the effect suggested by the ASC is apparent once it is recognised that Mr Skase would not breach it if he were to withdraw the instructions he gave Messrs Henderson Trout in May 1991 and give those instructions instead to some other solicitor in Australia, for example, a Western Australian practitioner. In view of the undertaking, a writ issued out of, say, the Queensland Supreme Court against Mr Skase could be effectively served on him, even if he was resident outside Australia, pursuant to an order by the Queensland Court for substituted service upon the Western Australian solicitor. But even if the Western Australian solicitor was entitled to practise in Queensland, he still would not be able to nominate his own address as Mr Skase's address for service in the Queensland proceedings: if he wanted to do that he would have to engage a Queensland solicitor as his town agent, whose address would be Mr Skase's address for service in the particular proceedings - see RSC (Qld) O 12 r 4. However, the undertaking cannot be read as obliging Mr Skase, if he were to engage such a Western Australian solicitor in lieu of Messrs Henderson Trout, to also instruct that solicitor to engage a Queensland town agent to act in the proceedings. Moreover, while the undertaking permits Mr Skase to retain a solicitor outside Queensland in lieu of Messrs Henderson Trout, it does not impose any obligation on him to retain such a solicitor who is entitled to practise in Queensland. If Mr Skase were to engage, in lieu of Messrs Henderson Trout, a Western Australian solicitor who was not entitled to practise in Queensland, that solicitor, as Mr Skase's principal solicitor, could not lawfully engage a Queensland solicitor as his agent to assist him there in his conduct of the litigation: see ss. 39 and 44 of the Queensland Law Society Act 1952 (Qld) and TNT Bulkships Ltd. v Hopkins (1989) 65 NTR 1 at 11-12. If he had appropriate instructions from his client, the Western Australian solicitor could engage a solicitor in Queensland to act not as the Western Australian solicitor's town agent, but as Mr Skase's principal solicitor on the record in the particular Queensland proceedings. But the undertaking cannot be read as obliging Mr Skase to so instruct the Western Australian solicitor: TNT Bulkships Ltd. v. Hopkins at 12. All that the undertaking requires of Mr Skase is that he at all times has a solicitor somewhere in Australia with authority to accept service of court process on his behalf, not that he retain a solicitor with authority to act for him in litigation.

17. Since the purpose of the undertaking was to facilitate the service of process on Mr Skase while he was outside Australia, the limitation on the power of courts to order substituted service in such a case should be noted. In the absence of a provision like that contained in r. 6.10(3) of the Supreme Court Rules (Vic.), substituted service would only be available if Mr Skase was overseas when the writ issued, if the action was one in respect of which the writ could be issued for service outside Australia under O. 8 of the Federal Court Rules or the cognate rules of the other Australian courts: see paragraphs 10.1.3 to 10.1.8 of Williams, Supreme Court Practice (Victoria), 2nd Ed.. The various actions to which Mr Skase was potentially exposed when he gave the undertaking were almost certainly all ones in respect of which the originating process could be served on him outside Australia pursuant to the rules of all the Australian courts, including those exercising jurisdiction in bankruptcy (as to which see Re Mendonca; Ex parte Federal Commissioner of Taxation (1969) 15 FLR 256 at 261 and Re Skase (1991) 104 ALR 229 at 232-3).

18. There is no need to read the undertaking as obliging Mr Skase to retain Messrs Henderson Trout, initially at least, to act as his address for service (as the ASC put it) or to act as his solicitors in all proceedings in which he might be involved. The procedural rules of the various courts in which action might be taken against Mr Skase would require him, upon his deciding to defend proceedings brought against him, to nominate in his notice of appearance or equivalent document an address at which interlocutory process in the particular proceeding could be served on him. See, for example, O. 9 r. 4 and O. 7 r.6 of the Federal Court Rules, RSC (Qld) O 12 rr. 4 and 5, rr. 50 and 51 of the District Court Rules (Qld) and rr. 101 and 106 and Form 46 of the Bankruptcy Rules. As to r. 101(1) of the Bankruptcy Rules, when read with the definition of "proceeding" in s. 5(1) of the Bankruptcy Act 1966 (Cth) it permits a person to have different addresses for service for the purposes of different proceedings in connection with the one bankruptcy; there is nothing to prevent a person nominating one address for service for the purpose of a proceeding comprising the filing of his own petition and having another different address for service for the purpose of a proceeding brought by him (or brought against him) in his own bankruptcy: he would not be required by r. 101(2)(b) to file a notice of change of address, but would merely be required to nominate his address for service for the purpose of the particular proceeding in the first document filed by him in that proceeding.

19. The Commission relies upon the words in the undertaking, "initiating or otherwise", as supporting its argument that the undertaking covers not only the situation in which someone who wants to take proceedings against Mr Skase will be able to serve process on him in Australia, but also the case in which Mr Skase himself institutes proceedings against others. I do not think the undertaking can be read as obliging Mr Skase to instruct Messrs Henderson Trout to accept service of court process on him in any proceedings which he himself may institute: it is not appropriately worded to achieve that, but in terms deals only with the case of someone who wants to proceed in Australia against Mr Skase. Moreover, there is no need for such an arrangement because the rules of the various Australian courts in which Mr Skase might sue all require him to nominate in his initiating process his address for service for the purposes of any such proceedings: see, for example, O. 4 r. 4 and O. 7 r. 6 of the Federal Court Rules, RSC (Qld) O. 2 rr. 9 and 10 and r. 101 of the Bankruptcy Rules.

20. The explanation for the undertaking requiring Mr Skase to have a solicitor with general authority to accept service not only of initiating process, but of process "otherwise" than initiating is, I think, to ensure that in pending proceedings in which it might be necessary for persons who want to take steps against Mr Skase in Australia which involve personal service of process on him, there would be no difficulty in effecting service on him of such process even if he were overseas. If Mr Skase were to become bankrupt, a summons to attend for examination in his bankruptcy would be an example of process other than initiating process that could be served on him outside Australia in reliance on the undertaking. A summons calling on Mr Skase to attend for public examination in his bankruptcy was in fact served on him pursuant to an order for substituted service, by service on Messrs Henderson Trout, which was made by Pincus J on 20 September, 1991, in reliance on Mr Skase's undertaking. (The reasons of Pincus J. show that, while Mr Skase was not bankrupt at the date the order incorporating the undertaking was made, it was clearly contemplated that he would probably become bankrupt in the near future and that a range of proceedings in the bankruptcy could be expected to be brought against him. In the event that Mr Skase were to become bankrupt, Pincus J considered that Mr Skase could expect to be summonsed under s. 81 of the Bankruptcy Act for the purposes of an examination as to transactions in which he was involved prior to his bankruptcy and as to property to which his trustee might have a claim; Pincus J. also adverted to the possibility that Mr Skase could expect to be summonsed as a witness under r. 125 of the Bankruptcy Rules in proceedings the trustee might bring for the avoidance of dispositions of property made by Mr Skase prior to his becoming bankrupt. Such summonses are court process other than initiating process. They could be served on Mr Skase pursuant to orders for substituted service, if necessary, even if he was outside Australia, in reliance on the undertaking). The undertaking also ensures that if proceedings are brought against Mr Skase, but he elects not to defend those proceedings and thus is not required by the relevant rules of court to file an address for service in the particular proceeding, the applicant will always be in a position to effect service of any interlocutory process that might be required to be served on Mr Skase personally by obtaining an order for service of such process on Messrs Henderson Trout. If, for example, he were to be sued in the Federal Court, but were to elect not to participate in those proceedings, before the applicant could obtain judgment in default of appearance the applicant would be required by O. 19 r. 4 to serve Mr Skase personally. In view of the undertaking (the court's jurisdiction over Mr Skase in respect of the matter being previously established by effective service of the originating application on him), an order for substituted service of the interlocutory process could readily be obtained: see O. 7, r. 9.

21. In my view, the undertaking was designed to satisfy the ASC that anyone who wished to take proceedings against Mr Skase would have an assurance that there would be no difficulty in serving Mr Skase in Australia with any originating or other process that might have to be served on him, i.e., on him personally, because he would always have a solicitor retained as his agent in Australia to accept service of any such process, even though he might choose to live outside Australia.

22. The undertaking imposes an obligation on Mr Skase to instruct Messrs Henderson Trout to act as his general agent to receive service on his behalf of court process in respect of any proceedings that may be brought against him in Australia. But it does not go beyond this: it does not require Mr Skase to instruct that firm or any other firm of solicitors to nominate their address as the place at which process in any particular proceeding brought against Mr Skase can be served on him. Should he withdraw from Messrs Henderson Trout the general instruction he was required by the undertaking to give them, it also obliges him in that event, but only in that event, to retain another firm of solicitors in Australia in substitution for Messrs Henderson Trout to act in their place as his general agent to receive service of any court process. The undertaking also obliges Mr Skase, in the event of him engaging a substitute agent for Messrs Henderson Trout, to inform the ASC of the identity of that substitute agent.

23. I am reinforced in this view of the meaning of the undertaking by a consideration of the reasons which Pincus J gave for making the order which incorporates the undertaking in question.

24. The undertaking in question is incorporated in an order of the Court. There is authority that it is permissible, in interpreting a judgment or order, and even in the absence of any ambiguity in the order, to have regard to the reasons of the Judge who made the order as comprising a part of the surrounding circumstances or the factual matrix in which the order was made: see Kwikspan Purlin System Pty. Ltd. v Federal Commissioner of Taxation 86 ATC 4602 at 4605; Australian Energy Limited v Lennard Oil N.L. (No. 2) (1988) 2 Qd R 230 at 232 and cf. Gordon v Gonda (1955) 1 WLR 885, per Evershed M.R., Hodson L.J. agreeing. The dictum of Southwell J in McNair Anderson Associates Pty. Ltd. v Hinch (1985) VR 309 at 312 deals only with the impropriety of looking to the Judge's reasons to resolve an ambiguity in an order, the breach of which is the subject of contempt proceedings.

25. Assuming that I can have regard to Pincus's J. reasons in identifying the operative effect of the undertaking, the following passages in his Honour's reasons are of relevance:

" ... the purpose of the provision (s. 573) is so far as
relevant to protect creditors and potential creditors ...
the basis upon which the matter is put is that the
respondent has, in the past, made difficulties about the
service of process; that he has on occasions failed to
appear when he should have done and has given reasons for
doing so which were not entirely convincing; that he has
given addresses which were not quite bona fide; that he is
substantially indebted; that he is being prosecuted and may
seek to stay out of the country to evade these difficulties.
The respondent came before a Court on a similar application
last year, and it has been suggested by his counsel that the
situation is much the same as it then was. That does not
appear to me to be so; " (page 2)
" I therefore do not accept the suggestion, made on behalf of
the respondent, that the situation is much the same as it
was in September last year and the implicit submission that
the applicant has no justification for concern. It seems to
me that the situation so far as the respondent's finances
are concerned has worsened, and events have occurred which
would increase the apprehension of anyone who wished to
contact him. The question nevertheless remains whether, in
these circumstances, the applicant has discharged the onus
of showing that the condition as to protection of creditors'
interests laid down in s. 573 of the Companies Code is
satisfied.
That provision, as I have mentioned, requires so far as
relevant that the Court be satisfied that it is either
necessary or desirable to exercise the powers which the
applicant desires to have exercised for the purpose of
protecting the interests of persons to whom the respondent
is liable or may become liable. The argument which is
advanced on behalf of the respondent includes the contention
that, whether or not the respondent is in Australia, the
creditors will have similar difficulties; he says he has no
money of any consequence.
...one would think that, as a practical matter, if the
creditors are going to gain any satisfaction, it would only
be by undoing transactions which the respondent entered into
in anticipation of financial trouble (if there are any such
transactions, and it seems possible that there are) or by
unearthing some hidden funds or property. " (pages 5 and 6)
" After having made what I am satisfied were deliberate
difficulties about service and having been, as I am also
satisfied, inclined to conceal his whereabouts, the
respondent seems to have abandoned those tactics and has
given instructions for a series of undertakings to be
proffered. I propose to read the undertakings out and to
comment upon them briefly. " (page 7)

26. After setting out the fourth undertaking here in question, which his Honour said seemed to him to be of particular importance, he observed:

" The applicant does not suggest that there is any particular
difficulty in the wording of that. It is reasonably
watertight and should, I think, alleviate the concerns of
those interested in the respondent's affairs who are
suspicious of his intentions." (page 9)

27. It can be seen from his Honour's reasons that the undertaking was given by Mr Skase (together with certain other undertakings) to avoid an order that would have prevented him leaving Australia in circumstances in which he had previously created difficulties for his creditors and other persons wishing to bring him before various Australian courts by avoiding service of court process. It was designed to ensure that no person (including the person who was likely to be appointed Mr Skase's trustee in his imminent bankruptcy) would face any difficulty in serving Mr Skase with any court process, initiating or otherwise, because of Mr Skase's absence from Australia or for any other reason.

28. Because the undertaking in general must be construed in the way I have indicated, a finding that Mr Skase has breached it cannot be made.

29. The complaints made by the ASC in paragraph 1(b), (c) and (d) of the statement of charge based on the retaining of Messrs Kenny and Loel by Mr Skase to act for him in two particular matters that arose in his bankruptcy and the retaining of that firm of solicitors and subsequently another firm of solicitors, Messrs Gilshenan and Luton, to act for him in the Supreme Court proceedings he has instituted against Mr Donnelly, do not involve any breach of the undertaking. So long as Mr Skase continued to retain Messrs Henderson Trout to accept service on him of any court process that might be issued against him anywhere in Australia, he was free to specially retain any other solicitor he chose to act for him in particular proceedings brought by or against him even though he would be required by relevant rules of court to nominate the address of that specially retained solicitor as his address for service for the purpose of the particular proceeding. There is no evidence to suggest that, either at the time Mr Skase retained those other solicitors for those limited purposes or at any other time, he gave either of those other firms of solicitors general instructions to accept service on his behalf of any court process in any proceeding other than those in which he specifically retained them to act for him. Mr Harley's uncontradicted evidence to which I have referred shows that Mr Skase has never withdrawn the general instruction he initially gave to Messrs Henderson Trout to accept service, which was all that was required by the undertaking. Moreover, as to paragraphs 1(b) and (d) of the statement of charge, for the reasons given, I do not think the undertaking has any application to a case where it is Mr Skase who initiates a proceeding against another.

30. Further, as to paragraph 1(c), it is alleged that Mr Skase was in breach by failing to instruct Messrs Henderson Trout to accept service of court process in relation to the Abbott security for costs application wherein Messrs Kenny and Loel sought leave to withdraw as his solicitors. It was suggested that it was Mr Skase who had brought about this situation by withdrawing his instructions from Messrs Kenny and Loel to act in that particular matter. However, there was no evidence that would justify a finding that this situation arose because Mr Skase withdrew his instructions from Messrs Kenny and Loel. The evidence of Mr Whiting, the solicitor acting for Mr Abbott and Sun Newspapers in the contempt proceedings instituted by Mr Skase, also shows that service on Mr Skase of the security application was effected in accordance with Cooper's J order of 12 May, 1992 by service on Messrs Kenny and Loel, who up to that date were on the record as his solicitors in that particular proceeding. His Honour gave Messrs Kenny and Loel leave to withdraw but he also then ordered that service on Mr Skase at the office of Messrs Kenny and Loel "be deemed sufficient service until the bankrupt shall cause to be filed a notice of change specifying, inter alia, a new address for service". On 30 July, 1992, Cooper J ordered Mr Skase to give security in an amount of $8,000.00 and further ordered that a copy of his order be served "at the address for service endorsed on the application filed on 6 February, 1992", i.e., at the offices of Messrs Kenny and Loel, notwithstanding the fact that his Honour had previously given those solicitors leave to withdraw, because Mr Skase had not filed a new address for service in respect of his contempt application. That order was entirely appropriate since so long as a solicitor's name remains on the record, he must be taken, as between himself and the opposite party, to continue to represent the client even though the retainer has been terminated by either the solicitor or the client: see Cordery on Solicitors 8th Ed., p 74 and O. 45 rr. 6, 7 and 8 of the Federal Court Rules. On 29 July, 1992 Mr Skase's London solicitors wrote to the District Registrar in reply to the District Registrar's request that Mr Skase file an address for service within the jurisdiction in the contempt proceedings involving Mr Abbott and his newspaper; they asserted that Mr Skase was unable to provide an address for service because of "the absence of any other firm willing to act". They claimed in a later letter to Messrs Gilshenan and Luton that in July 1992 they were unaware of Mr Skase's undertaking of 30 May, 1991 (although the evidence shows that they were told of the undertaking in correspondence they received from the solicitors acting for Mr Skase's trustees in September 1991). For the reasons given, I do not, however, think Mr Skase was bound by the undertaking to comply with the request made by the District Registrar of his London solicitors. None of what occurred in relation to the security for costs application establishes a breach by Mr Skase of the undertaking.

31. The first limb of paragraph 1(a) of the statement of charge asserts that Mr Skase breached the undertaking by not instructing Messrs Henderson Trout to accept service on his behalf of court process in this proceeding "wherein there is no address for service of" Mr Skase. Mr Cleary, an officer of the ASC, had searches of the file in these proceedings carried out from which it appears:

(a) that there is evidence in an affidavit sworn on 14 August, 1991
by Mr L'Estrange, a member of Messrs Allen Allen and Hemsley
(the solicitors acting for Mr Skase's trustees in bankruptcy,
who were appointed on 2 August, 1991 following the resignation
of Mr Skase's original trustee), that Mr Mylton Burns of
Messrs Phillips Fox was then acting for Mr Skase. The
material annexed to Mr L'Estrange's affidavit shows that
Messrs Phillips Fox, after an initial denial on 11 July, 1991
that they were acting for Mr Skase, by letter of 9 August,
1991 advised Messrs Allen Allen and Hemsley that: "Prior to the
3 July (1991) meeting of creditors in Sydney we received
instructions from the bankrupt and from certain creditors in
relation to that meeting of creditors. The instructions and
our advices were confined to matters arising out of that
meeting ..." The material also includes copies of letters sent
by Messrs Phillips Fox prior to the meeting of creditors of 3
July, 1991 to various of Mr Skase's creditors advising them
that Mr Harley of Henderson Trout had encountered a conflict
of interest and had referred Mr Skase to Phillips Fox to
arrange proxies for the then forthcoming meeting of creditors
of his bankrupt estate.
(b) that on 17 December, 1991, Mr Londy, of Messrs Kenny and Loel,
filed an affidavit wherein he deposed to his firm being the
solicitors acting on behalf of Mr Skase. Mr Londy said his
firm was retained to act for Mr Skase by his London solicitors
on or about 19 September, 1991.
(c) that (notwithstanding what Mr Skase's London solicitors told
the District Registrar in their letter of 29 July 1992) on 28
August, 1992, Mr Londy wrote on Smits Leslie Barwick
letterhead to my associate in connection with the application
brought by the trustee for the issue of a warrant for the
arrest of Mr Skase saying: "we act for Mr Skase." On 3
September, 1992 my associate wrote to Mr Londy as follows:
"Mr Justice Drummond notes that Messrs Kenny and Loel
remain on the record as solicitors for Mr Skase in
this matter.
If a notice has not been filed in the court by 2.15
p.m. tomorrow (when judgment in this matter will be
given) recording that Mr Skase's solicitors have
changed from Messrs Kenny and Loel to Messrs Smits
Leslie Barwick, Mr Justice Drummond will require your
Mr Londy to attend at 2.15 p.m. tomorrow to explain
why he wrote to the court on behalf of Mr Skase in
connection with this matter on 28 August last."
On 4 September, 1992, in response to that letter, a notice
was filed by Messrs Smits Leslie Barwick advising of the
name change from Kenny and Loel and also that "The address,
telephone number and facsimile numbers of the firm remain
unchanged". Mr Londy appeared on behalf of Mr Skase when
judgment was given that day in that matter.

32. Other evidence touching this issue came from Mr Harley who, in cross-examination, said that he was acting for Mr Skase when the latter filed the affidavit verifying his statement of affairs on 13 June, 1991 (which affidavit had to accompany presentation of Mr Skase's own petition upon which he became bankrupt) and "for something like four or five weeks after that date". In a letter dated 8 August, 1991, Mr Harley told Mr Skase's trustee: "I am no longer acting for Mr Skase in relation to his bankruptcy but if you wish me to pass on correspondence to him I can fax that to the number in Spain (which you already have)." Mr Harley also said that he was aware that Messrs Phillips Fox acted for Mr Skase after his firm ceased to act.

33. I am not prepared to find that Mr Skase had no address for service for the purpose of the proceeding instituted by the filing of this petition.

34. There is no evidence before me to show whether, when Mr Skase presented his petition in June 1991, he gave as his address for service in connection with that proceeding the address of Messrs Henderson Trout, the solicitors then acting for him in that regard, as he was required by r. 101(3) of the Bankruptcy Rules to do; nor is there any evidence as to whether r. 101(2)(b) of the Bankruptcy Rules was complied with when Messrs Phillips Fox were retained to act for him, whether on the limited basis suggested in the material exhibited to Mr L'Estrange's affidavit or generally, as suggested by Mr Harley in his oral evidence; nor is there any evidence as to whether r. 101(2)(b) was complied with when Messrs Kenny and Loel were engaged in mid-September 1991 to act for Mr Skase on a retainer which appears from Mr Londy's affidavit of 17 December, 1991 to have been one to act generally for him in connection with the bankruptcy proceedings. Mr Cleary does not say that his searches revealed that these rules were complied with. However, he does not say that the state of the file is such as to indicate that these rules were not complied with.

35. But even if the true position is that Mr Skase has breached r. 101 on one or more occasions, that does not I think determine the question whether he has also breached his undertaking of 30 May, 1991.

36. The evidence also suggests that from September 1991 to at least September 1992, Messrs Kenny and Loel were retained by Mr Skase to act for him in connection with his bankruptcy (although they may have sought to determine this retainer insofar as it authorised them to act in connection with the contempt proceedings they initiated in the bankruptcy on Mr Skase's instructions against Mr Abbott and his newspaper). This cannot amount to a breach by Mr Skase of the undertaking in the respect alleged in the second limb of paragraph 1(a) of the statement of charge: having regard to how I think it should be construed, there is no evidence to suggest that when he retained Messrs Kenny and Loel in connection with his bankruptcy, he gave that firm general instructions to accept service on his behalf of any court process in any proceedings that might be brought against him other than in his bankruptcy.

37. The application must be dismissed.