Re The Estate of Langley George Hancock (deceased); Ex Parte: Hancock Prospecting Pty Ltd (ACN 008 676 417 & Ors [1998] FCA 587 (27 May 1998)

Last Updated: 2 June 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 8429 of 1998

RE: BETWEEN:	THE ESTATE OF LANGLEY GEORGE HANCOCK (DECEASED) THE ESTATE OF LANGLEY GEORGE HANCOCK DEBTOR
EX PARTE:	HANCOCK PROSPECTING PTY LTD (ACN 008 676 417) CREDITOR ROSEMARIE PORTEOUS APPLICANT ON THE MOTION HANCOCK PROSPECTING PTY LIMITED RESPONDENT ON THE MOTION

JUDGE:	TAMBERLIN J
DATE:	27 MAY 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Rosemarie Porteous, on 11 February 1998, applied to the Court for leave to be heard in this proceeding, which is brought by Hancock Prospecting Pty Limited ("HPPL") against the Estate of Langley George Hancock ("the Estate"). In that proceeding HPPL petitions the Court for an administration order against the Estate under Part XI of the Bankruptcy Act 1966 (Cth) ("the Act").

Rosemarie Porteous was the wife of Langley George Hancock and is a beneficiary under his will, dated 17 December 1991. In a Notice of Intention to Oppose the Petition, filed on 3 March 1998, she raises the following matters:

* the petition is an abuse of process;

* the Estate has a bona fide counter-claim against HPPL in an amount which far exceeds the debt claimed;

* there is litigation on foot which is well advanced and which is likely to restore solvency to the Estate;

* that HPPL has not provided sufficient or adequate proof of the matters in the petition;

* there is no proper contradictor to the petition;

She claims that, in the exercise of its discretion under s 244 of the Act, the Court ought decline to make an order for the administration of the Estate even if otherwise satisfied with proof of the matters asserted in the petition. On 3 March 1998, she also filed particulars of her interest in the proceedings.

On 7 May 1998, three subpoenas were issued on her application addressed respectively to HPPL, Gary Schwab, an executor of the Estate, and Gina Hope Rinehart, a co-executor of the Estate. On 12 May 1998, Davies J heard an application to set aside the three subpoenas. In a judgment delivered by his Honour on that day, the application was dismissed.

Presently before me is a Notice of Motion by HPPL for leave to appeal from the interlocutory judgment to the Full Court.

The first matter raised in support of the Application for Leave is that Ms Porteous was not entitled to have subpoenas issued because she is not a party to the bankruptcy proceedings. Counsel points out that, O 27 r 2 of the Federal Court Rules, confers power on the Court in any proceeding to issue a subpoena. Order 27 r 6(1) provides:

"6(1) On request by a party, the Registrar shall, unless the Court otherwise orders, issue a subpoena..." (Emphasis added)

It is said to follow from r 6(1) that if a person is not "a party" she cannot procure the issue of a subpoena and that notwithstanding the fact there is no definition as to the meaning of "party" in this rule, it is evident that only a party has the entitlement. It is further said that the expression "party" should be read to mean "a party to the proceedings in question". Reliance is placed on the decision of Gummow J in Smith Kline & French Laboratories (Australia ) Ltd v The Secretary Department of Community Services and Health (1989) 89 ALR 366 at 369, where his Honour held that the expression "party", in an Undertaking given in the case, meant a party to the proceedings in question because this was the way in which the expression "party" was used in the Rules of Court. Gummow J said that the Court, in an appropriate case, had power to demand an undertaking as to damages, the beneficiaries of which were not only parties to the proceedings but were also persons whose interests might be adversely affected by the grant of the interlocutory relief. However, the circumstances of that case are far removed from the present.

Order 77 r 9 of the Federal Court Rules, which relates to bankruptcy, under which Ms Porteous seeks leave to be heard, empowers the Court to grant leave at its discretion in a proceeding, to a person who is not a party to the proceeding. Counsel submits that the rule is predicated on a person not being a party but only having leave to be heard. If the person is a "party" for the purposes of the rule then naturally such leave is not necessary.

It is suggested that there is an important reason for restricting the entitlement to issue subpoenas. If this were not so, it is said that the Court may be exposed to the possibility of vexatious applications by persons with no real interest in the proceedings but who seek to employ Court process to obtain information for some ulterior or extraneous purpose. In the present circumstances, it is plain that Ms Porteous does have standing and has an interest in agitating the matters raised in her application. Moreover, it is always open for the Court to dismiss frivolous, vexatious or improper applications for the issue of subpoenas by persons with no substantial interest in the proceedings.

In his judgment, Davies J points out that Ms Porteous is a party to the application to be heard in relation to the petition seeking administration in bankruptcy. He considered that her interest was more immediate than simply that of an applicant for leave because, in substance, she was claiming that the creditor's petition was an abuse of the process of the Court and was brought in bad faith and for improper purposes and she sought dismissal on those grounds. His Honour also considered that HPPL, Ms Rinehart and Mr Schwab were effectively respondents to her application to have the petition dismissed. His Honour did not accept the submission that she was not entitled to have the subpoenas issued because she was not a party.

It is important in considering this question, to bear in mind that the hearing of the Application for Leave to be Heard and the substantive Application for Dismissal have been set down for hearing. I am not satisfied that the submission for HPPL has been made good. Ms Porteous is a party to the application for leave. In order to properly pursue that application Ms Porteous ought not be prevented from presenting material which goes to the strength of her substantive Application. Given that the two matters are closely related and are to be heard together, the decision of his Honour was , in my view, not in error.

A second submission advanced was that relevance of the documents is confined by reference to the application of Ms Porteous for leave to be heard because that is the only application in support of which she seeks to have the subpoenas issued. The submission is made that, in assessing the relevance of the documents, regard should only be had to her motion for leave to be heard; her particulars of interest in the proceedings which have been filed; the creditor's response to those particulars; and that part of her reply which deals with the creditor's response.

However, as Counsel for Ms Porteous points out the function of the Particulars of Interest, which have been filed, were simply to establish her standing. That document should not be read in any way as a pleading which delimits the area in respect of which evidence can be adduced. If Ms Porteous is granted leave to appear but not entitled to obtain documents to support her case on the petition, there would be an undue restraint in the effectiveness of her right to be heard, which is the subject of her application.

A further matter relied on by HPPL is that his Honour referred in his judgment to an assurance by Counsel for Ms Porteous that the subpoenas were issued on his advice and that they were for the purposes of the hearing coming on in June for those proceedings alone. It is said that such assurances are irrelevant and that they beg the question of whether the matter set down for hearing in June was the relevant matter in connection with the three subpoenas. I do not agree. It will often be the case that the Court, in making a determination as to relevance particularly at an early stage of proceedings when the details of the litigation are not fully apparent, will need to rely on statements made by Counsel in relation to matters of relevance and purpose. There is no error of law apparent in this approach adopted by Davies J.

Another important factor to bear in mind is that this is an application for leave to appeal against an order made in the exercise of a discretion upon a matter which is classically one of practice and procedure, namely whether a subpoena should be set aside: see O 27 r 9. In such an application the applicant must persuade the Court there should be an appeal to a Full Court: Lenijamar Pty Limited v The AGC(Advances) Ltd [1990] FCA 520; (1990) 98 ALR 200 at 206. As the High Court pointed out in Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 177, not only must there be an error of principle but the decision appealed from must work an injustice to one of the parties. See also Decor Corp Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397 at 399.

Apart from raising the above questions as to the principles which should apply in considering relevance, the question whether particular documents were in fact relevant was not canvassed before me and there is therefore no necessity to refer to specific documents.

I am not satisfied that any error of principle has been established. Nor am I satisfied that a case has been made out that injustice to one of the parties would result if leave were not granted. Moreover, the efficient administration of the Court and the proper application of principles of case management are important considerations to take into account.

In all the circumstances I am not satisfied that the judgment of the primary Judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court.

Having regard to the above considerations the application for leave to appeal is dismissed with costs.

An application has been made to vacate the hearing dates fixed for next week. All parties agree that the matter will not be ready to proceed next week. I am informed that there are a large number of documents to be filed and served and that it will take several weeks for them to be made available. In these circumstances it is appropriate to vacate the hearing dates which have been set down. I direct the parties to bring in Short Minutes of Order setting out a comprehensive timetable as to the future conduct of this matter.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin

Associate:

Dated: 27 May 1998

Counsel for the Creditor (Applicant on the Motion):	S G Finch SC
Solicitors for the Creditor (Applicant on the Motion):	Corrs Chambers Westgarth
Counsel for the Applicant for leave to be heard:	N J Styant-Browne
Solicitor for the Applicant for leave to be heard:	Slater & Gordon
Counsel for the Executors:	S J Archer
Solicitors for the Executors	Mony De Kerloy
Date of Hearing:	26 May 1998
Date of Judgment:	27 May 1998