|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
Federal Court of Australia |
Last Updated: 15 January 1999
PRACTICE & PROCEDURE - leave to administer interrogatories - whether interrogatories sought to be administered relate to matters in question between the interrogating party and the parties served - interrogatories sought to be administered against the bankrupt against whom no relief is sought although a party to the proceedings - whether oppressive to administer interrogatories to a party against whom no final order is sought
Federal Court Rules - O 16 r 1, O 16, r 3, O 16 r 5
Supreme Court Rules (NSW) - Pt 24 r 1
Buxton & Lysaught Pty Ltd v Buxton [1977] 1 NSWLR 285 referred to
Navair Pty Ltd v Transport Workers' Union of Australia [1981] FCA 1; (1981) 52 FLR 177 cited
RE: MICHAEL JOHN FULLER
HUGH JENNER WILY (Trustee) v
LAIMA ANN FULLER & ORS
SB 699 of 1993
HILL J
SYDNEY
13 JANUARY 1999
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| SOUTH AUSTRALIA DISTRICT REGISTRY | SB 699 OF 1993 |
|
BETWEEN: | HUGH JENNER WILY as Trustee of the Estate of
MICHAEL JOHN FULLER First Applicant
M J FULLER SERVICES PTY LIMITED (In Liquidation) Second Applicant |
|
AND: | LAIMA ANN FULLER
First Respondent
DAIVA CECELIA FULLER and JOANA MARIA FULLER Second Respondents
LYNN WILKINSON and NORA WILKINSON Third Respondents
ST HELIER TRUST COMPANY LIMITED Fourth Respondent
MICHAEL JOHN FULLER Fifth Respondent |
JUDGE:
HILL J DATE: 13 JANUARY 1999 PLACE: SYDNEY
2 Each of the respondents oppose leave being granted in respect of all or some of the interrogatories sought to be administered. The parties, other than St Helier, do so essentially on the basis that the interrogatories sought to be administered relate to no matter at issue between them on the one hand and the trustee on the other. In the case of St Helier, it is said that, additionally, leave should be refused on the basis that answers to such interrogatories would involve St Helier in breaching requirements of the law of Jersey, under which the trust deed is incorporated, in relation to confidentiality. No evidence has been filed as to the relevant provisions of Jersey law and for present purposes it must therefore be assumed to be the same as the law of South Australia.
3 After hearing some oral submissions I directed the parties to file written submissions. I have taken account of what is said in those submissions. Before discussing the relevant principles, however, it is necessary to say something shortly about the case as pleaded against the various respondents.
4 The further amended statement of claim filed pursuant to directions made on 29 July 1998 makes it clear that the substantive proceedings are essentially proceedings against St Helier. It is alleged that St Helier was to constitute itself as trustee of a fund to be paid to it by Mr Fuller to be dealt with in accordance with his directions or the directions of his agents which included his wife. The fund as so constituted is referred to in the proceedings as the "Fuller Bare Trust".
5 It is then alleged that in accordance with this arrangement Mr Fuller paid or caused to be paid to St Helier a sum of $US 1,000,000 to be held upon trust. Particulars demonstrate that the source of the monies said to be held on trust arose from the sale by a company called Gloucestershire Investments Pty Limited of options in another company, Independent Resources Limited. Mr Fuller is said to have been a director of Gloucestershire and beneficially entitled to one of the six shares in that company. The other directors included Mr Wilkinson. The monies in question went to a company called Sovereign Trustees Limited, so it is said, in its capacity as trustee of a trust styled "The Chinook Trust" of which there were four beneficiaries who included Mr Fuller and Mr Wilkinson. The beneficiaries of that trust, it is alleged, segregated their interests into separate trusts of which St Helier was to be the trustee. In the result, it is said that the sum of $US 1,000,000 was paid by Sovereign Trustees Limited as trustee of the Chinook Trust to St Helier as trustee of the Fuller Bare Trust.
6 It is accepted that the money was held in a separate account styled "Vilnius Trust". A written declaration of trust executed by St Helier, constituting the Vilnius Trust, is said not to set out the terms upon which the money was to be held. Rather, it is alleged that the money was beneficially owned by Mr Fuller and was to be held for him.
7 The pleadings then particularise what happened to the fund of $US 1,000,000 to which reference has already been made. The substantive allegation is that a large amount was dispersed by St Helier in accordance with Mr Fuller's instructions and, so it is said, on the terms of the trust. It is then alleged that, as at 24 November 1986, the assets of the trust included a sum of $A 410,000 which was then, so it is alleged, in breach of trust, lent to another trust called "The Mutley Trust". Being in breach of trust, it is said that the money in question or the right of action in respect thereof, was vested in the trustee as trustee of Mr Fuller's bankrupt estate.
8 Although four separate causes of action are pleaded against St Helier, in essence each relates to $A 410,000 said to have been advanced by that company as trustee of the Fuller Bare Trust to itself as trustee of the Mutley Trust.
9 However, in respect of one of the causes of action, the facts become more complicated for it is said that St Helier as trustee purported to waive repayment of the Mutley debt pursuant to an agreement whereby Mr Wilkinson would procure another company, of which he and his wife were directors, to waive repayment of a loan of $A 410,000 which that company had made out of its own monies to Mrs Fuller. The effect of the waiver was to diminish, it is said, Mr Fuller's assets and to increase the assets of his wife.
10 The case against Mrs Fuller is said to come about because part of the sum of $US 1,000,000 was paid by St Helier, said to be acting as the trustee of the Bare Trust, to a firm of Adelaide solicitors, Messrs Baker O'Loughlin, for the benefit of Mrs Fuller, the relevant sum being $A 150,000. It was said the money was used by Mrs Fuller in connection with the purchase of a property. The payment is said to arise from monies lent to Fuller Services Pty Limited by St Helier at the request of Mrs Fuller.
11 The claim against Mr and Mrs Wilkinson is said to arise by virtue of a loan having been made by St Helier as trustee of the Fuller Bare Trust to them of SFr 100,000 and paid to a bank account held by them in Canada. It is said that there was an agreement between Mr Fuller and Mr Wilkinson that the payment would be a loan to Mr and Mrs Wilkinson, repayable on demand. The loan remaining outstanding, it is said that the monies in question are an asset of the Fuller Bare Trust and vested in the trustee of the bankrupt's estate.
12 Although Mr Fuller is party to the proceedings, being the fifth respondent, no remedy is sought against him at all. This being the case, it is hard to see why he is relevantly a party. No doubt he has an intellectual interest in the proceedings and perhaps an emotional one too given the parties in question. There may be circumstances where a bankrupt may have a legitimate interest in proceedings such as the present. An example might be a case where the assets of the estate are such that there is a surplus in the estate after creditors are paid with the consequence that that surplus is required to go to the bankrupt. But that is not the present case. It could be an abuse of process to join a bankrupt for the purpose only of administering interrogatories. This is not suggested here. To the contrary, Mr Fuller seems enthusiastic to be a party.
13 Relief is, of course, sought against the other respondents.
14 The power, with leave, to administer interrogatories in this Court arises under Order 16 rule 1 of the Federal Court Rules. That rule provides:
"The Court may, in its discretion, give leave to any party to file and serve upon any other party, within the period limited by the Court for this purpose, a notice requiring the party served to answer interrogatories relating to any matter in question between the interrogating party and the party served." [emphasis added]15 Rule 3 permits the Court to limit interrogatories or classes of interrogatories. It is clearly, however, qualified by rule 1 and relates to interrogatories concerning any matter in question between the interrogating party and the party served. The unnecessary use of interrogatories is prevented by rule 3. Subrule 1 of rule 3 is in the following terms:
"The Court may, before or after any party has been required under rule 1 to answer interrogatories, order that answers to interrogatories under rule 2 by any party shall not be required, or shall be limited to such interrogatories or classes of interrogatories, or to such of the matters in question in the proceeding, as may be specified in the order."16 The regime for interrogatories in this Court differs from that to be found in some other courts, such as the Supreme Court of New South Wales, where interrogatories may, at least to a limited extent, be administered as of right, but subject to the overall supervision of the Court. So, the Rules of the Supreme Court of New South Wales, Part 24 Rule 1, provide:
"(1) Subject to this rule and to any direction given in a particular case, after the pleadings between any parties are closed, any of those parties may:17 It needs no authority to reach the conclusion that Order 16 rule 1 of the Federal Court Rules authorises only interrogatories that relate to matters in question between the interrogating party and the party served. The rule does not authorise interrogatories in respect of matters not in issue between the interrogating party and the party served although they may relate to matters at issue between other parties.
(a) where the place of trial is Sydney, not later than two months prior to the call-over; and
(b) in any other case, not later than two months prior to the beginning of the sittings at the place where the trial is to take place,
serve on any other of those parties a notice requiring the party served to answer not more than 30, or such other number as the Court may by orders specify, separate specified interrogatories relating to any matter in question between the interrogating party and the party served."
18 The reason for the rule being formulated in this narrow way is not difficult to understand. The purpose of interrogatories is to obtain admissions on oath of the facts that might assist the case of the interrogating party directly or cast doubt on the case of the party being interrogated. Admissions of one party not really involved in a dispute between other parties though joined in one action would not usually be admissible.
19 The rule applicable in proceedings brought in the Supreme Court of New South Wales was considered by Holland J in Buxton & Lysaught Pty Ltd v Buxton [1977] 1 NSWLR 285. In that case the first four defendants sought to administer interrogatories against the fifth and sixth defendants in a case where no cross claim arose as between the parties seeking to interrogate and those to be interrogated. It was held that in such a case interrogatories were not authorised. Holland J said at 287:
"The predecessors of this rule used the expression `opposite party' where the present rule now says, `any other party', but the words `matter in question between the applicant and that other party in the cause or matter' indicate that the parties between whom interrogation may take place are those between whom there is some issue to be decided in the cause of matter."20 At page 288 his Honour commented that he had found no decided case where interrogatories were ordered between co-defendants where no rights inter se were to be determined in the case. At least in the ordinary case the question whether there are issues between the parties is a question which is determined by reference to the pleadings which define those issues. It should be noted here that although Mr Fuller was not a party against whom any relief was sought he did file a defence denying various matters. Be that as it may, it is clear enough that it could be necessary if the trustee is to prove his case for evidence to be advanced by way of admissions by Mr Fuller or alternatively the trustee might well need to call Mr Fuller and, if necessary, cross examine him (with leave).
21 The trustee, however, seeks to rely not upon rule 1 but rule 5 of Order 16 which is in the following terms:
"The Court may, at any stage of the proceeding, order any party to answer interrogatories either in accordance with rule 2 or in accordance with such directions as the Court may give."22 Reference is made to the relevant English rule which permits interrogatories relating to any matter in question in the proceedings. The language of that rule is given a wider construction than that advanced in the Supreme Court of New South Wales in that it is not necessarily limited to matters in question between the party seeking to administer interrogatories and the parties to be interrogated. It is here, however, suggested that Order 16 rule 5 permits the Court to order interrogatories going outside those contemplated by Order 16 rules 1 and 2 and to order a person to answer interrogatories not only in respect of matters at issue between the interrogating party and the party being interrogated but also with respect to other parties.
23 It is no doubt correct that rule 5 must be limited to interrogatories having an adjectival relevance in the proceedings. However, I do not think that rule 5 extends the scope of interrogatories which may be administered beyond that contemplated by rule 1, that is to say interrogatories which are directed to matters at issue between the interrogating party and the party sought to be interrogated. The reference to rule 2 in rule 5 is a reference to the form in which the answers to interrogatories may take rather than the scope of the interrogatories themselves.
24 The reasons why leave is required to administer interrogatories in this Court include the ability of the Court to ensure that interrogatories sought to be administered are not oppressive. Even where leave was not required, interrogatories sought to be administered could be set aside if the administration of them was oppressive: Navair Pty Ltd v Transport Workers' Union of Australia [1981] FCA 1; (1981) 52 FLR 177. In my view, if interrogatories are sought to be directed to a party against whom no final order is sought, such interrogatories are of their nature oppressive. It follows for that reason, or for the reason that there is in truth no real matter at issue between the trustee and Mr Fuller in that no relief is sought against him, that leave should be refused to administer interrogatories to him.
25 That leaves the question of interrogatories in respect of other parties.
26 In the case of Mrs Fuller the matter at issue between the parties concerns the sum of $A 150,000 said to have been paid to her solicitors by Fuller Services Pty Limited, the second applicant in the proceedings. The monies said to have gone to Mrs Fuller were paid to Fuller Services Pty Limited it is said by St Helier as trustee for the Fuller Bare Trust.
27 No doubt it is a necessary part of the trustee's case, the relevant facts being denied, that it prove not only that monies were paid to Mrs Fuller by Fuller Services Pty Limited but also the origin of those monies. There is thus really in issue between Mrs Fuller and the trustee not merely whether the matters in clause 46 of the statement of claim are made out, namely whether Mrs Fuller was not entitled to receive the money from Fuller Services Pty Limited and in the result held it upon resulting trust for that company, but also matters which go, as well, to the dispute between the applicant and St Helier, namely the setting up of the Bare Trust and the use of monies under it to pay to Fuller Services Pty Limited. Interrogatories therefore directed to these matters are authorised.
28 In the case of the Wilkinsons it will be observed that, to succeed, the first applicant must show that there was a loan from the trustee of the Fuller Bare Trust to them out of the assets of the Fuller Bare Trust. Matters, therefore, which go to show both the establishment of the Fuller Bare Trust and the fact that monies said to be impressed with that trust were used as a loan to the Wilkinsons will be relevant.
29 It is necessarily finally to say something about the interrogatories sought to be administered against St Helier.
30 Obviously, subject to any questions of oppression, interrogatories against St Helier concerning the establishment of the trust and its activities will be highly relevant. Interrogatories directed at these matters are clearly authorised. They are, even if matter known to the first applicant, proper matters the subject of interrogatories.
31 On the assumption that the law of Jersey is the same as that in South Australia, the fact that there is an obligation of confidentiality imposed upon a person is no answer to an application for leave to administer interrogatories, assuming those interrogatories are adjectivally relevant.
32 As I understand it, the third respondent now concedes that interrogatories 1 to 48 and interrogatories 49 to 124 are directed to the origin of funds said to constitute the Fuller Bare Trust and the use of those funds in a loan to the Mutley Trust. It is my view, however, that leave should be given to administer interrogatories which are clearly adjectivally relevant to the issue between the trustee and St Helier and that this extends beyond those interrogatories which, it is conceded, should be responded to by St Helier.
33 I shall, when the matter comes before me on the next occasion, make orders and will hear any brief submissions as may be addressed to the particular form in which the interrogatories sought to be administered are cast and, should there still be a dispute between the parties, whether the interrogatories follow in substance the principles which I have set out so that leave should be given to administer them.
|
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable
Justice Hill |
Associate:
Dated: 13 January 1999
|
Counsel for the Applicants: | Mr J Chippindall |
| Solicitor for the Applicants: | M D Nikolaidis & Co |
| Counsel for the Third Respondents: | Mr C J Caldicott |
| Solicitor for the Third Respondents: | Caldicott & Co |
| Counsel for the Fourth Respondent: | Mr B O'Brien |
| Solicitor for the Fourth Respondent: | Finlaysons |
| Mr M Fuller appeared in person and on behalf of the First Respondent | |
| Dates of Hearing: | 12 November 1998 |
| Date of Judgment: | 13 January 1999 |
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/cth/FCA/1999/6.html