Clout (Trustee), in the matter of Dexter (Bankrupt) [2000] FCA 1949 (14 December 2000)

Last Updated: 2 February 2001

FEDERAL COURT OF AUSTRALIA

Clout (Trustee), in the matter of Dexter (Bankrupt) [2000] FCA 1949

IN THE MATTER OF GEOFFREY ROBERT DEXTER (A BANKRUPT)

THE APPLICATION OF DAVID LEWIS CLOUT (AS THE TRUSTEE IN BANKRUPTCY OF THE ESTATE OF GEOFFREY ROBERT DEXTER)

Q 7302 OF 2000

DOWSETT J

14 DECEMBER 2000

BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 7302 OF 2000

IN THE MATTER OF GEOFFREY ROBERT DEXTER (A BANKRUPT)
THE APPLICATION OF DAVID LEWIS CLOUT (AS THE TRUSTEE IN BANKRUPTCY OF THE ESTATE OF GEOFFREY ROBERT DEXTER)
JUDGE:	DOWSETT J
DATE OF ORDER:	14 DECEMBER 2000
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1. The application is refused.

2. The applicants are to pay the respondent's costs of the proceedings today.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 7302 OF 2000

IN THE MATTER OF GEOFFREY ROBERT DEXTER (A BANKRUPT)

THE APPLICATION OF DAVID LEWIS CLOUT (AS THE TRUSTEE IN BANKRUPTCY OF THE ESTATE OF GEOFFREY ROBERT DEXTER)

JUDGE:	DOWSETT J
DATE:	14 DECEMBER 2000
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1 This is, in effect, an application to review a decision by a Deputy District Registrar declining to stay, or perhaps adjourn examinations pursuant to s 81 of the Bankruptcy Act 1966. Anne Shirley Corbett, John McDonald McAuley and Graeme Scott and Co Propriety Limited (the "examinees") were summoned to appear today.

2 Earlier this week, the examinees applied to Drummond J to set aside the relevant summonses. The motions were unsuccessful. A perusal of his Honour's reasons, which have become available in the course of the hearing today, indicates that the grounds argued were firstly, that because the application was made by the trustee in bankruptcy of the estate of Geoffrey Robert Dexter, who is also the applicant in proceedings against the examinees, it involved an abuse of process or a misuse of process because the trustee might obtain from their examination, information to be used in the proceedings against them. The second ground was that the orders may have been a little wide in their description of certain documents. Neither argument found favour with his Honour. The examinees now wish to appeal against that decision and ask that the examinations before the Registrar be stayed or adjourned pending that course. No notice of appeal has been filed, nor has any draft notice of appeal been prepared. It is said that there has not been time for that to be done. In those circumstances the Deputy District Registrar declined to adjourn or stay the examinations. I am asked to review that decision.

3 In applying for the summonses pursuant to s 81, the trustee relied upon par (d) of the definition of "examinable person" in s 5 of the Bankruptcy Act. It seems that in the proceedings which are on foot, the trustee asserts that the bankrupt paid excessive amounts to an intermediate company, Anscor Pty Ltd, that those payments, or parts of them, are void as against the trustee and that Anscor disposed of the funds to other persons directly or indirectly associated with it. The trustee seeks to recover such funds from Anscor and also to trace them into other assets in the hands of Anscor and/or other persons or companies. It is not appropriate for present purposes that I form any concluded view as to the strength or weakness of such claims. It is sufficient to say that the trustee asserts that the examinees are persons who were associated with these transactions and demonstrates that they might reasonably be expected to have knowledge of them. They therefore fall within the provisions of par (d) of the definition of "examinable person". His Honour points out in his reasons for judgment that no submission to the contrary was made before him.

4 Before me, it was also argued that there had been non-compliance with the provisions of O 77 r 34(2), particularly pars (b) and (c). It was said, firstly, that there was no evidence to establish that the examinees were examinable persons. I have already dealt with this point. Secondly, it was said that there was no evidence to identify the books which the examinees were ordered to produce, as to any inquiry by the trustee concerning those books nor of any refusal by the examinees to co-operate with the inquiry. Again, the point was not taken before his Honour. It was said that the applicants had not then had access to the relevant affidavit, not having seen it until yesterday. I find it odd that they should have gone to the trouble of commencing proceedings to challenge the validity of the summonses without first ascertaining the basis upon which they were obtained. If, in fact, this is what they did, then they must bear the consequences of it. In any event, even conceding a technical deficiency in the affidavit, it would not necessarily lead to the summonses being set aside. It is s 81 of the Act which regulates the entitlement of an applicant to seek orders for public examinations. It is unlikely that failure to comply with a rule of court would render the order liable to be set aside, particularly as the point was not taken at first instance.

5 I should deal specifically with one other aspect of this submission. It was that the trustee had actively misled the Court or perhaps, had failed to make a material disclosure on the ex parte application for summonses. This submission related to par 41 of the affidavit filed in support of that application which recited:

Preliminary discovery of documents has been effected by Anscor and its related entities in the Action, and to date these parties have failed to discover their bank statements, financial statements and taxation returns evidencing the receipt and expenditure of the Commission monies from Dexter.

6 It was said that this was incorrect, partly because some of the documents are, to the knowledge of the trustee, in the hands of a law enforcement agency. That has nothing to do with the question of whether or not they have been discovered. Discovery and production are different processes. It was also said that some of the documents had been discovered. This appears to be correct in that items in a list of documents provided by Anscor, which is exhibited to Mr Saunders' affidavit, filed today, may include some of the documents referred to in the summonses. However, it is clear that most have not been discovered. It may be that there is some peripheral untidiness about Mr Clout's affidavit but I cannot see that there has been any material non-disclosure. In any event, had proper inquiries been made as to the basis of the order, the point could have been raised before his Honour. It was not. In the circumstances, and particularly given the fact that there is no appeal on foot, nor any draft notice of appeal, I am not minded to intervene at this stage. Even if there were a notice of appeal, I would not consider this an appropriate case in which to intervene. The application is refused.

7 I order the applicants to pay the respondent's costs of the proceedings today.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated: 1 February 2001

Counsel for the Applicant:	D Cooper SC
Solicitor for the Applicant:	Shand Taylor
Counsel for the Respondent:	P D McMurdo QC D A Quayle
Solicitor for the Respondent:	Mallesons Stephen Jacques
Date of Hearing:	14 December 2000
Date of Judgment:	14 December 2000