Heard: 26th February 1980 Delivered: llth March 1980 pabnnvPTCt QEGISTEN FILED 41 MAR 1980 pisteict OF THE STATE OF WESTERT AUSTRALIA. } . —_— IN THE SUPREME COURT } OF WESTERN AUSTRALIA ) EXERCISING FEDERAL ) JURISDICTION IN ) BANKRUPTCY ) BANKRUPTCY DISTRICT OF THE ) STATE OF WESTERN AUSTRALIA ) No. 74 of 1978/X re: KELVIN BRIAN LAMB Ex Parte: PETER MICHAEL MELSOM and TERENCE JOHN COLLINSON No. 70 of 1979 re: MICHAEL JAMES HARGREAVES DUNCAN Ex Parte: TERENCE JOHN COLLINSON Mr. R. Harmer appeared for the applicants (instructed by McCusker and Harmer). BRINSDEN J. The above matters concern two applications for directions one in each case which came on before me in the Supreme Court of Western Australia exercising Federal Jurisdiction in Bankruptcy. The applications are for directions on behalf of, in action 74 of 1978/X the trustees of a deed of arrangement made by the debtor Kelvin Brian Lamb, and in respect of action 70 of 1979 by the trustee of the bankrupt Michael James Hargreaves Duncan. In each case the application for the purpose of facilitating the proper administration of the joint estate of the debtor and of the bankrupt seeks an order for the consolidation of the estate of the bankrupt and the debtor. 2. I have had the advantage of reading an affidavit of the solicitor acting in respect of both matters who provides me with the background of the applications. Prior to the execution of the deed of arrangement Lamb had been carrying on business in partnership with Duncan under the style or firm name of "Duncan & Lamb Publishers & Associates". On the 3rd January, 1979 Lamb, the debtor, entered into the deed of arrangement already referred to, while on the 2nd March 1979 Duncan filed his petition in bankruptcy and he thereby becqme bankrupt by operation of the Bankruptcy Act 1966. Both the debtor and the bankrupt had separate assets and separate liabilities, but both of them have joint assets being the assets of the business previously mentioned and of course are jointly liable for the debts and liabilities of such business. The business was and is insolvent. The joint assets comprised inter alia some ready realisable assets which the applicants have realized in the course of their respective trusteeships. The proceeds of such realization of joint assets amounts to a considerable sum of money. The funds from the realized assets are currently credited to a separate bank account in the names of the applicants and have been kept distinct and apart from the separate affairs of the debtor and bankrupt. There are other joint assets yet to be realised including a potential substantial claim that the bankrupt and the debtor have against a third party in respect of the acquisition of the business, and in respect of which Litigation will probably eventuate. There are considerable joint debts of the bankrupt and the debtor. It will therefore be necessary for the applicants to be able to call for and deal with proofs of Re ee 3. joint debts and to pay dividends from the joint estate for the benefit of proven creditors. Additionally the applicants have incurred and will continue to incur costs and expense in dealing with the joint assets and the joint debts and should of course be entitled to recoup the same and to enjoy remuneration for their work from the joint estate. The applicants have endeavoured to file joint accounts as is normally required by the Bankruptcy Act with the Registrar in Bankruptcy in respect of their administration thus far of the joint estate. But the Registrar has declined to accept such accounts on the ground that the estates of the bankrupt and the debtor whether joint or otherwise ought to be administered separately. The above recitation of facts seems to me to demonstrate that it is obviously for the benefit of all parties that for the purpose of facilitating the proper administration of the joint estate of both the debtor and the bankrupt an order for consolidation of the estates should be made, but the question is am I able at law to do this? Section 53 of the Act provides that where two or more members of a partnership, or two or more joint debtors, have become bankrupt, the Court may consolidate the proceedings upon such terms as it thinks fit. It appears from this section that it is only in relation to debtors who have become bankrupt that the Court may make an order for consolidation so the section does not appear to cover the facts of this case. Counsel for the applicants directed my attention to s.30 which provides, inter alia, that "the 4. Court (b) may make such orders ...... as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter". The words "in any such case or matter" are a reference back to the provisions of sub-paragraph (1)(a) of the section which includes any case of bankruptcy or any matter under Part X or Part XI coming within the cognizance of the Court. This leads to the next question: what is the function of this Court sitting in the Bankruptcy Jurisdiction? The answer to that question was given a long while ago by Lord Selborne L.c. in Ellis v. Silber 8 Ch. Appeal Cases 83 at 86 when he said: "That which is to be done in bankruptcy is the administration in bankruptcy. The debtor and the creditors, as the parties to the administration in bankruptcy, are subject to that jurisdiction. The trustees are assignees, as the persons entrusted with that administration, are subject to that juris- diction. The assets which come to their hands and the mode of administering them are subject to that jurisdiction. " The jurisdiction in bankruptcy of this Court is therefore the administration in bankruptcy of those matters which properly fall within the provisions of the Bankruptcy Act, including any case of bankruptcy and any matter under Part X or Part XI. Prima facie therefore I would think that the orders sought fall squarely within the contemplation of the provisions of s.30(1)(b) above referred to, unless there is any earlier decision of a Court binding upon me which has found to the contrary. Counsel's diligence in this matter plus my own efforts have failed to locate any authority which denies Iy power, but there is no authority which concedes the 5. power in the precise circumstances of this case. The only cases which have passing relevance are in re Greaves Ex Parte the Official Receiver 1904 2KB 493 where an order of consolidation was made in respect of the adminstration of the estate of a deceased partner with the administration of the estate of the bankrupt surviving partner. Bingham J. who gave the decision does not appear however to have relied upon a section equivalent to s.30. In a further decision of that Judge in re P. Macfadyen & Co. 1908 1KB 675 his Honour made an order sanctioning an agreement between the trustee in bankruptcy in England and the official assignee abroad, of a firm, bankrupt in England and abroad, and having English and foreign assets, notwithstanding that the Bankruptcy Act of 1883 contained no express provision authorizing such a scheme. Inherent jurisdiction apparently was relied upon though the Judge makes no express mention of that in his short reasons for judgment. I note in Williams on Bankruptcy 18th Edn. when dealing with s.105 of the Bankruptcy Act of 1914, a section roughly equivalent of our s.30, the learned authors state that the Court has the widest powers under the section as regards matters arising out of the bankruptcy. I believe therefore that I am entitled to make the orders sought in these applications and I propose to do so on being supplied with a minute of the directions thought to be necessary, in addition to the formal order consolidating the administrations. IN THE SUPREME COURT ) OF WESTERN AUSTRALIA ) EXERCISING FEDERAL )} JURISDICTION IN ) BANKRUPTCY ) BANKRUPTCY DISTRICT OF THE ) STATE OF WESTERN AUSTRALIA ) No. 74 of 1978/X re: KELVIN BRIAN LAMB Ex Parte: PETER MICHAEL MELSON and TERENCE JOHN COLLINSON No. 70 of 1979 re: MICHAEL JAMES HARGREAVES DUNCAN Ex Parte: TERENCE JOHN COLLINSON REASONS FOR JUDGMENT BRINSDEN J. Delivered on 11th March 1980