CATCHWORDS Bankruptcy - Application by bankrupt to leave Australia - Application by creditor to be joined as a party to proceeding. Bankruptcy Act, 1966 ss. 30, 178, 272 Re Barton (1980) 43 F.L.R. 245 - con. Re Neville; Ex parte The Official Assignee, Gardiner & Anor. (1898) 19 N.S.W. L.R. B. & P. 22 - con. PETER CLYNE v. WILLIAM EDWARD ANDREW and JOHN WILLIAM O'BRIEN No. 838 of 1983 No. 929 of 1983 Beaumont, J. 14 March, 1984. Sydney. IN THE FEDEPAT COURT CF sUSTRALIA GENERaL DIVISION BANKRUPTCY DISTRICT OF PRE TATE CF NEW SCUTH WALES alid ne ee eee THE AUSTRALIAN CAPITAT TERRITCRY No. 835 of 1983 No. $2G cf 19835 BETWEEN : PETER CLYNE Applicant AND: WILLIAM EDWARD ANDREW First Respondent AND: JOHN WILLIAM O'BRIEN Second Respondent ORDER Judge making order: Beaumont, J. Date order made: 14 March, 1984 Where made: Sydney THE COURT ORDERS THAT: 1. Grant leave to the Deputy Commissioner of Taxation to intervene in the application by the bankrupt filed in Court on 13 March, 1984. 2. Order that the Deputy Commissioner of Taxation be joined as a respondent to the said application. 3. Reserve liberty to any party to apply to the Court on such notice es a wsudge sheli allow for an ordaer dismissing tne Deruty Commissioner of Taxation as a carty to the said application. 4. Direct that the Leputy Commissioner of Taxation frle and serve on or before 4 p.m. on 23 march, 1984: (a) any affidavit or affidavits to be relied on by him; (b) a summary of the case, 1n outline form, sought to be made by him in opposition to the said application, including a reference to any points of law to be raised by him together with a list of cases, if any, to be cited. 5. Fix 29 and 30 March, 1984 for the final hearing of the application. 6. Costs reserved. IN THE FEDERAE CCURE CF AUETRALIA GENERAL DIVISION BANKRUPfCY DISTRICS OF THE STATE OF NEW SOUSE Walrs ant Re eee THE AUSTRALIAN CAPITAL CERRIECRY Ne. &36 of 19€?F No. 29 of iS&E BETWEEN: PETER CLYNE Applicant AND: WILLIAM EDWARD ANDREW First Respondent AND: JOHN WILLIAM O'BRIEN Second Respondent CORAM: Beaumont, J. DATED: 14 March, 1984. REASONS FOR JUDGMENT By application dated 13 March, 1984, the bankrupt applies to the Court for the following orders against the respondents as the trustees of his estate: "1. That the Court, in the exercise of the powers vested in ai1t by the provisions of Sections 30 and 178 of the Bankruptcy Act, should grant its consent to the applicant leaving Australia on or about the 2nd April 1984 (or alternatively should direct the first and second respondents to consent to the applicant doing so) subject to the applicant undertaking to the Court that he will return to Australia on or before the 50th June, 1984. 2. That in relation toa the applicant's proposed departure from Australza the Court should meke such further or other orders as it considers to be just anda equitable." The Deputy Commissioner or Taxation, the major, if not the sole, creditor in the estate, now seeks to be edaed as a party to the proceeding or, alternatively, seeks leave to intervene. The applicant submits that the Court has no power to make either order sought by the Deputy Commissioner. If this submission is rejected, he argues that, in its discretion, the Court should decline to make either order. In support of his primary submission, the bankrupt refers to those provisions of the Bankruptcy Act which confer a specific right of audience upon a2 creditor: see ss.69(9); 74(3)(b); 81(8) and 150(4)(a)({1i). He then says that the fact that the Act confers no specific right of audience upon a creditor in any other provision 1S an indication that, on its true construction, the Act confers no such right except 1n the 1unstances cited. In particular, he relies upon the circumstances that s.272 makes no mention of any right of a creditor to be heard; and that s.178 is to similar effect, save where the creditor 1s himself "affected" by an act, omission or decision of the trustee and the bankrupt denies any such affection in the present case (see Moser v. Marsden [1892] 1 Ch.487; Amon v. Raphael "yuck & Sons Lid. [1956] 1 K.B. 3557; Vanderveli Trustees Ltd. v. White [1971] A.C. 912). In my ofinion, the construction of the act contended for by the bankrupt should not be accepted. In my view, s.30(1)(tb) gives the Court the power, in an appropriate case, to grant leave to a creditor to intervene in any proceedings involving the bankrupt or his estate. In Re Barton (1980) 43 F.L.R. 245, Lockhart, J., in an application by a creditor, whose debt had not been proved, to intervene in a discharge application, held thai s.30(1)(b) empowered the Court to grant the epplication for leave to intervene and, 1n so doing, rejected an "exclusive code" argument similar to that now advanced. Whilst the reasoning 1s not squarely in point, I propose to follow that decision and to adopt its reasoning as analogous for present purposes (see also Re Neville; Ex p. Official Assignee (1898) 19 N.S.W. L.R. B. & P. 22 at v.23). Power having been established, I turn now to the question of discretion. In my opinion, where a trustee (or, in the peculiar circumstances of this case, two trustees) can represent the interests of creditors in the application, special circumstances must be shown to exist before intervention of a creditor should be permitted. In the present case, the Deputy Commissioner says that he hes a special knowledge of the affairs of the bankrupt, having i regard to the extensive litigation which nas 7 ww ~ ken Place between them. He says that, accepting fully the integrity and competence of the trustees and their advisers, he 1s seized of a deal of information atout tne bankrufi which 1s impossible to communicate properly to the trustees, at least in the short term. There can be no doubt that the circumstances of the case are unusual and thet the affairs of the bankrupt are complex. Prima facie, in my view, the Deputy Commissioner has established a case for intervention (cf. Barton at p-253). At the same time, I think that there is force in the submission put by the bankrupt (and to varying degrees) by the trustees, that the Deputy Commissioner should not be permitted to take over the functions of the trustees in the administration of the bankrupt's estate, even if he 1s the major creditor. It need hardly be said that this 1s not adversary litigation and that the questions which arise concern the administration of the bankrupt's estate by the trustees as officers of the Court. On the whole, I have concluded that the Deputy Commissioner should be granted leave to intervene but that conditions should be attached to tne grant of that leave to ensure, so far as possible, that the primary responsibility for assisting the Court in the substantive application remains with the trustees ~hemselves. 2 propose te give directions to this end by requiring the Deputy Commissioner to file and serve promptly an outline of the matters sought to be relied on by him. I also propose to reserve to any el party liberty tc apply for an order dismissing tne Lepury Commissioner as a party to the proceedings should 1t smerge that, having regard to the parts played by the trustees respectively in the proceeding, no useful purpose would be served by his remaining a party. It goes without saying that, in the circumstances, the Deputy Commissioner eppears at his own risk as to costs. I make the following orders: l. Grant leave to the Deputy Commissioner of Taxation to intervene in the application by the bankrupt filed in Court on 13 March, 1984. 2. Order that the Deputy Commissioner of Taxation be joined as a respondent to the said application. 3. Reserve liberty to any party to apply to the Court on such notice as a Judge shall allow for an order dismissing the Deputy Commissioner of Taxation as a party to the said application. 4. Direct that the Deputy Commissioner of Taxation Fereh, 194: file and serve on or before 4 p.m. on 2 iS ) (a) any affidavit or affidavits to be relied on by hin; (b} a summery of the case, 1n outline form, sought tc be made by him in opposition to the said application, including a reference to any points o7 law to be raised by him together with a list of cases, 1f any, to be cited. 5. Fix 29 and 50 March, 1984 for the final hearing of the application. 6. Costs reserved. —_ | certify thar this enc the Pages are ais -- preceding cna ad "9 '- sucgment pera - . . Nir Justice se er Dated j- '