IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY (Not for publication or distribution) No. 533 of 1986 BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA EX TEMPORE JUDGMENT Coram: Date: ~ eevee ve wrvw Re: BARRY JAMES RUMPF Ex parte: THE OFFICIAL TRUSTEE IN BANKRUPTCY (as trustee of the bankrupt estate of Barry James Rumpf) (Applicant) E BARRY JAMES RUMPF', CANTENAE PTY. LTD., ADAVON NOMINEES PTY. LTD. and WELSH INVESTMENTS PTY. LTD. (Respondents) Ryan J. 16 October 1986 EX TEMPORE REASONS FOR JUDGMENT This application is made on behalf of the Official trustee as trustee of the bankrupt estate of Barry James Rumpf. By the application, the Official Trustee seeks declarations and consequential orders in respect of certain assets which have been effectively used in and generated by the conduct of two businesses carried on respectively under ee ' aay r wen ee wor. cere ee says rot aT, ste i. ae fee et ae gn eee pee ee ee oes, the names of R. J. Kirwan and Associates and Combined Group Services. I am satisfied on all of the evidence before the court- that all of the assets comprised in the businesses respectively carried on under those registered business names are property of which the bankrupt, Barry James Rumpf, is the beneficial owner, of over which he has a general power of appointment. As such, in my view, those assets are "property" as defined in s.5 of the Bankruptcy Act 1966 and are "property of the bankrupt" as defined in the same section. I am led to the conclusion which I have just indicated, by the following facts and events which I consider have been clearly established by the evidence. However, the recital which I am about to give should not be taken as exhaustive of all of the facts which lead to, or tend to support, the conclusion to which I have come. In 1980 the two businesses which, for the sake of brevity I shall hereafter call "the cleaning business" and "the security business", were sold on terms which provided that Mr. and Mrs. Kirwan and Mr. and Mrs. Eddy as vendors should receive a consideration amounting in all to $50,000 per couple per year for the next 10 years. rerrece es weasee pee we = —— y moon or one te Vat om Re hoe + Ase . Ye > z a ore te me pes pe ae The purchaser of the cleaning business was Tanavent Nominees Pty. Limited and the purchaser of the security business_was Tertiary Nominees Pty Limited. Both of those. companies had common directors, Mr. Rumpf and two otherwise unidentified gentlemen with Chinese names, Ng Kim Ling and Chan Wai Chung. By 1 July 1983 the company controlling the cleaning business and the security business changed to Peter Brian Pty. Limited and Burra Anna Nominees Pty. Limited respectively. Peter Brian Pty. Limited had the same directors as Tanavent Nominees Pty. Limited and Tertiary Nominees Pty. Limited, being Mr. Rumpf and the two other, presumably Chinese, gentlemen. The directors of Burra Anna Nominees Pty. Limited were Mr. Rumpf and Fifth Minrip Pty. Limited. On 18 June 1985 Tenth Cantenae Pty. Limited resolved to purchase the cleaning business and the security business as trustee for the Anzac No. 11 fTfrust. The minute which embodies that resolution recited in part; "Resolve that as at 1 July 1985 the company acquire, as trustee, a group of businesses carried on under the following names:- R.J. Kirwan & Associates Combined Group Services Kirwan Security Services Kirwan Group Services from Peter Brian Pty. Ltd. and Burra Anna Nominees Pty. Ltd. iedetnt ae) Further resolved that the basis of the purchase shall be the net tangible assets as set out in the accounts at 30th June, 1985 plus a further amount for goodwill of one million dollars." It is a_strong inference from the facts disclosed to the- court that a trustee acting in the best interests of its beneficiaries would not have regarded $1 million as an appropriate price to pay for the goodwill of the businesses which Tenth Cantenae Pty. Limited resolved to acquire. Previously, it seems, Tenth Cantenae Pty. Limited had been a shelf company and, until 30 June 1984 had been a vehicle for the conduct of a newly founded-business of a Mr. Torrance and a Mr. Teal who were clients of Mr. Rumpf in his capacity as a chartered accountant. Even at that time, Tenth Cantenae Pty. Limited was purportedly the trustee for the Anzac No. 11 Trust. That trust was constituted by a deed of trust dated 2 September 1981. According to Mr. Teal, the trust remained dormant because the business founded by him and Mr. Torrance did not generate any profits in the early years of its existence which could be impressed with the character of trust funds of the Anzac No. 11 Trust. It appears that, when Messrs Torrance and Teal no longer wished to use Tenth Cantenae Pty. Limited as a vehicle for their business venture, they arranged with Mr. Rumpf for their business to be sold by Tenth Cantenae Pty. Limited. Presumably, that company and its still dormant Anzac No. 11 Trust simply went back on to the shelf. At all events, there is no evidence of any injection of funds into either Tenth Cantenae Pty. Limited or the Anzac No. 11 Trust to enable the purchase_in June 1985 of either the cleaning business or the- security business. It seems that from 1980 onwards all major decisions in respect of both the cleaning business and the security business were taken by Mr. Rumpf. Employees of the cleaning business and the security business were paid through one or other of two Queensland-based firms, Southern Labour Pool and West Coast Labour Pool, by means of cheques drawn on Queensland banks. The bank accounts of those firms were kept in funds by periodic advances from the cleaning business and the security business. Also, from time to time, moneys were drawn on the Queensland account of either Southern Labour Pool or West Coast Labour Pool and paid either to Mr. Rumpf as director's er consultant''s fees or paid at his direction; for example, to an account at the Bendigo building Society standing in the name of Edwin Ross Irwin from whom, if he exists, Mr. Rumpf holds a power of attorney. The proprietor of both of the business names "Southern Labour Pool" and "West Coast Labour Pool" is Welsh Investments Pty. Limited of which the directors are Mr. Rumpf and Tenth Wakool Pty. Limited of which company Mr. Rumpf is, in turn, a director. wae ae en wea ee ere, wr MIA, PU re vag ee a ee eee > roe see oe Mr. Rumpf has admitted that he controls Welsh Investments Pty. Limited. Substantial sums of between $1500 and $3000 a fortnight were drawn in cash by Mr. Todd, an- employee of the cleaning business and the security business, on Mr. Rumpf's instructions from both of those businesses. The money was placed in sealed envelopes and put in the firm's safe and thereafter collected by somebody unknown to Mr. Todd, but clearly believed by him to have been Mr. Rumpf. Moreover, although Mr. Rumpf this morning disputed the inference that he had, in fact, received that money, as Mr. Meagher reminded me, he showed no reaction to the evidence given by Mr. Todd yesterday and took no advantage of the opportunity to cross-examine Mr. Todd or otherwise to suggest that those very substantial sums had been misappropriated. It is significant, in my view, that none of the other matural persons whose identity has been established by reference to such documents as have been able to be found, has made any claim to a beneficial interest in any of the assets of the cleaning business or the security business or otherwise in the trust property presumptively vested in Tenth Cantenae Pty. Limited, I raised with Mr. Meagher this morning the concededly remote possibility that somebody other than Mr. Rumpf may have acquired a vested interest in some part or other of the " trust estate of which Tenth Cantenae Pty. Limited is the trustee. Such a person could still be entitled to funds in the hands of the Official Trustee if his claim could be substantiated. Indeed, it might be to the benefit of that- person for the remaining assets of the businesses to be vested in the Official Trustee rather than be simply allowed to waste. It must also be remembered that the identity of any such person can be presumed to be within the knowledge of Mr. Rumpf. If such a person exists, Mr. Rumpf has apparently made the judgment that the interests of that person are better served by preserving his or her anonymity than by disclosing the identity of that person and by substantiating that person's beneficial interest in any of the assets in question in this application. Accordingly, I propose to make orders in terms of the application in this matter. Iwill make a declaration in terms of paragraph 1 of the application; an order in accordance with paragraph 2; a declaration in the form of paragraph 4 and an order in respect of the shares of Welsh Investments Pty. Limited in the form of paragraph 5. I understand that there may be some small amounts of money still standing to the credit of Southern Labour Pool or West Coast Labour Pool or both of those firms. Accordingly, Iomake a declaration in terms of paragraph 6G, and I order that the costs of this application be taxed and paid out of the estate of the bankrupt. I reserve liberty to any party to apply-for further orders or directions in this matter and- I include in that reservation a right in any person not a party to the application who may wish to claim a beneficial interest in any of the assets with which this application has been concerned, to pursue that claim. MR. BRETT: If your Honour pleases. MR. MEAGHER: Tf your Honour pleases. Your Honour, in paragraph 6 of the application, there is an error. It refers to the Western Labour Pool. All the evidence - it is the West Coast Labour Pool. Yes. HIS HONOUR: West Coast, yes. The order should be amended to reflect that correction. MR. MEAGHER: If your Honour pleases. HIS HONOUR: In paragraph 7, I think the word, "state", should read "estate" too, Mr. Meagher. Is there anything else that you wish to be included. MR. MEAGHER: your Honour about today. No, your Honour, that release of the exhibits? HIS HONOUR: Yes, the exhibits will be - is all we need trouble Would your Honour order the they all came, I think from your client, did they not, Mr. Meagher? - I will order custody of the Official Trustee. MR. MEAGHER: that the If your Honour pleases. I certify that exhibits be released into the this and the preceding eight (8) pages are a the Reasons for herein of the Mr. Justice Ryan. Dated: true copy of Judgment Honourable o- "fe S9PPO Associate poe reper le aan Sop a san tee e+ - oe were. tae