JUDGMENT No. Bb Brrsenel KZhdu , IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT IN THE STATE OF No. W168 of 1984xX NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL TERRITORY Re: KENNETH GRAHAM WINTON Debtor Ex parte: JAMES JOHN JOLLIFFE Deputy Registrar in Bankruptcy CORAM: Einfeld J PLACE: Sydney DATE: 10 June 1987 FEDERAL. COURT OF AUSTRALIA 28 JAN 2003 LIBRARY ~ EX TEMPORE JUDGMENT This is an application on behalf of the bankrupt, Kenneth James Winton, for an order pursuant to section 14(5) of the Bankruptcy Act 1966 ("the Act") that a summons of the Registrar under section 81 of the Act be reviewed. He also seeks review of section 81 summonses issued to two companies called Latia Pty. Limited and Cataplumb Pty. Limited to produce records and other documents. Heard at the same time as those two applications were applications by those two companies that the summonses issued against them under section 81 should be set aside. I have some doubt about whether Mr. Winton can properly be an applicant for review of the issue of the summonses against the two companies, but because those companies have raised the same matters in argument on their applications to set aside as has Mr. Winton in his applications for review, it is not necessary to decide that matter in this particular case. All applications for the summonses were made by the Deputy Registrar in Bankruptcy ("the respondent"). The grounds upon which all applications sought the orders referred to were that firstly the respondent had _ . no status to bring the applications, and secondly, that the summonses themselves were too wide, oppressive, and insufficiently precise. So far as concerns the question of the status of the respondent to bring the application, this was put on two grounds at the commencement of the hearing. The first ground was that under section 81 itself the application can only be brought by a creditor or by the official receiver or trustee. Section 15(4) provides that the Inspector-General may by written document direct an officer to exercise and perform such of the powers and duties of an official receiver as he specifies in the direction. The evidence discloses, through an affidavit filed by the respondent and dated 25 March 1987, that he was appointed by the Inspector-General under section 15(4) to carry out the relevant duties of the official receiver in this matter. There is therefore no substance to the point taken in respect of this aspect of the respondent's status to bring the proceedings. The second attack on his status is that under section 15(4), the only person who may be directed in this way by the Inspector-General to exercise the official receiver's powers and perform his functions or duties is "an officer". It is said that the Deputy Registrar does not so qualify. "Officer" is defined in section 5(1) of the Act as an "officer of the court or of the Commonwealth". It having been previously determined by a case which is binding on me that a registrar in bankruptcy is not an officer of the court, James v Deputy Commissioner of Taxation (1956-57) 97 CLR 23, the question raised by way of objection to his status in this matter is that he is not an "officer of the Commonwealth". That argument was not raised in any of the three applications presently before the court when the matter was commenced. During the hearing I gave leave to the applicant debtor and the two applicant companies to amend their applications to raise that particular point, reserving all questions of evidence and costs that arose from the late notice of that matter. In order to permit further argument and perhaps further evidence to be addressed to that issue, I will reserve the rights of the parties in this regard and make no decision on the matter at this stage as it has not yet been fully litigated and argued, still less considered by me. At the end of this judgment, I shall fix a timetable and a date for the conclusion of that particular aspect of the litigation. The second attack on the summonses relates to a different question altogether. It is said that the form of the summonses provides no guidance or direction at all in relation to the companies as to what documents are being sought and to what issues the documents relate. My attention has been drawn to some case law, which I accept without question, to the effect that it is not permissible to use section 81 summonses as what are known, generally speaking, as fishing expeditions; nor may they be expressed in terms which impose oppressive burdens on the person expected to respond in the supply of documents, records and other material. In one of the cases mentioned, Rees v Kratzmann (1965-66) 114 CLR 63, Windeyer J at 79 said in the context of an analogous provision relating to the winding up of companies: "The matters on which a person may be examined are, however, not wholly at large. The court which directs the examination must, I take it, state in its order whether the person summoned is to be examined on matters concerning the promotion or formation, or the conduct of the business of the company, or, in the case of an officer or former officer of the company, as to his own conduct and dealings as such officer. And the court before which the examination is held has a discretion as to the questions that may be asked. The boundaries of the discretion are admittedly not defined. But the purpose of the inquiry is to gain information that may be relevant for the proper conduct of the winding-up of the affairs of a company in relation to which there are prima facie grounds for thinking that some fraud has been committed or some material fact concealed. Doubtless a court would be guided in the exercise of the discretion that the Act gives by its apparent policy and purpose." There is reference later in his Honour's judgment at page 80 to the balancing of the question of what a lawyer regards as justice in common law terms on the one hand, and the place for such concepts of justice, normally applicable to the criminal law, in the Chancery Court as it was then and in the bankruptcy jurisdiction in this particular case. He observed that the common law concepts have little place in the bankruptcy jurisdiction. In other jurisdictions orders of the court to third parties to produce documents are in the main viewed from the standpoint of whether the respondents to the orders may be put to great expense or trouble, not merely in producing the documents but in identifying from a vast bulk of material what precisely is relevant and is required. However, it seems translating the views of Windeyer J to the situation existing here that such concepts are generally inapplicable in the bankruptcy jurisdiction, especially in relation to section 81 summonses, except perhaps if the scope of the summonses is grossly irrelevant, intrusive or otherwise offensive to justice. Until recently, it appears to have been the practice if not the law that a respondent to a_ section 81 summons was not permitted to see the application upon which the summons was based and which brought about its issue, still less the evidence in support of the issue produced to the Registrar on the application for the summons. In this particular case, I permitted access to the material which was used to ground the issue of the summons, not merely because this course was consented to by the respondent as the appointee of the Inspector-General, but also because, in my view, each case must be determined on its own facts. In this particular case, there was no apparent reason for not permitting the debtor or his representatives to have access to the relevant material. There appears to be some dispute in the authorities as to whether the documentation which preceded the issue of the summons needs to establish what is strictly called a prima facie case for the summons or whether it is some lesser level of proof. Sir George Jessel in Re Gold Company 12 Ch D 77 at 84, described the test as being the probability of a case being made out. The case to which this test must be applied will vary with the circumstances. It may be a fraud or suspected fraud. It may, on the other hand, merely be an inquiry in the interests of creditors to see what assets might be available for distribution to them, and there are many other possibilities that come to mind. The applicants in this case, having been given access to the application, would immediately discover, and have discovered, what is being investigated, or sought to be investigated, as to the relationship between the debtor and the two companies concerned. These companies have been listed in the respondent's statements of affairs as being substantial creditors of his - in the case of Latier Pty. Limited for a sum of money in excess of a quarter of a million dollars, and in the case of Cataplumb Pty. Limited, for just over $50,000, this in the context of his having disclosed assets of $5,624 and liabilities of a little over half a million dollars. The applications in respect of the issue of the summonses allege a potentially close relationship between the debtor and _ those two companies. It would be expected that at least the companies' records would disclose the way in which the respective debts were incurred and for what services or goods they were incurred. The companies' records would also be expected to disclose the exact relationship of the debtor with the companies and a summons would permit the possibility of an examination as to whether these companies are, in fact, true creditors of the bankrupt's estate or have some other less wholesome place in the scheme of things. None of this has been denied by the applicant or the two companies in these proceedings. In my view, therefore, a section 81 summons needs _ to _ be looked at not merely in terms of the traditional authorities on supboenas to third parties who are strictly arms length entities for whom they can claim no attachment. It is not even a question of section 81 summonses needing to be looked at in the light, as Mr. Justice Windeyer described it, of the apparent policy and purpose of the Bankruptcy Act. They must also be looked at in the context of the applications to which access was given and, for that matter, to the affidavits filed in support of the applications. This context is that the two companies are associated with the debtor and for whom he has some responsibility. There is therefore no question of the debtor having to paw through every line of substantial evidence, which is strange to him, nor for that matter, of the companies officers being required to go through every document attached to the affidavits in support of the applications for the issue of the summonses, with which they are familiar. In my view, such applications need not identify every document sought in a way which shows its immediate relevance to any specific question that might arise but merely to identify the classes of documents and the categories of documents that the summons might reasonably cover. In the event that any difficulty arose in relation to a liability for production of an appropriate document, the matter could no doubt be dealt with by the Registrar on the examination or referred to the court for further decision. These summonses, and their applications, make quite clear what documents are being sought and the purposes for which they are being sought. In those circumstances, there seems to me to be no ground for complaint available to the debtor or the two companies that the summonses are too wide or oppressive or insufficiently precise. For the above reasons, I shail dismiss those aspects of these. applications as challenge the terms of the summonses themselves and reserve the decision as to the status of the respondent to issue the summonses so as to allow the respondent to file written submissions.