JUDGMENT No. 28../ CATCHWORDS BANKRUPTCY - Discovery of bankrupt's property - Summons' to third party - Whether statement of grounds adequate - Whether Registrar or Court can have regard to information acquired in earlier proceedings in the same bankruptcy - Whether summons too wide or otherwise oppressive - Whether summons obtained for ulterior motive of assisting pending litigation - Principles governing issue of such summonses' to third parties. Bankruptcy Act 1966 (C'th) s.81 Banbkruptcy Rules Rule 129 SOPHIA KAROUNOS, ELIAS KAROUNOS, KATINA KAROUNOS, and BARBARA JOY HUNT V OFFICIAL TRUSTEE No. G 32 of 1988 FORSTER, WOODWARD and SPENDER JJ. ADELAIDE 3 JUNE 1988 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: JUDGES MAKING ORDER No. G 32 of 1988 ON APPEAL from a Single Judge of the Federal Court of Australia SOPHIA KAROUNOS, ELIAS KAROUNOS, KATINA KAROUNOS, and BARBARA JOY HUNT Appellants and OFFICIAL TRUSTEE Respondent MINUTE OF ORDER FORSTER, WOODWARD and SPENDER JJ. DATE OF ORDER : 3 guNE i9s8 WHERE MADE Hy ADELAIDE IT IS ORDERED THAT: 1. The appeal be dismissed. 2. The appellants pay the respondent's costs of the application for leave to appeal and of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIA DISTRICT REGISTRY ) No. G 32 of 1988 ) GENERAL DIVISION ) ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: SOPHIA KAROUNOS, ELIAS KAROUNOS, KATINA KAROUNOS, and BARBARA JOY HUNT Appellants and OFFICIAL TRUSTEE Respondent COURT: Forster, Woodward and Spender JJ. DATE: 3 June 1988 PLACE: Adelaide REASONS FOR JUDGMENT THE COURT This is an appeal, by leave, from a decision of Fisher J refusing to set aside four summonses directed to the appellants and issued by the Registrar in Bankruptcy under 8.81 of the Bankruptcy Act 1966 ('the Act'). That section, so far as is relevant for present purposes, provides - "(1) The Court or the Registrar may .... on the application of the Official Receiver or the trustee, at any time summon - (a)... (b) a person who ... is supposed to be able to give information concerning the bankrupt or his trade dealings, property or affairs, to attend ... before the Court or the Registrar ... to give evidence concerning, and produce any books in his custody or power relating to, the bankrupt or his trade dealings, property or affairs." Bankruptcy Rule 129(1) provides that such an application shall set out the grounds on which the application is made but, in the case of a bankrupt's trustee's application, does not require an affidavit of supporting facts. It is not disputed that the bankrupt in this case was a landbroker and finance broker, who received large sums of money from investors for investment by him on secured loans for relatively short terms. It was intended that these loans would be secured by mortgages over property. However in many cases no such mortgage was obtained and funds received were paid arbitrarily into various accounts of the bankrupt - often to return such accounts to the credit balance which they should have been showing. This state of affairs had obtained for a number of years before bankruptcy. Large sums of money were placed by the bankrupt with Krakat Pty Ltd ("Krakat") and the appellants were all, at one time or another, officers of that company. The summonses were all in the same form, though directed to different pgople and returnable on different dates, and the following may be taken as typical of all four:- "TO: SOPHIA KAROUNOS of 55 Marion Road, Plympton Park in the State of South Australia In pursuance of the power conferred on the Registrar by Section 81 of the Bankruptcy Act 1966 the Registrar hereby summonses you to attend before the Registrar at 9th Floor, Grenfell Centre, 25 Grenfell Street, Adelaide in the State of South Australia on the 4th day of November 1987 at the hour of 10.30 o'clock in the forenoon to give evidence and to produce books and documents in connection with:- 1. the receipt of funds by Krakat Pty. Ltd. from Ross D Hodby & Associates and Archer Finance Brokers between the lst day of January, 1980 and the 17th day of October, 1986; 2. the granting and discharge of Mortgages numbered:- (a) 4775635; (b) 4845666; (c) 6022133; (d) 6153497; 3. the granting of a mortgage dated the 29th day of August, 1986 over the land comprised and described in Certificates of Title Register Book Volume 4213 Folio 460, Volume 4189 Folio 336, Volume 4182 Folio 49 and Volume 4228 Folio 218 for the sum of $586,000.00, and to produce all documents in your possession, custody or power pertaining to the above matters and without limiting the generality thereof the following documents:- 1. Bank account statements in respect to bank accounts conducted by Krakat Pty. Ltd:- (a) at the State Bank branch at Pirie Street, Adelaide in the State of South Australia No. 924396 6 40; (b) at the State Bank branch at South Plympton No. 923 932 9 40; 2. Bank deposit books pertaining to the said accounts. 3. Cheque butts pertaining to the said accounts. 4. Minutes of the meeting of directors of Krakat Pty. Ltd. for the period from the lst day of January, 1980 until the 17th day of October, 1986. 5. Any other documents relevant and pertaining to the above transactions. DATED this 18th day of September 1987." The summonses were issued on applications made the Official Receiver which were in common form in instance. four: by each The following may again be taken as typical of all * BANKRUPTCY ACT 1966 APPLICATION TO REGISTRAR FOR EXAMINATION OF WITNESSES UNDER SECTION 81 OF THE BANKRUPTCY ACT BANKRUPTCY DISTRICT OF THE STATE OF SOUTH AUSTRALIA NO.910 of 1986 RE: ROSS DANIEL HODBY EX PARTE: OFFICIAL TRUSTEE PATRICK JOSEPH CASEY, Official Receiver for the Bankruptcy District of the State of South Australia for and on behalf of the Official Trustee, the Trustee of the property of the abovenamed Ross Daniel Hodby (hereinafter called 'the bankrupt') HEREBY APPLIES to the Registrar for an order pursuant to Section 81 of the said Act directing the issue of a summons to BARBARA JOY HUNT of 550 Marion Road, Plympton Park in the State of South Australia to attend before the Registrar on the 4th day of November 1987 at 2.30 o'clock in the afternoon and so from day to day until excused from further attendance to give evidence in the above matter and to produce documents in the above matter concerning the receipt of funds by KRAKAT PTY. LTD. from the bankrupt and ARCHER FINANCE BROKERS (REG. ) between the ist day of January, 1980 and the 17th day of October, 1986 and to produce documents in the above matter concerning the registration and discharge of mortgages over the land comprised and described in Certificates of Title Register Books:- Volume 4213 Folio 460 Volume 4228 Folio 218 Volume 4276 Folio 899 Volume 4251 Polio 40 Volume 4189 Folio 337 and tgage No.:- 4775635 4845666 6022133 6153497 A certain unregistered mortgage dated the 29th day of October, [an error for August] 1986 over the land comprised and described in Certificates of Title Register Book Volume 4213 Folio 466, Volume 4189 Folio 336, Volume 4189 Folio 43 and Volume 4228 Folio 218. RAR AR BAe enn enareroonnuea Nee ee ee ee eee The grounds upon which this application is made are:- i. That up to the 17th day of October, 1986 the bankrupt conducted a business of a land broker and finance broker. The bankrupt was a director of Hodby Nominees Pty. Ltd. a business which traded under the name of Archer Finance Brokers (hereinafter called 'the business'). 2. That the said Barbara Joy Hunt was' the secretary of Krakat Pty. Ltd. for various periods between the ist day of January, 1980 and the 17th day of October, 1986 according to the records of the Commissioner for Corporate Affairs. 3. Between January, 1980 and the date of the bankruptcy Krakat Pty. Ltd. received advances of funds from the bankrupt's businesses. 4. The funds advanced from the bankrupt's businesses were on occasions deposited into banking accounts conducted in the name of Krakat Pty. Ltd. at:- 10. (a) The State Bank, Pirie Street, Adelaide No. 924696 6 40. (b) The State Bank, South Plympton Branch, No. 923 932 9 40. The funds advanced to Krakat Pty. Ltd. were funds held by the bankrupt on trust to the persons who are creditors of the bankruptcy estate. The amounts advanced to Krakat Pty. Ltd. have been secured by various mortgages over various properties including the aforesaid titled. In respect of a mortgage dated the 29th day of August, 1986 over the land comprised and described in Certificates of Title Register Books Volume 4213 Folio 460, Volume 4189 Folio 336, Volume 4183 Folio 49 and Volume 4228 Folio 218. The said mortgage records an advance from clients of the bankrupt to Krakat Pty. Ltd. for a total sum of $586,000.00. Official Receiver maintains the true amount advanced from the funds of the bankrupt's clients being creditors of the bankrupt estate was $903,000.00 A Mortgage No. 6153497 over the land comprised and described in Certificate of Title Register Book Volume 4189 Folio 337 was discharged on the 17th day of February, 1986. The amount recorded on the mortgage as having been advanced from clients of the bankrupt to Krakat Pty. Ltd. was $479,000.00. The mortgage was discharged without any funds being paid in respect thereof. The sum of $800,603.45 has been paid into this Honourable Court pursuant to an order of Mr Justice Fisher dated the 22nd day of December, 1986 and the 26th day of February, 1987. The sum of $586,000.00 representing the amount purportedly advanced to Krakat Pty. Ltd. pursuant to the aforesaid unregistered mortgage has been determined by this Court to vest in the Official Receiver for the benefit of creditors of the bankrupt estate. The Official Receiver seeks production of the records of Krakat Pty. Ltd. pertaining to the within advance and within transactions in order to assist him in determining his rights to recover monies due by Krakat Pty. Ltd. for the benefit of the creditors of the bankrupt estate." The grounds advanced by counsel for the appellants to this Court, for the upholding of the appeal and the discharge of the summonses, fall under five headings, "1. Inadequate information was provided in the grounds of the Section 81 application to enable the Registrar to justify the issuing of the summonses. 2. The summonses were defective in that they were s0 wide and vaque as to be oppressive. 3. The summonses were not sought for the restricted purpose permitted by Section 81 of the Bankruptcy Act 1966. 4. The summonses were unfair and oppressive to the proposed examinees in view of the substantive dispute proceedings. 5. The Learned Judge erred in a number of respects, particularly as to the assessment of the factual issues involved in the matters raised in 1-4 and as_ to the principles applicable to such issues." . Before considering these grounds it is necessary to say something further about the facts of the case. By way of background, Fisher J said in his reasons for decision, "The Official Trustee is trustee of the bankrupt estate of Ross Daniel Hodby ('the bankrupt') who filed his own petition on 15 October 1986. Since that date the Official Receiver for the Bankruptcy District of South Australia ('the Official Receiver') and other persons interested in the administration of the bankrupt estate have made many applications to the Court for decisions and directions in respect of relevant matters. To date there have been at least 45 such applications and five sets of reasons for judgment of this Court have illustrated the difficulties encountered in the administration of the bankrupt's estate." Counsel for the appellants provided the basis for the following chronological summary of the facts: 9.7.80 9.7.80 - 17.10.86 December, 11.2.87 27.2.87 16.4.87 17.6.87 15.7.87 17.6.87 - 23.7.87 18.9.87 21.9.87 30.10.87 2.11.87 6.11.87 Krakat Pty. Ltd. (Krakat) incorporated. 17.10.86 Financial dealings between Hodby and Krakat Ross Daniel Hodby, declared bankrupt. 1986 Official Trustee ('trustee') obtained injunctions to prevent sale of any land. Krakat applied to vary injunctions in order to sell land. Net proceeds of sales paid into Court ($800,603.45). Court ordered that trustee entitled to $586,000 (admitted by Krakat). Notice of motion by trustee - claiming total of $903,091,40 owed but seeking to recover only the balance ($214,603.45) of money in court - Points of Claim filed. Points of Defence filed. 23.7.87 Trial date set for 31.8.87. No discovery or interrogation. Trustee applied to adjourn (because counsel unavailable) - new trial date 9.11.87. Applications by trustee to examine. Summons issued for 3.11.87 ~- six days before hearing was due to commence. Applications to discharge summonses. Examinations adjourned. Application to adjourn trial refused. a, / aa t 10.11.87 Order by court that balance left in court ($214,603.45) vest in the trustee. (Not opposed by Krakat.) January, 1988 Examinations fixed for the 2nd, 3rd and 4th March, 1988. 12.2.88 Trustee demanded from Krakat the balance due after deducting the $800,603.45 (in Court) from original claim of $903,091.40 - balance therefore $102,487.95 but trustee now claiming $132,487.95, following further inquiries. 12.2.88 Trustee demanded same balance from Sophia Karounos and Barbara Hunt. Before dealing with the detailed grounds of appeal in the present case, it is convenient to set out some propositions which, in our view, are relevant to the issue of summonses under s.81 of the Act in cases such as this. one. They derive, to a large extent, from decisions relating to parallel provisions concerning company liquidations. Many of the relevant authorities are considered by Cox J in In Re John Arnold's Surf Shop Pty Ltd (In Liquidation) 1979 23 SASR 222 at 224-231, where his Honour discusses a difference of emphasis which seems to have arisen between English and Australian authorities. In our view the relevant principles may be summarized as follows, 1. The power given by s.81 of the Act is an unusual -10- and far-reaching one (In re North Australian Territory Company (1890) 45 Ch.D 87 at 93; Ex parte Willey 23 Ch.D 118 at 128) and its use could easily become oppressive and vexatious if it is not approached responsibly by applicants for summonses, and controlled carefully by the Registrar and the Court; see Re H.J. Price (No 3) (1948) 14 ABC 137 at 139-140. 2. However the power is exercised in the interests of creditors, and those interests should not be defeated by an unduly technical or restrictive approach to the use of the power. The procedure is basically designed to establish what assets the bankrupt had, what has happened to those assets, and whether action should be begun (or continued) to recover them. See Re H.J. Price (No 4) (1948) 14 ABC 142 at 144; Re Robert Henry Andrews (1958) 18 ABC 181 at 184; Re Poulson (1976] 2 All ER 1020 at 1029. 3. The grounds stated in the application for a summons must clearly identify which part of paragraph (b) of sub-section 81(1) is relied upon and provide sufficient information to show how the knowledge, suspicion or supposition referred to in that paragraph has been arrived at; see Re Weiss ex p. Official Trustee (1983) 74 FLR 259. The statement of grounds need not be compendious (Re Csidei; ex parte Andrew (1979) 39 FLR 387 at 393-4). 4. The summons itself should be expressed in terms which make the intended areas of inquiry as clear as the -~-1i1- circumstances of the case permit, and which specify as clearly as possible any books and records which the person summoned has to produce (see Re Robert Henry Andrews, above, at 186-7). 5. The Registrar should examine the application and form of summons carefully to satisfy himself that the grounds of the application are sufficiently clear and the form of the summons is not oppressive or vexatious, by reason of being uncertain, too wide or otherwise objectionable. 6. If the application and summons are in proper form (in the sense just indicated) the Registrar should issue the summons. He is under no duty to inquire whether there may be some further circumstance which would make compliance with the summons oppressive for a particular person, or at a particular time, or with regard to particular books or records. 7. If a person summoned believes that compliance with the summons would be oppressive or vexatious, he can apply to the Court to have the summons set aside or adjourned to a more convenient time. Such an application to the Court will usually be determined on a broad view of the issues in the particular case and a weighing of competing principles; see Re Castle New Homes Ltd [1979] 2 All ER 775 and cases there cited; Re John Arnold's Surf Shop, above; Re Nalanda Pty Ltd (1983) 7 ACLR 596. ~12- 8. Discharge or adjournment of a summons may be appropriate where there is litigation pending or likely to be instituted and it is alleged that (a) the summons is being improperly sought as an aid to that litigation (cf In re Northern Australian Territory Company (above); In re Bletchley Boat Co Ltd [1974] 1 WLR 630 at 637), where ordinary procedures of discovery, interrogation or subpoena would be fairer and more appropriate, or (b) it would be more just and equitable to defer the examination under s.81 of the Act until the particular piece of litigation has been disposed of. 9. If such an application is made to the Court by a person summoned, the Court must consider afresh, on the material before it, whether the summons should be set aside or adjourned to a more convenient time. It is not merely deciding whether, on the material before the Registrar, he correctly exercised his discretion. 10. There is no difference in principle between cases where proceedings have actually been instituted and where they are merely in contemplation, see Re Hugh J Roberts Pty Ltd (In Liquidation) (1970) 91 WN (NSW) 537 at 541; but where litigation is afoot the issues will be clearer, procedures of discovery, inspection and subpoena available, and a time of hearing more certain. Any of these factors may -~13- affect the Court's decision in a particular case. 11. Where litigation is pending or likely to be brought and the information sought under a summons could affect that litigation, there is no presumption that the summons will be set aside or adjourned. It would normally only be set aside if the application were defective in some way or the Court found some improper motive behind the application. It would be adjourned if the balance of justice and convenience in the particular case so required. In some cases it might be appropriate to defer examination on a particular topic. In all cases the Registrar or the Court will be careful to see that injustice is not occasioned in the course of examination by the particular questions asked; see, for example, Re Anderson; ex parte Official Receiver (1937) 10 ABC 284 at 288-9; Re Robert Henry Andrews, above, at 184-5; Re Hugh J Roberts, above, at 539, 542. 12. Both the Registrar and the Court will give due weight to the fact that a summons is sought by the Official Trustee, who will not be presumed to have acted unfairly or for an improper purpose except on convincing evidence; Re H.J. Price (No 3), above, at 141. The same is true of an official liquidator; see Re Castle New Homes Ltd, above, at 791; Re John Arnold's Surf Shop, above, at 229-30. But an application by the Official Trustee will still be subject to proper scrutiny and will be refused if the Registrar or Court is not satisfied that it should be granted. -14- In the light of these propositions, we turn now to consider the several headings nominated by counsel for the appellants for consideration of the grounds of appeal. 1. Inadequate information provided Counsel first argued that the grounds in support of the application were inadequate because - "Evidence and documents were sought concernin certain land and mortgages without providin an apparent nexus between the affairs of the bankrupt and such Tape and Mortgages." In our view this objection cannot be sustained. Rule 129 of the Bankruptcy Rules makes it clear that, in a case such as this where the applicant is the trustee of the bankrupt, there is no requirement to state the facts upon which the applicant relies. In the statement of grounds it is made clear that Krakat received advances of funds from time to time from the bankrupt's businesses. Paragraph 6 of the grounds alleges, "the amounts advanced to Krakat Pty Ltd have been secured by various mortgages over various properties including the aforesaid titled." (This may have been a misprint for "titles", but either way the meaning is clear enough.) It is true that the grounds go on in paragraphs 7 and 8 to give details of some of the listed certificates of title and mortgages while not referring again to others. However, in our opinion, the inference is clear that all the -15- land titles and mortgages specified related to alleged securities which were given by Krakat to protect the interests of those persons whose moneys were allegedly being lent to Krakat by the bankrupt. It has not been suggested by the appellants that they are in any way embarrassed or confused by the particular title deeds and mortgages referred to in the summons. It is merely argued on their behalf that the material is not sufficient to enable the Registrar to be satisfied that there is a connection between the titles and mortgages cited and the affairs of the bankrupt. We do not accept this contention. Counsel next submitted that the grounds - "did not disclose why it was supposed that the individual a Ilants were able to assist and, in articular, the aebiication related to the period 1.1.50 - Yi 10.86 but the eriods during whic e appellants he officia positions es Krakat were not specifies" As can be seen in the particular summons set out above, the grounds state that the appellant Hunt = was secretary of Krakat Pty Ltd "for various periods" between the dates in question "according to the records of the Commissioner for Corporate Affairs". A similar allegation was made concerning the other appellants, describing them as office-holders. It was established in evidence before Fisher J that the appellants Elias and Katrina Karounos were appointed directors of Krakat within a month of its incorporation in July 1980 and they held these positions until July 1984. Katrina Karounos was also secretary of the - 16 - company between the same dates. Barbara Joy Hunt was appointed a director in November 1981 and became secretary of the company in July 1984. In October 1984 Sophia Karounos was appointed a director of the company. Thus Barbara Hunt had been a director for most of the relevant period and secretary of the company for upwards of two years before the bankruptcy. Elias and Katrina Karounos were directors for four of the relevant seven years and Katrina was secretary during that time. In view of the apparent close connection between Krakat and the Karounos family it is reasonable to suppose that both these appellants had some continuing interest in the company and knowledge of its affairs even after they ceased to be directors. Sophia Karounos only came upon the scene officially at a later stage of the company's existence, but it could well be that she had knowledge of its affairs before that time or that she presently has control of documents relating to the period before she became an officer of the company. In view of the substantial connection between all the appellants and Krakat, we do not believe that it was necessary for the grounds to state any more precisely than they did the publicly-recorded periods of connection between the appellants and Krakat. We note in passing that the appellants have not provided any information as to their actual knowledge of Krakat's affairs, nor suggested that they are unable to give relevant information concerning the bankrupt or his trade dealings, property or affairs. Nothing -~17- we have said should be taken as suggesting that the statement of grounds may properly conceal a short or tenuous connection with a bankrupt's affairs behind vague and generalised language; but that has not happened here. The next sub-heading of the appellants' complaint was that - "The Registrar was not informed as to the existence, histor and advanced state of the substantive proceedings between the trustee and Krakat." As Fisher J pointed out, in a passage cited earlier, this was a bankruptcy in which there has already been a great deal of litigation and, as his Honour also said, "The Registrar has had substantial involvement in and much common knowledge of the happenings in this bankruptcy." . In fact his Honour had given judgment in a matter arising from the bankruptcy and involving Krakat, among others, on 16 April 1987. His Honour there made a number of findings about the bankrupt's method of carrying on business in general and his dealings with Krakat in particular. We can see no reason why, in the case of a continuing and difficult bankruptcy administration such as this, the Registrar and, on appeal, the Court should not have regard to material which has been placed before them in earlier proceedings in the same bankruptcy when they are called upon to consider the issuing of a summons. There is no reason to think that the Registrar was unaware of pending - 18 - proceedings at the time when the summons was issued. Further, by the time the matter came before Fisher J, when he was asked to review the Registrar's decision, the pending litigation was out of the way. As the appellants' chronology shows, the outstanding litigation was finalised on 10 November 1987. However, as the same chronology shows, fresh proceedings have been foreshadowed against Krakat and Sophia Karounis and Barbara Hunt. In fact it has been alleged on behalf of the Official Receiver that Krakat "has received by way of advances of clients of the Bankrupt which have not been repaid an amount of $1,456,000". This is clearly an extremely difficult bankruptcy to administer, the dealings of the bankrupt having been so numerous, confused, and lacking in documentation. We are not persuaded that there is any ulterior or improper purpose underlying the summonses in the present case. There is ample justification for them for the ordinary purpose of obtaining information, from persons in a position to give it, which will enable the trustee to decide whether actions against particular individuals or companies should be continued or instituted and for what amounts of money. The one area of possible injustice, namely the circumstance that Barbara Hunt and Sophia Karounos were co-borrowers with Krakat, has been covered by an undertaking by the Official Receiver not to examine either of those appellants on that subject. This undertaking was accepted by the learned trial judge and has not been questioned in this Court. ~19 - Of course it is possible for a particular question or line of questioning to become unfair or oppressive, but this is a matter to be dealt with on the return of the summons, if it should occur. For these reasons the arguments alleging inadequate grounds for the summons, considered both separately and cumulatively, should fail. 2. Summonses vague and too wide Under this heading counsel for the appellants referred again to the alleged absence of a nexus between particular mortgages referred to and the abilities of the respective appellants to assist inquiries into the bankrupt's dealings. That question has already been dealt with and nothing further need be said about it. The main thrust of the submission under this heading was that paragraphs 1-3 of the summons, listing the documents to be produced, "do not limit the various classes of documents specified to those concerning the dealings between Krakat and the bankrupt nor are ey mite o the relevant periods. In our view this complaint is founded upon a misreading of the relevant parts of the summons. The paragraphs complained of are introduced by the words "and to produce all documents in your possession, custody or power pertaining to the above matters and without limiting the generality thereof the following documents:" {underlining supplied] - 20 - The 'above matters' referred to are those set out in paragraphs 1-3 of the matters about which evidence is reguired, namely, the receipt of funds by Krakat from the bankrupt, the granting and discharge of four specified mortgages and the granting of another specified mortgage. When so understood it cannot be suggested that the summons is too wide or uncertain. The same can be said of the next two objections on behalf of the appellants that - "the minutes sought in paragraph 4 of the summons are not limited to those relevant to the affairs of the bankrupt" and that —- "paragraph 5 seeking any other relevant documents is so wide as to be oppressive." Both these requirements are limited by the introductory words "pertaining to the above matters", and this is reinforced by the wording of paragraph 5 which required production of "any other documents relevant and pertaining to the above transactions." We have no doubt that both these requirements are limited in the way which we have indicated and that these objections are misconceived. The next objection by the appellants under this heading repeats the objection under the first heading that the time-frame within which information is sought has not -~ 21 - been related with sufficient precision to the individual appellants. This point has also been dealt with adequately under the previous heading. 3. Purpose of summonses Here counsel submitted that - "the course of the substantive proceedings and the setting of the trial date clearly demonstrated that the trustee did not need to examine for a Tegitimate purpose permitted by section An affidavit sworn on behalf of the Official Receiver deposed that he would not be in a position to decide what action to take in respect of the two mortgages' the subject of the applications for issue of summonses until the examinations contemplated by the summons were concluded. The reference was presumably to the 'mortgages referred to in paragraphs 7 and 8 of the grounds (above). This deposition, as Pisher J pointed out in his reasons for decision, was not challenged in any way before him. Since the Official Receiver obtained what he sought in the action which was pending at the time the summonses were issued, and now persists in his application to have the appellants examined, it can reasonably be assumed that he needs the information sought in order, among other things, to determine whether to continue to press Krakat for the repayment of further moneys allegedly advanced to it by the bankrupt. - 22 - 4. Unfairness/oppression Under this heading counsel for the appellants again argued the unfairness of issuing summonses to persons connected with Krakat a few days before the substantive trial of issues between Krakat and the Official Receiver was due to be heard. In our view, for the reasons already given, there is no substance in this complaint. This might well have provided a ground for adjourning the original return of the summonses until after the litigation then pending had concluded. But, with the resolution of that limited claim, there is no longer any action pending and there is no reason to doubt that the Official Trustee is having difficulty in deciding whether to press Krakat for payment of the balance of the moneys originally sought (now $102,487.95), the additional $30,000 demanded in February of this year, or some or all of the further $523,000 making up the total of $1,456,000 alleged to have been advanced to Krakat by the bankrupt. There may well be further questions as to whether any creditor has a secured claim to any of the moneys advanced. 5. Errors by the Learned Judge This heading was used by counsel for the appellants to pick up the alleged mistakes made by the learned trial judge under earlier headings. The only new point raised is that - "the learned judge erred in determining that the Registrar was en e to re upon nowie e aine rom sources other than the grounds of the application and that he was entitled to rely upon 'common knowledge'. - 23 - This issue has already been touched upon. While it is true that it would not be proper for the Registrar to rely upon sources which might be described as hearsay, there can be no reason why he should not take into account, when exercising his discretion, material properly proved before him, or findings made by the court, in earlier proceedings in the same bankruptcy. We have no doubt that, when Fisher J referred to ''common knowledge' in this context, he meant knowledge which was common to the appellants, the Official Trustee, the Registrar and those members of the Court who had been dealing with the numerous applications in the bankruptcy. Even this knowledge could not properly be used to supply unstated grounds for the issue of a summons. But it could, in our opinion, be used by way of background information, either to raise doubts or to settle those that might otherwise have existed. Por the reasons given, none of the grounds of appeal has been made out, and the appeal should be dismissed with costs. I certify that this and the2Zpreceding pages are a true copy of the Reasons for Judgment of The Court. Associate: (fe), ,~— Dated: 3/6/¥% Counsel for the appellants : Solicitors for the appellants : Counsel for the respondents 3 Solicitors for the respondents: Date of hearing : Date of judgment H Mr B. Martin Q.C. with Mr D. Lovell Andersons Mr R.D. Lawson Kelly & Co. 5 May 1988 3 June 1988