Re Fuller, Michael John [1997] FCA 169

IN THE FEDERAL COURT OF AUSTRALIA) ) SOUTH AUSTRALIA DISTRICT REGISTRY) ) GENERAL DIVISION ) No SB 699 of 1993 ) BANKRUPTCY DISTRICT OF THE ) ) STATE OF SOUTH AUSTRALIA ) Re: MICHAEL JOHN FULLER Debtor EX TEMPORE REASONS FOR JUDGMENT CORAM: Mansfield J PLACE: Adelaide DATE: 6 March 1997 On 20 May 1993 a sequestration order was made in respect of Michael John Fuller ("Mr Fuller"). Hugh Jenner Wily ("the trustee") was appointed trustee of his estate. On 15 to 17 September 1993 Mr Fuller was examined by the trustee pursuant to a summons issued by the Court on application under s81 of the Bankruptcy Act 1966 ("the Act"). That examination was then adjourned to a date to be fixed. There has been no further examination between then and the present time. On 10 December 1996 the trustee applied to the Court for further dates to be fixed for the examination of Mr Fuller. Pursuant to that request a summons was issued by the Registrar on 19 February 1997 and served on Mr Fuller on 25 February 1997 for his further examination under s81. That further examination was to be conducted on 6 and 7 March 1997. On 3 March 1997 Mr Fuller applied for an adjournment or a stay of the summons so issued until further order, and that application was made returnable this morning. Although that summons sought an adjournment or stay until further order, in practical terms it sought an adjournment or stay of the summons until about June of 1997 for reasons associated with a separate application made by Mr Fuller to the Administrative Appeals Tribunal. The Court has power under s14(5) of the Act to grant the orders sought. Mr Fuller filed his statement of affairs in his bankruptcy on 29 June 1993 and in the normal course would have been automatically discharged pursuant to s149(2)(c) of the Act on 28 June 1996. However, the trustee filed and then served a notice of objection to his discharge effective from 11 June 1996, pursuant to s149G of the Act, that being the date of the filing of that notice of objection. The notice of objection so filed had the effect of preventing the automatic discharge of Mr Fuller from bankruptcy: s149A of the Act. The grounds of the notice included grounds specified in s149D(1)(g)(ii) and s149D(1)(n) of the Act by virtue of which, under s149A(2), Mr Fuller will not be discharged from bankruptcy for a period of eight years because of the invoking of a ground under s149D(1)(g), or five years in respect of the other grounds; that is, of course, subject to what the Administrative Appeals Tribunal decides, and subject to the notice of objection not otherwise being withdrawn or cancelled. As he is entitled to do under s149Q(a) of the Act, Mr Fuller applied to the Administrative Appeals Tribunal for a review of the trustee's decision to object to his bankruptcy. I am told in submissions that that application, which was made on 4 July 1996, is proposed to be heard in late April 1997 and, allowing some time for the tribunal to consider and deliver its reasons, that it is expected to be resolved towards the end of May 1997. It was on the basis of that time table that I said that in a practical sense this application is to adjourn further examination until about June 1997. If that application is successful Mr Fuller will effectively be discharged from bankruptcy as at 28 June 1996 because the objection to bankruptcy will be deemed never to have been made: s149A(3) of the Act. It is plain that s81, as presently it provides, contemplates that the examination of a bankrupt may be undertaken even after the discharge of that bankrupt. Thus that section explicitly says that the Registrar may summons a person for examination under s81 at any time whether before or after the end of the bankruptcy. I interpose that it may be that that form of s81 which was introduced by Act number 119 of 1987 may be a consequence of the issues which arose for decision in the matter of Official Receiver in Bankruptcy v Todd (1986-1987) 70 ALR 119. The consequence is that Mr Fuller could be examined by the trustee even if his application to the Administrative Appeals Tribunal is successful, although the questions which he may be examined upon generally identified by s81(10) of the Act would then be limited by s81(10A) of the Act. For those reasons he quite properly does not object to the examination itself but only to the timing of the examination. That leads me to address the reasons for the application which are said to arise because of the proximity of the proposed examination to the Administrative Appeals Tribunal hearing. Mr Fuller puts two arguments in support of the application: the first and main one is that the reason for the examination now is that the trustee has the purpose in the examination, or at least a substantial purpose in the examination, of getting information directed not to investigating the affairs of Mr Fuller or of entities associated with him or said to be associated with him, but of getting information to support or better justify his decision to object to the discharge of Mr Fuller from bankruptcy. It is contended that if that purpose is made out as a substantial purpose of the current examination, it is an improper purpose and not one contemplated by s81(10) of the Act and not within the scope of what might be 'examinable affairs' as defined under s5 of the Act. The second and, I think, fairly described, as subsidiary ground, is that until the Administrative Appeals Tribunal decision is given, it will be unclear whether Mr Fuller should be examined at large, subject to the proper limits of examination under s81, or whether he should be examined subject to the restrictions which s81(10A) imposes on the trustee or person conducting an examination under s81 in respect of a bankrupt person, after the end of the bankruptcy. It is said that there are, or would be, practical difficulties on the part of the Registrar before whom the examination is being conducted, in deciding in those circumstances what questions or questioning is appropriate, a function of the Registrar before whom the examination is being carried out by virtue of the terms of s81(10) of the Act. Before dealing with those submissions, I first turn to the submission put on behalf of the trustee that, even if the sole or a substantial purpose of the trustee was to provide the justification or better justification of his decision to object to the automatic discharge of Mr Fuller from bankruptcy for the purposes of resisting Mr Fuller's application before the Administrative Appeals Tribunal, in any event that would not be an improper purpose. I accept what was put to me by counsel for the trustee that the decision of the trustee to object to Mr Fuller's bankruptcy and the filing of the notice of objection and matters relating to it may constitute proceedings under the Act as defined in s5, however, I do not think that is of itself an answer to the question. I am also mindful of the remarks of Street J (as he then was) in Re Hugh J. Roberts Pty Limited (In Liquidation) and The Companies Act (1969) 91 WN (NSW) 537 in a oft-quoted and approved passage at 541: