Gargan, Peter Alexander v Official Trustee in Bankruptcy & Ors [1997] FCA 320

NO QUESTION OF GENERAL PRINCIPLE IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND DISTRICT REGISTRY ) ) GENERAL DIVISION ) QG 107 of 1996 BETWEEN: PETER ALEXANDER GARGAN Appellant AND: OFFICIAL TRUSTEE IN BANKRUPTCY First Respondent AND: JOHN ERNEST GARGAN Second Respondent QG 113 of 1996 BETWEEN: PETER ALEXANDER GARGAN Appellant AND: OFFICIAL TRUSTEE IN BANKRUPTCY First Respondent AND: SAM INDUSTRIES PTY LIMITED Second Respondent AND: KIPPEN INVESTMENTS PTY LTD Third Respondent AND: CHARLES ANTHONY MARINO Fourth Respondent AND: WAYNE COCHRANE Fifth Respondent

QG 181 of 1996 BETWEEN: PETER ALEXANDER GARGAN Appellant AND: OFFICIAL TRUSTEE IN BANKRUPTCY First Respondent AND: JOHN ERNEST GARGAN Second Respondent AND: BARRY MICHAEL JOHNSON Third Respondent AND: CHARLES ANTHONY MARINO Fourth Respondent AND: WAYNE COCHRANE Fifth Respondent AND: SAM INDUSTRIES PTY LTD Sixth Respondent AND: MR A. MOHAMMED Seventh Respondent AND: PETER TOY Eighth Respondent CORAM: Burchett, Heerey and Mansfield JJ PLACE: Brisbane DATE: 30 April 1997

REASONS FOR JUDGMENT BURCHETT J: The reasons I am about to deliver are the reasons of the Court. The appellant, Mr Peter Gargan, brings three appeals, and seeks by an amendment to challenge an additional judgment. All these matters arise out of his bankruptcy, and have some relation to an action in the Supreme Court of Queensland which preceded it. The action in the Supreme Court was heard by Thomas J, who gave judgment on 12 March 1993. In the proceeding, Mr Peter Gargan's brother, Mr John Gargan, claimed that certain land in the name of Mr Peter Gargan was held in trust for Mr John Gargan, and that a deed of dissolution of partnership dated 7 September 1984 ought to be specifically performed. Thomas J held that the brothers had agreed in 1984 to dissolve their partnership, the deed being part of their wider arrangement reached in relation to the dissolution. The judge rejected the evidence of Mr Peter Gargan, accepting his brother. He held that the land in question belonged beneficially to Mr John Gargan, and he decreed specific performance of the deed of dissolution. Ten days later, on 22 March 1993, Spender J made a sequestration order on a creditor's petition against Mr Peter Gargan. In the end, the petition was unopposed. Of course, the bankruptcy commenced at an earlier date than that of the making of the order; the order declared that its date of commencement was 6 January 1992. The appellant's contention is that the result of his bankruptcy was to abrogate entirely the judgment of Thomas J. This is the central proposition he has maintained through a series of proceedings and appeals. On the basis of it, he has argued that the partnership continued so as to affect the assets available in the bankruptcy, and that he had continuing entitlements as a partner. Furthermore, Mr Peter Gargan says that the decision in The University of Wollongong v Metwally (1984) 158 CLR 447 supports the proposition that the bankruptcy completely supplants the decision of Thomas J, as being inconsistent with federal law. On this basis, the appellant brought a proceeding in the Supreme Court of Queensland to overturn the effect of the judgment. That proceeding was dismissed on 3 June 1996 by Derrington J, who held that the bankruptcy deprived Mr Peter Gargan of his alleged interest in the partnership, so that he had no standing to pursue a claim arising out of it. Further, the matter was concluded by the judgment of Thomas J. Mr Peter Gargan took the same question back to court upon an application for judicial review, under Queensland legislation, which was heard by Moynihan J, also in the Supreme Court of Queensland. He gave judgment on 10 July 1996, holding that the matter was not one for judicial review. Any right Mr Peter Gargan may have had would have been, he considered, a right of appeal. So far as in argument, but not in the documents filed, relief was sought by way of review of decisions of the Official Trustee, this was inappropriate, there being current proceedings on that question in the Federal Court. His Honour said that Mr Peter Gargan's application reflected - "fairly profound misconceptions as to the law and its application in [the] circumstances." He dismissed the proceedings as being liable to be struck out. This one judgment of Moynihan J is the subject of the first two notices of appeal before us in matters numbers 107 and 113 of 1996. It would be impossible to uphold Mr Peter Gargan's appeals against the judgment of Moynihan J. It was given in relation to proceedings in the Supreme Court of Queensland, which were not of any of the special kinds that may give rise to appeals to this court. In general, an appeal from a Supreme Court judge cannot come to this Court. But, in any case, nothing has been said to suggest any basis for the appeals. The decision was plainly right for the reasons given by the learned judge. The third appeal is number 181 of 1996, in which Mr Peter Gargan challenged, originally, the decision of Kiefel J given on 2 October 1996, and seeks now, by application for amendment, to challenge also a decision given by her Honour on 23 August 1996. The decision of 2 October 1996 related to an application made by Mr Peter Gargan for annulment. It is clear it could not be found that the sequestration order ought not to have been made. There was no evidence suggesting that. Furthermore, a group of creditors had not been served as required by the Rules. The sequestration order, as has been said, was not opposed, and no good reason has been given why Mr Peter Gargan should be entitled to change his attitude at a so much later date. He says he relied, when withdrawing his opposition, on the effect he thought the doctrine of relation back would have on his assets available in the bankruptcy, and that this was the reason why he had not opposed the making of an order. So be it. That was his choice. The fact that he may have misunderstood the doctrine does not supply a reason to reconsider the order, in the absence of any demonstration that it ought not to have been made. The earlier judgment of Kiefel J related to an application by Mr Peter Gargan for an inquiry, under s. 179 of the Bankruptcy Act 1966, into the conduct of the Trustee. But this application was examined with meticulous care by her Honour. It would be sufficient to say that the Court should affirm her Honour's decision for the reasons which she so fully gave. There is simply no basis here for an order to be made under s. 179. We may add, however, that a Trustee is entitled, in deciding whether to pursue claims urged upon him by a bankrupt, to have regard to a decision of a Supreme Court judge upon some of those very claims, in which the evidence alleged to support them has been sifted and found lacking in credibility. In the present case, the Trustee was also justified by the attitude of the creditors generally in declining to support an appeal against the decision of Thomas J. It may be desirable also to point out that the appellant has plainly misunderstood ss. 86 and 139A et seq. of the Bankruptcy Act, which do not have the far reaching impact on all dealings following the dissolution of a partnership, or relating to a partnership, that he attributes to them. Fresh evidence was tendered at the hearing of the appeals. It is unnecessary to rule on whether it should have been received, because the Court has considered it and can find nothing in it to affect the judgments under appeal. The orders of the Court are that the appeals be dismissed with costs, and that the reserved costs in relation to Mr Barry Michael Johnson be included, so that he is entitled to have those costs also paid by the appellant. In the circumstances, the Court orders that each of the names of the fourth and fifth respondents mentioned in matter number 113 and the fourth, fifth and sixth respondents mentioned in matter number 181 be struck out as inappropriately joined. I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment of the Court. Associate: Date: