n the matter of Cousins, Wayne Robert & Ors t/as Active Constructions Services v Clout, David Lewis [1998] FCA 1462

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QG 7326 of 1998

In the matter of WAYNE ROBERTS COUSINS, BRENDAN OLIVER MOLLOY, SUSAN JANE BEAVERSON AND GARY GRAHAM BEAVERSON trading as ACTIVE CONSTRUCTION SERVICES

WAYNE ROBERTS COUSINS, brendan oliver molloy, susan jane beaverson AND gary graham beaverson trading as active constructionS services

Applicants

DAVID LEWIS CLOUT

Respondent

JUDGE(S): SPENDER J

DATE OF ORDER: 16/10/98

WHERE MADE: BRISBANE

THE COURT ORDERS THAT: 1. The summonses issued to William Harold Clough, Stuart Cunningham, Peter Jorss, Wayne Hartfiel and Michael Wardale be discharged. 2. The applicants on the motion have three-quarters of their costs, to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QG 7326 of 1998

In the matter of WAYNE ROBERTS COUSINS, BRENDAN OLIVER MOLLOY, SUSAN JANE BEAVERSON AND GARY GRAHAM BEAVERSON trading as ACTIVE CONSTRUCTIONS SERVICES

WAYNE ROBERTS COUSINS, brendan oliver molloy, susan jane beaverson AND gary graham beaverson trading as active constructionS services

Applicants

DAVID LEWIS CLOUT

Respondent

JUDGE(S): SPENDER J

DATE: 16/10/98

PLACE: BRISBANE

REASONS FOR JUDGMENT By notice of motion filed 7 October 1998, a number of natural persons sought orders that a number of summonses be discharged. The summonses were directed to William Harold Clough, Michael Schoenauer, Stuart Cunningham, Peter Jorss, Michael Wardale, Gavin Taylor and Wayne Hartfiel. Each of those persons have been summoned to attend a public examination, the summonses having been obtained at the instigation of Mr David Lewis Clout, who is the trustee of a deed of arrangement of a number of natural persons, being Wayne Robert Cousins, Brendan Oliver Molloy, Susan Jane Beaverson and Gary Graham Beaverson. Those persons had carried on a partnership called Active Constructions Services. In 1995 they had performed work under a sub-contract for Clough Engineering. A Supreme Court action was instituted by the partnership claiming more than $350,000 was owed to the partnership by Clough Engineering pursuant to the sub-contract. In 1996 a deed of arrangement was entered into and the trustee under the deed has the conduct of the proceedings in the Supreme Court. A statement of claim has been delivered and particulars of the statement of claim sought and given, but the proceeding has not advanced much further than that. Part of the reason for the delay has been because of the financial constraints concerning the resources available to the trustee to prosecute the litigation. The material before me discloses, amongst other things, a "without prejudice" offer having been made by Clough Engineering to settle the matter for $130,000. That particular aspect of the matter is troubling but the present proceedings are concerned with setting aside the summonses directed to the named persons. The applicants seek an order that the summonses be set aside on the basis that they are oppressive and an abuse of process. The task of the court in such circumstances is to apply a balancing test as to the likely utility of the summons for any legitimate purpose by the trustees on the one hand, against the cost and inconvenience to the respondents on the other. The power of the court to issue a summons to attend a public examination is contained in s 81 of the Bankruptcy Act 1966, which relevantly provides. "81. (1) Where a person (in this section called the 'relevant person') becomes a bankrupt, the Court or a Registrar may at any time (whether before or after the end of the bankruptcy), on the application of: