In the matter of Fuller [2000] FCA 280

FEDERAL COURT OF AUSTRALIA

In the matter of Fuller [2000] FCA 280

IN THE MATTER OF MICHAEL JOHN FULLER HUGH JENNER WILY (Trustee) AND ANOR v LAIMA ANN FULLER AND ORS NG 7049 OF 1996 and N 7201 OF 2000 HILL J 7 MARCH 2000 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA NG 7049 OF 1996

NEW SOUTH WALES DISTRICT REGISTRY N 7201 OF 2000

IN THE MATTER OF MICHAEL JOHN FULLER, a Bankrupt

BETWEEN: HUGH JENNER WILY as Trustee of the Estate of

MICHAEL JOHN FULLER

First Applicant

M J FULLER SERVICES PTY LIMITED (In Liquidation)

Second Applicant

AND: LAIMA ANN FULLER

First Respondent

LYNN WILKINSON and NORA WILKINSON

Second Respondents

MICHAEL JOHN FULLER

Third Respondent

JUDGE: HILL J

DATE: 7 MARCH 2000

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT 1 Before the Court are two applications, one an application by Mr Wily, the trustee of Mr Fuller's bankrupt estate, for an order that a request be issued to the Royal Court of Jersey and to the High Court in the United Kingdom in bankruptcy. The request is based on an affidavit of Mr Wily dated 13 October 1999. The other matter is an application made by the trustee but supported by Mr Caldicott on behalf of Mr Wilkinson that the proceedings which are listed before me for a period of two weeks from 3 April 2000 be adjourned to a date later in the year. There is some relationship between the two matters and it is useful to deal with the first before the second. 2 The application by Mr Wily is of course an application made in the bankrupt's estate. It is not directly an application made in the proceedings between Mr Wily on the one hand and the Wilkinsons on the other. It seeks a large amount of material in relation to the Chinook Trust and the Mutley Trust. So far as the request may have relevance to the proceedings against Mr and Mrs Wilkinson, no doubt it may or may not be relevant to know all the circumstances surrounding the establishment of Vilnius Trust. The Chinook Trust is said to have played some part in this, as well as the distribution ultimately to the Wilkinsons, in which distribution, it is possible, the Mutley Trust played some part. 3 Mr Caldicott on behalf of Mr and Mrs Wilkinson opposes the making of the order. He says that he does so for a number of reasons which may shortly be summarised as follows: 4 First, an order was made in the proceedings that Mr Wily file evidence-in-chief on affidavit at least six months ago. 5 Secondly, it is unlikely that the documents would be received before the hearing set down in April. 6 Thirdly, that the affidavit refers to a large number of documents, including correspondence with third parties, in Mr Wily's possession which apparently may not have been discovered in the proceedings. 7 Fourthly, the trustee has known about these trusts for a large number of years, has made a number of investigations and has had, at the very least, the last two years in which to make the request. It is said that Mr and Mrs Wilkinson have been interrogated in respect of documents, but have no knowledge of the documents referred to in the affidavit in support. It is said that the actual case before me relates merely to a loan said to have been made from the Vilnius Trust and really whether other trusts may have had some part in the background of the transaction has no relevance to the present proceedings. 8 Mr Fuller, on behalf of his wife, submitted that there was very little chance that Mr Wily would be able to obtain the material he seeks to obtain before the time of the trial. He said it might arrive late in the trial, have a potential for embarrassment for the parties to the proceedings and could lead to an adjournment of the proceedings. 9 There is little doubt that the circumstances surrounding what went on in Jersey is a proper matter for the trustee to investigate in the estate of the bankrupt. The real criticism one may make of the trustee is why it has taken so long for the application to be made. It is true, of course, that the application may have some bearing on the current proceedings. It is also true that it might have bearing on other proceedings that the trustee may subsequently wish to take. 10 For that reason I have some difficulty in now preventing the trustee from making the investigation when that investigation may reveal other assets available for the estate. On the other hand it is obvious enough, if the investigation produces material which relates to the present proceedings, that material does have potential for embarrassment to the respondents and real prejudice to them if the proceedings continue without their having a chance to meet it. It seems to me that the trustee has to take the risk as to costs. If material is ultimately obtained pursuant to the letters of request and the trustee proposes to use it in the proceedings, the material must of course be made available to the respondents to those proceedings as immediately as it is obtained and if a request to adjourn those proceedings is made, then the trustee may find himself liable to the costs of any adjournment that may be required to permit the respondents to deal with the matter. 11 I should say that the fact that the affidavit was dated 13 October yet the application was only made yesterday on 6 March is not something on which I would wish to congratulate the trustee or his advisers. However, ultimately, I am faced with the fact that there are matters which do, on the face of it, require investigation. The investigation may ultimately be of benefit to the estate, not merely in respect of the proceedings against the Wilkinsons but in respect of other potential assets which may be revealed or, for that matter, other proceedings which have been instituted in the Supreme Court of South Australia but to which the trustee is not directly a party. 12 In the circumstances, I would propose to make the orders which the trustee seeks, noting that the trustee is on notice as to the danger that he may have that an order of costs may in due course be made against him should an adjournment become necessary. 13 That leads to the question of whether the present proceedings ought to be adjourned. The proceedings have been listed for two weeks commencing at the beginning of April this year. That date has been settled since at least October last year. Something less than a month before the hearing an application is made to adjourn it. 14 The application by the trustee is based, apparently, upon the failure of senior counsel to be available on the relevant day. It is said that senior counsel has been involved in the proceedings over a lengthy period of time, having initially been involved in the settling of the proceedings. On the other hand the trustee has been represented by a very senior junior counsel over a long period of time in various interlocutory proceedings and there is no suggestion that he is unavailable. So far as it matters, it seems to me that within a month there would be no difficulty in any event in briefing another senior counsel to participate in the matter should that be necessary. 15 The reason Mr Caldicott on behalf of the Wilkinsons supports the application is also because of unavailability of counsel. I have to say that I do not think the matter is of such complexity that competent counsel could not, in a period of a month, prepare themselves for the hearing. No doubt it would suit Mr Wily to have the matter adjourned if he were to obtain documents from Jersey but I do not think that I should take that matter into account, given the obvious procrastination which the administration of the estate reveals in the delay in making that application. I propose accordingly not to grant an adjournment. The hearing will proceed on the day which has been set aside for it. It may be that it will take less than the two weeks allotted. If so, so much the better. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill