FEDERAL COURT OF AUSTRALIA Donnelly (trustee) v Archer, in the matter of Archer [2003] FCA 197 IN THE MATTER OF STEPHEN JOHN ARCHER MAX DONNELLY (TRUSTEE) v SARAH ANN ARCHER N 7324 OF 2002 ALLSOP J 20 FEBRUARY 2003 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY 7324 OF 2002 IN THE MATTER OF STEPHEN JOHN ARCHER BETWEEN: MAX DONNELLY (TRUSTEE) APPLICANT AND: SARAH ANN ARCHER RESPONDENT JUDGE: ALLSOP J DATE OF ORDER: 20 FEBRUARY 2003 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The examination be adjourned. 2. There be no order as to costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY 7324 OF 2002 IN THE MATTER OF STEPHEN JOHN ARCHER BETWEEN: MAX DONNELLY (TRUSTEE) APPLICANT AND: SARAH ANN ARCHER RESPONDENT JUDGE: ALLSOP J DATE: 20 FEBRUARY 2003 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I have before me a notice of motion filed in Court today seeking an order that the examination summons served on Sarah Ann Archer on 9 January 2003 be discharged or alternatively adjourned and an order that the applicant pay the respondent's costs of this notice of motion. 2 The notice of motion arises from an order for the examination of Mrs Archer which was originally issued by the Court on 5 November 2002. That summons to attend for examination nominated 10.15am on Tuesday and Wednesday, 10 and 11 December 2002 as the times for examination. There is evidence before me that those dates were inconvenient to Mrs Archer and by arrangement further days in February were identified. 3 The summons to attend the examination under Order 77 was then reissued by the Court using the same first page but amendments were made for Wednesday and Thursday, 19 and 20 February, that is yesterday and today. However, the second page of the summons which was reissued had the notes required by the rules conformable with a bankrupt being examined rather than an examinable person other than a bankrupt. 4 The relevance of that is that there was no notation on the second summons issued to the effect of Notes 2 and 3 in Form 151; Note 2 being that if the recipient does not comply with the summons a warrant for apprehension or arrest may be issued under s 264B of the Bankruptcy Act 1966 Cth (the Act). However, a warrant will not be issued if the recipient has not been given a reasonable amount for expenses. Note 3 provides that the recipient may apply to have the summons discharged by filing a notice of motion and affidavit as provided for by Order 77, Rule 38 of the Federal Court Rules. 5 The second summons was served on 9 January 2003. The previous summons had been served on 22 November 2002. The bankrupt, Mr Stephen Archer, who is the husband of Mrs Archer, was examined yesterday. I do not have any record of the contents of the examination before me. I do have before me, however, annexed to the affidavit of Debra Gayle Meredith three extracts of this morning's newspapers dealing with Mr Archer's examination yesterday. I will not set out in full those matters. It is sufficient to say that they are newspaper extracts with some headlines dealing with the affairs of Mr Archer and his expenditures on various matters which can perhaps be described as raising a certain level of sensational interest in the readers of the newspapers. There is no evidence before me in this application about it, but I think it would be common ground between the parties, that there was a significant degree of publicity in this city and in New South Wales over members of the profession and barristers, in particular, having a history of bankruptcy in the past few years. 6 This was raised in some years past. I raised with the parties before hearing that I had given assistance to the New South Wales Bar Association in 2000 and 2001 about these matters. 7 The newspaper articles of this morning are said by Mr Ireland, QC, who appears for Mrs Archer, to have been likely to cause hostility and pressure in and about Mrs Archer's examination. There is no direct evidence, either by way of conversation through Ms Meredith or otherwise as to the effect of these articles on Mrs Archer, but one can, I think, readily accept a degree of upset of anyone reading them in the position of Mrs Archer. I do not pass upon the accuracy or otherwise of the newspaper articles. 8 Mr Skinner indicated that there is no evidence that Mrs Archer has even read the articles. I am prepared to infer that she has, in the circumstances of the application being brought. The trustee of Mr Archer's estate has only one relevant creditor to report to, that is the Australian Taxation Office. The evidence before me is that the Tax Office is the only creditor of Mr Archer's estate. 9 There was a conversation early in February between Mr Archer and Mr Donnelly by chance in Phillip Street in which Mr Donnelly indicated after some brief exchange with Mr Archer that in effect the Tax Office was driving the examinations. I am asked to infer from that that Mr Donnelly has in a sense abrogated his responsibilities as a trustee to exercise his own discretion in and about the conduct of the administration of Mr Archer's estate. 10 I am not prepared to draw that inference in the light of the whole conversation. I think the inference is plain that Mr Donnelly was indicating that he had one creditor of whose views he needed to take account. I am not prepared to infer that Mr Donnelly is not appropriately attending to his responsibilities as a trustee to consider these matters for himself. 11 There is before me an affidavit which was sworn by Mr Donnelly on 23 October 2002 which was the basis for the issue of the summonses in question. The affidavit is short and general. It contains in pars 6 and 7 evidence which would indicate that Mr Donnelly wishes to investigate possible claims for recovery against Mrs Archer. In par 7 of the affidavit there are three sums of not inconsiderable amounts in the years ended 30 June 1999, 30 June 2000 and 30 June 2001 which Mr Donnelly wishes to investigate, they apparently being payments by the bankrupt to his wife. 12 Whilst those matters are stated generally, I think they form the foundation of the legitimacy of an inquiry. There is evidence that Mrs Archer has, through her solicitor, offered to assist the trustee in answering questions. The question whether in those circumstances it is proper for the trustee to prefer a public examination to a private inquiry is very much a matter for the trustee unless there were a clear basis to infer that there was some misdirection by the trustee of his own discretion or some improper purpose. I am not prepared to infer that the trustee's preference for a public examination is in any way improper. 13 There were put to me a number of reasons for the discharge of the examination summons. First was that there was a failure to comply with the rules in the necessity to identify a specific time and a specific day. The examination summonses identified a time in the morning on two days. This summons arises from the terms of subs 81(1A) of the Act. I didn't ask Mr Skinner to give me submissions on this, however in my view the ordinary rules of construction would not limit the identified singular place and day to one day or the first day of an examination. If a trustee anticipates an examination of a person to last more than one day I do not think that the trustee is required to issue more than one summons and if he or she has an anticipation of the length of time I think the identification of two days in the one examination summons is legitimate. Nor do I think that there is any other basis set aside or discharge the summons. As I've said I'm not prepared to infer that Mr Donnelly has abrogated or given up his own responsibilities in conducting the affairs of the administration, in particular in issuing the summons. 14 The question, however, arises as to whether I should adjourn this summons to another day. The reasons put forward as to why I should are substantially the effect of the publicity in today's press about Mr Archer's examination yesterday. As I said earlier, for reasons which are not necessarily legally illegitimate, the affairs of Mr Archer are seen as newsworthy. I make no further comment than that. 15 It is a public examination of Mrs Archer. She has not been given any conduct money to attend. There is no evidence before me as to the usual practice these days as to issuing conduct money. She cannot be arrested by a warrant for failing to attend if she is not given conduct money. The complaint as to conduct money was raised latterly, but nevertheless no conduct money has been given; nor is it proffered. 16 I think it appropriate in all of the circumstances that conduct money be proffered if people are to be required to attend examinations. There is evidence before me that it was not raised as an issue earlier. It is raised as an issue now and I think in all the circumstances in particular the need for enforcement of orders of the Court that regularity would tend towards the position that conduct money, and appropriate money, should be proffered. 17 Secondly, the question as to the effect of publicity of the kind in today's newspaper is not I think lightly to be brushed aside. There is no suggestion of a contempt of court. Mrs Archer is not facing criminal prosecution. However, she is going to be asked some questions on her oath about the affairs of her husband which will involve her. They are also questions which could well lead to or concern suit against her for not inconsiderable sums of money. 18 On the evidence before me it is not clear how much the trustee knows about the three payments referred to in par 7 of his affidavit of 23 October. Mr Skinner has indicated to me that he will require one to three hours to examine Mrs Archer. I think I can take judicial notice, without any disrespect to Mr Skinner at all, of the reliability of barrister's estimates as to time. (I use my experience as a judge, and also as counsel.) What is to be examined, amongst other things, are three transactions undertaken some years ago in the hundreds of thousands of dollars, the possibility being for claims of recovery against Mrs Archer. Notwithstanding what Mr Skinner says to me, I would have thought that there is a real and substantial risk that this examination will last longer than three hours. If that is the case, Mrs Archer is going to have to come back, in any event, at a time convenient to the trustee. 19 Whilst making no criticism of the press or the individual journalists I think it appropriate to say that in a matter which not only affects Mrs Archer personally through her relationship with her husband but one in which she may be sued for large amounts of money, she is entitled to come to Court in circumstances that do not risk her feeling either under pressure through no fault of her own or in a climate in which hostility has been generated. 20 For these reasons I do propose to adjourn the examination of Mrs Archer, but not for very long. It is unfortunate that these matters have occurred. I can't stop them occurring again, but Mrs Archer will need to perhaps compose herself for the next occasion. 21 It was put to me that Mr Donnelly generated or assisted in the generation of this publicity. As an objective fact that Mr Donnelly had some participation in passing information to the journalists; that is common ground. To the extent that there was veiled in some of the questions and submissions a personal criticism of Mr Donnelly I don't think that is made out. Mr Donnelly answered some questions which he perhaps appreciated would or may form the basis of part of the next day's press. However, I am not prepared to infer any impropriety on Mr Donnelly's part in answering questions of the press about the previous bankruptcies of Mr Archer. 22 In all the circumstances, in the interest of justice and in the interest of a fair hearing for Mrs Archer, in particular in circumstances where there is some risk that she may be upset and not in the best frame of mind to answer serious questions about serious matters which may affect her both personally and financially I think her examination should be adjourned. 23 I make no order as to costs. The reason I do that is that the reason I have adjourned this is because of circumstances that have occurred that may or may not have been contributed to by Mr Donnelly. I say once again I make absolutely no criticism of his answering the journalist's questions, but it is important, I think, that examinations of this kind be conducted in circumstances that are conducive to the fair, balanced and composed answering of questions. I think there is a risk, as I have said, that that will not occur. In those circumstances I do not think that the application for the adjournment was inappropriate as is obvious from the fact I have granted it. In all the circumstances, including the fact that an application was made which was unsuccessful to have the summons discharged, I think there should be no orders as to costs. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop J. Associate: Dated: 20 February 2003 Counsel for the Applicant: B Skinner Solicitor for the Applicant: Church & Grace Counsel for the Respondent: J M Ireland QC Solicitor for the Respondent: Gayle Meredith & Associates Date of Hearing: 20 February 2003 Date of Judgment: 20 February 2003