FEDERAL COURT OF AUSTRALIA Pascoe; in the matter of Hudson [2005] FCA 1421 BANKRUPTCY – letter of request issued by the Federal Court to the High Court of New Zealand requesting it to act in aid and be auxiliary to the Federal Court in a 'matter of bankruptcy' – Bankruptcy Act 1966 (Cth) s 29(4) –bankrupt's mother died in New Zealand –distribution made by executor of her will from her estate to bankrupt – trustee in bankruptcy wishing to trace the money distributed to bankrupt – whether notice of application should be given to bankrupt – limited form of order at this stage – conditions protective of bankrupt included in order. Bankruptcy Act 1966 (Cth) s 29(4) Ayres v Evans (1981) 56 FLR 235 cited Official Trustee in Bankruptcy; in the matter of Lyons (2000) 104 FCR 486 cited IN THE MATTER OF PETER GEORGE HUDSON, a bankrupt SCOTT DARREN PASCOE as Trustee of the Property of Peter George Hudson NSD 1817 OF 2005 LINDGREN J 27 SEPTEMBER 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1817 OF 2005 IN THE MATTER OF PETER GEORGE HUDSON, a bankrupt SCOTT DARREN PASCOE as Trustee of the property of Peter George Hudson, a bankrupt APPLICANT JUDGE: LINDGREN J DATE OF ORDER: 27 SEPTEMBER 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant ('the Trustee') be granted leave to file in Court his application and two affidavits sworn 26 and 27 September 2005. 2. A letter of request, in the form annexed, issue to the High Court of New Zealand under s 29(4) of the Bankruptcy Act 1966 (Cth), requesting it to act in aid of and be auxiliary to the Federal Court of Australia. 3. If, as a result of the issue of the letter of request and any further letter of request, any part of the sum of NZD92,946.90 referred to in the letter of request, or of any assets representing any part of it, should be recovered by the Trustee, the Trustee not distribute or part with such part of that sum or of those assets, until: (a) Peter George Hudson (the Bankrupt) has been served with a sealed copy of these orders and a copy of the accompanying reasons for judgment; and (b) any application by the Bankrupt for a variation or setting aside of the orders, made by notice of motion filed and served within 14 days after such service of the sealed copy of the orders and copy of the reasons upon the Bankrupt, has been heard and determined. 4. The Trustee have liberty to apply on 24 hours' notice. 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 NSD 1817 OF 2005 IN THE MATTER OF PETER GEORGE HUDSON, a bankrupt SCOTT DARREN PASCOE as Trustee of the property of Peter George Hudson, a bankrupt APPLICANT Form of Letter of Request To the Justices of the High Court of New Zealand: WHEREAS THE AFFIDAVITS OF SCOTT DARREN PASCOE SWORN 26 AND 27 SEPTEMBER 2005 SHOW THAT: 1. Peter George Hudson became a bankrupt on 21 January 2000 upon acceptance of his own (Debtor's) Petition; 2. Scott Darren Pascoe ('the Trustee') of SimsPartners is the trustee in bankruptcy of the estate of the Bankrupt. 3. The Bankrupt is the son of Enid Eleanor Hudson (also known as Phyllis Enid Eleanor Hudson) late of Eastbourne, widow, deceased ('the Deceased') who died on 24 April 2004, having left as her last will a will dated 4 September 1998, probate of which was granted on 26 May 2004 by the High Court of New Zealand to Public Trust; 4. The Bankrupt was named as a beneficiary in the will of the Deceased, and on or about 16 February 2005, Public Trust made a final distribution to the beneficiaries, including a distribution of NZD92,946.90 to the Bankrupt; 5. Public Trust has informed the Trustee that Public Trust has received advice that Public Trust is prevented from disclosing to the Trustee further information in relation to the distribution of NZD92,946.90 to the Bankrupt. NOW: I, Kevin Edmund Lindgren, as a Judge of the Federal Court of Australia, do hereby request that, for the above reasons and for the assistance of this Court, you as the Justices of the High Court of New Zealand or one or more of you, for the reasons aforesaid, will be pleased: (a) to authorise or direct, as may seem appropriate, Public Trust to obtain and provide to the Trustee full and ample information in respect of the distribution of NZD92,946.90 made by Public Trust to the Bankrupt on or about 16 February 2005, including details of the form of the distribution and of any bank account into which the sum of NZD92,946.90 was paid; or (b)(i) to appoint the Official Assignee for New Zealand as agent of the Trustee for the purpose of obtaining full and ample information in respect of the distribution of NZD92,946.90 made by Public Trust to the Bankrupt on or about 16 February 2005, including details of the form of the distribution and of any bank account into which the sum of NZD92,946.90 was paid; and furnishing that information to the Trustee; and (ii) to reserve liberty for the Official Assignee for New Zealand to apply for such further orders as may be necessary. A letter of request does hereby issue requesting the High Court of New Zealand to act in aid of and be auxiliary to this honourable Court accordingly. Dated: Justice Kevin Edmund Lindgren Judge of the Federal Court of Australia IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1817 OF 2005 IN THE MATTER OF PETER GEORGE HUDSON, a bankrupt SCOTT DARREN PASCOE as Trustee of the property of Peter George Hudson, a bankrupt APPLICANT JUDGE: LINDGREN J DATE: 27 SEPTEMBER 2005 PLACE: SYDNEY REASONS FOR JUDGMENT INTRODUCTION 1 The applicant ('the Trustee') is the trustee in bankruptcy of the estate of Peter George Hudson ('the Bankrupt'). The Trustee applies under s 29(4) of the Bankruptcy Act 1966 (Cth) ('the Act') for an order that a letter of request issue to the High Court of New Zealand requesting it to act in aid of, and be auxiliary to, this Court in the matter of the bankruptcy. Subsection 29(4) provides: 'The Court may request a court of an external Territory, or of a country other than Australia, that has jurisdiction in bankruptcy to act in aid of and be auxiliary to it in any matter of bankruptcy.' 2 The Bankrupt's mother died in New Zealand on 24 April 2004. On 16 February 2005 there was a final distribution to the beneficiaries by the executor of her will, Public Trust (the successor to the Public Trustee), including a distribution to the Bankrupt of NZD92,946.90. Without the aid of the High Court of New Zealand, however, the Trustee is unable to trace that amount. 3 By letter dated 21 September 2005, Public Trust advised the Trustee: · that Enid Eleanor Hudson, also known as Phyllis Enid Eleanor Hudson ('the Deceased'), died on 24 April 2004; · that Public Trust was the executor named in the Deceased's will; · that probate of the will was granted to Public Trust in the High Court of New Zealand on 26 May 2004; and · that a final distribution was made to the beneficiaries on that day. 4 Public Trust enclosed a copy of the will and of the final accounts for the estate of the Deceased. The will referred to the Bankrupt as a child of the Deceased and named him as a beneficiary. 5 The statement of account showed the distribution of NZD92,946.90 in favour of the Bankrupt. In its letter, Public Trust advised that it was not aware of the status of the bankrupt and had therefore treated him in the same way as any other beneficiary. 6 Public Trust further stated that it had been advised that the bankruptcy had no effect under New Zealand law, and that Public Trust was prevented from disclosing to the Trustee any further information. 7 The High Court of New Zealand has jurisdiction in bankruptcy: see the numerous sections of the Insolvency Act 1967 (NZ) which confer such jurisdiction. Subsection 135(1) of that Act provides: 'The [High Court]shall, in all matters of bankruptcy, act in aid of and be auxiliary to any Court of any Commonwealth country other than New Zealand, being a Court having jurisdiction in bankruptcy, and an order of that Court requesting aid shall be sufficient to enable the [High Court] to exercise in regard to the matter specified in the order such powers as the [High Court] might exercise in respect of the matter if it had arisen within its own jurisdiction.' 8 Subsections 29(2) and (3) of the Act are similar to this provision, and I note that this Court has acted in aid of the High Court of New Zealand pursuant to a letter of request from that Court in circumstances which had some similarities to those of the present case, in Ayres v Evans (1981) 56 FLR 235. FURTHER BACKGROUND FACTS 9 The background facts are established by affidavits of the Trustee sworn 26 September 2005 and 27 September 2005. 10 The Bankrupt became a bankrupt on 21 January 2000 upon acceptance of his own (debtor's) petition. The petition gave the Bankrupt's address as 'PO Box 1359 Southport, Queensland, Post Code 4215', and a person who signed 'J. Sheedy' as witness to his signature, gave that person's address as 'PO Box 121, Runaway Bay 4216'. 11 In his statement of affairs, the Bankrupt gave his residential address as 'c/o E35 Runaway Bay Marina, 245 Bayview Street, Runaway Bay 4216', and his postal address again as 'PO Box 1359, Southport, Qld 4215'. 12 The Bankrupt stated, as what he believed to be the cause of his bankruptcy, 'Greedy wife and her slimy lawyer'. 13 Initially the trustee in bankruptcy was the Official Trustee in Bankruptcy, but on 8 November 2001, the Trustee was appointed instead, pursuant to s 157 of the Act. 14 On 20 March 2004, the Bankrupt left Australia without the Trustee's consent. That was an offence punishable on conviction by imprisonment for a period not exceeding three years: s 272(1)(c) of the Act. According to the Trustee's affidavit evidence, the bankrupt was arrested and prosecuted for that offence on his return, but no conviction was recorded. The Bankrupt explained that he had left the jurisdiction because his mother was dying and he needed to return to New Zealand to be with her. It was that information which caused the Trustee to make inquiries of Public Trust and to acquire from it the information referred to earlier. 15 The Trustee wrote to the Bankrupt on 2 August 2005, 11 August 2005 and 30 August 2005 seeking information in relation to his mother's estate. The letters were written to him, in some cases by ordinary post and in others by registered post, at PO Box 289, Runaway Bay, Qld 4216. The Trustee's evidence is that the post office box address given in the petition is closed, and that in a proceeding in the Administrative Appeals Tribunal with respect to the discharge of the Bankrupt from bankruptcy, in which the Trustee is engaged, the Bankrupt has given in correspondence his address as PO Box 289, Runaway Bay, Qld, 4216 and 9 Meadowlake Drive, Carrara, Qld, 4211. The Bankrupt has not replied to the Trustee's letters. The Bankrupt's failure to give the information requested was an offence punishable by imprisonment for one year: s 265(1)(ca) of the Act (and see s 77(1)(ba) of the Act). 16 On 13 September 2005 the Trustee gave notice of objection to the automatic discharge of the Bankrupt from bankruptcy under s 149B of the Act. The ground of the objection was that the Bankrupt had failed, when so requested in writing by the Trustee, to provide written information about his property, income or expected income: see s 149D(1)(d) of the Act. 17 The making of the objection had the effect of extending the period of the bankruptcy to a period of eight years from the date of lodgement of the statement of affairs. Accordingly, the current discharge date is 22 January 2008. 18 The Trustee has been monitoring the one and only bank account in Australia which the Trustee knows the Bankrupt to have. That is an account in the Bankrupt's name with Suncorp-Metway Ltd (BSB 484-799). Direct credits from Centrelink Newstart go into that account. The sum of NZD92,946.90 to which I referred has not been paid into it. The Trustee suspects that that amount may have been deposited into an account in New Zealand, or into an account in Australia standing in a name other than that of the Bankrupt. 19 In the first instance, the purpose of the present application is to obtain from Public Trust information as to the precise form of the distribution of NZD92,946.90 to the Bankrupt, including particulars of the bank account into which the cheque was deposited. CONSIDERATION 20 A case is made out for a limited letter of request to the High Court of New Zealand in the form annexed to today's orders. The request will be 'limited' because the evidence does not establish that the Bankrupt has assets in New Zealand. I agree with Ms Nash, the solicitor for the Trustee, that it is urgent that the letter be issued and the information obtained. Depending upon what information is elicited, it may be appropriate for a letter containing a further request to be issued. To that end, the Trustee will have liberty to apply on 24 hours' notice. 21 An initial question has arisen as to whether the Trustee should be required to give notice of this application to the Bankrupt (a similar question arose in Official Trustee in Bankruptcy, in the matter of Lyons (2000) 104 FCR 486). The Trustee submits that he should not be, because the contraventions of the Act by the Bankrupt suggest that if he were to learn of the application he might well ensure that the money or its proceeds, if still available, is secreted away. 22 I accept the Trustee's submission. There should be built into the order, however, a provision allowing the Bankrupt to apply for variation or a setting aside of the order. There should also be an order that if, as a result of the issue of the letter of request, and any further letter of request that may be issued, any part of the sum of NZD92,946.90 or of any assets representing that sum or any part of it, should be recovered by the Trustee, the Trustee must not pay or transfer the same, until: (a) a sealed copy of the orders and a copy of these reasons are served on the Bankrupt; and (b) any application by the Bankrupt, made within 14 days after such service, for a variation or setting aside of the order, has been heard and determined. 23 It is unclear to me whether the Official Assignee for New Zealand will need to become involved at this stage. The reason for my doubt is that the purpose of the present letter of request is only to obtain information, which, at present, the Public Trust has been advised it may not provide. Perhaps the High Court of New Zealand will be able to aid this Court to that extent by reason of the fact that that Court is the source of the grant of the probate to Public Trust. Accordingly, the letter of request will be expressed in a form broad enough to accommodate both possibilities in the alternative: that Court's directly authorising or directing Public Trust; and that Court's appointment of the Official Assignee of New Zealand as the Trustee's agent to obtain the information and provide it to the Trustee. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 5 October 2005 Solicitor for the Applicant: Ms S Nash, of Sally Nash & Co Date of Hearing: 27 September 2005 Date of Judgment: 27 September 2005