Pascoe, in the matter of Hudson [2006] FCA 785

FEDERAL COURT OF AUSTRALIA

Pascoe, in the matter of Hudson [2006] FCA 785 IN THE MATTER OF PETER GEORGE HUDSON, a bankrupt SCOTT DARREN PASCOE As Trustee of the Property of Peter George Hudson NSD1817 OF 2005 EMMETT J 4 MAY 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD1817 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: EMMETT J

DATE OF ORDER: 4 MAY 2006

WHERE MADE: SYDNEY

THE COURT: 1. Notes the usual undertaking as to damages given by the applicant, Scott Darren Pascoe. 2. Notes the undertaking to the Court by the applicant, Scott Darren Pascoe, that no part of any funds or assets representing funds presently held by Public Trust that may be received by the said Scott Darren Pascoe will be dispersed without leave of the Court. 3. Orders that a letter of request in the form annexed, issue to the High Court of New Zealand under s29(4) of the Bankruptcy Act 1966 (Cth), requesting it to act in aid of and be auxiliary to the Federal Court of Australia 4. Reserves liberty to Scott Darren Pascoe and Peter George Hudson and any other person who may be effected by Order 3 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 NSD1817 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: EMMETT J

DATE: 4 MAY 2006

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 I have before me an application for an order that a letter of request issue to the High Court of New Zealand, requesting it to act in aid of, and to be auxiliary to, the Federal Court of Australia in relation to the administration of the estate of Peter George Hudson. The letter of request concerns a fund apparently held by Public Trust for the benefit of Mr Hudson. 2 Mr Hudson was made bankrupt on 21 January 2000, upon the filing and acceptance of a debtor's petition. At that time, the Official Trustee was appointed as trustee of his property. A statement of affairs dated 21 January 2000 disclosed only two creditors, being Mr Hudson's former wife and the Australian Taxation Office. 3 On 8 November 2001, steps were taken for the appointment of Mr Scott Darren Pascoe as trustee of Mr Hudson's property. There is some question concerning the effect of that appointment, the details of which I do not propose to examine. I shall proceed on the basis that the appointment of Mr Pascoe as trustee was effective. 4 In the ordinary course, Mr Hudson would have been discharged from bankruptcy on the expiration of three years from 21 January 2000, namely, 20 January 2003. However, on 18 December 2002, Mr Pascoe lodged a notice of objection to discharge under s 149B(1) of the Bankruptcy Act 1966 (Cth) ('the Act'). The effect of that was to extend the bankruptcy for a period of five years. On 7 February 2003, Mr Pascoe lodged a second notice of objection to discharge under s 149B(1). On 11 February 2003, Mr Pascoe withdrew the first notice of objection. Mr Hudson subsequently sought internal review of the decision to give the second notice of objection to discharge. 5 Ultimately, on 20 May 2005, the Inspector-General cancelled the second notice of objection to discharge. However, by the operation of s 149N(2) of the Act, that cancellation does not take effect until either the end of the period within which an application may be made to the Administrative Appeals Tribunal for review of the Inspector-General's decision or, if such an application is made, the decision of the Tribunal is given. In fact, Mr Pascoe has applied to the Administrative Appeals Tribunal for a review of the Inspector-General's decision and the Tribunal has not yet made a decision. 6 Nevertheless, a question arises as to the effect of the withdrawal of the first notice of objection. A withdrawal takes effect upon the entry of notification of the withdrawal in the National Personal Insolvency Index. Mr Pascoe contends that the effect, upon such an entry, is that the objection ceases to operate by that day but that the bankruptcy's extension is effective until the withdrawal has effect. If that is so, and the assumption I have made concerning the effectiveness of the appointment of Mr Pascoe as trustee is well made, it follows that Mr Pascoe is still the trustee of the property of Mr Hudson and that Mr Hudson has not yet been discharged from bankruptcy. 7 I have referred to these issues because of the circumstances in which the present application is made. It was originally made ex parte. I directed that Mr Hudson be notified of the application. Mr Hudson made some written submissions opposing the orders that are now sought and asked that a decision be made on the papers. He was informed that I would hear all argument on behalf of Mr Pascoe, but that I would take into account his written submissions. Mr Hudson did not appear following service of the application upon him. 8 Mr Hudson is the son of the late Enid Eleanor Hudson, late of Eastbourne in New Zealand. Mrs Hudson died on 24 April 2004, having left as her last will an instrument dated 4 September 1998. Probate of that will was granted by the High Court of New Zealand to Public Trust on 26 May 2004. Mr Hudson and three of his siblings, were named as beneficiaries under the will. On 16 February 2005 Public Trust made a final distribution to the beneficiaries under the will. That distribution included a distribution Mr Hudson in the sum of $NZ92,946.92. The amount of the distribution to Mr Hudson was paid by Public Trust into a Public Trust on-call account. 9 Mr Pascoe sought information from Public Trust concerning the fund held on behalf of Mr Hudson. Public Trust took the stance that it was not obliged to disclose any information to Mr Pascoe, since the bankruptcy of Mr Hudson was a matter of Australian law which was not necessarily recognised by Public Trust. Mr Pascoe therefore applied for a letter of request to be issued to the High Court of New Zealand, requesting assistance in ascertaining particulars of the fund held by Public Trust for Mr Hudson. 10 On 27 September 2005, the Court ordered that a letter of request issue to the High Court of New Zealand, requesting that Court to authorise or direct, as may seem appropriate, Public Trust to obtain, and to provide to Mr Pascoe, information in respect of the distribution of $NZ92,946.90 made to Mr Hudson. Following the issue of a letter of request, Public Trust wrote to Mr Pascoe on 20 March 2006, relevantly saying: 'The balance of the funds is held in a Public Trust on-call account. On completion of administration of funds due to Peter from the estate of his mother were paid, were paid [sic] into this account. The only withdrawal was a payment to the IRD (Inland Revenue Department) of New Zealand as shown on the statement. I enclose for your information a copy of the account statement as at 20 March 2006. Public Trust has certain costs relating to your application to be debited but I am deferring any action in this regard pending completion of all matters.' The account statement enclosed with that letter showed a payment of $NZ22,918.65. 11 Mr Pascoe then wrote to Public Trust, requesting that the on-call account be closed immediately and that the balance be forwarded to Mr Pascoe. Enclosed with the letter of 28 March 2006 was a demand under s 129(4B) of the Act. Public Trust was requested: 'To put a freeze on withdrawals from the account pending a further order if it was unwilling to pay the funds to Mr Pascoe.' 12 By letter of 11 April 2006, Public Trust declined to meet the demand for payment of the funds to Mr Pascoe. The letter says: 'Your appointment under Australian law and the powers given to you under Australian law do not entitle you to exercise those powers in New Zealand. That is why you had to obtain the authority of the New Zealand High Court directing Public Trust to disclose information. I have inquired whether Peter Hudson would agree to Public Trust releasing the funds to you but I have not received a reply.' 13 Mr Pascoe has no further information as to the nature of the payment to the Inland Revenue Department in the sum of $NZ22,918.65 made on 11 November 2005. The statement of account enclosed with Public Trust's letter of 20 March 2006 shows that, as at that date, the balance of the account was $74,745. Mr Pascoe seeks the issue of a letter of request to the High Court of New Zealand seeking an order directing or authorising Public Trust to pay the balance of the account to Mr Pascoe. 14 I have indicated the concerns that I have as to the standing of Mr Pascoe to make the application. Nevertheless, if he is trustee of the property of Mr Hudson, he is entitled to get in the fund presently standing to the credit of the account with Public Trust. Due to the urgency and the absence of any assistance by way of argument from Mr Hudson, I would be reluctant for the request to be made unless the fund is preserved until such time as Mr Hudson has had an opportunity to contest the status of Mr Pascoe. 15 There is already on foot, in the Queensland Registry of this Court, a proceeding brought by Mr Hudson, in which some challenge is made to the position of Mr Pascoe. In addition, of course, there is the review currently on foot before the Administrative Appeals Tribunal concerning the decision of the Inspector-General to cancel the notice of objection to discharge. I therefore enquired whether Mr Pascoe is prepared to give the usual undertaking as to damages and an undertaking not to disperse any funds obtained from Public Trust without the leave of the Court. Those undertakings have been given by Mr Pascoe through counsel. I consider, therefore, that it is appropriate to make orders for the issue of a letter of request. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.