Wong (Trustee), in the matter of Mackellar (Bankrupt) v Mackellar (No 2) [2020] FCA 1583

Federal Court of Australia

Wong (Trustee), in the matter of Mackellar (Bankrupt) v Mackellar (No 2) [2020] FCA 1583 File number: QUD 186 of 2020

Judgment of: DERRINGTON J

Date of judgment: 26 October 2020

Catchwords: PRACTICE AND PROCEDURE – request for adjournment – no prejudice to trustees in bankruptcy – adjournment granted INSOLVENCY – personal insolvency – cross-border insolvency – adjournment of application pending proposed Individual Voluntary Arrangement in Hong Kong

Legislation: Bankruptcy Act 1966 (Cth) Cross-Border Insolvency Act 2008 (Cth) Model Law on Cross-Border Insolvency of the United Nation Commission on International Trade

Division: General Division

Registry: Queensland

National Practice Area: Commercial and Corporations

Sub-area: General and Personal Insolvency

Number of paragraphs: 14

Date of hearing: 26 October 2020

Solicitor for the Applicant: Mr D Jardine of HopgoodGanim Lawyers

Solicitor for the Respondent: Mr J Elliot of Cornwalls

ORDERS QUD 186 of 2020

BETWEEN: WONG TECK MENG AND MAK HAU YIN AS JOINT AND SEVERAL TRUSTEES OF THE PROPERTY OF WOLFGANG FRANK WILLIAM MACKELLAR (A BANKRUPT) Applicant

AND: WOLFGANG FRANK WILLIAM MACKELLAR (A BANKRUPT) Respondent

order made by: DERRINGTON J DATE OF ORDER: 26 OCTOBER 2020

THE COURT ORDERS THAT:

1. The matter is adjourned to 9.30 am AEST on 18 December 2020. 2. Costs are reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

Background 1 On 31 January 2018, Mr Mackellar was made bankrupt by an order of the High Court of the Hong Kong Special Administrative Region, Court of First Instance (the Hong Kong Proceedings). On 24 May 2019, a resolution of Mr Mackellar's creditors appointed Mr Wong Teck Meng (Mr Wong) and Ms Mak Hau Yin (Ms Mak) as trustees in bankruptcy. 2 On 12 August 2020, this Court made orders on the application of the trustees that the Hong Kong proceedings be recognised as a "foreign main proceeding" pursuant to the Cross-Border Insolvency Act 2008 (Cth) and the Model Law on Cross-Border Insolvency of the United Nation Commission on International Trade. Other orders were made preserving the property of Mr Mackellar in Australia and giving Mr Wong and Ms Mak the powers available to trustees in bankruptcy in Australia under the Bankruptcy Act 1966 (Cth). A further order was made requiring Mr Mackellar to be examined as to his affairs. 3 Part of the relief claimed in the application, namely that a summons be issued to Mr Mackellar for a public examination, was adjourned until 12 October 2020. The reason for that was that Mr Mackellar had commenced the process of applying for an Individual Voluntary Arrangement (IVA) under Hong Kong insolvency law. In his affidavit of 20 October 2020, Mr Wong deposed that the procedure to implement an IVA in Hong Kong is as follows: 6.1 As a debtor in Hong Kong, the Respondent must find a party willing to act as his nominee in relation to the IVA. I verily believe the Respondent's proposed nominee in this case to be FTI Consulting; 6.2 The Respondent must apply for an Interim Order pursuant to ss 20 and 20A of the Bankruptcy Ordinary (Cap 6) in the Hong Kong Court; 6.3 Three (3) days before the expiry of the Interim Order, the Respondent's Intended Nominee must submit a report to the Hong Kong Court whether, in the Intended Nominees [(sic.)] opinion, a meeting of creditors should be held to consider the Respondent's IVA proposal; 6.4 If the intended nominee approves the debtor's proposal, the debtor must then apply to the Court for an extension of the Interim Order for a creditor's meeting to be held to consider the Respondent's IVA proposal; 6.5 For the IVA to be successful, the approval requires at least 75% in value of the creditors present at the meeting of creditors or by proxy. 4 On 16 September 2020, Mr Mackellar's Hong Kong lawyers sent a timetable to the solicitors for the trustees in bankruptcy outlining the proposed timetable for preparing the IVA proposal. It provided that: (a) By 23 September 2020, Mr Mackellar would give a written notice of his IVA proposal to his nominee, trustee and official receiver; (b) By the week commencing 28 September 2020, he would make an application for an interim order in the Hong Kong Court; and (c) By mid to late October 2020, his nominee would submit a report to the creditors stating whether a meeting should take place to consider the IVA proposal. 5 As a result of that indication, the parties agreed to adjourn the application to 26 October 2020.