Ayres, W.H. v. Evans, F.P. [1981] FCA 238

Federal Court of Australia|1981-12-17|Before: McGregor JJ, Fox J

Bankruptcy - Person bankrupt in New Zealand - Request

by New Zealand Court to Federal Court of Australia to act in aid - Property of bankrupt in Australia - Claim by New Zealand revenue authorities in New Zealand bankruptcy - Opposition to request by bankrupt person to transfer of property on ground that it would be enforcing a foreign revenue claim - Scope and purpose of

Insolvency Act, 1967 (N.Z.) s.42 Bankruptcy Act 1869 (Eng.) s.74

Fox, Northrop and McGregor JJ i] December 1981 Sydney

pen eteetnt pase behn stent tar nts Kecaesvihbatiety Aen a Danmetrrtatent me Atase tn ad Yaa arm ate

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

Z. The costs of the respondent of this appeal as between solicitor and client be taxed by the taxing officer of this Court and when so taxed the Official Receiver referred to in the order under appeal pay the same out of any moneys of the bankrupt in Australia

The Court makes no order as to the custs of the appellant.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

This appeal has been argued fully and well, but I am clearly of the opinion that the decision appealed

The appellant is entitled to the residuary estate of his late father, who lived in New South Wales, and died on 12 March 1979. His interest as residuary beneficiary is locally situate in New South Wales; a grant of probate was made there of the father's will and codicil on 25 May 1979 but the estate has not been fully adminis-

The appellant lived and lives in New Zealand. He was declared bankrupt there on 5 December 1979, and the respondent is the official assignee of his estate. The High Court of New Zealand by letters of request dated 12 November 1980 has asked the Federal Court of Australia for its assistance in the administration of the bankruptcy, and has, to be more specific, sought aid to get in the residuary interest of the appellant in his father's estate as part of the estate to be administered by the official assignee in accordance with New Zealand law. About 56 per cent of the debts now outstanding (preferential creditors

and a dividend of 20 cents in the dollar have already been

paid or provided for) is due to New Zealand revenue authori-

ties. It is possible that, with the inclusion of the property represented by the interest, there will be an excess of assets over liabilities in the estate, but this

Court will not lend its aid in obtaining moneys for the payment of the revenue debts due to another state. It is argued that it matters not that in this case the making of the residuary interest available as an asset to the official assignee will also benefit the other creditors, who are numerous. The title of the official assignee to the property under New Zealand law is not disputed (see

(see Dicey and Morris, The Conflict of Laws, 10th edn.,

pp. 89, 90; Cheshire and North's Private International Law, 10th edn., pp. 131 et seq.; Nygh, Conflict of Laws in Australia, 3rd edn., pp. 198 et seq.). So far as the researches of counsel, and of myself, have disclosed there is no case which decides that when a person in a representative position comparable to that of an official assignee, or liquidator, being a person who is appointed in a foreign state, claims property or moneys part only of which will go to satisfy foreign revenue claims, the claim, if otherwise competent, should be denied. The farthest the cases have gone is to deny a claim where it is apparent that the whole of the amount sought to be recovered by a liquidator, or by an official assignee, in a foreign country will go to satisfy a revenue claim

(Peter Buchanan Ltd. and Macharg v McVey (1955) AC 516,

reported as a footnote to Government of India (1955) AC

491; Re Gibbons ex parte Walter (1960) Irish Jurist 60).

The rule applies to cases where the revenue authority, or some person acting in its interest or on its behalf, seeks to enforce the revenue liability as such. A liquidator, or an official receiver or assignee, does not act to enforce the revenue claim, but to obtain property which is to be dealt with in a due course of administration. In his own country he will doubtless meet revenue claims where these are payable out of the property coming to his hands, but in the foreign country he is simply seeking to get in property under a title

and Macharg v McVey it was obvious that the property in Ireland which was wanted by the Scots liquidator would go only to the Scottish revenue authority and the claim was rejected (see at p.530). The Court looked behind the representative character of the claimant. It is in some respects an anomalous case, although doubtless sensible in its result. I do not know however how far the learned judge (Kingsmill Moore J) would wish to press the example

"A national of a foreign country after incurring a debt to its revenue, comes to Ireland bringing with him a quantity of movables. The foreign revenue instead of courting certain defeat by suing him here in its own capacity resorts to bankruptcy proceedings in its own country (as in the case of In re Cohen (1950) 2 All ER 36), and the creditors' assignee seeks to enforce his claim here. In the course of the hearing it appears that the tax was incurred as the result of discriminatory legislation of a type repugnant to the political views of the enormous majority of the citizens of this country and that the bankrupt has sought asylum herein as a political refugee, bringing with him the remnants of his fortune. The court may admit the claim, may refuse because of the nature of this legislation, or may reject it on the broad principle that it is an attempt to collect the tax of a foreign revenue. To do the first would be to bring the courts into contempt in the eyes of the people and to offend against their own highest principles; to do the second would be publicly to censure the behaviour of a foreign State, a procedure dangerous and possibly arrogant; in the third course alone safety, propriety and a recognition of the feeling of the community are com- bined."

There are many different situations. It is not suggested

in the present case that there is any machinery whereby

the whole value of the residuary interest could be paid

revenue authorities. Taxed as to whether, if some propor- tion less than 56 per cent (say 30 or 40 per cent) were

to go to the revenue authorities, recovery of the interest would still be precluded, counsel was not able to formulate any principal enabling a line of division to be

I am of the opinion that the rule does not apply where a liquidator or an official assignee seeks to get in property which will in a due course of administration benefit ordinary creditors as well as the revenue. This accords, as I understand, with the view of Dicey and Morris (10th edn., p.91). I£ it were otherwise, the rule could operate adversely not only to the interests of persons proving in a bankruptcy or liquidation but also to people with valid claims in a deceased or settled estate. In most cases of a deceased estate there would be some amount owing to revenue authorities, and to prevent par- ticipation by beneficiaries raises public policy consider- ations quite different from that which treats revenue enforcement as confined to the place of enactment. In the present case, if the executor in a due course of administ- ration were to transfer the residuary estate to the official assignee, it could not, I believe, be said that he had acted in breach of trust. Doubtless, if there were a bankruptcy administration here, the official receiver or

trustee would quite properly refuse to pay a claim by the

New Zealand revenue authority, but I do not see how the local executor can refuse to transfer the appellant's interest to the official assignee overseas, once he is shown to be the person having title to it. It is to be remembered, too, as a general consideration, that Australian individuals or companies may be creditors or beneficiaries in an overseas estate. If the rule were as contended for by the appellant, public policy would

There has long existed an arrangement in British courts whereby countries act in aid and are auxiliary to each other in connection with bankruptcy and insolvency administration (see s.74 of the Bankruptcy Act 1869 (Eng.); s.118 of the Bankruptcy Act 1883 (Eng.) and s.122 of the "Imperial" Bankruptcy Act 1914). A similar provision, s.71 of the Bankruptcy (Ireland) Act, 1872 was considered by

Walsh J in Re Gibbons ex parte Walter (supra) and he

exercised a discretion against giving aid. The operation of s.122 of the "Imperial" Bankruptcy Act, 1914 was preserved in Australia until 1980 (see s.29(2) of the 1966 Act). These provisions meant that persons administering bankruptcies had available to them wider and readier relief through overseas caurts than would otherwise have been available. This is not to say that they were in the

same position as if there had also been an overseas - bankruptcy, for example, as to the date for determining

whether an execution is complete (Galbraith v Grimshaw

(1910) AC 508), and as to vesting of immovables see Re

Levy's Trusts (1885) 30 Ch.D. 119, 123, 124; Re Reilly (1942) Ir.R. 416, 422-425 and Dicey and Morris pp. 718,9. By Act No. 12 of 1980 (s.18) s.29 of the Bankruptcy Act, 1966 was amended by omitting sub-section (2) and sub- stituting new sub-sections (2} to (5), so that the section

"29. (1) All Courts having jurisdiction under this Act, the Judges of those Courts and the officers of or under the control of those Courts shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.

(a) shall act in aid of and be auxiliary to the courts of the external Territories, and of prescribed countries, that have jurisdiction in bankruptcy; and

(b) may act in aid of and be auxiliary to the courts of other countries that have jurisdiction in bankruptcy.

(3) Where a letter of request from a court of an external Territory, or of a country other than Australia, requesting aid in a matter of bankruptcy is filed in the Court, the Court may exercise such powers with respect to the matter as it could exercise if the matter had arisen within its own jurisdiction.

(4) 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.

(b) a country prescribed for the purposes of this sub-section; and

The learned judge from whom the appeal comes based his decision on s.29. My own view can be expressed by saying that the same practical result could have been reached in this case without reliance on s.29 if applica- tion had been made to the Supreme Court of New South Wales in its equitable jurisdiction. The principle concerning enforcement of foreign revenue laws relied upon by the appellant would not bar recovery there, for the reasons I

The relevant jurisdiction of a court exercising federal jurisdiction in bankruptcy can however only stem from s.29, and it is from that source that this Court derives jurisdiction. It seems to me that there is no doubt that the aid which can be provided includes transfer of the applicant's interest to the official assignee, or the appointment of a receiver of it for the official assignee. The form of relief granted in this case is not challenged, and this includes an order for the appointment of a receiver. Section 29(2)(a) at least requires the Court to entertain an application for aid in a case to which 1t applies. It has jurisdiction to give aid. However, the nature, extent and terms of the aid remain a matter for the

discretion of the Court (see Re Osborne; Ex parte The

Trustee (1931-32) 15 B & CR 189). I prefer not to express a final conclusion on the question whether the use of "shall", as in s.29(2)(a), necessarily overcomes the application of the principle concerning revenue debts in a case where recovery is only for the purpose of satisfying

such a debt. It did not do so in Re Gibbons ex parte

Walter, already referred to (see also Williams and Muir Hunter on Bankruptcy, 19th edn. p.474n.), but the position may be different under the present Australian legislation. I also leave aside the question whether s.29 can operate to exclude consideration of the nature or amount of the proofs in the overseas bankruptcy (CF. Re a Debtor ex parte

Viscount of the Royal Court of Jersey (1980) 3 WLR 758). I

think the preferable view to be that in a case such as the present where there are non-revenue as well as one or more

revenue creditors the rule in question has no application.

I am therefore of the opinion that the appeal should be dismissed. In respect of costs I suggest that it be ordered that the costs of the respondent of this appeal as between solicitor and client be taxed by the taxing officer of this Court and when so taxed the Official Receiver referred to in the order under appeal pay the same out of any moneys of the bankrupt in Australia received by him. In my view no order should be made as to the costs of

the appellant. + Yi x) Hel fa v My ee ot Yy T aan ee TI cerunty tat 3

tea ow. Cie C.F LVRS PORT OL Las RVs TI ea Thee toe Gate ee Hee evs

NEW SOUTH WALES DISTRICT REGISTRY N.S.W. No. G.63 1981

Appellant and FRANCIS PETER EVANS t Respondent CORAM: Fox, Northrop and McGregor JJ. NORTHROP J. REASONS FOR JUDGMENT a DECEMBER 1981

On its face, this appeal involves what is said to be the need for reconciliation between the jurisdiction of

this court in a matter of bankruptcy to act in aid of and to be auxilary to the court of a prescribed country, being the High Court of New Zealand, and a matter of public policy, namely that courts should not assist the enforcement of foreign revenue debts. The facts giving rise to the issue between the parties are set out in the reasons for judgment

(New Zealand), upon the appellant being adjudged bankrupt in

New Zealand on 5 December 1979, subject to certain exceptions

not presently relevant, all his property vested in his Official Assignee and became divisible amongst his creditors. Under that Act, the context not otherwise requiring, the word "property" means "land, money, goods, things in action, goodwill, and every valuable thing, whether real or personal, and whether situated in New Zealand or elsewhere ...". On 5 December 1979 the appellant, as residuary beneficiary, had an interest in the estate of his late father, William Henry Ayres, senior, who had died in New South Wales on 12 March 1979. The estate of the father included a claim in the estate of the appellant's step-mother who had predeceased his father, but the extent of the claim depends upon the outcome of legal proceedings pending in the Supreme Court of New South Wales. For present purposes it is sufficient to say

that the interest of the appellant in the estate of his late

father constitutes property situated in Australia. Under the Insolvency Act, the interest of the appellant in his late father's estate is vested in the appellant's Official

Assignee, even though that property is situated in Australia.

By two Letters of Request dated 30 July 1980 and 12 November 1980, the High Court of New Zealand, after reciting the facts already summarized, sought the aid of this court to

get in that property and to remit the proceeds therefrom to

the appellant's Official Assignee in New Zealand for division

constituted by a single judge, made the following order:

"Upon the Official Assignee by his Counsel undertaking to the Court :-

(a) that all money or other property received by him as Official Assignee in Bankruptcy of the property of the bankrupt under or pursuant to these orders shall be applied by him in due course of administration of the bankruptcy in New Zealand;

{b) that any matters in controversy in connection with the bankruptcy between the Official Assignee and the Official Receiver for the Bankruptcy District of the State of New South Wales and the Australian Capital Territory ('the Official Receiver') and persons resident in Australia shall be determined by this Court;

A (c) that the Official Assignee submits to the jurisdiction of this Court in all such

matters as aforesaid and abides by any order the Court may make subject to appeal; and

(d) that the Official Assignee shall appoint a solicitor or firm of solicitors in this country to accept service on his behalf of any process or other documents in relation to proceedings brought by the Official Receiver or by persons resident in Australia in connection with the said bankruptcy as aforesaid and file a notice of such appointment in these proceedings:

the Official Receiver be appointed Receiver' without security of the interest of the bankrupt as residuary beneficiary in the state of William Henry Ayres, senior, deceased with authority to take all necessary steps to obtain possession of and to sell the same and to receive the proceeds thereof and to do all such acts and things as may be necessary or expedient for the purposes of giving full force and effect hereto;

the Official Receiver be authorised and directed to pay all moneys received by him under these orders to the credit of an account opened and kept in the name or style of 'The Official Receiver - The Receiver of property of William Henry Ayres, junior, a bankrupt' at such bank as he may select;

the Official Receiver be authorised where any balance standing to the credit of the said account is in the excess of the amount that in the opinion of the Official Receiver is required for the time being to meet demands in respect of his duties hereunder to deposit the excess or any part of it on fixed deposit in such bank and for such term as he considers desirable;

subject to and in accordance with the laws of the Commonwealth with respect to Banking and Foreign Exchange regulation the Official Receiver be authorised to remit from moneys received by him under these orders to the Official Assignee in Bankruptcy in whom the estate of the bankrupt is vested pursuant to s.42 of the Insolvency Act, 1967 (New Zealand) after payment of any encumberances on the said property and of the costs, charges and expenses that may be incurred in the exercise of any of the powers hereby conferred or otherwise hereunder such sum as is required by the Official Assignee to pay in full all proved debts, interest on proved debts, the costs charges and expenses of the administration in the bankruptcy and all other expenses claims or demands (if any) properly payable in the bankruptcy under the said Act;

the Official Receiver be authorised and directed to postpone any remittance of moneys to the Official Assignee under these orders until a reasonable time after the expiration of a period of ten days commencing on the day

after the date of service by the Official Receiver on the Bankrupt at his address for service of a notice in writing signed by the Official Receiver stating the amount of moneys to be remitted by him to the Official Assignee as aforesaid together with particulars of the calculation of the amount;

the Official Receiver be authorised to obtain such advice or assistance as he considers necessary in the discharge of his duties hereunder;

leave be given to the bankrupt to file in these proceedings a notice of the appointment of a solicitor or firm of solicitors in this country to accept service on his behalf of any process or other documents in connection with the said bankruptcy;

the costs of the Official Assignee of and incident to this application including reserved costs be taxed as between solicitor and client by the taxing officer of this Court and that the costs of the bankrupt of this application including reserved costs be taxed by the taxing officer of this Court; and when so taxed the Official Receiver be at liberty to pay the same out of any moneys of the bankrupt in Australia received by the Official Receiver; ca

the Official Assignee, the Official Receiver and the bankrupt be at liberty to apply to this Court on seven days' notice for any consequential or ancillary orders or Girections in this matter as may be necessary; and

the Official Assignee serve a sealed copy ef this order on the bankrupt and the Official Receiver as soon as possible hereafter."

The appellant has appealed from the whole of that order and seeks an order that the request for aid made by the High Court of New Zealand be declined. The substance of the appellant's contention is that since the greatest part of his

debts in New Zealand comprise monies owing to revenue

authorities in New Zealand, the Federal Court should decline the request for aid since to grant it would be directly or

indirectly enforcing the revenue laws of New Zealand and that

As the first step in considering the issues raised by the appeal, it is necessary to consider the jurisdiction and power of the Federal Court to grant the request for aid.

jurisdiction in the Federal Court, see s.19 Federal Court of

Australia Act 1976. In the Bankruptcy Act, unless a contrary

intention appears, "bankruptcy", in relation to jurisdiction

or proceedings, means any jurisdiction or proceedings under

or by virtue of that Act, s.5. By way of comment it is noted

that by reason of the definition of the word "property"

contained in s.5, and by reason of s.58, upon a court making a sequestration order against the estate of a debtor, the

debtor becomes bankrupt and, subject to certain exceptions

not presently relevant, all his property, whether situate in Australia or elsewhere, vests in the Official Receiver, but note the amendments effected by the Commonwealth Functions

(Statutes Review) Act 1981 - Part V Bankruptcy which came

into operation on 2 November 1981. Those amendments do not

affect the principles involved. Under s.27 of the Bankruptcy

Act, the Federal Court is one of the courts in Australia

having jurisdiction in bankruptcy. The other courts referred

to in that section are the State courts and the Supreme Court

of the Northern Territory. Each of the courts referred to in that section has jurisdiction in bankruptcy throughout Australia, s.28. Section 29 is of crucial importance. Since

the amendments effected by s.18 of Act No. 12 of 1980, that

"29.(1) All Courts having jurisdiction under this Act, the Judges of those Courts and the officers of or under the control of those Courts shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.

(a) shall act in aid of and be auxiliary to the courts of the external Territories, and of prescribed countries, that have jurisdiction in bankruptcy; and

(b) may act in aid of and be auxiliary to the courts of other countries that have jurisdiction in bankruptcy.

(b) a country prescribed for the purposes of this sub-section; and

Before the 1980 amendments s.29 provided as follows:

"29.(1) All Courts having jurisdiction under \ this Act, the Judges of those Courts and the : officers of or under the control of those Courts shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.

(2) Nothing in this Act shall be taken to affect the operation in section 122 of the

At that time, s.122 of the Imperial Act known as the

"The High Court, the county Courts, the Courts having jurisdiction in bankruptcy in Scotland and Ireland, and every British Court elsewhere having jurisdiction in bankruptcy or insolvency, and the officers of those Courts respectively, shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy, and an order of the Court seeking aid, with a request to another of the said Courts, shall be deemed sufficient to enable the latter Court to exercise, in regard to the matters directed by the order, such jurisdiction as either the Court which made the request, or the Court to which the request is made, could exercise in regard to similar matters within their respective jurisdictions."

presently in force, the word "matters" does not have any

technical meaning and is to be construed in its ordinary sense of an affair or thing and no contrary intention appearing, the word "bankruptcy" is to be given its defined meaning in relation to jurisdiction as any jurisdiction under or by virtue of the Bankruptcy Act. A contrary intention does appear with respect to the word "bankruptcy" appearing at the end of paragraphs (a) and (b) of s.29(2) respectively. In each of those cases the word "bankruptcy" refers to a court exercising a jurisdiction other than under the Bankruptcy Act (Australia). It follows, therefore, that before the jurisdiction under s.29(2)(a) can arise, two requirements must exist, namely that a court of an External Territory or of a prescribed country has jurisdiction in bankruptcy in the ordinary sense of that word and that court has requested a court referred to in s.27 to act in its aid and be auxiliary to it. In some cases questions might arise as to whether the court requesting aid is a court having jurisdiction in bankruptcy, see In_re Bolton [1920] 2 I.R. 324. In the present case it is conceded, quite correctly, that the High Court of New Zealand is a court having jurisdiction in bankruptcy. Likewise, it is conceded, quite correctly, that the High Court of New Zealand has requested the Federal Court to act in its aid and be auxiliary to it. The request relates to the exercise of jurisdiction by the

Federal Court in relation to a matter under or by virtue of

within s.29(2)(a), see sub-section (5). In this respect, the use of the word "shall" is to be contrasted with the use of the word "may" in s.29(2)(b). The word "shall" is used in s.122 of the Imperial Bankruptcy Act. Speaking of that section, in a case where a court in the Isle of Man exercising jurisdiction in bankruptcy requested the aid of the High Court in England in a matter of bankruptcy, Farwell

J. In re Osborne, (1932) 15 B. & C. R. 189 said at p.194:

"I think it is clear that I am bound in a proper case, under section 122, to assist the Court in the Isle of Man in the bankruptcy which is the bankruptcy under that jurisdiction. I think under the section it is plain that this Court must give such assistance as it can, but subject, of course, to the considerations which would arise if there was also a bankruptcy in this country, as to the rights of the creditors and other persons in this country. There not being any such conflict, I think this Court is bound to give all the assistance that it can. On the other hand, it is,,in my judgment, a matter of discretion in this Court as to what assistance it ought to give in each case, and I think I am therefore certainly entitled to impose conditions in any order which I think it right to make in aid of the bankruptcy in the Isle of Man."

See also In re Jackson [1973] N.I.L.R. 67 and In re a Debtor

In my opinion, s.29(2)(a) of the Bankruptcy Act (Australia) confers upon the Federal Court a jurisdiction

which it is bound to exercise when the two requirements

referred to therein are satisfied. Under s.29(2)(b) the Federal Court may have a discretion whether to exercise jurisdiction where the two requirements referred to in that paragraph are satisfied, but I express no final opinion thereon. Generally, see Barrett v. Opitz (1945) 70 C.L.R. 141.

Section 29(3) specifies the powers of the Federal Court when exercising the jurisdiction conferred upon it by s.27 and s.29(2). It "may exercise such powers with respect to the matter (of bankruptcy) as it could exercise if the matter (of bankruptcy) had arisen within its own jurisdiction". Those powers are extremely wide, see for example, s.30, and include the power to make the orders the

appellant that this court should not grant the request since to do so would be against public policy in that it would be assisting the enforcement of a foreign revenue debt. It is necessary to consider the nature of that policy. In Dicey &

Morris, The Conflict of Laws, 10th ed., Vol. 1, the matter is

considered under Part One: Preliminary Matters, and in particular under Chapter 6, headed "The Exclusion of Foreign

"Rule 3. - English courts have no jurisdiction to entertain an action:- -

(1) for the enforcement, either directly or indirectly, of a penal, revenue, or other public iaw of a foreign State; ..."

The nature of the policy is discussed by the House of Lords

in Government of India v. Taylor [1955] A.C. 491, a case in

which a foreign State sought to recover in an English court taxes due under its laws. It was held that such a claim was

"My Lords, I will admit that I was greatly surprised to hear it suggested that the courts of this country would and should entertain a suit by a foreign State to recover a tax. For at any time since I have had any acquaintance with the law I should have said as Rowlatt Jd. said in the King of the Hellenes v. Brostron ((1923) 16 L1.L.Rep. 190, 193): "Tt 1s perfectly elementary that a foreign government cannot come here - nor will the courts of other countries allow our Government to go there ~ and sue a person found in that jurisdiction for taxes levied and which he is declared to be liable to in the country to which he belongs.' That was in 1923. In 1928 Tomlin J. in In re Visser, Queen of Holland v. Drukker ([{1928] Ch. 877, 884; 44 T.L.R. 692), after referring to the case of Sydney Municipal Council v. Bull ([{1909] 1 K.B. 7; 25 T.L.R. 6), in which the same proposition had been unequivocally stated by Grantham J., and saying that he was bound to follow it, added: 'My own opinion is that there is a well-recognized rule, which has been enforced for at least 200 years or thereabouts, under which these courts will not collect the taxes of foreign States for the benefit of the sovereigns of those foreign States; and this is one of those actions which these courts will not entertain.'"

It is interesting to note that following a reference in that

case at p.507 to the Dicey's Conflict of Laws, the relevant

Counsel relied also on the views expressed in Peter

Buchanan Ltd. v. McVey being judgments of the High Court of

Justice of Eire and on appeal thereof to the Supreme Court and is contained in a note to the Government of India case commencing [1955] A.C. 516. The facts of that case are of interest but need not be set out. It is sufficient to say that the liquidator of a company in Scotland commenced proceedings in Eire seeking orders against a debtor of that company for money had and received to the use of the company. The only debtors of the company were revenue authorities in Scotland. The claim failed. At p.530 Kingsmill Moore J.

"T hold as a fact - and, indeed, I understand it to be admitted - that*'the sole object of the liquidation proceedings in Scotland was to collect a revenue debt. There is no evidence that any ordinary creditor would not have been paid in full out of the assets left in Scotland, and as far as ordinary creditors are concerned the result of the liquidation proceedings in Scotland would be to deprive them of payment by reason of the priority in Scotland of a revenue debt. I hold that the sole object of the present proceedings before me is also to collect a Scottish revenue debt, and that if I were to decide for the plaintiff the only result of those proceedings would be that every penny recovered after paying certain costs and liquidator's remuneration could be claimed by the Scottish Revenue. That, in my opinion, is the substance of the

suit - to collect the revenue claim of a foreign State. Being of this opinion, I reject the claim."

In my opinion, the provisions of s.29(2)(a) prevent the application of that policy to the present case. It is inconceivable that the policy would prevent a request, for example, under s.29(1) by the Supreme Court of the State of Queensland being denied by the Supreme Court of the State of Western Australia on the ground that the sole creditor of the bankrupt in Queensland was a revenue authority of that State.

Compare Permanent Trustee Co. (Canberra) Ltd. v. Finlayson

(1968) 122 C.L.R. 338 at pp.345-6. The use of the word "shall" in s.29(2)(a) supports that view apart from the nature of the jurisdiction conferred by s.28. In my opinion, a request under s.29(2)(a) is different in nature from an action seeking to enforce a claim based upon a cause of action and leaves no room for the application of the policy. Different considerations may well arise in the application of s.29(2)(b). Likewise, I express no opinion on the principles to be applied where there is an existing bankruptcy within Australia as well as a bankruptcy in the foreign State each

re Gibbons [1960] I.J.R. 60 in which Walsh J. held that under

s.71 of the Bankruptcy Act 1972 (Ireland) which is in similar form to s.122 of the Imperial Bankruptcy Act 1914 in that it used the word "shall", the court was not bound to act in aid and that in the exercise of its discretion it refused to act in aid since the aid was invoked to assist the English revenue authorities to recover monies. I do not find the reasons of Walsh J. persuasive. He made no reference to In

re Osborne (supra) nor to the use of the word "shall".

Further, for the reasons expressed by Fox J., on the facts of this case the policy has no application as the Official Assignee is seeking to get in the property of the appellant for the benefit of ordinary creditors as well as

I would dismiss the appeal and order that the costs of the parties to the appeal be taxed and paid in the same manner aS was specified in paragraph 8 of the order under

I certify that this and the fourteen (i#) preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Ve~theep . ,

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: WILLIAM HENRY AYRES Appellant AND FRANCIS PETER EVANS

decision of a Judge of the Federal Court of Australia delivered on 1 May 1981 in respect of an application by FRANCIS PETER EVANS (Official Assignee) that this Court

should upon the facts and in the circumstances which are

to be referred to later lend its aid to the High Court of New Zealand.-to assist the Official Assignee there to obtain

control of a foreign (New Zealand) bankrupt's property in

The respondent is the Official Assignee in Bankruptcy

in New Zealand whose office 1s derived from the Insolvency Act

1967 there. His application before the learned Judge at

first instance sought an order that the Federal Court act in aid of and be auxiliary to the High Court of New Zealand in Bankruptcy in the administration of the Estate of the bankrupt. He relied in his application upon the Bankruptcy

(a) shall act in aid of and be auxiliary to the courts of the external Territories, and of prescribed countries, that have jurisdiction in bankruptcy; and

(b) may act in aid of and be auxiliary to the courts of other countries that have jurisdiction in bankruptcy.

(3) "here a letter of request fron a court of an external Territory, or of a country other than Australia, requesting aid in a matter of bankruptcy is filed in the Court, the Court may exercise such powers with respect to the matter as it could exercise if the matter had arisen within its own jurisdiction.

The "prescribed " countries are the United Kingdom, Canada and

Section 5(1) of the Act includes various definitions {unless a contrary intention appears) including that "bankruptcy" in relation to jurisdiction or proceedings, means any jurisdiction

A summary of the facts upon which the appellant relied which I do not purport to quote exactly and which do

On 5 December 1979 the bankrupt was adjudicated bankrupt by the High Court of New Zealand. The total due to the proved creditors was $78,248.00.

His estate thereupon vested in the Official Assignee in Bankruptcy pursuant to s.42 of the Insolvency Act 1967.

From information given to the said Official Assignee it appeared that the estate of the bankrupt was entitled to certain property situated in the State of New South Wales (viz. an estate as residuary beneficiary in the deceased estate of William Henry Ayers (Senior)).

It had been represented to the said High Court of New Zealand that it 1s necessary for the purpose of justice and the due administration of the said estate of the bankrupt in accordance with the laws of bankruptcy in that country that the said property in New South Wales should be made available to the said Official Assignee

After allowing for the payment of preferential claims and a dividend, revenue debts due to the Crown yet unpaid constitute some 56% of the total remaining debts of proved creditors.

For reasons which he set out in his judgment, the learned Justice at first instance expressed himself as satisfied that the Court should lend its aid to the High Court of New Zealand. Though he reviewed authorities,

eventually his judgment depends on the terms of s.29 itself.

this appeal are that (paraphrasing the arguments) -

(1) The action by the Official Assignee is one to enforce the revenue laws of New Zealand;

that is its predominant effect, even if not his subjective motive.

(ii) Courts will not ~ even must not - lend aid to enforce foreign revenue or penal laws. So to do would be offensive to public policy in the way outlined by Kingsmill Moore L.J. in Buchanan (infra) p.516, an argument developed in para (v) (infra).

(ii1) The prohibition is a matter of substance; therefore does not depend upon procedural matters or allow achievement of this process by indirect means.

(iv) So, even though the action is by the Official Assignee, it is to be noticed that the substantial part of the proceeds of New South Wales property would be used to pay revenue debts- in New Zealand.

(1955) A.C. 491 at p.510 et seq.; Peter Buchanan Ltd. v.

Metal Industries (Salvage) v. Owners of S.T. Harle 1962

S.L.T. 114 at p.117; Municipal Council of Sydney v. Bull

(1909) 1 K.B. 7; Rossano v. Manufacturers' Life Insurance Co.

(1963) 2 Q.B. 352; Bath v. British and Malayan Trustees Ltd.

(1969) 9O W.N. (Pt.1) (N.S.W.) 44; Brokaw v. Seatrain U.K. Ltd.

(1971) 2 Q.B. 476 at p.483; Schemmer v. Property Resources Ltd.

One of Counsel's submissions included a reference to

Moore v. Mitchell 30F- (2d) 600 in which I draw attention to

To these I would add a reference to Permanent Trustee

Company (Canberra) Limited v. Finlayson & Ors. (1969) 122 C.L.R.

At a glance

Court

Decision date

Before

Source

Judgment (242 paragraphs)

Cited By (1)