Harrison (Trustee) Roberts v Roberts, in the matter of Roberts

AND: Mei Lan Roberts Respondent

TO: The High Court of New Zealand RE: Federal Court of Australia proceedings NSD1643/2024 WHEREAS:

1. On 23 May 2024, a sequestration order was made by a Registrar of Division 2 of the Federal Circuit and Family Court of Australia against Ms Mei Lan Roberts (Ms Roberts), and on the same day Mr Brett Richard Geoffrey Harrison (the Trustee) was appointed as trustee in bankruptcy of her estate.
2. Under Australian law and pursuant to sections 58(1) and 116 of the Bankruptcy Act 1966 (Cth) (the Act) if a person becomes bankrupt in Australia their real and personal property vests in their trustee who is authorised to sell that property and distribute the proceeds of sale amongst the bankrupt's creditors.
3. From information given to the Trustee and following his investigations, the Trustee has determined that Ms Roberts holds a fee simple interest as the sole proprietor of a property located in New Zealand, described in certificate of title NA3A/178 and situated at 170 Bleakhouse Road, Mellons Bay, Auckland, 2014, New Zealand (the Property).
4. In an application to this court, the Trustee gave evidence that the debts owing to the creditors of the bankrupt estate of Ms Roberts total approximately $4,046,575.
5. Pursuant to the provisions of the Act a trustee is authorised to take possession of the assets of a bankrupt, subject to certain limited exclusions, and to realise those assets, by sale or otherwise, for the benefit of the creditors in the bankrupt estate. A reference to assets includes all real estate property, cash at bank, shares in companies, a beneficially vested interest in a trust and any income derived from those assets, located both within Australia and outside of Australia's external territories.
6. It has been represented to this Court that it is necessary for the purposes of justice and the due administration in bankruptcy of the estate of the bankrupt under and in accordance with the bankruptcy laws of the Commonwealth of Australia, that the Property should be made available to the Trustee in his capacity as trustee of Ms Roberts' bankrupt estate, so that it may be dealt with by him under the Act for the purpose of realising it for the benefit of the creditors of the estate.
7. Pursuant to section 27 of the Act, the Federal Court of Australia has jurisdiction in bankruptcy, and under section 29 of the Act this Court can request a court outside Australia that has jurisdiction in bankruptcy to assist it in any matter of bankruptcy.
8. On 18 November 2024, the Trustee applied to this Court for an order that a letter of request be issued under section 29 of the Act to the High Court of New Zealand, to assist in the realising of the Property for the benefit of the creditors of the bankrupt. Request for Assistance
9. This Court requests, for the reasons given above and for the assistance of this Court in the matter of the estate of Ms Roberts, that the High Court of New Zealand: (a) vest in the Trustee the property real and personal of Ms Roberts in New Zealand and the possession and control thereof, with liberty to sell and lease the same and receive the proceeds of such sale or leasing and with authority to take such steps and do such acts and things as may be necessary for those purposes; and (b) grant such orders on application by the Trustee as may be necessary and proper for the purpose of implementing the request in paragraph (a) above and ancillary thereto.

DATE: FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES REGISTRY

BROMWICH J: 1 By an originating application dated and filed today, 18 November 2024, Mr Brett Richard Geoffrey Harrison, who is the trustee in bankruptcy of the respondent, Ms Mei Lan Roberts, seeks an order under s 29(4) of the Bankruptcy Act 1966 (Cth). That is an order by which this Court may request a court of an external territory 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. All references to the applicant in these reasons are to him in his capacity as trustee. 2 The applicant has ascertained that there is an asset by way of real estate in the name of the respondent, which was not disclosed in her statement of affairs, but has become known from documents produced in aid of consent orders made by Division 2 of the Federal Circuit and Family Court of Australia. The applicant's investigations identified a property in New Zealand, being at 170 Bleakhouse Road, Mellons Bay, Auckland, 2014, New Zealand (the Property). The applicant applies for an order under section 29(4) of the Bankruptcy Act for this Court to issue a letter of request to the High Court of New Zealand seeking assistance in relation to the property. The object of this exercise is to get the assistance from the High Court of New Zealand so that, amongst other things, the caveat can be registered and all the divisible property of the respondent in New Zealand can be vested in the applicant as the respondent's trustee in bankruptcy. 3 In support of the application before me the applicant has sworn an affidavit, which I have read. That affidavit deals with the circumstances predicating the application, as well as the reasons that this application is brought ex parte, namely due to a level of non-cooperation on the part of the respondent. I accept that, in the circumstances evidenced by that affidavit, it is appropriate that this matter be heard ex parte, so as to avoid potential acceleration of any efforts to alienate the Property from the reach of the applicant before those steps can be taken. 4 The applicant has sought to register a caveat in relation to the Property, which is registered in the name of the respondent. The currency of that registration was confirmed by an updated search carried out by the applicant's solicitors during the hearing of this application. The Property is still registered in the name of the respondent as of about 3.30 pm Sydney time today, about 5.30 pm New Zealand time. 5 The circumstances leading to this application are that a sequestration order was made by a Registrar of the Federal Circuit and Family Court of Australia against the respondent on 23 May 2024, and on the same day the applicant was appointed as trustee in bankruptcy of the respondent's estate. Pursuant to s 58(1) of the Bankruptcy Act, the real and personal property of the respondent was vested in the applicant as trustee. 6 If this initial step is taken of a letter issuing from this Court, it will be in the hands of the High Court of New Zealand as to what components should be made inter partes as opposed to ex parte. However, the most important thing for the applicant at the moment is to secure the status quo in terms of current title of the known real estate; and secondly and importantly to ensure that the Property, in keeping with the rest of the estate of the respondent, is vested formally, by reference to New Zealand law as well as Australian law, in the hands of the applicant. 7 As I have already indicated, the aid sought is, amongst other things, in vesting in the applicant all of the respondent's divisible property situated in New Zealand. At this stage the Property is all that is known of. The aid is then in assisting the applicant to obtain possession and control of the Property and, I anticipate, assisting the trustee to sell and realise the property for the benefit of creditors of the bankrupt estate. 8 The total indebtedness with which I am presently concerned is set out in the annexures to the affidavit of the applicant. In particular, annexure E to that affidavit is a notice to the creditors of this bankruptcy, being a five-page document. And the fourth page of that document, being page 45 of the affidavit, discloses a list of creditors and amounts owed to each of them, with the total disclosed being $4,046,575. The applicant has been unsuccessfully seeking the cooperation of the respondent to realise the Property, the most recent effort being by way of an email which was sent on 24 September 2024, with no further communications from the respondent since then. 9 I have been assisted in dealing with this application and giving these reasons orally by the judgment of O'Callaghan J in Mclean (Trustee) v Kurene, in the matter of Kurene [2020] FCA 464, and there will be some inevitable resemblance between his Honour's reasons and mine, for which I express immediate gratitude. His Honour noted, as do I, that French J, when a member of this Court, had held in Re Clunies-Ross v Ex parte Totterdell [1987] 82 ALR 475 at 473 that three issues arise on applications such as this, being: (1) whether the court has power to issue the letter of request; (2) whether the recipient court has power to act upon the letter of request; and (3) whether, as a matter of discretion, the letter of request should be issued. 10 The power to issue a letter of request is conditioned on this Court and the recipient court, being the High Court of New Zealand, having jurisdiction in bankruptcy: see Ex parte Warner; Re Barnes [2018] FCA 1784 at [19]. Section 27 of the Bankruptcy Act confers upon this Court, as well as Division 2 of the Federal Circuit and Family Court of Australia, jurisdiction in bankruptcy. Under section 30 of the Bankruptcy Act, this Court has power to make such orders as it considers necessary for the purposes of carrying out or giving effect to that Act. Section 30 has been interpreted in many cases as giving a very wide set of powers and discretions. 11 As already indicated, the recipient court is the High Court of New Zealand. The jurisdiction in bankruptcy of that court is recorded in s 411 of the Insolvency Act 2006 (NZ), as referred to in the decision of this Court in Official Assignee and Bankruptcy of the property of Hanna in the matter of Hanna v Hanna [2018] FCA 156; 15 ABC(NS) 603 at [52]. In Kurene at [13], O'Callaghan J observed that s 411 of the New Zealand Insolvency Act read together with s 3 (which defines "court" as the High Court and "Judge" as a Judge of the High Court), confers on a Judge of the High Court all the powers and jurisdictions given under that Act. 12 It follows that I am satisfied that both this Court and the High Court of New Zealand have jurisdiction in bankruptcy and that this Court may exercise the power conferred by s 29(4) of the Bankruptcy Act to request aid from the High Court of New Zealand. 13 Turning then to the powers of the recipient court, the power of the High Court of New Zealand to act upon requests such as that under section 29(4) of the Bankruptcy Act is contained in s 8 of the Insolvency (cross-border) Act 2006 (NZ) (NZ CBI Act), which states: (1) This section applies to a person referred to in article 1(1) of Schedule 1. (2) If a court of a country other than New Zealand has jurisdiction in an insolvency proceeding and makes an order requesting the aid of the High Court in relation to the insolvency proceeding of the person to whom the section applies, the High Court may, if it thinks fit, act in aid of and be auxiliary to that court in relation to that insolvency proceeding. (3) In acting in aid of and being auxiliary to a court in accordance with subsection (2), the High Court may exercise the powers that it could exercise in respect of the matter if it had arisen within its own jurisdiction. 14 Thus s 8 imposes two relevant requirements that must be met before the High Court of New Zealand could, if it thought fit, act on a letter of request issued by this Court. First, s 8(2) requires that the requests for aid be made "in relation to [an] insolvency proceeding". Section 4 of the NZ CBI Act defines "insolvency proceeding" as follows: ... a collective judicial or administrative proceeding, including an interim proceeding, pursuant to a law relating to insolvency (whether personal or corporate) in which the assets and affairs of a debtor are subject to control or supervision by a judicial or other authority competent to control or supervise that proceeding, for the purpose of reorganisation or liquidation. 15 As in that case, the present proceeding in relation to which aid would be sought from the New Zealand High Court meets the description of being an "insolvency proceeding". The first requirement is therefore met. 16 The second requirement in s 8(2) of the NZ CBI Act requires that the proceeding in relation to which aid is sought be "the proceeding of a person to whom this section applies." Section 8(1) of the NZ CBI Act specifies that a person to whom this section applies means "a person referred to in article 1(1) of Schedule 1." Article 1(1)(a) of Schedule 1 to the NZ CBI Act provides that it applies when: assistance is sought in New Zealand by a foreign court or a foreign representative in connection with a foreign proceeding; 17 The second requirement in s 8 will therefore be met where the proceeding in relation to which aid is sought is a proceeding "of" a foreign representative. This proceeding is a proceeding "of" the trustee, because it is brought by the applicant who is the trustee in bankruptcy of the respondent: see Kelly, in the matter of Halifax Investment Services Pty Ltd (in liquidation) (No 5) [2019] FCA 1341; 139 ACSR 56 at [72] (Gleeson J). Further the present applicant, as the trustee, is a foreign representative because that term is defined to include: A person … authorised in a foreign proceeding to administer the reorganisation or liquidation of the debtor's assets or affairs or to act as a representative of a foreign proceeding: see schedule 1, article 2(d). 18 The second requirement is therefore also met. Accordingly, if issued with a letter of request, the High Court of New Zealand would have power, if it thought fit, to act in aid of, and be auxiliary to, this Court in relation to this proceeding. The power of the Court to make a request for aid of a court of an external territory or another territory under section 29(4) is discretionary. This was explained by Lockhart J in Re Ayres; ex parte Evans (1981) 34 ALR 582 at [589]-[591]: The object of s 29 is to enable all courts having jurisdiction under the Act, the courts of prescribed countries (including the United Kingdom, New Zealand and Canada) and the courts of other countries having jurisdiction in bankruptcy to act in aid of and be auxiliary to each other in bankruptcy matters. The section "does not create any new rights, but only creates new remedies for enforcing existing rights" per Griffith J who delivered the judgment of the High Court in Hall v Woolf (1908) 7 CLR 207 at 212. His Honour was speaking of s 118 of the Bankruptcy Act 1883 (46 and 47 Vict) c 52 (Imp); but what he said applies also to s 29 of the Act. 19 The discretion is to be "...exercised with regard to considerations of utility and comity": Totterdell at 486. In all the circumstances, I am satisfied it is appropriate for this Court to issue a letter of request to the High Court of New Zealand to act in aid of, and be auxiliary to, this Court and the administration of the bankrupt estate of the respondent and to do so in the form of annexure A to the originating application, with such adjustments and amendments as I may find necessary. 20 Orders will be made accordingly. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromwich.