Jackson v Sterling Industries Limited

Federal Court of Australia|1986-10-15|Before: French J

BANKRUPTCY - jurisdiction and power of Federal Court of Australia

Supreme Court of Cocos (Keeling) Islands Territory - Mareva injunction to restrain disposal of realty and personal assets on Cocos (Keeling) Islands Territory - ex parte application - substantive application for letter of request to 1ssue under s.29 of Bankruptcy Act - jurisdiction in bankruptcy of Supreme Court of Cocos (Keeling) Island Territory ~ power of Federal Court to grant

interlocutory Mareva injunction - s.30 Bankruptcy Act 1966.

Bankruptcy Act 1966 s.5(1), s.30(1), s.58 Cocos (Keeling) Islands Act 1955 s.7, s.8 Federal Court of Australia Act s.23

Jackson v Sterling Industries Limited (unreported Full Court 15

Re: JOHN CECIL CLUNIES-ROSS EX PARTE; GEOFFREY FRANK TOTTERDELL

the Trustee of the property of John Cecil Clunies-Ross, a bankrupt and JOHN CECIL CLUNIES-ROSS NO. 263 OF 1986

THE FEDERAL COURT OF WESTERN GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALIA

JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER; 3 APRIL 1987 WHERE MADE; Perth

The respondent be and is hereby restrained until 5 pm on Monday 6 April 1987 by himself, his servants or agents from disposing or taking any steps to dispose of any interest he may have in any real or personal property in the Cocos (Keeling) Islands Territory or granting or taking any steps to grant any lease, licence or right to

The question of any extension or variation of the terms

of the above order be adjourned to 2.15 pm on Monday 6

A copy of this order together with the application and supporting affidavit and exhibits thereto is to be

served by the applicant on the respondent forthwith.

A directions hearing in the application 15 to be fixed

Note : Settlement and entry of orders is dealt with in

IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALIA

By an Indenture dated 7 July 1886 Sir Frederick Weld, Governor of what was then known as the Straits Settlements, acting on behalf of Queen Victoria, granted to George Clunies-Ross and

"ALL AND SINGULAR the lands situate and being above high water mark within the Cocos [Islands including' the northern island otherwise called the North Keeling Islands......"

The respondent, John Cecil Clunies-Ross, said to be the successor 1n title to George Clunies-Ross now lives in Nedlands in

On 5 May 1986 he became a bankrupt upon acceptance of his petition presented to the Registrar in Bankruptcy for the

respondent vested in the trustee upon the date at which he became

The property as vested is by the definition in s.5(1) of

",..real or personal property of every description,

whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property."

The applicant says that he has taken steps to obtain

A report exhibited to his affidavit shows receipts as at 22 December 1986 totalling $68,664.14 and other assets yet to be

The statement of affairs disclosed unsecured creditors totalling $1,036,359 of which $1,030,000 was shown as owed to

Armco Pacific Limited, a company evidently based in Singapore.

The applicant deposes to his belief that the respondent

is the successor in title to George Clunies-Ross under the

In 1978 certain portions of the lands granted by the Indenture and held by the respondent were transferred to the Commonwealth of Australia but a portion, upon which the family

residence and certain associated dwellings stand, have been

There are also, according to the applicant, items of

personal property in the home and associated dwellings.

The land and personal property comprise, it is said, property of the respondent available for the satisfaction of his

By his substantive application the applicant seeks the

(a) An order that a letter of request should issue requesting the Supreme Court of the Cocos (Keeling) Islands Territory to act in aid of and be auxiliary to this Honourable Court in the following manner:

(1) By vesting 1n GEOFFREY FRANK TOTTERDELL, the person appointed under the Bankruptcy Act 1966 as the trustee in bankruptcy of the Estate of JOHN CECIL CLUNIES-ROSS, the possession and control of the property real and personal of the said JOHN CECIL CLUNIES-ROSS in the Cocos (Keeling) Islands Territory, with liberty to sell and lease the same and receive' the proceeds of such sale or leasing with

authority to take such steps and do such acts and things as may be necessary for those purposes;

(ii) Alternatively by vesting in the Official Assignee appointed under s.69 of the Bankruptcy Ordinance 1888 (Singapore) continued in operation in the Territory by s.8 of the Cocos (Keeling) Islands Act 1955 (Commonwealth), the possession and control of the property real and personal of the said John Cecil Clunies-Ross in the Cocos (Keeling) Islands Territory, with liberty to sell or lease the same and receive the proceeds of such sale or lease with authority to take such steps and do such acts and things as may be necessary for those purposes and to remit moneys coming to him via the sale or leasing of the said property to the said Geoffrey Frank Totterdell, after payment out of the said moneys of any proper charges on the said property that may be lawfully payable, and of the costs, charges and expenses incurred by the said Official Assignee in respect of the Matters aforesaid.

(b) An order restraining the said John Cecil Clunies-Ross by himself, his servants or agents from disposing or taking any steps to dispose of any interest he may have in real or personal property in the Cocos (Keeling) Islands Territory or granting or taking any steps to grant any lease, licence or right to use or possess such property in any way and in particular in the land the subject of the indenture a copy of which is exhibit "GFT5" to the affidavit of Geoffrey Frank Totterdell filed herewith.

By way of interlocutory relief pending the hearing and determination of the substantive application, he seeks an injunction broadly in the terms of paragraph (b) above. His claim

in that respect was brought on before me ex parte on 2 April 1987.

It is brought ex parte because of the expressed fear of

the applicant that the respondent or his agents will deal with the

land in such a way that the creditors may be prejudiced unless he

The basis for that fear is set out in paragraphs 13 to

17 of the applicant's affidavit which deposed as follows:-

"13. On or about 27th March 1987 I saw in the "Western Mail" newspaper the advertisement, a true copy of which 1S now produced and shown to me and marked " GFT6 " . "

"ISLAND PARADISE SEEKS 20 ADVENTURERS. Cocos Holidays is a brand new concept to Perth. A beautiful, privately owned tropical island with a single

graciously appointed manor house situated on it has become accessible.

discos, just acres of palm groves and white sandy beaches.

The island abounds with marine and bird life, has brilliant lagoons, rolling surf, excellent diving and snorkelling and is virtually uninhabited.

This easter we will be taking 20 people only on the first public tour to the island for a very special rate which includes airfare, accommodation, food, all drinks, fishing and diving equipment including boats and crew. Plus you'll get the chance to do some great duty free shopping before you go.

So if you really want to get away from it all this easter come to the Cocos.

For further information and bookings phone Lisa on 367 2712. Or after hours Ph. 342 6815.

newspaper of 28-29 March 1987 is exhibited to the affidavit and

"14. Upon seeing the advertisement I formed the view that 1t must relate to the abovementioned land. I accordingly instructed one of my staff, Carole Stabb to ring the telephone number given in the advertisement.

Carole Stabb informs me and I verily believe the following:-

(a) she rang the telephone number on the afternoon of 27th March 1987;

(b) a male person who gave his name as Trevor Kitcher answered and she asked to speak to the "Lisa" referred to in the advertisement;

(c) a woman then spoke to her and told her that the advertised holiday cost $1500 all inclusive, including accommodation at the "Clunies-Ross Mansion" on Cocos Island;

(d) she gave her other information on_ the advertised holiday.

On 31st March 1987 I received a telephone call from one Peter Lim of the Commonwealth Department of Territories. He told me that he had been informed by one Paul Kempthorne, who worked for Wave Master Pty Ltd, a company controlled by Kitcher, that Wave Master Pty Ltd had offered the bankrupt $1,500,000 for the abovementioned land.

I then contacted Kempthorne by telephone and asked him whether what I had been told was true. He said that Wave Master had told the bankrupt that it would be prepared to offer $1,500,00 for the land

but had been told by the bankrupt that he would not accept such an offer if it were made."

In paragraph 12 of the affidavit, the applicant referred to a meeting that he had on 5 March 1987 with the respondent and his son John. At that meeting the respondent's son had told him, in response to a question from him, that Trevor Kitcher did not

appear to have any interest in the Cocos (Keeling) Islands

The applicant also deposed that Kitcher is a person

I find that the material before me raises a serious possibility that the respondent has made some arrangement with the advertiser or with some other person or persons permitting the use for reward of the residence which still forms part of his

The inference is open that such arrangement has been

The question arises whether the Court has power to grant

The substantive application seeks relief pursuant to

"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

Islands are declared to be accepted by the Commonwealth as a territory under the authority of the Commonwealth. Section 7

"All rights and powers vested in the Queen, or in the Governor of the Colony of Singapore, as successor to the Governor of the Straits Settlements, on behalf of the Queen, under the Indenture dated the seventh day of July One thousand eight hundred and eighty six, and made between her late Majesty Queen Victoria, the Governor of the Straits Settlements and George Clunies-Ross are, from and including the proclaimed date, exerciseable on behalf of the Queen by the Governor General of the

Commonwealth or by such authority or person as the Governor General appoints."

"8(1)Subyect to this Act and to any other Act extending to the Territory (whether passed before or after the proclaimed date) all laws in force immediately

before the proclaimed date in the Islands shall continue in force in the Territory by virtue of this Act and not otherwise."

Section 12 empowers the Governor General to make ordinances for the peace, order and good government of the Territory. By one such law, the Supreme Court Ordinance 1955, the

Supreme Court of the Territory of Cocos (Keeling) Islands is

"14(1) A reference in a law continued in force in the Territory by section eight of the Act to -

(a) the Supreme Court of the Straits Settlements or the High Court or Court of Appeal being part of that Supreme Court;

{b) the Supreme Court of the Colony of Singapore or the High Court or Court of Appeal being part of that Supreme Court; or

shall be read as a reference to the Supreme Court established by this Ordinance, and a reference in any such law to the Chief Justice, a judge or two or more judges of any such court shall be read as a reference to the judge of the Supreme Court established by this Ordinance."

One of the laws continued in force in the Territory by

s.8 of the Cocos (Keeling) Islands Act 1955 1s the Bankruptcy

"The High Court shall be the court having jurisdiction in bankruptcy in the Colony under this Ordinance."

This is evidently a reference to the High Court being

On that basis it would appear at least arguable that the Supreme Court of the Territory of Cocos (Keeling) Islands has

It would therefore be a court to which a request for aid of the kind contemplated in the substantive application could be

Pending the hearing of the application for a request of

such aid to issue from this Court, the applicant invokes s.30 of

the Bankruptcy Act 1966 to ground his claim for interlocutory

Section 30 of the Bankrupty Act provides, inter alia:-

(a) has full power to decide all questions, whether of law or of fact in any case of bankruptcy or any matter under Part X or Part XI coming within the cognisance of the Court; and

(b) may make such orders (including declaratory orders and orders granting injunctions' or other equitable remedies) as the Court considers necessary for the purposes. of

carrying out or giving effect to this Act in any such case or matter."

In my opinion the power conferred by paragraph 30(1)(b) will enable the Court to grant interlocutory relief of the kind sought by the applicant in this case. The construction of that

paragraph which supports such a grant is, I think, analogous to

the construction of s.23 of the Federal Court of Australia Act

which supports the court's power to grant mareva injunctions -

Jackson v Sterling Industries Limited (unreported Full Court 15

October 1986). The restraint sought is I think necessary for the purposes of carrying out or giving effect to the Act so that any consideration by this Court of an application for a request to issue to the Supreme Court of the Cocos (Keeling) Islands Territory will not be rendered nugatory by any prior disposition

It is an injunction which has its legal operation not on the property itself but on a person who presently resides within

I am therefore prepared to make a short term holding order broadly 1n terms which are set out in the Minute attached to

I make the observation that this motion is brought ex parte. Notwithstanding that fact and in view of the evidence of

some basis for the applicant's concern, I am prepared to grant an

The order will only operate for long enough to enable the respondent to put any submission he wishes to this Court in

The conclusions of fact or law which I have expressed in these reasons are based on the materials put before me and the argument submitted by the applicant. It will of course be open to the respondent to challenge any of these materials and submissions when the matter comes on for further argument next Monday or at

I hereby certify that the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of

. for the Applicant : Mr Malcolm McCusker QC and Mr P. Johnston

At a glance

Court

Decision date

Before

Source

Judgment (114 paragraphs)

Parties

Cited By (1)