Low v Barnet

Federal Court of Australia|2014-11-06|Before: Ms J, Foster J

Pursuant to r 2.04 of the Federal Court (Bankruptcy) Rules 2005 and subject to any order revoking leave, Mathew Keralavakayil Mathai have leave to be heard in this proceeding upon condition that: (a) He be represented by a suitably qualified lawyer; (b) The amount of security provided by the said Mathew Keralavakayil Mathai pursuant to Order 1(b) made by the Court on 4 July 2014 in proceeding NSD 310 of 2014 also stand as security for any adverse costs orders that may be made against him in this proceeding; (c) The said Mathew Keralavakayil Mathai be responsible for his own costs of and incidental to his intervention herein to the intent that it shall not be open to him to seek an order for costs against either the applicant or the respondent no matter what the outcome of the present proceeding may be; (d) Subject to any further or other order of the Court, the intervention by the said Mathew Keralavakayil Mathai be limited to: (i) The filing and service of one Written Submission of no more than ten (10) pages in length which Submission shall be filed in proceeding NSD 310 of 2014 only after and in light of the Written Submissions of the applicant and of the respondent which address all claims in this proceeding and in proceeding NSD 310 of 2014 and shall be confined to such relevant matters as are not addressed at all in the respondent's submissions or which, in the reasonable opinion of Mr Mathai's legal representatives, have not been addressed adequately in those submissions; and (ii) Appearing at the hearing represented by a suitably qualified lawyer.
The Interim Application filed by the said Mathew Keralavakayil Mathai on 10 October 2014 otherwise be dismissed.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 769 of 2014

IN THE MATTER OF THE BANKRUPT ESTATE OF MATHEW KERALAVAKAYIL MATHAI BETWEEN: LOW MOOI KWEE (ALSO KNOWN AS MONICA LOW)

AND: KATHERINE BARNET AS TRUSTEE OF THE BANKRUPT ESTATE OF MATHEW KERALAVAKAYIL MATHAI

JUDGE: FOSTER J DATE: 6 NOVEMBER 2014 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 On 4 July 2014, in a related proceeding between the same parties (NSD 310 of 2014), I published Reasons for Judgment and made orders in relation to an application by the former bankrupt, Mathew Keralavakayil Mathai, and his son Michael Mathai, for leave to be heard in that related proceeding (Low v Barnet (Trustee); In the Matter of Mathai [2014] FCA 728). 2 The orders which I made on 4 July 2014 in proceeding NSD 310 of 2014 were in the following terms: 1. Pursuant to r 2.04 of the Federal Court (Bankruptcy) Rules 2005 and subject to any order revoking such leave, Mathew Keralavakayil Mathai have leave to be heard in this proceeding upon condition that: (a) He be represented by a suitably qualified lawyer; (b) By 28 July 2014, he provide security for any adverse costs orders that may be made against him, such security to be in the total amount of $100,000 being $50,000 on account of the costs of the applicant and $50,000 on account of the costs of the respondent and to be paid in cash to the NSW District Registrar; (c) The said Mathew Keralavakayil Mathai be responsible for his own costs of and incidental to his intervention herein to the intent that it shall not be open to him to seek an order for costs against either the applicant or the respondent no matter what the outcome of the present proceeding may be; (d) Subject to any further or other order of the Court, the intervention by the said Mathew Keralavakayil Mathai be limited to: (i) The filing and service of a Written Submission of no more than ten (10) pages in length which Submission shall be filed after and in light of the Written Submissions of the applicant and of the respondent and shall be confined to such relevant matters as are not addressed at all in the respondent's submissions or which, in the reasonable opinion of Mr Mathai's legal representatives, have not been addressed adequately; and (ii) Appearing at the hearing represented by a suitably qualified lawyer. 2. The Amended Interim Application filed by the said Mathew Keralavakayil Mathai and his son, Michael Lee Mathai, otherwise be dismissed. 3. The taxed costs of both the applicant and the respondent of and incidental to the said Interim Application be paid out of the estate of the said Mathew Keralavakayil Mathai. 4. The proceeding be listed for directions at 9.30 am on 29 July 2014 before Foster J. 3 In proceeding NSD 310 of 2014, the applicant (Ms Low) claims orders pursuant to s 109(10) of the Bankruptcy Act 1966 (Cth) (the Act) giving her priority in respect of all property and expenses recovered or realised by the respondent in that proceeding (Ms Barnet), who is the trustee of the bankrupt estate of Mathew Keralavakayil Mathai, in the administration of that estate. 4 In this proceeding, pursuant to s 178 of the Act, or in the exercise of such other power as may be available to the Court, Ms Low appeals from the decision of the trustee (Ms Barnet) to reject certain specified claims made by Ms Low in the bankrupt estate of the said Mathew Keralavakayil Mathai upon the basis that those claims are payable to her as a priority payment pursuant to s 109(1)(a) of the Act and/or pursuant to reg 6.01 of the Bankruptcy Regulations 1996 (Cth) and/or payable to her pursuant to s 82 of the Act. In this proceeding, she claims an order setting aside the trustee's decision to reject the particular claims specified by her in her Originating Application and an order for payment out of the bankrupt estate of Mathew Keralavakayil Mathai of the amount of $443,024.21 or of such other sum as the Court deems fit. The amounts claimed in this proceeding are also claimed in proceeding NSD 310 of 2014. To that extent, the proceedings overlap. 5 Ms Low also claims an order pursuant to s 32 of the Act that the costs specified in Items 2 to 11 in her Originating Application be paid by the trustee to Ms Low in priority to all other payments from the estate or, alternatively, in such priority as to the Court seems fit. 6 By Interim Application filed on 10 October 2014 (the bankrupt's Interim Application), the former bankrupt claimed the following relief, namely, orders that: 1. Leave be granted to Mathew Mathai to be heard in this proceeding, on the same terms as he has been granted leave in proceeding NSD 310/2014, save that he should not have again to provide security for costs. 2. Leave be granted to Mathew Mathai to file and serve the [sic] affidavit in the form exhibited at "MKM-1" to the supporting affidavit dated 9 October 2014, in this proceeding and in proceeding NSD 310 of 2014. 3. Such further or other order that the Court deems appropriate. 4. An order that the costs of this application be reserved. 7 The bankrupt's Interim Application was supported by an affidavit sworn by the former bankrupt on 9 October 2014 and filed in Court on 24 October 2014. 8 I heard the bankrupt's Interim Application on 24 October 2014. 9 During the course of the hearing, it became apparent that my decision as to whether the former bankrupt would be permitted to file any affidavit evidence in this proceeding or in proceeding NSD 310 of 2014 would be influenced to a large extent by the rulings which I might make in respect of objections to be taken by the trustee to the affidavit evidence sought to be read and relied upon by Ms Low in proceeding NSD 310 of 2014. That evidence will also be read and relied upon in this proceeding. By 24 October 2014, the parties and I had all been proceeding upon the basis that the hearing of proceeding NSD 310 of 2014 and the hearing of this proceeding would take place at the same time and that evidence in one would be evidence in the other. For these reasons, on 24 October 2014, I made the following orders: THE COURT: 1. GRANTS leave to the applicant in the Interim Application filed on 10 October 2014, the former bankrupt Mathew Keralavakayil Mathai, to file in Court the original affidavit sworn by him on 9 October 2014 (without exhibits). 2. DIRECTS that the solicitors for the said Mathew Mathai file as soon as practicable the original exhibits to that affidavit. 3. DIRECTS that, by 28 October 2014, the respondent in proceeding NSD 310 of 2014 serve and lodge with the Associate to Foster J a list of all objections which she proposes to take to the evidence-in-chief of the applicant in that matter which list shall contain a brief statement of the grounds of objection in each case. 4. DIRECTS that, by 4.00 pm on 30 October 2014, the applicant in proceeding NSD 310 of 2014 serve and lodge with the Associate to Foster J a responsive document to the list of objections put forward by the respondent in that matter. 10 On 28 October 2014, the trustee notified her objections to Ms Low's affidavit evidence. On 30 October 2014, Ms Low filed and served a Written Submission by which she sought to support as admissible the material in the affidavits filed on her behalf to which objection had been taken by the trustee. 11 Yesterday (5 November 2014), I informed the parties and the former bankrupt of the terms of my rulings on the objections taken by the trustee to Ms Low's evidence. I have marked as MFI-1 and placed in the Court file the document in which those rulings are set out.

Consideration 12 All of the affidavit evidence to be relied upon by the parties in proceeding NSD 310 of 2014 has now been filed and served. That evidence will also be relied upon in this proceeding. The affidavit sworn by Mr Mullette on 25 July 2014 and filed in this proceeding on the same day will also be read and relied upon by Ms Low in proceeding NSD 310 of 2014. 13 As I have already mentioned, I have now ruled upon the trustee's objections to Ms Low's affidavit evidence sought to be read and relied upon by her in both proceedings. Subject to ruling upon any objections to be taken by Ms Low to the evidence to be relied upon by the trustee and subject to the tender of additional documentary material, the evidence-in-chief of both parties in both proceedings is now known. 14 The former bankrupt seeks to be involved in this proceeding to the same extent as he has been permitted to be involved in proceeding NSD 310 of 2014 save that: (a) He does not accept that he should have to post additional security for the parties' costs of the present proceeding; and (b) He now wishes to be allowed to file, serve, read and rely upon in both proceedings an affidavit in the form of the draft affidavit annexed to his affidavit sworn on 9 October 2014 and marked with the letters "MKM-1" and filed in this proceeding. 15 At pars 10, 14 and 15 of his affidavit sworn on 9 October 2014, the former bankrupt said: 10 I am seeking leave to be heard in this proceeding on the same basis as I was granted to be heard in proceeding NSD310/2014, save for the requirement to provide any additional security for costs. I consider that I should not have to give further security for costs, because this proceeding arises from the same facts and covers the same subject matter as proceeding NSD 310/2014, so that no additional costs would be incurred by my appearing and being heard in it. I only proposed to file one affidavit in both proceedings, and to make one set of submissions (though the submissions would address the relief sought by the applicant under both s 109(10) and 178 of the Bankruptcy Act 1966 (Cth)). … 14 I am also seeking an order from this Honourable Court that I be granted leave to file and serve the affidavit exhibited at "MKM-1" in this proceeding and in proceeding NSD 310/2014. 15 My Affidavit seeks to respond to matters deposed to in the Affidavit of Philip Leong sworn 26 February 2014 and Affidavit of Stephen Mullette sworn 3 June 2014 and provide clarification to the Court in respect of those matters. 16 In submissions made to the Court both in writing and orally on behalf of the former bankrupt, Counsel for the former bankrupt accepted that the Court's decision as to whether the former bankrupt should be permitted to file an affidavit in the form of the draft notified in his affidavit sworn on 9 October 2014 to a large extent depended upon the rulings which I proposed to make in respect of the evidence sought to be read and relied upon by Ms Low in both proceedings. Counsel for the former bankrupt frankly accepted that the evidence sought to be led by his client was, for the most part, responsive to evidence sought to be led by or on behalf of Ms Low and that, if this latter body of evidence was reduced, that would have an impact upon the admissibility of the evidence sought to be led by the former bankrupt. 17 It is not necessary to describe in any detail the evidence which the former bankrupt proposes to lead. For the most part, that evidence comprises matters which have no relevance to either proceeding. Insofar as it contains some relevant material, that material has generally been the subject of evidence coming from Ms Low's side of the record and need not be repeated in evidence to be led from the former bankrupt. 18 In light of the above matters, I have come to the firm view that I should not permit the former bankrupt to file and serve any affidavit evidence in either proceeding. The evidence which he proposes to bring before the Court is either completely irrelevant or of such marginal relevance as to be of no real utility. His claim to be permitted to lead evidence in the form of the draft which he has provided will be refused. 19 Counsel for Ms Low filed a Written Submission in which they set out arguments for refusing all of the relief claimed by the former bankrupt in his Interim Application. They pointed to the circumstance that the current proceeding is an appeal from a decision made by the trustee and is, for that reason, quite different from the claims made by Ms Low in proceeding NSD 310 of 2014. They submitted that the former bankrupt has failed to demonstrate that it is likely he will contribute something useful to the present proceeding. They also emphasised Ms Low's legitimate concern that any involvement by the former bankrupt in this proceeding would be likely to add to the hearing time and the cost of the parties. 20 There is considerable force in the submissions made on behalf of Ms Low. 21 However, for the reasons which I explained in the judgment which I delivered on 4 July 2014 in proceeding NSD 310 of 2014, I think that the former bankrupt should be permitted to take some part in the present proceeding. I propose to make orders substantially along the lines of the orders which I made in proceeding NSD 310 of 2014 on 4 July 2014. However, I do not think that there is any justification for requiring the former bankrupt to post additional security. The fact that this proceeding will be heard at the same time as proceeding NSD 310 of 2014 will not add substantially to the costs of the other parties which I intended to secure by the orders which I made on 4 July 2014.

Conclusions 22 For all of the above reasons, I propose to make orders substantially along the lines of the orders which I made in proceeding NSD 310 of 2014 on 4 July 2014. On this occasion, however, I will not leave open the possibility that the former bankrupt might file evidence given that I have refused his application to be permitted to do so. Further, I will not order the former bankrupt to post additional security. 23 I also propose to make appropriate pre-trial directions. 24 There will be orders accordingly. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (8 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (1)

Cited By (1)