Mayger v Prentice, in the matter of Mayger

REASONS FOR JUDGMENT 1 This is an application pursuant to s 178 of the Bankruptcy Act 1966 ("the Act") to review the trustee's decision to refuse consent to the applicant to travel outside Australia. The matter has an unfortunate history. The matter first came before the Registrar of the Court on 8 February 2000 in matter number N7091 of 2000 in an application under s 139ZU of the Act. The Registrar pointed out that the section was not applicable to the applicant. The applicant thereupon urgently sought the consent of the trustee to travel, obtained an oral refusal confirmed by written memorandum, and then brought this application to review the trustee's refusal. 2 When the matter came before me yesterday afternoon the written note from the trustee indicated that reasons for his refusal would be provided. Reasons were subsequently provided by the trustee to the Registrar of the Court and the applicant received a copy of those reasons. Yesterday I gave a direction that the proceedings be adjourned until 2.15pm today on the basis that material would be served upon the trustee, and further that Mr Mayger ensure he filed an affidavit recounting his dealings with the trustee which are relevant to this application. He has today sought leave to file in court an affidavit sworn by him today which I have read and considered along with the evidence that he filed yesterday. 3 I say the procedural history is unfortunate because it involves the Court in reviewing a decision by a trustee which was only made yesterday, reasons for which were only received late yesterday, and in circumstances where the trustee declines to appear due to lack of funds. From the affidavit evidence of the applicant and the letter from the trustee, it is clear that the applicant made a conscious decision not to seek the approval of the trustee for the release of a passport or to travel. 4 His evidence is that he was advised that he could obtain a passport if he received a clearance from Federal and Family Courts. He says in his evidence that he approached the Federal Court at Parramatta but it is pretty plain that it was the Family Court at Parramatta which he approached. By some means he was able to obtain a passport. It is not for the Court to stand in the shoes of the applicant and decide quite why he decided to go about the matter in that way. His reason was that he claims not to trust the trustee, in the sense that he sees the trustee as being biased against him by reason of the trustee's association with the petitioning creditor. I am in no position to assess that claim and I am unable to give it any real credence at this point. There are provisions in the Act which govern trustees which can be enforced in various ways. This is not the appropriate vehicle for doing that. All I can say is that the appropriate procedures for obtaining permission from the trustee have not been undertaken, or at least were not undertaken until yesterday, following the first appearance in court. 5 The applicant presses me with the proposition that there had been an oral consent given during the course of the morning which was revoked at one o'clock or thereabouts. Technically, that is not correct because it was presented as consent to the initial application to the Court which was, of course, not able to be made because there is no jurisdiction. 6 Furthermore, it is clear to me that the trustee was not in a position to give serious consideration to this request until yesterday and then under circumstances of some pressure from the court. The trustee's position, in his last sentence, is as follows: "I believe that the bankrupt must surrender his passport as required of any bankrupt then I will consider release for normal reasons stated in the Bankruptcy Act, (ie for business or compassionate reasons)." 7 It seems to me that sentence states what the legal position requires. The obtaining of the passport without the consent of the trustee in the face of the obligations of a bankrupt under the Act was irregular and this applicant is entitled to no special position as compared with others. I think the trustee's position, in that respect at least, is perfectly appropriate. This bankrupt is not entitled to any special consideration in relation to his passport or his travel overseas. 8 It may be said that the trustee is adopting an unnecessarily adversarial approach to the matter, and indeed that has been pressed upon me by the applicant. That is not a conclusion I can readily come to as I do not have a sufficient knowledge of the dealings between the parties since the sequestration order was made. 9 It seems to me that the Court is in no position to conclude in accordance with the authorities to which I have been referred, including Re Wheeler (1994) 54 FLR 166; Re Tyndall (1977) 30 FLR 8; and Malouf v Prentice, Sackville J, 30 October 1998, that the trustee has approached this application in a manner which breaches the law. It is not a case where the court should simply substitute its own view for that of the trustee, as Lee J made clear in Re Wheeler (supra). In my view, the application must fail. 10 Given the circumstances which now exist, namely that the trustee is now on notice and will be provided with the further affidavit and any further matter which Mr Mayger thinks it appropriate to put to the trustee, then it seems to me that the Court would give some consideration to a further urgent hearing of the matter when the trustee has been given a proper opportunity of considering what is put by the applicant to him. 11 When the trustee comes to consider the position, he would not, it seems to me, be restricted to the reasons which he outlines, namely business and compassionate reasons, although they are clearly very relevant. I do not propose to indicate a limit to the matters which a trustee can take into account in exercising this discretion but certainly foremost amongst them would be any legitimate claims that he would have to the attention of the applicant during the period he would be away. In other words, if there is no pressing reason for the bankrupt to be in touch with the trustee over this period, then that would be a cogent factor for the trustee to take into account. 12 I do not propose, as I have said, to lay down a framework for the trustee to make his decision. It is a matter for him. Nor do I propose to give any lectures to the trustee about this point. He, of course, will have in mind the statements in the cases to which I have been referred by the applicant, which indicate, in the case of a person facing no criminal charges, that the discretion given to the trustee is not to be used as any form of punishment for what is considered to be past misbehaviour. It is only to be utilised for the legitimate purposes of the Act. 13 I have just been informed that the further affidavit was given to the trustee this morning, which further underlines the point I have made that the trustee now has before him, together with anything else which Mr Mayger may wish to put before him, a fuller account of the situation than he had yesterday at 1 o'clock to which he can now turn his mind. 14 Whilst it is a matter for the trustee, of course, whether he appears in the matter, and whilst I, of course, appreciate the practical limitations imposed by the lack of resources in the estate, the trustee does have duties, and in these sorts of matters there are swings and roundabouts. It is plain enough that the views of the trustee conveyed to the Court, either by the trustee or by a practitioner on his behalf able to be questioned and subject to scrutiny, will be entitled to much more consideration than written reasons tendered in the way of these written reasons. Again, in saying that, I am not intending to give any lectures as to how the trustee shall conduct himself but merely to indicate that failure to attend will not assist the position that the trustee takes if he, in the fullness of time, wishes to pursue the matter, and his decision falls to be reviewed by the Court. 15 It is obvious that, because of the urgency of the matter, I have had occasion to give an ex tempore judgment which, of necessity, does not set out all of the facts in as neat a fashion as I would like but I hope, firstly, indicates to the applicant the legal difficulty that I see in his path at the moment, secondly, gives some guidance to the trustee in the limited way that I have mentioned and thirdly, indicates the way forward. Having done that, I dismiss the application and make no order as to costs. To make matters quite clear, I would confirm that yesterday I dismissed application N7091 of 2000 for the defect in jurisdiction to which I have referred.