Papoutsakis v Prime Capital Securities Pty Ltd

Federal Court of Australia|2022-09-01|Before: Halley J

The applicant's Interlocutory Application dated 16 August 2022 (Interlocutory Application) be dismissed.
The applicant pay the costs of the interested person (Robert Tenbensel) of and incidental to the hearing of the Interlocutory Application.
The matter be listed for a case management hearing at 9.30 am on Friday, 16 September 2022. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BACKGROUND 1 Mr Papoutsakis moves on an interlocutory application dated 16 August 2022 (Interlocutory Application), in which he seeks an order that the trustee of his bankrupt estate, Mr Robert Edward John Tenbensel (or "ten Bensel") (Trustee), be restrained from appearing in the appeal of the matter of NSD 456 of 2022, Papoutsakis v Prime Capital Securities Pty Ltd. 2 Mr Papoutsakis relies on an affidavit that he swore on 16 August 2022 in support of the application that he makes. 3 The Trustee relies on an affidavit that he affirmed on 25 August 2022 and an email from Sophia Young of Pitcher Partners dated 9 August 2022, which was admitted into evidence, in opposition to the Interlocutory Application. 4 The Trustee was appointed as the Trustee of the bankrupt estate of Mr Papoutsakis following a sequestration order made on the petition of the respondent, Prime Capital Securities Pty Limited (Prime Capital), in the Federal Circuit Court of Australia (as it then was) on 21 May 2018. 5 The Trustee is a chartered accountant and director at Bentleys Tasmania Group, and a registered trustee in bankruptcy with over 33 years of experience in the area of corporate and personal insolvency. He is also a professional member of the Australian Restructuring Insolvency & Turnaround Association. 6 Before proceeding further, it is necessary to explain that the Trustee was given leave to appear as an interested party in a hearing of the application before Judge Cameron in the Federal Circuit Court of Australia for an order pursuant to s 153B of the Bankruptcy Act 1966 (Cth) annulling the bankruptcy of Mr Papoutsakis: Prime Capital Securities Pty Ltd v Papoutsakis [2021] FCCA 1594. 7 That application was initially brought by way of a review, which in part explains why Prime Capital is identified as the respondent in the proceedings to which the Interlocutory Application relates. 8 The fact that the Trustee was given leave to appear in the hearing of the matter before the primary judge is an important consideration in determining whether the Trustee should be permitted to appear and be provided with material relied upon by Mr Papoutsakis for the purposes of the appeal by Mr Papoutsakis against the decision of the primary judge not to annul his bankruptcy.

SUBMISSIONS 9 Mr Papoutsakis objects to the Trustee having any involvement in the appeal on the following grounds. 10 First, he contends that the Trustee is not the party responsible for his bankruptcy. 11 Second, he submits that the Trustee's involvement will not be of any assistance to the Court as the Trustee was appointed after the date of Mr Papoutsakis' bankruptcy and has no prior knowledge or information of the matters that led to his bankruptcy. 12 Third, he submits that he has made requests of the Trustee to look behind the judgment on which the sequestration order was made and take appropriate action to recover debts owning to him, but the Trustee has declined to do so. 13 Further, he submits that if his bankruptcy were to be annulled, no prejudice would be caused to creditors as the Trustee does not wish to pay any creditors despite having funds to do so. I interpolate at this stage that there is no evidence on which I am satisfied that such an allegation or submission has any substance. The position, of course, may change in the event that further evidence is led and admitted into evidence. 14 Finally, Mr Papoutsakis submits that any intervention by the Trustee will only serve to cause prejudice to his application for leave for an extension of time in which to file his appeal and any subsequent determination of his appeal from the decision of the primary judge. 15 The Trustee, for whom Mr Groves appeared today, submits that the weight of authority of both this Court and the Federal Magistrates Court (as it then was) is that the involvement of a trustee is, at least, of assistance to the Court in the context of applications by a bankrupt for an annulment of a bankruptcy. 16 Mr Groves pointed to judgments of the Federal Magistrates Court in Drake & Anor v Jones [2009] FMCA 298 at [110], Symes v Holbrook (No 3) [2004] FMCA 71 at [4], [5] and [14], Yi v Chan & Li Trading Pty Ltd [2003] FMCA 95 at [7] and to the decision of the Full Court of this Court in Maas v Maas & Anor [1998] FCA 1447, in particular at 10 to11, in which the Full Court cited an observation of French J, as he then was, in Re Hatcher, K.L. [1987] FCA 608 in these terms at 5: In my opinion the report initially filed by the trustee did not meet minimum requirements of particularity. That deficiency was exacerbated by the trustee's failure to appear in person or by counsel on the first hearing of the application in this court. Instead he sent an employee of the firm of chartered accountants of which he is a member to appear in his stead. … At the critical point in the administration of an estate where the bankrupt applies for the discharge or annulment, it is the trustee himself or properly instructed counsel who should appear.

CONSIDERATION 17 I am satisfied in this case that it is appropriate for the Trustee to appear in this appeal to assist the Court, that the order sought by Mr Papoutsakis should not be made, and that the Trustee should be provided with access to all documents in respect of the appeal. 18 In further support of that conclusion, I note that Mr Papoutsakis is self-represented, there is no proper contradictor and that Mr Papoutsakis is, by reason of his lack of experience, not in a position to provide the assistance to the Court as to the factual context and background that might be expected of a party who was able to obtain legal representation. 19 I also note that it would appear from the email of 9 August 2022 that the respondent will not be appearing as a party to the appeal if leave is otherwise granted to extend the time for filing of the foreshadowed notice of appeal. Further, I note, as I have indicated earlier, that the Trustee appeared before the primary judge, and made submissions, and provided assistance to him, and I see no reason why the Trustee should not be given a similar opportunity to do so before me. 20 Finally, I am not satisfied on the evidence before me that there is any overriding concern that the Trustee has been acting in a manner that would preclude or otherwise disqualify him from being in a position to assist the Court in considering, in particular, the interests of creditors, the status of the administration of the bankruptcy, in particular, the consequences to the bankruptcy and the position of creditors if the bankruptcy of Mr Papoutsakis was annulled.

DISPOSITION 21 For those reasons, the Interlocutory Application is to be dismissed, and Mr Papoutsakis is to pay the costs of the Trustee. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Halley.

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