Prayers for relief: 1, 4, 5 and 6
15 In his helpful submissions as to whether or not the examination summons should be discharged, counsel for Mrs Loiterton has drawn my attention to a number of authorities including Karounos v Official Trustee (1988) 19 FCR 330 ("Karounos"), a decision of Forster, Woodward and Spender JJ in this Court. In their reasons for judgment their Honours said at 336:
"… Where litigation is pending or likely to be brought and the information sought under a summons could affect that litigation, there is no presumption that the summons will be set aside or adjourned. It would normally only be set aside if the application were defective in some way, or the court found some improper motive behind the application. It would be adjourned if the balance of justice and convenience in the particular case so required. In some cases it might be appropriate to defer examination on a particular topic. In all cases the Registrar or the court will be careful to see that injustice is not occasioned in the course of examination by the particular questions asked..." (emphasis added).
16 Counsel for Mrs Loiterton has also referred me to other authorities, including Hong Kong Bank of Australia v Murphy (1992) 8 ACSR 763, a case in which the bench comprised Gleeson CJ, then of the Supreme Court, and Mahoney and Priestley JJ of the New South Wales Court of Appeal.
17 At 742 in his reasons for judgment Gleeson CJ, with whose judgment the other two Judges agreed, said:
"While the court will not permit a liquidator, or other eligible person, to abuse its process by using an examination solely for the purpose of obtaining a forensic advantage not available from other ordinary pre-trial procedures, such as discovery or inspection, on the other hand, the possibility that a forensic advantage will be gained does not mean that the making of an order will not advance a purpose intended to be secured by the legislation." (emphasis added)
18 In the light of the principles to which I have referred, it does not seem to me that a case has been made out warranting the discharge of the summons directed to Mrs Loiterton. It goes without saying that the Registrar conducting the examination can be expected, to use the words of the Court in Karounos, to be careful to see that injustice is not occasioned in the course of examination by the particular questions asked.
19 No doubt, Mrs Loiterton will be represented at the examination and she may probably be examined in respect of the Bankrupt's property. If some collateral benefit is enjoyed by the Trustee as a result of answers that are given, so be it. There is nothing to suggest that the summons has been taken out against her for a foreign purpose which could be said to be the predominant purpose.
20 The possibility that she will be asked questions which may be germane to proceedings NSD 1779 of 2005 does not mean that she should not deal with them appropriately if they relate to what constituted the property of the Bankrupt, and the circumstances in which she or any other party is said to have become the owner of those assets, if at some stage they were the property of the Bankrupt or were paid for by him.
21 However, if the Trustee uses the examination to try and secure evidence which will be used to cross-examine Mrs Loiterton in proceedings NSD 1779 of 2005, or to attack her credit in those proceedings, then one may assume that the Registrar will intervene if the proper use of s 81 of the Act is taken beyond the permissible limit. In the circumstances, I am not disposed to discharge the examination summons as sought in paragraph 1 of the amended notice of motion.
22 Paragraphs 4, 5 and 6 seek in the alternative orders that the examination be adjourned to a later date. In my opinion, it would be inappropriate for the examination to be adjourned by order of the Court. It is a matter for the Registrar as to when and how the examination should proceed. In the circumstances, I decline to make orders in accordance with paragraphs 1, 4, 5, and 6 of the amended notice of motion.
23 An application for costs has been made by the Trustee in respect of the costs of the notice of motion to date on an indemnity basis. It is conceded that there should be an order for costs made in the Trustee's favour against the Applicant in the notice of motion, Mrs Loiterton, but it is suggested by her counsel that it would be inappropriate for the Court to order that costs be paid on an indemnity basis. I am satisfied that in the exercise of my discretion, the proper order is simply that the costs of the notice of motion to date be paid by the Applicant in the notice of motion, Mrs Loiterton.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham .