Porter, in the matter of Slater [2020] FCA 1133

MARKOVIC J: 1 This proceeding was commenced by Jason Lloyd Porter and Richard Moretti (who I will refer to as the applicants or Australian representatives) who seek the relief set out in their application filed with the Court on 15 April 2020. 2 On 7 May 2020, when the matter came before me for a first case management hearing, Michael Wilson & Partners, Limited (MWP) sought and was granted leave, pursuant to r 2.03 of the Federal Court (Bankruptcy) Rules 2016 (Cth), to be heard in the proceeding. In addition, orders were made for the parties to file submissions and objections to evidence and, relevantly, in the case of MWP, to file and serve any interlocutory application setting out the relief it seeks and any affidavits in support. That step was to be taken by 28 May 2020. 3 The proceeding next came before me on 18 June 2020 for case management hearing. At that time MWP had not filed any interlocutory application in accordance with the orders first made on 7 May 2020 (7 May Orders). Accordingly, the time by which any such application and affidavits in support were to be filed was extended so that the material was to be filed and served by 2 July 2020 and the applicants were to file and serve any affidavits in reply, their submissions in support of their application and their submissions in reply to any submissions filed by MWP by 10 July 2020. 4 As things turned out, MWP provided an application dated 14 July 2020 (MWP Application) to the applicants on that date. That is, 12 days after the date so ordered. An affidavit titled First Affidavit sworn by Michael Earl Wilson on 14 July 2020 was also provided. On 20 July 2020 one of the applicants, Mr Porter, swore a second affidavit (Porter Affidavit) said to be in response to the MWP Application and the affidavit of Mr Wilson, and an outline of submissions also dated 20 July 2020 (Reply Submissions) was served on behalf of the applicants. Those submissions respond to the material served by MWP on 14 July 2020. 5 Two issues arise which have been the subject of submissions this morning, and which I now address. They concern, first, whether an adjournment should be granted to allow MWP time to consider the Porter Affidavit and the Reply Submissions. The second concerns the MWP Application and whether MWP ought to be entitled to proceed with it in the course of this hearing. In that regard the applicants take two objections to it: first, that it was not provided in accordance with the 7 May Orders and was only provided on 14 July 2020; and secondly, because of the nature of the orders sought in the MWP Application. I will deal with each issue in turn.

MWP Application 10 That then brings me to the question of the MWP Application upon which MWP seeks to rely, and whether it should be permitted to proceed with its application as currently framed. The applicants object to that occurring. The first reason for that is because it was filed late and the second is because of the nature of the orders sought by MWP. 11 As to the latter, the MWP Application comprises some 15 paragraphs. Paragraph 1 of the application has 11 subparagraphs in which various orders and relief are sought. Of those subparagraphs, seven seek relief against the trustee, Ms Julie Palmer of Begbies Traynor, a UK firm of insolvency specialists. Ms Palmer is the trustee in bankruptcy appointed to the estate of the bankrupt, David Ross Slater. The applicants in this proceeding are the Australian representatives appointed in proceeding NSD 866 of 2016 by order dated 16 August 2016. In particular, Order 3 made on that date provided that, pursuant to s 6 of the Cross-Border Insolvency Act 2008 (Cth) (Act) and Art 21(1)(e) of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (Model Law), the administration and realisation of all of the assets of David Ross Slater located in Australia be entrusted to the applicants as the local representatives of the applicant in that proceeding who was the trustee, Ms Palmer. At that time, orders were made recognising the administration of Mr Slater's estate by Ms Palmer pursuant to proceeding 0215 of 2015 in the Croydon County Court in the United Kingdom (UK Proceeding) within the meaning of Art 2(a) of the Model Law within Australia and recognising the UK Proceeding as a foreign main proceeding within the meaning of Art 2(c) of the Model Law within Australia. 12 However, Ms Palmer is not a party to this proceeding and no application has been made to join her. Further, the MWP Application does not set out what power this Court has to make a number of the orders sought, nor were there any submissions filed by MWP to explain how it is that it is entitled to some of the relief sought. 13 Mr Wilson contends that Ms Palmer was aware of this application and had been provided with the material but there is no evidence before me to demonstrate that is so. As I have said, Ms Palmer is not a party and no application has been made to join her. MWP submits that, because the UK Proceeding has been recognised as a foreign proceeding under the Act and the Model Law, that in some way makes Ms Palmer, the UK trustee, a party to this proceeding. But that is not so. This proceeding is a fresh proceeding commenced by the Australian representatives. 14 Mr Golledge SC, who appears for the applicants, submits that should the Court be minded not to permit MWP to proceed with its application there is a way forward that would preserve its right to bring whatever proceeding it wishes in relation to the administration of Mr Slater's estate by the Australian representatives and/or Ms Palmer, the UK trustee. That is, that the applicants be permitted to proceed with their substantive application today in which they seek orders for payment and quantification of their remuneration and for their retirement, but that, in effect, MWP's right to bring any application of the nature I have described be preserved. 15 The applicants also seek an order that they be released and discharged from all liability in respect of any act done or default made by them in the administration of Mr Slater's estate. As Mr Golledge SC candidly submits, in order to preserve the rights of MWP to bring any such application, then any ruling on that order would have to be deferred to another day, or, subject to submissions made, the application insofar as it seeks that order would have to be refused. Proceeding in that way would leave the way open for MWP to apply for the orders it seeks in the MWP Application in the future in a proceeding properly constituted. 16 In my view, that is the way in which this matter should proceed. That is, I am satisfied that it is not appropriate to permit MWP to proceed with its application as currently framed. As I have already observed, it seeks relief against the UK trustee who is not a party and in relation to whom no application has been made for joinder to this proceeding. 17 That said, paras 1.8 to 1.10 of the MWP Application raise issues about the remuneration now sought by the Australian representatives in this proceeding. While those matters are framed as orders sought in the MWP Application, it is open to MWP to make submissions before me today in relation to those matters by way of response to the applicants' application insofar as the applicants seek orders for payment and quantification of their remuneration. 18 In addition, at para 1.11 of the MWP Application, MWP effectively seeks an order that the Australian representatives should not be discharged and released and that they must continue in office. Once again, that is a matter which can be raised by way of submissions, together with any evidence in reply, if admitted, in this proceeding. As I have already said, the Australian representatives seek an order permitting them to retire from their current office and an order for release from liability. 19 For those reasons, I would not permit MWP to proceed with its application lodged with the Court on 19 July 2020 and accepted for filing on 20 July 2020. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Markovic.

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