Re Ayres, William Henry [1981] FCA 48

Federal Court of Australia|1981-05-01|Before: Lockhart J

Bankruptcy - orders in aid - person declared bankrupt by the High Court of New Zealand - bankrupt has assets in Australia - request by High Court of New Zealand for the aid of Federal Court of Australia to enable bankrupt's assets in Australia

to be applied in administration of bankrupt's estate in New Zealand - proved creditors of bankrupt include New Zealand Revenue Authorities - whether request for orders in aid can be characterised as an attempt to enforce foreign revenue laws and against public policy - discussion of nature of Letters of Request - discussion of Bankruptcy Act 1966 s. 29 - discussion of procedure to be invoked when requesting aid in bankruptcy

IN THE MATTER OF WILLIAM HENRY AYRES NO. NZ B472 of 1979 ,

) ) ) ) BANKRUPTCY DISTRICT OF THE STATE ) ) OF NEW SOUTH WALES AND THE )

IN THE MATTER of a request for aid made by the High Court of New

IN THE MATTER OF a request for aid made by the High Court of New Zealand (in Bankruptcy) on 12th November, 1980

IN THE MATTER OF William Henry Ayres of Flat 2, 28 Haast Street, Auckland

New Zealand, a bankrupt under the laws of New Zealand

) ) ) ) BANKRUPTCY DISTRICT OF THE STATE ) No. NZ B472 of 1979 ) OF NEW SOUTH WALES AND THE )

IN THE MATTER of a request for aid made by the High Court of New Zealand (in Bankruptcy) on 30th July, 1980

IN THE MATTER OF a request for aid made by the High Court of New Zealand (in Bankruptcy) on 12th November, 1980

IN THE MATTER OF William Henry Ayres of Flat 2, 28 Haast Street, Auckland

New Zealand, a bankrupt under the laws of New Zealand

The High Court of New Zealand issued two Letters of Request for the aid of this Court to enable the Official Assignee in Bankruptcy of the estate of William Henry Ayres ("the bankrupt") who has been adjudicated bankrupt in New Zealand, to obtain control of the bankrupt's property in Australia.

There have been very few occasions in the past when the aid of this Court has been sought by Letters of Request. The procedure to be followed in cases of this kind has not been

prescribed, so I directed the Official Assignee to file

The course taken in these matters satisfies me of the desirability generally of ensuring, when future Letters of Request are issued by foreign Courts seeking the aid of this Court, that the bankrupt is served with notice thereof and that evidence is given by the moving party as to the administration of the estate including the assets and liabilities of the bankrupt and the countries in which the creditors reside.

I need not refer to the differences between the two Letters of Request or the reasons for there being two, as nothing turns on this. The two applications were heard together by consent.

The bankrupt was adjudicated bankrupt by the High Court of New Zealand on 5 December 1979. Pursuant to s. 42 of the Insolvency Act 1967 of New Zealand the estate of the bankrupt

vested in the Official Assignee. The bankrupt has not been made bankrupt in Australia. .

It is claimed by the Official Assignee that the bankrupt has property in Australia, namely, his interest as sole residuary beneficiary under the will of his late father, also William Henry Ayres formerly of Dulwich Hill, who died in New South Wales on 12 March 1979. The final balance of the father's estate was sworn for purposes of New South Wales death duty at about $50,000.00. Administration expenses and about $8,000.00 in legacies must be paid; but what remains passes to the bankrupt together with the following asset, if any:-

predeceased the bankrupt's father, left a will which leaves in some

doubt the nature of the interest,if any, taken by the bankrupt's

father thereunder: the bankrupt's father may have acquired

an interest in a house known as 17 Yule Street, Dulwich Hill or there may have been a partial intestacy, in which case the bankrupt's father would take some part of the estate under the laws as to intestacy. The Official Assignee asserts that, on either view, the bankrupt acquires his father's interest. Proceedings have been instituted in the Supreme Court of New South Wales, Equity Division, by the Administrator with the Will Annexed, of the estate of the step-mother; but the proceedings have not yet been determined. This possible interest of the bankrupt is not included in the dutiable estate of his father mentioned earlier.

Prior to his bankruptcy the bankrupt carried on a business known as "Rent-A-Set" which involved the hiring of television sets, stereo equipment, juke boxes and electrical equipment.

One hundred and thirty seven creditors have proved in the bankrupt's estate for a total sum of $78,248.00 of which $11,451.97 is in respect of preferential claims. None of the bankrupt's creditors reside in Australia; nor were any of his debts incurred here.

The bankrupt's assets have been realised and produced $48,911.74. Some assets remain to be realised; but they are expected to produce only about $500.00 to $700.00.

There 1s a dispute whether one creditor is a secured creditor in the sum of about $12,000.00; and this dispute is

A first dividend of 20 cents in the dollar was paid to

proved creditors on 10 Jvly 1980; and preferential creditors

The bankrupt was represented by counsel before this

Bankruptcy Act 1966 ("the Act") which provides as follows:-

this Act, the Judges of those Courts and the officers of or under the control of those Courts shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.

(a) shall act in aid of and be auxiliary to the courts of the external Territories, and of prescribed countries, that have jurisdiction in bankruptcy; and

(b) may act in aid of and be auxiliary to the courts of other countries that have jurisdiction in bankruptcy.

Where a letter of request from a court of an external Territory, or of a country other than Australia, requesting aid in a matter of bankruptcy is filed in the Court, the Court May exercise such powers with respect to the Matter as it could exercise if the matter had arisen within its own jurisdiction.

The Court may request a court of an external Territory, or of a country

other than Australia, that has jurisdiction in bankruptcy to act in aid of and be auxiliary to it in any matter of bankruptcy.

In this section, 'prescribed country' means - (a) the United Kingdom, Canada and New Zealand;

(b) a country prescribed for the purposes of this sub-section; and

Mr. Farmer of counsel, who appeared for the bankrupt, submitted that the applications should not be granted because to grant them would infringe the rule of public policy that the courts of this country should not lend their aid to the enforcement, direct or indirect, of foreign revenue debts. He submitted that, included in the 137 proved creditors of the bankrupt, were the following revenue debts due to the Crown which accounted for more than 60% in value of the total debts of proved creditors:~ New Zealand Post Office $21,549.24 Outstanding Television

Department of Customs $ 4,858.55 Import duty and sales tax Inland Revenue Department $11,454.18 Income tax Inland Revenue Department $ 383.37 Accident Compensation Levy

due under the Accident Compensation Act, 1972(N.Z.3

Inland Revenue Department $ 97,938.36 Tax ~ as a preferential claim New Zealand Post Office 691.31 Telephone Account Total $48,875.01

After allowing for the payment of preferential claims (which includes the $9,938.36 tax) and the dividend of 20 cents in the dollar, debts due to the Crown as yet unpaid still account for some 56% in value of the total remaining debts of proved creditors. In support of his argument that these were foreign

revenue debts, counsel for the bankrupt relied on Municipal Council

of Sydney v. Bull (1909) 1 K.B. 7 at p. 12; Metal Industries (Salvage)

Limited v. Owners of the S. T."Harle"1962 S.L.T. 114 at p. 116- 117; and Connor v. Connor19741N.Z.L.R. 632 at p. 635.

None of these facts or figures are in dispute. Nor was it disputed by senior counsel for the Official Assignee that, if the primary contention of the bankrupt, as to the application of the rule of public policy that our courts should not assist the enforcement of foreign revenue debts, is accepted in the present case, the debts mentioned above and totalling $48,875.01 are to be treated as foreign revenue debts.

It is now well established that the English, Australian or New Zealand courts will not, directly or indirectly, enforce the revenue laws of another country: Peter Buchanan Ltd. v. McVey (1951) 1955A.C. 516; Government of India v. Taylor 1955A.C. 491;

Municipal Council of Sydney v. Bull (supra); Rossano v.

Manufacturers' Life Insurance Co. 1963 2 Q.B.352 ; Bath v. British

and Malayan Trustees Ltd. (1969) 90 W. N. (Pt. 1) (N.S.W.) 44;

There is no valid distinction for this purpose between nations being members of the British Commonwealth and foreign nations: Government of India v. Taylor.

What matters is not the form in which the claim 1s made to enforce the revenue laws of another country; but the substance of the claim.

In Peter Buchanan Ltd. v. McVey, Kingsmill Moore J. said at p. 529:-

enforcement must not depend merely on the form in which the claim is made. It is not a question

Claims to recover taxes of a foreign State are unenforceable whether they take the form of an action to recover the taxes - as in Peter Buchanan Ltd. v. McVey; a proof of debt by the foreign State in a winding up - Government of India v. Taylor; a foreign garnishee order or attachment - Rossano v. Manufacturers" Life Insurance Co.; or some other form.

Counsel for the bankrupt submitted that the proceeding before this Court was in substance a claim to recover lew Zealand revenue and, therefore, should not be assisted. In the course of his able argument, Mr. Farmer relied strongly on the judgment of Kingsmill Moore J. in Peter Buchanan Ltd. v. McVey, described by

Lord Keith of Avonholm in Government of India v. Taylor as an

"admirable judgment, which somehow has escaped the notice of the reporters". Doubtless this explains why it was reported as a note to Government of India v. Taylor in 1955 A.c.

In Peter Buchanan Ltd. v. McVey the plaintiffs were a company incorporated in Scotland which had been wound up by the Court, and its liquidator. The winding up followed the presentation of a petition by the Commissioners of Inland Revenue in respect of a very large claim for excess profits tax and income tax. The liquidator was treated by Kingsmill Moore J. as a nominee of the revenue; or as he expressed it:-

the Revenue because of his potentialities as a financial Sherlock Holmes...Sir Andrew

worked in every respect hand in glove with the authorities in an effort 'to chase the tax.' That was the task for which he had been selected".

The defendant was the beneficial owner of all the issued shares in the company's capital and was one of its two directors. The defendant realised all the company's assets,

paid all, or almost all, the company's creditors except the Commissioners of Inland Revenue, and by various devices transferred the balance of the proceeds of realisation to his credit with an Irish bank and decamped to Ireland. The Judge described the defendant's activities more colourfully as follows:

with his private assets to safe hands in Ireland, and in due time follow his money

to this jurisdiction from where, he was advised, he might safely snap his fingers

The action was in form an action to recover the credit balance from the defendant at the suit of the company and its liquidator. Kingsmill Moore J. held that it was in substance an action to enforce indirectly a claim to tax by the revenue authorities of another State. He dismissed the action.

"I hold that the sole object of the present proceedings before me 1s also to collect a Scottish revenue debt, and that if I were to decide for the plaintiff the only result of those proceedings would be that every penny recovered after paying certain costs and liquidator's remuneration could be claimed by the Scottish Revenue. That, in my opinion, is the substance of the suit - to collect the revenue claim of a foreign State."

The plaintiffs appealed to the Supreme Court of Eire. Maguire C.J., who delivered the judgment of the Court dismissing the appeal, said at p. 533:- "A foreign State, it is said, recognizes the title given to a liquidator by the laws of has country. I agree that if the payment of a revenue claim was only incidental and there had been other claims to be met, it would be difficult for our courts to refuse to lend assistance to bring assets of the company under the control of the liquidator. But there is no question of that here. The position seems clearly to be as found by the trial judge, that these proceedings were started in Scotland with the purpose of collecting a tax -- and that apart from

any moneys recovered will inevitably pass to the Revenue."

In form, the present matter 1s not an action to recover or enforce a revenue claim by a foreign State; although New Zealand is, so far as concerns the principle of public policy relied on by the bankrupt, a foreign State.

The Official Assignee contends that this is not in substance an action to recover or enforce a revenue claim by the New Zealand Inland Revenue Commissioners; but a request by the High Court of New Zealand to the Judges of this Court to act in aid of the High Court in the administration of the bankrupt's estate; the fact that the New Zealand Revenue will take about 56% of the property of the bankrupt remaining for distribution is the result of the application of the New Zealand Insolvency Act 1967; 1t says nothing as to the character of the proceedings before this Court.

This case is distinguishable from Peter Buchanan Ltd.

v. McVey. That was an action to recover moneys from the defendant

by the company in liquidation and its liquidator. All the fruits of the litigation would have gone to the Scottish Revenue. It was held that the sole purpose of the action was to collect the Scottish Revenue''s debt.

But the fact that this case and Peter Buchanan Ltd. v. McVey are distinguishable does not to my mind necessarily answer the contention of the bankrupt that the matter before this Court is in substance a claim to recover New Zealand revenue. Trustees in bankruptcy, Official Receivers or Official Assignees, are charged by statute to properly and impartially administer the estates of bankrupts in accordance with law. So it is with liquidators of companies. They should all listen to the views of creditors and sometimes are bound to seek them; but generally they must exercise their own independent judgment on matters concerning the insolvent administration in their hands. It must be a rare case indeed where they sue merely as the puppets of foreign revenue authorities to recover debts due to them by the estate. Peter Buchanan Ltd. v. McVey was one such case. They will distribute to the proved creditors moneys coming into their hands in accordance with the provisions of the particular statutes, be it bankruptcy or company winding-up legislation, including any preferential payments prescribed by law. Almost every insolvency will include revenue debts of some kind, some of which are usually payable in preference to other unsecured creditors. In most cases the revenue authorities will play no more active role in pursuing their claims, once bankruptcy or windaing-up

has occurred, than any other creditors do; or, if they do,

their participation in that pursuit will not go as far as it did

The strength of the bankrupt's argument is that its rejection leads inevitably to the conclusion that, although the rule of public policy against enforcing, directly or indirectly, the revenue laws of a foreign country is applied by our Courts in some cases (e.g. to debar a foreign Government from suing or proving in a local bankruptcy for a revenue claim) it will rarely be applied to prohibit the removal of a bankrupt's property to the trustee of a foreign bankruptcy if s. 29 is invoked. Thus a foreign revenue authority may choose not to sue here to recover its claims; but to join in the administration of the bankrupt's estate in its own country. If Letters of Request are issued by the Courts of that country to this Court under s. 29 of the Act, the revenue authority will simply receive dividends out of the bankrupt's Australian property. In other words, by simply resorting to bankruptcy proceedings in its own country, a foreign Government will be able to receive payment of its revenue claims.

On the other hand, if the bankrupt's argument is sound, a foreign trustee's claim to local property of the bankrupt would rarely succeed because of the presence of revenue claims in almost every bankruptcy. The consequence would be that ordinary unsecured creditors, as well as foreign revenue authorities, could not share in the bankrupt's local property. There may be many ordinary unsecured creditors, yet only one revenue authority; the value of revenue debts may be small, or large, in proportion to the

debts of other creditors - yet none of them would share in the

bankrupt's property. An answer to this in some cases would be

that the bankrupt's creditors could petition in Australia to sequestrate his estate here; and, if a sequestration order were made, the creditors (though not foreign revenue authorities) could prove in the local bankruptcy. But this would not provide an answer in certain cases. It is not a condition of jurisdiction under

the Act that the debtor should be an Australian national or domiciled in Australia. Australian courts have jurisdiction if

at the time the act of bankruptcy was committed, the debtor was

connected with Australia in one of the ways mentioned in s. 43 (1)

(b). See also s. 7 (1) and Re Mendonca; ex parte Commissioner of Taxation (1969) 15 F.L.R. 256.

It is not @ifficult to conceive of cases where a debtor has property in Australia; but has committed no act of bankruptcy under the Act or, having committed an act of bankruptcy, was not at the date thereof relevantly connected with Australia under s. 43 (1) (b). Thus there would be property of the bankrupt here, but no-one to assert rights with respect to it. Indeed, the present case is an example.

Mindful of these difficulties, counsel for the bankrupt presented an alternative argument namely, that if the greater part of the local assets would go to the foreign revenue authorities then the local courts should invoke the principle that they will not enforce the revenue laws of a foreign country.

This argument has an initial attraction because it leaves some room for the operation of the principle. Also it may have some support from the passage in the judgment of the Supreme

Court of Eire (delivered by MaguireC.J) in Peter Buchanan Ltd. v.

In practice it would involve full evidence of the bankrupt's affairs being placed before the local court and a close analysis being made of the trustee's administration. This should not present undue difficulty as the foreign trustee would be, for practical purposes, the moving party. Indeed, detailed

evidence of this kind seems to have been presented in Peter

Buchanan Ltd. v. McVey, and it has been presented in the present case.

I find difficultyin accepting this argument. Although it has the attraction and benefit of compromise in a difficult and relatively unchartered field of law, it suffers from the problem that so frequently attends compromise namely, that it leaves little, 1f any, room for the application of legal principle or logic. What is "the greater part" of the local assets? Is it 51% in value, 60% or some other proportion? The very notion of "the greater part" or some similar expression, unless 1t be a fixed percentage, is necessarily inexact. A precise percentage could be obtained because the proposition assumes the existence of detailed evidence from the foreign trustee of the very matters involved in this process of assessment. But why "the greater part", whether it be a known percentage, or not? I see no foundation for it whether it be in logic or common sense. Conversely 1fa matter arises involving "the lesser part" of local assets, the principle would not apply.

In the result, the right of creditors, who are not foreign revenue authorities, to share in the bankrupt's local

property would depend upon the accident of the amount of revenue

claims and the exercise by a court of its discretion owing little, if anything, to legal principle.

I see no justification for adopting this unsatisfactory test.

I recognise that there is no perfect solution to the problem. Every test propounded has logical or practical difficulties. Nor is any decided case directly relevant.

I have come to the conclusion that the answer lies in s. 29 itself.

The object of s. 29 is to enable all courts having jurisdiction under the Act, the courts of prescribed countries (including the United Kingdom, New Zealand and Canada) and the courts of other countries having jurisdiction in bankruptcy to act in aid of and be auxiliary to each other in bankruptcy matters.

The section "does not create any new rights, but only creates new remedies for enforcing existing rights." per Griffith C.J. who delivered the judgment of the High Court in

Hall v. Woolf (1908) 7 C.L.R. 207 at p. 212. His Honour was

speaking of s. 118 of the Bankruptcy Act 1883 (46 and 47 Vict.) c. 52 (Imperial); but what he said applies also to s. 29 of the Act.

The Bankruptcy Amendment Act 1980 (s. 18) amended s. 29

to read as it presently does. Prior to the amendment the section

"29, (1) All Courts having jurisdiction under this Act, the Judges of those Courts and the officers of or under the control of those Courts shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.

1914". Section 122 of the Imperial Act enables "British" courts to act in aid of each other. Section 29 of the Act, in its amended form, reflects Parliament's intention to overcome difficulties that may arise in the construction of s. 122 of the Imperial Act occasioned by the constitutional changes which have taken place in the British Commonwealth. Also the amendments to s. 29 extend the operation of the section to non=-Commonwealth countries, whereas s. 122 does not.

The Legislature has chosen to use the word "shall" in reference to Australian Courts acting in aid of the courts of the external Territories and of prescribed countries, that have jurisdiction in bankruptcy (s. 29 (2) (a) ); and the word "may" in reference to Australian Courts acting in aid of the courts of other countries that have jurisdiction in bankruptcy (s. 29 (2) (b) ). In my opinion, this distinction 1s drawn between countries which have similar bankruptcy legislation to Australia - the United Kingdom, New Zealand and Canada (s. 29 (5) (a) ) and other countries that may be prescribed from time to time (s. 29 (5) (b) ) - and other countries.

The word "shall" (and not the word "may") appears in s. 122 of the Imperial Act, as it did in its predecessor ~ s. 118 of the Imperial Act of 1883 ~- in each case with reference to the Courts of England, Scotland and Ireland having jurisdiction in bankruptcy and British Courts elsewhere having jurisdiction in

It has been held by Farwell J. in Re Osborn (1931-32) 15 B. & C. R. 189 that English Courts are bound to give assistance to the Court requesting aid, but have a discretion as to what assistance ought to be given, and may impose such conditions or

In re a Debtor; ex parte Viscount of the Royal Court of Jersey 1980 3 W.L.R. 758 Goulding J. said at p. 771:-

scrutinise the requesting court's transactions once it is satisfied that the case falls within the scope of the section. Farwell J. said, in

In re Osborn (1931/32) 15 B. & C.R. 189, 194: There not being any such conflict,' i.e. conflict with a concurrent English bankruptcy, ' I think this court is bound to give all the assistance that it can.' Lord Lowry L.C.J. took the same view of the section in In re Jackson 1973 N.I.L.R. 67, preferring it to that expressed by Walsh J.

in the Southern Irish case of In re Gibbons (1960) 26 Ir. Jur. Rep. 60, where he thought such provisions to be merely enabling and discretionary. I respectfully agree with Farwell J. and Lord Lowry, while recognising that the court might have to refuse aid if it were proved that the anterior proceedings were hopelessly bad under their own proper law, or that they offended against some overriding principle of English public policy."

In my opinion this statement is apposite to s. 29 of the Act in relation to Australian courts (s. 29 (1) ) and the courts of the external Territories and of the prescribed countries that have jurisdiction in bankruptcy. See also the judgment of Barker J. of the High Court of New Zealand in Re Beadle, unreported, 1 Sept- ember, 1980, B116/80. Once a request for aid 1s made by the court of a prescribed country to an Australian court having jurisdiction

in bankruptcy, 1f there is no Australian bankruptcy extant at the

time of the request, our courts should give their aid to the requesting court. Conflicts may arise if a person is bankrupt both in Australia and the country whose court is seeking aid.

In my opinion s. 29 leaves no room for the application to this case of the principle of public policy relied on by the bankrupt. The High Court of New Zealand 1s simply seeking to administer the estate of the bankrupt according to the bankruptcy laws of New Zealand.

New Zealand is a "prescribed country" within the meaning of s. 29 of the Act; it is a member of the British Commonwealth; and its bankruptcy legislation (the Insolvency Act 1967) is similar to the Australian Act and includes, I might say,

It is not legitimate to characterise the Letters of Request for Aid as in substance an attempt to enforce the revenue laws of New Zealand. Its true character is what it purports to be - a request by the High Court of New Zealand for the aid of this court in the administration of the estate of a New Zealand bankrupt. The fact that the New Zealand Inland Revenue Commissioners will benefit from the remission of funds from Australia to New Zealand is the result or consequence of the New Zealand bankruptcy laws and indirectly of the application to this Court; but does not import to the application the character of an attempt to enforce the revenue laws of New Zealand.

Both countries have in essence the same sections in their bankruptcy legislation relating to requests by the courts of one country for the aid of the courts of the other country. Both

have comprehensive revenue laws. It is difficult to envisage a

bankruptcy in either country where its own revenue authorities would not be creditors. Plainly one of the main uses of sections such as s. 29 (and s. 135 of the New Zealand Insolvency Act 1967) is to enable recourse to be had to a bankrupt's property in the country to the courts of which the request for aid is made.

These considerations lend support to my analysis of the true character of a request for aid under s. 29. This is not to say that there is no room at all for applying the principle of public policy relied on by the bankrupt in the context of bankruptcy. As I have mentioned earlier, it has been decided by high authority that the principle applies to prevent a foreign revenue authority from suing to recover a revenue debt or proving

in a winding-up for such a debt: Peter Buchanan Ltd. v. McVey?

I do not say that s. 29 excludes the operation of the principle, for that assumes it would otherwise apply. What I say is that the principle and s. 29 do not interact. An attempt to recover a revenue debt and a request for aid under s. 29 are qualitatively different.

Thus far I have considered s. 29 in relation to the

requirement that Australian courts shall act in aid of the courts

of "prescribed countries": (s. 29 (2) (a)). It is not necessary

to consider definitively if the section has any different meaning or operation in relation to the courts of "other countries": (s. 29 (2) (b) ) where the word "may" is used. All I will say is that on my present view 1t means that the power conferred by s. 29 1s merely enabling and discretionary; there is no initial assumption

that, once the Australian court is satisfied that the case falls

within the scope of s. 29, it is bound to give all the assistance it can. As the "other countries" are not "prescribed countries" their bankruptcy laws may not be similar to ours.

In the result, I am satisfied that the Court should lend its aid to the High Court of New Zealand.

I turn to the form of the order. I think it preferable that the Official Receiver for the Bankruptcy District of the State of New South Wales and the Australian Capital Territory ("the Official Receiver") be appointed receiver of the bankrupt's property in Australia rather than the Official Assignee. This is what the Official Assignee himself wishes, and the bankrupt has expressed no view on the matter. The Official Receiver is more familiar with local law and practice, is present here and in a better position to execute the orders to be made. He is an officer of the Commonwealth under the control of this Court: see the definition of "officer" in S. 5 (1) and also s. 15 (2); so there 1s no bar to his appointment.

The Official Receiver should be appointed receiver of the bankrupt's interest as residuary beneficiary in the estate of his late father. It was not argued that the nature of the bankrupt's interest as residuary beneficiary, whether it be a proprietary interest in the assets themselves or to the due administration of the estate, operated to prevent this order being made. Counsel for the bankrupt argued that the order should not include the interest, if any, which the bankrupt may have in his late father's estate arising out of the pending litigation over his

stepmother's will because there may in fact be no such interest.

I think the best course is for the order to be as I have mentioned.

Whether it ultimately includes property devolving from the step- mother's estate will be known later. I proposed to reserve liberty to apply so that these and any other matters that may arise can be considered later.

As to the appropriate form of order, precedents of orders in aid may be found in In re Osborn (supra); In re Bolton 1920 2 I.R. 324 at pp. 330-1; and In re Jackson 1973 N.I.L.R.

I prefer not to make an order at this stage without hearing counsel as to the form it should take; but for their guidance I will set out what seems to me to be an appropriate order. After they have considered it, short minutes should be brought in by counsel for the Official Assignee; or, if counsel cannot agree, the matter may be relisted for further argument. I suggest the following form of order:-

"Upon the Official Assignee by his counsel undertaking to the Court:- .

by him as Official Assignee in Bankruptcy of the property of the bankrupt under or pursuant to these orders shall be applied by him in due course of administration of the bankruptcy in New Zealand;

(b) that any matters in controversy in connection with the bankruptcy between the Official Assignee and the Official Receiver for the Bankruptcy District of the State of New South Wales and the

(c) that the Official Assignee submits to the jurisdiction of this Court in all such matters as aforesaid and abides by any order the Court may make subject to appeal; and

(d) that the Official Assignee shall appoint a solicitor or firm of solicitors in this country to accept service on his behalf of any proceedings brought by the Official Receiver or by persons resident in Australia in connection with the said bankruptcy as aforesaid:

l. That the Official Receiver be appointed Receiver

without security of the interest of the bankrupt as

residuary beneficiary in the estate of William Henry

necessary steps to obtain possession of and to sell

the same and to receive the proceeds thereof and to do all such acts and things as may be necessary or expedient for the purposes of giving full force and effect hereto;

That the Official Receiver be authorised to remit

Insolvency Act 1967 (New Zealand) after payment of any

encumbrances on the said property and of the costs,

charges and expenses that may be incurred in the exercise of any of the powers hereby conferred or otherwise hereunder; 3. That the Official Receiver be authorised to appoint, if necessary, solicitors in Australia to advise or assist him in the discharge of his duties hereunder; 4. That the costs of the Official Assignee of and incident to this application including reserved costs be taxed as between solicitor and client by the taxing officer of this Court and that the costs of the bankrupt of this application including reserved costs be taxed by the taxing officer of this Court; and when so taxed the Official Receiver be at liberty to pay the same out of any moneys of the bankrupt in Australia received by the Official Receiver; ° 5. That the Official Assignee and the bankrupt be at liberty to apply to this Court on seven days' notice for any consequential or ancillary orders or directions in this matter as may be necessary; and

1. That the Official Assignee serve a sealed copy of this order on the bankrupt as soon as possible hereafter.'

I make no order at this stage other than to adjourn

At a glance

Court

Decision date

Before

Source

Judgment (162 paragraphs)

Cited By (2)