Re Farrow; in the Matter of the Bankrupt Estate of Geoffrey Edward Farrow [2004] FCA 1569

REASONS FOR JUDGMENT 1 There is in this proceeding in the Litigants' Fund the sum of $1300 plus interest accrued of $52.87. 2 A sequestration order was made against the Estate of Geoffrey Edward Farrow (the bankrupt) on 8 May 1989. Maris Andris Rudaks (the trustee) is now the trustee of the bankrupt estate. During the period of his bankruptcy, the bankrupt moved to New Zealand in about April 1991. He did not return to Australia until about 10 November 2001. By operation of law, his bankruptcy is extended to eight years after his return to Australia, as the then trustee at the time objected to his automatic discharge from bankruptcy (inter alia) because he had left Australia without the permission of his trustee. 3 On 17 June 1991 an Order was made by a judge of this Court that a request be made to the High Court of New Zealand to act in aid of the administration of the estate of the bankrupt. In the High Court of New Zealand, on 4 February 1992, an application for such aid was adjourned upon conditions, including that the bankrupt pay the sum of $1300 into this Court. The payment was duly made on 21 February 1992. It is that sum, plus the interest of $52.87, which is the subject of the present application. Subsequently, the proceedings in the High Court of New Zealand were not pursued. 4 The trustee has now applied for the sum of $1352.87 to be paid to him as trustee of the bankrupt estate. The creditors of the bankrupt's estate have been paid $0.43 in the dollar. The costs of the trustee, during the balance of the bankruptcy until the bankrupt is discharged will, on the evidence, exceed the amount of $1352.87. Indeed, on the evidence, there are presently insufficient funds held by the trustee to pay his outstanding fees. 5 The bankrupt has been given the opportunity to make submissions upon the application. He made brief submissions. He complains of the lack of communication between himself and the trustee, although the material from the trustee suggests that the trustee may not have known of his whereabouts for lengthy periods. The bankrupt also asserts: 'As [the former trustee] uttered words to empty GE Farrow out then that is what they are trying to achieve. There has been many wrongs by the Trustees mainly forgery of court documents. The $1330 was paid into the Court by R Farrow and should remain there until the bankruptcy is rescinded.' 6 There are no particulars of those allegations. They are not supported by any affidavit or document. The bankrupt has taken no action in these proceedings in relation to those allegations, despite the lengthy elapse of time. In any event, even if those allegations were ultimately established as true, there is no foundation in the material presently before the Court to suggest that the trustee (or earlier trustees) would be unable to meet any judgment payable to the bankrupt. More importantly, there is no evidence from the bankrupt that the $1300 was not his property, either held by him at the time of his bankruptcy or after acquired property which should be available to his bankrupt estate. The assertion in his submission that the sum was paid by 'R Farrow' is unsupported by evidence and does not indicate of itself that the moneys were not paid by R Farrow on behalf of or from the resources of the bankrupt. The order of the High Court of New Zealand was that the sum of $1300 be paid by the trustee. The money was duly paid. The intent of the order was clearly that that sum should be available to the trustee in due course unless the sequestration order were set aside. 7 This application is made under O 63 r 4 of the Federal Court Rules. It provides: (1) Money may be paid out of a Litigants' Fund: (a) for money paid under Order 64 paragraph 46(3)(d): (i) in accordance with an order of the Court or a Judge; or (ii) in accordance with a direction by the Registrar under Order 62 paragraph 46 (6A)(d); or (b) in any other case - in accordance with an order of the Court or a Judge. (2) An order that directs that money in Court be paid out of a Litigants' Fund, or otherwise dealt with, must state the particulars of the payment out, the manner in which the money is otherwise to be dealt with and any other action to be taken by the Registry.' In Bou-Simon v Attorney-General of the Commonwealth of Australia (2003) 133 FCR 230;[2003] FCA 1303, at 235, [22] Tamberlin J said of O 63 r 4 the following: 'There are no specific factors which are mandated to be taken into account. Nor are any matters expressly excluded from consideration in the terms of O 63 r 4. The Court's discretion is a wide one and it is entitled to take into account any circumstances relevant to the exercise of its discretion in a proper and judicial manner. There is no specification as to the basis on which the Court is to exercise the discretion, apart from a requirement that the Order must state particulars of payment out, the manner in which the money is to be dealt with, and any action to be taken by the Registry.' 8 In the present circumstances, in light of the matters to which I have referred, in my judgment the proper order is that the sum of $1352.87, being $1300 paid into the Litigants' Fund by the bankrupt together with $52.87 interest accrued thereon, held in this proceeding, should be paid out to the trustee as trustee of the estate of the bankrupt, to be held by the trustee and used by the trustee as funds available in the estate of the bankrupt. I direct the Registrar to pay the said sum accordingly. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.