It was also submitted in oral argument by Mr Gargan that the trustee ought to have undertaken examinations of his brother, those associated with the company SAM Industries Pty Ltd, with a horse-riding partnership and the money lender Jue Sue Co, whom he described as "associated entities". It is not necessary to deal with that point. There was no warrant for any such course, which would have been to go over issues litigated in the Supreme Court in the hope that some further evidence or admissions might be forthcoming.
Mr Gargan referred to claims against SAM Industries Pty Ltd which, he says, should have been pursued. These were not dealt with by Thomas J and so were not relevant to the trustees' consideration of that appeal. However Mr Gargan had instituted proceedings against that company and this litigation was gone into by Drummond J who once again concluded that there was little prospect of success in it.
There was also, Mr Gargan argued, monies earned by a horse-riding business conducted by his brother and sister-in-law, but formerly conducted by him, which should have been pursued by the trustee. The basis for this is vague. A memo in the trustee's records shows that Mr Gargan maintained that either a profit-sharing agreement had been entered into or that rent was to be paid. Drummond J refers to an action brought by the brother claiming unlawful interference with the business. In that action Mr Gargan counter-claimed on the basis of an agreement said to have been reached in 1990 to the effect that the land upon which the business was conducted was to be assigned to him. This may be the foundation for the claim to rent. None other is apparent. But, in any event, as Drummond J observed, Thomas J had found there was no such agreement. There does not seem to me to be any other basis disclosed to require the trustee to take the matter further.
The other submission, that the trustee should have simply ignored the decision in the Supreme Court action, has two aspects to it, both of which are misconceived. It was submitted that the sequestration order took effect at an earlier time. The act of bankruptcy, to which s 115 might refer, occurred on 6 January 1992. But Mr Gargan's argument misunderstands the effect of the doctrine of relation-back. It was his submission that, because the sequestration order was effectively "backdated", the trustee was only bound by what occurred prior to that time and, could therefore ignore the Supreme Court judgment in 1993. It was further submitted that the Commonwealth legislation "covered the field". With respect to personal bankruptcy I have no doubt that it does but this does not have the effect for which Mr Gargan contended, namely that "anything that occurs in a State Court is of no consequence". There is no relevant conflict.
The Official Trustee has relied upon solicitors of associated entities of the bankrupt who misled the Trustee and the Trustee ignored his Statutory Duty to investigate their claims and ignored his own officer's recommendations
Mr Gargan referred to two letters from his brother's solicitors to the Australian Government Solicitor in March 1993 but it is not apparent to me what I was to draw from them adverse to the conduct of the trustee, unless Mr Gargan is saying that whatever was claimed in them ought to have been investigated or that they had some real influence on the decisions not to proceed with actions. The solicitors for the brother did refer to the substantial costs owed to him by Mr Gargan out of the
extensive litigation brought (some twenty three proceedings were said to have been brought by Mr Gargan against his brother and his family). And the brother proved in the bankruptcy for sums in excess of $150,000. But these assertions, and a warning that security for costs might be sought if any proceedings were pursued, are not shown to have had any influence on the trustee's decisions. Nevertheless it seems that the trustee undertook some investigation. Mr Gargan also refers, under this heading, to claims against a Mr Mohammed and with respect to the horse-riding business, which I have already dealt with. The material discloses the steps taken with respect to Mr Mohammed and there seems to me no basis for further inquiry. I have also dealt with Mr Gargan's claim that certain persons or entities which he described as "associated entities" should have been examined under s 139 Bankruptcy Act 1966.
A matter raised by Mr Gargan, was that his brother owed him or the partnership $50,000. If that were the case the reason why no action was taken may be that the trustee did not, faced with the brother's likely cross-claims or set-offs at least with respect to the debts for which he had proved consider that the outcome would benefit creditors. And, it is to be recalled the creditors had declined to provide funds for litigation. But it is not, in any event, clear to me that the sum was owed. Mr Gargan, as I understand it, places reliance on a memo by Mr Visser (the officer then having the conduct of the file) of 27 May 1993 which notes that $50,000 paid by the bankrupt to Jue Sue & Co for $50,000 in 1984 reducing the loan balance "seems to be a valid debt owing by John to the estate. Although paid in 1984, the judgment on 12 March 1993 determined that the loan was John's debt only. For this reason the transactions on the loan are current and the amount should be claimed from John Gargan." I have some difficulty with these comments. It may well be that the memo, entitled "summary of issues" does not record the officer's own view, but matters raised by Mr Gargan. In the judgment Thomas J finds that the agreement between the brothers was that, of the $230,000 owed by the partnership to the money lender Jue Sue & Co, liability for repayment of $180,000 of it was to be assumed by John Gargan. This was the amount which had not been paid when the matter was heard - partly because the brother had not had other property available to him to bring that about. The $50,000 spoken of was, his Honour found, to have been paid by the partnership. If it was paid by Mr Peter Gargan alone and not out of partnership funds there might be some argument that some of it was repayable to him - but this is not what is suggested by the note.
Mr Gargan also refers to a note contained in the memo which records "Book debts, owed by Michael & Simon Gargan for agistment for a number of years seems a valid debt. Agistment has been on land which was designated for use by B/rupt. Charge was $1.00 per head per week for approximately 300 cattle. The amount of debt needs calculation as the cattle have been on the land for a number of years and are still there now." Again, the difficulty with the note is that it is unclear whether it represents views held by the officer having conduct of the file or simply records Mr Gargan's claims which may or may not be considered worth while investigating. The only other reference to the claim in the material is with respect to agistment occurring in 1990. Whilst it is therefore unclear what sums are said to be in question and why no steps were taken to demand the sums of itself I do not consider it warrants an enquiry into the trustee's conduct.