Paragraph 1 of the summons
23 Liliana submits that paragraph 1 of the summons is not authorised by s 81(1B)(b) of the Bankruptcy Act as it does not seek production of documents which 'relate to the relevant person or to any of the relevant person's examinable affairs'. Cooper J accepted a similar argument in Re Osenton; Ex parte Osenton v Worrell [1995] FCA 90 at pp 36-37. His Honour did so on the authority of Federal Commissioner of Taxation v Australia & New Zealand Banking Group Ltd (Smorgon) (1979) 143 CLR 499.
24 Smorgon concerned the exercise by the Commissioner of Taxation of his power under s 264(1) of the Income Tax Assessment Act 1936 (Cth) to issue a written notice requiring a person to attend and give evidence and produce documents. The High Court held that this power was subject to the limitation that the evidence and documents had to concern the income or assessment of the recipient of the summons, or another identified taxpayer. If the written notice did not show the recipient that the documents required to be produced were ones which the Commissioner had power to require, then the notice would not be valid: see at 525 (Gibbs ACJ) and 537-538 (Mason J).
25 On the basis of that principle, the High Court held that some of the notices that the Commissioner had issued were valid and some were invalid, although the court was not unanimous on all points. Some of the notices sufficiently expressed the necessary connection between the documents sought and the income or assessments of identified taxpayers. One was invalid because it did not refer to any taxpayers at all. Another notice, which had been issued to the bank, was closer to the terms of the summons to Liliana than the other notices in Smorgon. It referred to the income and assessment of named taxpayers, and went on to require production of books in specified safe deposit boxes. It did not say that the documents in the safe deposit boxes had any connection with the income and assessment of the taxpayers. Gibbs ACJ did not find it necessary to rule on the validity of that notice, but Mason J held that it was invalid, because it did not in any way assert that the documents related to the income or assessment of the named persons: Smorgon at 538, Jacobs J agreeing at 541 and Murphy J agreeing at 547.
26 I respectfully agree with Cooper J in Re Osenton that the principle identified in Smorgon must be applied to summonses issued under s 81 of the Bankruptcy Act. It is clear on the wording of the section and the authorities to which I have referred above that the power of the court to issue summonses under that provision is relevantly limited to require production of documents that are in the possession of the recipient and relate to the bankrupt or any of the bankrupt's examinable affairs: see in particular s 81(1B). In s 5 of the Bankruptcy Act 'in the possession of' is defined to include 'in the custody of or under the control of'.
27 The summons to Liliana in the present case does expressly confine the evidence to be given by Liliana to evidence about the examinable affairs of Peter. It therefore goes further than the entirely uninformative notice I have already described which the High Court held to be invalid. But it does not expressly draw any connection between those affairs and the documents, production of which it purports to require. It may be argued that the connection is tolerably clear on the face of the document - why else would the trustee want to see those documents? However in my view, which I have reached with some hesitation, that is not enough.
28 First, in Re Osenton Cooper J set aside summonses which, like the summons to Liliana, did refer to the examinable affairs of the bankrupt, but did not draw any express connection between those affairs and the documents required to be produced. I am required to follow his Honour's approach unless I consider it to be clearly wrong which, with respect, I do not.
29 Second, as I have said, the High Court held to be invalid a form of notice which was relevantly similar to the notice to Liliana, in that it did refer to the subject matter of the investigation which animated the power to require attendance to give evidence, but it did not expressly draw any connection between that subject matter and the requirement to produce specified documents.
30 Third, and fundamentally, it must be recalled that the power of the trustee to seek the issue of summonses needs to be approached responsibly by applicants for summonses, and controlled carefully by the court. I am conscious that an unduly technical and restrictive approach to the power should not be taken, but at the same time it must be recalled that the summons is issued on pain of contempt of court, and it is well established that it should be expressed in terms that specify as clearly as possible any books and records which the person summonsed has to produce: Karounos at 335. That is especially so where the recipient of the summons is not the bankrupt: see Re Andrews (1958) 18 ABC 181 at 186-187.
31 That being so, I do not consider that the trustee should be given the benefit of the doubt here where he has not clearly drawn the necessary connection between the documents to be produced and the bankrupt's examinable affairs. In failing to do so, he has procured the issue of a summons which, in terms, will expose the recipient to penalties if she fails to produce certain documents, even if those documents have nothing to do with the bankrupt or his examinable affairs.
32 For those reasons, in my view the summons is invalid in so far as it requires production of the bank statements described at paragraph 1 of the list of books required for production.
33 It may also be observed that paragraphs 1 and 3 of the summons do not on their face recognise another limitation on the power which s 81(1B) expressly imposes, namely the requirement that the documents to be produced be in the possession of the recipient: see Re Osenton at p 36. However as the respondents did not make any objection on that ground, I will not decide their application on that basis.
34 Apart from the form of the summons, Liliana submits that a requirement to produce all bank statements in her name for a ten year period is oppressive because it is too wide. I do not accept that. The trustee wishes to investigate the affairs of family members of Peter in order to discern whether or not income or assets which are, in truth, his have been concealed in or directed through the bank accounts of those family members. The trustee points to the alleged misstatement of Peter's income and his failure to provide particulars of his assets which are the subject of the notices of objection to discharge of his bankruptcy. It is enough to say that it is an area into which the trustee may legitimately inquire. On their face, it is also legitimate for those inquiries to go back five years before the commencement of the bankruptcy, which this requirement does. I will not lightly conclude that the trustee is investigating that far back for no good reason.
35 There is no evidence as to the number of bank statements this would require Liliana to produce or any difficulty in locating or identifying them. Submissions filed on her behalf point out that she is 82 years old, but there is no evidence that this leads to any infirmity which would impair her, or those acting on her behalf, from producing the bank statements. Balancing the statutory purpose of the power conferred by s 81 of the Bankruptcy Act against the need to ensure that the power is not exercised oppressively, I consider that the requirement to produce bank statements over the ten year period has not been shown to be oppressively wide. The respondents claim that the trustee is fishing, but the s 81 process is available for that purpose: see Re Rothwells Ltd (No 2) (1989) 15 ACLR 168 at 182 (Nicholson J), a case concerning the power to issue summonses in corporate insolvency, but the principle is the same.
36 Certainly, if the paragraph had been limited by appropriate words confining it to the scope of the power granted by s 81 of the Bankruptcy Act, that would have required Liliana to form a judgement which could be difficult to make. That is, she may not know whether or not a given bank statement of hers contains information relevant to Peter or his examinable affairs. However in my view the class of documents required - bank statements over a specified period - is sufficiently definite so that she will be capable of identifying and producing documents that potentially answer the summons. Whether she wishes to withhold any of those bank statements and take the risk that they are subsequently shown to have related to Peter or his examinable affairs is a matter for her.
37 The dilemma thus produced is a real one, but it is an inevitable product of the way the legislation is framed: see Smorgon at 510 (Stephen J, overturned in part but not on this point); 523 (Gibbs ACJ); 537 (Mason J). It would be a mistake to approach a relationship which by reason of s 81 must be expressed in the summons as itself introducing uncertainty which vitiates the summons. That would frustrate the purpose of s 81 which is to help a trustee in bankruptcy investigate the affairs of the bankrupt. It would place an impossible burden on the trustee to require him to require production only of specified documents which he is sure relate to the bankrupt or his examinable affairs: see in particular Mason J at 537. This consequence of the particular legislation illustrates why caution is required in the application of principles developed in a different context, such as subpoenas for production of documents. My view might be different if the class of potentially relevant documents were indeterminate or unduly large, but in the case of the bank statements, for the reasons I have given, it is not.