FEDERAL COURT OF AUSTRALIA

Southwell v Maladina [2002] FCA 802

ROBERT SOUTHWELL v JAMES MUSTATA MALADINA (AKA JIMMY MALADINA), JANET MALADINA, FERRAGAMO LIMITED (PREVIOUSLY KNOWN AS FERRAGAMO PTY LIMITED), FERRAGAMO (AUST) PTY LTD ACN 084 743 144, ORD MINNETT MANAGEMENT LIMITED ACN 002 262 240 and NATIONAL PROVIDENT FUND BOARD OF TRUSTEES

Q 7027 OF 2001

DOWSETT J

3 MAY 2002

BRISBANE

THE COURT ORDERS THAT:

1.         The application be adjourned to a date to be fixed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     I am presently seized of proceedings which were, in effect, initiated by a letter of request received from the Chief Justice of Papua New Guinea to which the Court has been giving effect pursuant to s 29 of the Bankruptcy Act 1966 (Cth) (the “Act”).  The bankrupt and his wife are subject to orders for examination, and that examination has been proceeding.  I am told that the Trustee in Bankruptcy has also obtained orders against other persons who are not resident in Australia, such orders having been obtained from the Registrar.

2                     The trustee now seeks further orders against other persons not resident in Australia and also to facilitate the execution of the orders for examination previously made by the Registrar.  In effect I am asked to make orders for substituted service relying upon the purported authority of the decision of Pincus J in Re Skase (1991) 32 FCR 212.  Unfortunately, having considered that case, I find myself to be in substantial disagreement with his Honour.  I can briefly state my reasons. 

3                     His Honour relies substantially upon the decision of Gibbs J (as his Honour then was) in Re Mendonca; Ex parte Commission of Taxation (1969) 15 FLR 256.  However, it is clear that Gibbs J was dealing with a petition in bankruptcy directed towards a person who was neither a citizen nor physically within the jurisdiction of the Court.  However the provisions of s 7 of the Act clearly contemplate the bankruptcy of such a person provided that certain other provisions of the Act are satisfied, which provisions go to connection with Australia.  Gibbs J was of the view that the Act conferred jurisdiction to issue a petition for service outside of Australia.  There is no such conferment of jurisdiction with respect to an application for an order for examination pursuant to s 81. 

4                     Pincus J also referred to the decision of Lockhart J in In the matter of Deposit Investment Co. Ltd (1991) 30 FCR 463.  I prefer the decision of Lockhart J in that case to that reached by Pincus J in Skase.  Finally, the observations of the High Court in Laurie v Carroll (1957-58) 98 CLR 310, especially at 323 et seq, appear to me to dispose of the proposition advanced by Pincus J that the power to order substituted service can be used as a way of effecting service outside of the jurisdiction in the absence of any other power authorising such a course.  It is for those reasons that I have indicated that I am not willing to entertain applications for orders for examination pursuant to s 81 against persons not resident in Australia or physically present in Australia, except perhaps in the case of Australian citizens. 

5                     I should say that another factor also weighs with me.  The power to make an order pursuant to s 81 is clearly discretionary.  It seems to me that prima facie it will work an unacceptable hardship to persons not presently resident in Australia if they are compelled to remain here for some time to undergo examination when the bankruptcy is actually being conducted in Papua New Guinea and these people are resident in that country.  It would be far better if any such examination were to be conducted there.  I would be inclined to exercise my discretion against granting these orders even if I were satisfied that I had jurisdiction to make them.   

6                     I am asked to adjourn the application to a date to be fixed.  I will do that.

Associate:

Dated:              21 June 2002