FEDERAL COURT OF AUSTRALIA

Pearce (Trustee) v Mulhern (Bankrupt) (No 2) [2012] FCA 7

THE COURT ORDERS THAT:

1.    A warrant issue pursuant to section 78(1)(f) of the Bankruptcy Act 1966 (Cth) (“the Act”) in the form of Form 16 of the Federal Court (Bankruptcy) Rules 2005 for the arrest of the respondent bankrupt Michael Richard Mulhern also known as Derek O’Malley and his committal to such gaol as the Court appoints until this Court otherwise orders.

2.    The costs of this application including the costs of this day be payable from the estate of the respondent bankrupt with priority in accordance with section 109 of the Act.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 9 August 2011 Logan J ordered that a warrant be issued pursuant to s 78(1)(f) of the Bankruptcy Act 1966 (Cth) for the arrest of the respondent bankrupt, Michael Richard Mulhern also known as Derek O’Malley and for his committal to gaol (Pearce (Trustee) v Mulhern (Bankrupt) [2011] FCA 930). The arrest warrant directed that Mr Mulhern, when arrested, be delivered to Her Majesty’s Gaol at Brisbane and it directed the Governor or Keeper of that gaol to receive him and keep him in custody until the Court otherwise orders. The arrest warrant also required and authorised the seizure of specified property.

2    It appears that Mr Mulhern was arrested by the Australian Federal Police at Sydney airport early on the morning of Sunday, 8 January 2012. At the time of his arrest an Irish passport in his name, two United States driver’s licences, a United States residency card and some other documents were seized. Contrary to the directions in the arrest warrant Mr Mulhern was transported by Federal Police to the Surry Hills Police Station and given into the custody of the New South Wales Police. Later on 8 January 2012, he was granted bail by a New South Wales magistrate on condition that he report daily to Neutral Bay police station and post a surety of $2,000. Mr Mulhern posted the surety and was released. Although it is not necessary for me to decide, there appears to be considerable doubt whether the magistrate had authority to release Mr Mulhern from any custody arising from the warrant issued by this Court.

3    The preceding matters were deposed to in an affidavit of Paul Gerard Lynch, solicitor, who is a partner in the firm Lynch Morgan Lawyers who are solicitors for the trustees of Mr Mulhern’s bankrupt estate. Mr Lynch also deposed to the fact that the Australian Federal Police have failed to confirm that they would re-arrest Mr Mulhern on the existing warrant. Both Mr Lynch and Mark William Pearce (one of the trustees) have also deposed that since the issue of the warrant for the arrest of Mr Mulhern on 9 August 2011 Mr Mulhern has not taken any steps to comply with his obligations under the Bankruptcy Act which led to his arrest. Mr Lynch was, in those circumstances, instructed to apply for another warrant for the arrest of Mr Mulhern so that he might be taken to Brisbane to appear before a judge of the Court and for public examination which he has so far failed to attend. The application was for orders and a warrant in the same terms as those issued by Logan J on 9 August 2011.

4    I am satisfied that it is proper to issue a further warrant for the arrest of Mr Mulhern. Each of the matters judged relevant by Logan J remains relevant. Furthermore, Mr Mulhern seems to have been actually in the process of attempting to depart from Australia, confirming his apparent intention to repudiate his obligations. The orders sought and the terms of the warrant sought appear to me to be appropriate in the circumstances.

Associate:

Dated:    12 January 2012