FEDERAL COURT OF AUSTRALIA

Vats v McGibbon [2015] FCA 549

THE COURT ORDERS THAT:

1.    The name of the respondent (the old trustee, Mr John Cummings) in these proceedings, be substituted for the names of the new trustees, Mr Phillip McGibbon and Mr Malcolm Howell, of Jirsch Sutherland.

2.    The application for extension of time to file a Notice of Appeal, made under r 36.05, dated 21 April 2015, be dismissed.

3.    The respondents’ costs be paid out of the bankrupt’s estate.

Date that entry is stamped: 25 May 2015

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

REASONS FOR JUDGMENT

1    Dr Vats has applied for an extension of time in which to appeal the dismissal of his application to review the decision of his trustee in bankruptcy to refuse to consent to Dr Vat’s request to travel overseas. The expressed reason for the applicant’s proposed travel was to visit a sick relative. The primary judge dismissed the application on the ground that it lacked any utility because Dr Vats’ proposed travel dates had passed. The application was to travel overseas between 15 January and 28 January 2015 and Dr Vats’ application was heard on 2 February 2015. The primary judge reasoned, in Vats v Cummings [2015] FCA 69, at [7] to [8], that the:

…application is without any utility, because the application by Dr Vats and, consequently, the decision in response concerned travel in a period which ended on 28 January 2015, a date which has now passed.

No decision of the Court upsetting the Trustee’s decision in that regard would permit travel for a period which has expired. In any case, no basis was shown on which to impugn the decision of the Trustee. Dr Vat’s capacity to travel in the future should be tested by further application to the Trustee and, in the event of a refusal, an application for review under s 178 of the Bankruptcy Act 1966 (Cth).

2    Dr Vats’ application for an extension of time in which to appeal that decision should be refused. First, no adequate explanation was provided by Dr Vats as to why he did not file his appeal within 21 days of the decision made on 11 February 2015, being the time limit prescribed in r 36.03 of the Federal Court Rules 2011 (Cth). In an affidavit sworn by Dr Vats in support of his application for an extension of time, Dr Vats stated that ‘a number of events’ out of his control ‘transpired’ which resulted in the delay, ‘the foremost being lack of information’. The ‘lack of information’ referred to in the affidavit was said to be that the reasons for judgment were not provided to him promptly and the judgment did not mention a time limit within which an appeal must be filed. Dr Vats’ explanation was devoid of any detail and is wholly inadequate to explain the delay. Moreover, the explanation given in his affidavit is somewhat inconsistent with his draft notice of appeal in which he states, at [6], that he did submit another travel application to his trustee in bankruptcy:

However, [the trustee in bankruptcy] refused to answer that application and soon afterwards, very promptly, removed himself as the “trustee” and appointed a private third party, a Mr Phillip McGibbon from Jirsch Sutherland as the “new trustee”.

This left [Dr Vats] with no option, but to appeal this case to the Full Federal Court.

3    It appeared from his proposed grounds of appeal that Dr Vats made a conscious decision not to appeal. That circumstance provides sufficient reason in itself for refusal of the application for an extension of time in which to bring the appeal.

4    I do not consider that the circumstance of a new trustee being appointed after a fresh application was made to his trustee in bankruptcy affords proper reason as to why there was a delay in appealing the decision of the primary judge.

5    Furthermore, I am not satisfied that an appeal would have any prospects of success. Dr Vats, in substance, proposed two grounds of appeal in his draft notice of appeal. The first ground was that the primary judge failed to consider and address Dr Vats’ submission based on s 464I of the Crimes Act 1958 (Vic), arguing that, pursuant to that section, there is no power to detain a person not under arrest and that the effect of the trustee’s refusal to give him leave to depart Australia has been his unlawful detention. The primary judge, in his reasons for decision, does not make reference to that argument but it is, in my view, one that lacks any merit for two reasons. First, the section has no application to the present case. Secondly, it is an offence under s 272(1)(c) of the Bankruptcy Act 1966 (Cth) for a bankrupt to leave Australia without the consent in writing from the trustee. There was no unlawful detention and Dr Vats is able to leave Australia if he obtains the consent in writing of the trustee.

6    The second ground was that the primary judge’s decision was wrong because the primary judge failed to mention s 272 of the Bankruptcy Act in his reasons for judgment. There is no substance in this ground either.

7    The Court’s jurisdiction to review the Trustee’s decision is found in s 178(1) of the Bankruptcy Act 1966 (Cth), which provides that:

If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the Court, and the Court will make such order in the matter as it thinks just and equitable.

8    By the express words of s 178(1), the primary judge was empowered to make such order in the matter as his Honour thought just and equitable. His Honour dismissed the application because it lacked utility by reason that the travel dates had passed. It was open to the primary judge to reach the conclusion and to dismiss Dr Vats’ application on that basis. No error is shown in the reasoning of the primary judge that the application lacked utility and the decision of the primary judge is not attended by sufficient doubt to warrant its reconsideration. Furthermore, I take into consideration that the dismissal of his application by the primary judge did not, and does not, prevent Dr Vats from making a fresh application to travel.

9    Accordingly, the application for leave to extend the time in which to file an appeal is dismissed.

Associate:

Dated:    4 June 2015