FEDERAL COURT OF AUSTRALIA
Palmer (Trustee), in the matter of Slater (Bankrupt) [2016] FCA 780
ORDERS
JULIE A PALMER AS TRUSTEE OF THE ESTATE OF DAVID ROSS SLATER, A BANKRUPT Applicant | ||
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. Leave be granted to the applicant to file a further amended application and any further evidence upon which she may seek to rely on or before Monday 11 July 2016, or such later date as the applicant may reasonably require.
2. The applicant:
(a) serve any such further amended application and any further evidence, together with a copy of her affidavit of 28 June 2016 and a copy of these reasons, on Mr Slater by email to the email address nominated in his bankruptcy questionnaire;
(b) file an affidavit of service in compliance with order 2(a) on or before Monday 11 July 2016, or such later date as the applicant may reasonably require.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
GLEESON J:
1 This is an application for recognition of a foreign proceeding pursuant to the Cross-Border Insolvency Act 2008 (Cth) (“CBI Act”). By s 6 of that Act, subject to the Act, the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (“Model Law”) has the force of law in Australia.
2 The applicant is the trustee of the estate of David Ross Slater, a bankrupt, being administered under the Insolvency Act 1986 (UK) (“Insolvency Act”). Mr Slater was adjudged bankrupt by order of Deputy District Judge Sadd of the County Court at Croydon in the United Kingdom on 22 December 2015 (“bankruptcy order”). The order was made on the petition of Michael Wilson & Partners Ltd (“MWP”), a creditor of Mr Slater.
3 The applicant was appointed as trustee by the Secretary of State of the Government of the United Kingdom, in place of the official receiver, on 9 February 2016 pursuant to s 296 of the Insolvency Act.
4 In support of the application, the applicant relies on the following evidence:
(1) Her affidavits sworn 31 May 2016 and 28 June 2016;
(2) Affidavit of service of Christie Lonnon sworn 6 June 2016;
(3) Affidavit of Melanie Cavanough sworn 14 June 2016;
5 The proceeding for which recognition is sought is Case No 0215 of 2015 in the Croydon County Court (“UK proceeding”). The bankruptcy order was made in the UK proceeding.
6 Mr Slater is an Australian citizen. In 2014, MWP unsuccessfully sought to have Mr Slater declared bankrupt by the Federal Circuit Court of Australia (“FCCA”): Michael Wilson & Partners Ltd v Slater [2014] FCCA 2871 (“2014 FCCA judgment”). MWP’s creditor’s petition was dismissed, on Mr Slater’s opposition, because the FCCA was not satisfied that it had jurisdiction where Mr Slater did not have a connection with Australia of the kind required by s 43 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”). Section 43 confers jurisdiction to make a sequestration order against the estate of the debtor on a petition presented by a creditor where, relevantly, a debtor has committed an act of bankruptcy; and at the time when the act of bankruptcy was committed, the debtor:
(1) was personally present or ordinarily resident in Australia;
(2) had a dwelling-house or place of business in Australia;
(3) was carrying on business in Australia, either personally or by means of an agent or manager; or
(4) was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager.
7 In the FCCA proceeding, Mr Slater gave sworn evidence via video-link from London. He gave his residential address as an address in Kent, in the United Kingdom.
8 In summary, the applicant seeks orders to the following effect:
(1) That the UK proceeding be recognised as a “foreign proceeding” within the meaning of article 2(a) of the Model Law;
(2) That the UK proceeding be recognised as a “foreign main proceeding” within the meaning of article 2(b) of the Model Law;
(3) That the administration and realisation of Mr Slater’s assets located in Australia be entrusted to Jason Lloyd Porter and Richard Moretti, registered trustees in bankruptcy under the Bankruptcy Act, as local representatives of the applicant;
(4) That all powers normally available to a trustee in bankruptcy appointed under the Bankruptcy Act be made available to Messrs Porter and Moretti;
(5) That the costs of this proceeding be costs in the bankruptcy of Mr Slater.
9 I am not presently satisfied that the Court should make the orders sought. I will make directions that will afford the applicant an opportunity to adduce further evidence in support of the application.
Model Law on cross-border insolvency
10 The Model Law is contained in Schedule 1 to the CBI Act.
11 Relevantly, and subject to the CBI Act, the Model Law applies where assistance is sought in this State by a foreign representative in connection with a foreign proceeding: article 1(a).
12 Article 2 of the Model Law contained the following relevant definitions:
(a) “Foreign proceeding” means a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation;
(b) “Foreign main proceeding” means a foreign proceeding taking place in the State where the debtor has the centre of its main interests;
…
(d) “Foreign representative” means a person or body, including one appointed on an interim basis, authorized in a foreign proceeding to administer the reorganization or the liquidation of the debtor's assets or affairs or to act as a representative of the foreign proceeding
13 Article 4 of the Model Law provides that the functions referred to in the Model Law relating to recognition of foreign proceedings and cooperation with foreign courts shall be performed by a specified court or courts or other authority. Section 10(a) of the CBI act provides relevantly that, if the functions relate to a proceeding involving a debtor who is an individual, the Federal Court of Australia is taken to be specified in article 4 as a court competent to perform the functions referred to in the Model Law relating to recognition of foreign proceedings.
14 Article 6 provides:
Nothing in this present Law prevents the court from refusing to take an action governed by the present Law if the action would be manifestly contrary to the public policy of this State.
15 Article 15 of the Model Law provides:
1. A foreign representative may apply to the court for recognition of the foreign proceeding in which the foreign representative has been appointed.
2. An application for recognition shall be accompanied by:
(a) A certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or
(b) A certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or
(c) In the absence of evidence referred to in subparagraphs (a) and (b), any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the foreign representative.
3. An application for recognition shall also be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative.
4. The court may require a translation of documents supplied in support of the application for recognition into an official language of this State.
16 Section 13 of the CBI Act provides:
In addition to the requirement in paragraph 3 of Article 15 of the Model Law (as it has the force of law in Australia) that an application for recognition be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative, the application must be accompanied by a statement identifying:
(a) all proceedings under the Bankruptcy Act 1966 in respect of the debtor; and
(b) any appointment of a receiver (within the meaning of section 416 of the Corporations Act 2001), or a controller or a managing controller (both within the meaning of section 9 of that Act), in relation to the property of the debtor; and
(c) all proceedings under Chapter 5, or section 601CL, of the Corporations Act 2001 in respect of the debtor;
that are known to the foreign representative.
17 Article 16 of the Model Law provides:
1. If the decision or certificate referred to in paragraph 2 of article 15 indicates that the foreign proceeding is a proceeding within the meaning of subparagraph (a) of article 2 and that the foreign representative is a person or body within the meaning of subparagraph (d) of article 2, the court is entitled to so presume.
2. The court is entitled to presume that documents submitted in support of the application for recognition are authentic, whether or not they have been legalized.
3. In the absence of proof to the contrary, the debtor’s registered office, or habitual residence in the case of an individual, is presumed to be the centre of the debtor’s main interests.
18 Article 17 of the Model Law provides:
1. Subject to article 6, a foreign proceeding shall be recognized if:
(a) The foreign proceeding is a proceeding within the meaning of subparagraph (a) of article 2;
(b) The foreign representative applying for recognition is a person or body within the meaning of subparagraph (d) of article 2;
(c) The application meets the requirements of paragraph 2 of article 15;
(d) The application has been submitted to the court referred to in article 4.
2. The foreign proceeding shall be recognized:
(a) As a foreign main proceeding if it is taking place in the State where the debtor has the centre of its main interests; or
(b) As a foreign non-main proceeding if the debtor has an establishment within the meaning of subparagraph (f) of article 2 in the foreign State.
3. An application for recognition of a foreign proceeding shall be decided upon at the earliest possible time.
4. The provisions of articles 15, 16, 17 and 18 do not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist.
19 Thus, if certain matters are established, the foreign proceeding must be recognised, unless recognition would be manifestly contrary to the public policy of Australia: Kapila, in the matter of Edelsten [2014] FCA 1112; (2014) 320 ALR 506 (“Re Edelsten”) at [22].
20 Rule 14.03 of the Federal Court (Bankruptcy) Rules 2016 states:
(1) An application by a foreign representative for recognition of a foreign proceeding under article 15 of the Model Law must be made by filing an application in accordance with Form B2.
(2) The application must:
(a) be accompanied by the statements mentioned in article 15 of the Model Law and in section 13 of the Cross‑Border Insolvency Act; and
(b) name the foreign representative as the applicant and the debtor as the respondent; and
(c) be accompanied by an affidavit verifying the matters mentioned in paragraphs 2 and 3 of article 15 of the Model Law and in section 13 of the Cross‑Border Insolvency Act.
(3) When filing the application, the foreign representative must file, but need not serve, an interim application seeking directions as to service, and the Court may give any directions about service, and make any incidental orders, that it thinks just.
(4) The applicant must serve a copy of the application and the other documents mentioned in subrule (2):
(a) unless the Court otherwise orders—on each respondent (if any) to the proceeding as soon as practicable after filing an application and, in any case, at least 5 days before the date fixed for hearing; and
(b) on any other persons the Court may direct at the hearing of the interim application.
(5) A person who intends to appear before the Court at the hearing of an application for recognition must file and serve the documents mentioned in rule 2.04.
21 By article 20, and subject to s 16 of the CBI Act, upon recognition of a foreign main proceeding:
(a) commencement or continuation of individual actions or individual proceedings concerning the debtor’s assets, rights, obligations or liabilities is stayed;
(b) execution against the debtor’s assets is stayed;
(c) the right to transfer, encumber or otherwise dispose of any assets of the debtor is suspended.
22 Article 21(1) of the Model Law provides, relevantly that, upon recognition of a foreign proceeding, whether main or non-main, where necessary to protect the assets of the debtor or the interests of the creditors, the court may, at the request of the foreign representative, grant any appropriate relief, including:
(e) entrusting the administration or realization of all or part of the debtor’s assets located in this State to the foreign representative or another person designated by the court;
and
(g) granting any additional relief that may be available to [a trustee in bankruptcy] under the [Bankruptcy Act].
Background Facts
23 On 1 April 2015, a “Creditor’s bankruptcy petition on failure to comply with a statutory demand for a liquidated sum payable immediately” (“bankruptcy petition”) was filed by MWP in the Croydon County Court in the United Kingdom. The petition states that Mr Slater’s centre of main interests is in England and Wales. The petition also states, relevantly:
We are presenting this petition to the Croydon County Court because: (i) the debtor is resident in the district of the Croydon County Court; (ii) the debtor made an application on 16th July 2014 in the Croydon County Court (Insolvency Case Number: 0526 of 2014) seeking to set aside the creditor’s Statutory Demand dated 26th June 2014 (“the Demand”); (iii) such application was finally dismissed with costs in favour of the creditor by Order of the Croydon County Court on 26th March 2015; (iv) the petition debt is more than £50,000; and (v) the debtor has resided within the district of the Croydon County Court during the 6 month period immediately preceding its presentation.
By an Order of Master Cook in an action in the High Court of Justice, Queen’s Bench Division having claim number FJ 147/14, various orders and judgments of the Supreme Court of New South Wales, Australia, the High Court of Australia and the Court of Appeal of the Supreme Court of the State of New South Wales, Australia were registered as a judgment in the Queen’s Bench Division of the High Court of Justice under the Foreign Judgments (Reciprocal Enforcement) Act 1933 (and pursuant to CPR Parts 23 and 74.3). Full particulars of the said Australian judgments are set out on the sheet attached to this petition. The total amounts due at the date of the Demand were US$1,245,050.26, €691,079.10 and AU$297,657.17. The sterling equivalent at the date of the Demand of all those sums was £1,597,790. The debtor was and is justly and truly indebted to the creditor in the aggregate sum of £1,597,790 as was set out in the Demand (and on which interest continues to accrue). An up-to-date calculation of the debt, showing the interest accrued and accruing, is attached as a Schedule hereto.
The above-mentioned debt is for a liquidated sum payable immediately, and the debtor appears to be unable to pay it. The debt is unsecured.
On 29th June 2014, at 18.20 hours, the Demand was served personally upon the debtor by Mr Norman Davison of A.S.H. (UK) Process Servers Limited in respect of the above-mentioned debt.
To the best of our knowledge and belief the Demand has neither been complied with nor set aside in accordance with the Rules.
As noted above, the debtor’s application to set aside the Demand was dismissed by the Croydon County Court on 26th March 2015, and the Croydon County Court expressly authorised MWP, as the creditor, to issue a bankruptcy petition against the debtor forthwith.
24 Thus, it appears that the presentation of the bankruptcy petition shortly followed the County Court’s dismissal of an application by Mr Slater to set aside a statutory demand issued by MWP against him and dated 26 June 2014.
25 On 22 December 2015, by order of Deputy District Judge Sadd, Mr Slater was made bankrupt. According to the bankruptcy order, the order was made immediately following the dismissal of an application by Mr Slater for an adjournment. The applicant’s evidence is that, pursuant to the bankruptcy order, Mr Slater’s worldwide assets and estate were sequestrated.
26 On 14 January 2016, Mr Slater signed a document entitled “Bankruptcy Preliminary Information Questionnaire Form PIQB” (“bankruptcy questionnaire”). Mr Slater listed assets including assets in Australia and including real property located in Ainslie, in the Australian Capital Territory. He also listed bank accounts in Australia and creditors in Australia. I was informed by counsel for the applicant that this document is the statement of affairs required to be provided to the official receiver pursuant to s 288 of the Insolvency Act.
Application of Model law in this case
Status-based criteria
27 These criteria are the conditions precedent specified by article 17(1) of the Model Law, namely:
(1) The UK proceeding is a “foreign proceeding” within the meaning of article 2(a);
(2) The applicant is a “foreign representative” within the meaning of article 2(d);
(3) The application has been submitted to the court referred to in article 4.
28 As to (3), the application has been submitted to the court referred to in article 4, being the Federal Court of Australia.
Is the UK proceeding a foreign proceeding?
29 The applicant’s evidence is that Mr Slater was adjudged bankrupt by an order made in the UK proceeding. Her evidence is that the order satisfied the requirements of article 15(2)(b) of the Model Law. However, article 15(2)(b) refers to a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative. The order is not such a certificate.
30 The precise nature and scope of the UK proceeding is not explained by the evidence. The relevant evidence includes:
(1) the applicant’s evidence that the bankruptcy petition was filed in the UK proceeding;
(2) the bankruptcy order made in the UK proceeding;
(3) Mr Slater’s completed questionnaire which refers to the bankruptcy “in the Croydon Country Court No 215 of 2015”; and
(4) the certificate of the applicant’s appointment as trustee of the bankrupt estate of Mr Slater which is headed “In the County Court at Croydon 215 of 2015”.
31 The applicant’s evidence is that she is administering the bankrupt estate of Mr Slater under the Insolvency Act. Section 363(1) of the Insolvency Act provides, relevantly, that every bankruptcy is under the general control of the court. By s 385(1), “the court” is defined to mean, in relation to any matter, the court to which, in accordance with s 373 in Part X and the rules, proceedings with respect to that matter are allocated or transferred.
32 Section 373 provides:
(1) The High Court and the county courts have jurisdiction throughout England and Wales for the purposes of the Parts in this Group.
(2) For the purposes of those Parts, a county court has, in addition to its ordinary jurisdiction, all the powers and jurisdiction of the High Court; and the orders of the court may be enforced accordingly in the prescribed manner.
(3) Jurisdiction for the purposes of those Parts is exercised—
(a) by the High Court [or the Central London County Court] in relation to the proceedings, which, in accordance with the rules, are allocated to the London insolvency district, and
(b) by each county court in relation to the proceedings which are so allocated to the insolvency district of that court.
33 The power of “the court” to make a bankruptcy order is conferred by s 264, which falls within “the Parts in this Group” referred to in s 373(1). Accordingly, the county courts have jurisdiction to make a bankruptcy order. That jurisdiction is exercised by each county court in relation to the proceedings which are so allocated to the insolvency district of that court.
34 Rule 3 of The Insolvency (Commencement of Proceedings) and Insolvency Rules 1986 (Amendment) Rules 2014 provides:
(1) Proceedings under Parts 7A to 11(1) of the Act that are allocated in accordance with the Insolvency Rules to the London Insolvency District when they are commenced in the county court may only be commenced in the County Court at Central London.
(2) Elsewhere such proceedings when they are commenced in the County Court may only be commenced in the county court hearing centre determined in accordance with the Rules.
(3) However if the county court hearing centre so determined is one for which Schedule 1 lists an alternative county court hearing centre then such proceedings when they are commenced in the county court may only be commenced in the alternative county court hearing centre.
35 The applicant did not identify the relevant provision or provisions of the Insolvency Rules by which the UK proceeding was required or permitted to be commenced in the County Court at Croydon.
36 In the absence of more evidence, I am not satisfied that the UK proceeding is a “foreign proceeding” within the meaning of the Model Law. As presently advised, in order to be so satisfied, I would require a certificate of the kind described in article 15(2)(b), or a document of the kind described in article 15(2)(a) if the proceeding was commenced by a “decision” within the meaning of that article, or an affidavit from the applicant which verifies that the UK proceeding is a “foreign proceeding” within the meaning of the Model Law. Such an affidavit would demonstrate that the applicant had considered and understood each element of the definition of “foreign proceeding” for the purpose of satisfying herself that the UK proceeding is a “foreign proceeding”.
Is the applicant a foreign representative?
37 The applicant’s evidence is that she is “Trustee of the Estate of David Ross Slater, a Bankrupt”. Annexed to the applicant’s affidavit is a document dated 9 February 2016 which purports to certify that the applicant “has been appointed as trustee of the bankruptcy estate of DAVID ROSS SLATER with effect from 9 February 2016”. The document is signed by S Mallon on behalf of the Secretary of State.
38 The applicant’s evidence is that upon Mr Slater’s bankruptcy, trusteeship of his estate passed to the official receiver in the United Kingdom. This evidence appears to reflect the language of s 287(1) of the Insolvency Act which provides that, “[b]etween the making of a bankruptcy order and the time at which the bankrupt’s estate vests in a trustee under Chapter IV of this Part, the official receiver is the receiver and (subject to s 370 (special manager)) the manager of the bankrupt’s estate and is under a duty to act as such.”
39 By s 296(1) of the Insolvency Act, at “any time when the official receiver is the trustee of a bankrupt’s estate by virtue of any provision of this Chapter (other than s 297(1) below) he may apply to the Secretary of State for the appointment of a person as trustee instead of the official receiver.” By s 296(2), on an “application under subs (1) the Secretary of State shall either make an appointment or decline to make one.”
40 Section 305 of the Insolvency Act sets out the general functions of a trustee of a bankrupt estate. Section 305 states relevantly:
(1) This Chapter applies in relation to any bankruptcy where either—
(a) the appointment of a person as trustee of a bankrupt’s estate takes effect, or
(b) the official receiver becomes trustee of a bankrupt’s estate.
(2) The function of the trustee is to get in, realise and distribute the bankrupt’s estate in accordance with the following provisions of this Chapter; and in the carrying out of that function and in the management of the bankrupt’s estate the trustee is entitled, subject to those provisions, to use his own discretion.
…
(4) The official name of the trustee shall be “the trustee of the estate of ............, a bankrupt” (inserting the name of the bankrupt); but he may be referred to as “the trustee in bankruptcy” of the particular bankrupt.
41 The status of “foreign representative” arises only in connection with a “foreign proceeding”. The current evidence does not explain the relationship between the UK proceeding and the applicant, however, it may be that this would be sufficiently clear, if the nature of the UK proceeding as a foreign proceeding is established. If not established in accordance with article 15(2)(a) or (b), the status of “foreign representative” might be established by an affidavit from the applicant which verifies that she is a “foreign representative” within the meaning of the Model Law. Again, such an affidavit would demonstrate that the applicant had considered and understood each element of the definition of “foreign representative” for the purpose of satisfying herself that she is a “foreign representative”.
Procedural criteria
42 The procedural conditions precedent are set out in article 17(1)(c) of the Model Law, s 13 of the CBI Act and r 14.03 of the Bankruptcy Rules.
Article 17(1)(c)
43 Article 17(1)(c) requires the application to meet the requirements of article 15(2). The article 15(2) requirements are:
(a) A certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or
(b) A certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or
(c) In the absence of evidence referred to in subparagraphs (a) and (b), any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the foreign representative.
44 The applicant tendered a certified copy of the bankruptcy order and a certificate of her appointment as trustee of the bankrupt estate of Mr Slater. These documents do not satisfy the requirements of either article 15(2)(a) or (b).
45 For the reasons explained above, the current evidence is not evidence acceptable to the court of the existence of the foreign proceeding. I accept that the certificate of the applicant’s appointment as trustee of Mr Slater’s bankrupt estate is acceptable evidence of her appointment to that position, but not of appointment as a foreign representative. At present, I do not have sufficient evidence to be satisfied that the applicant is “authorized in a foreign proceeding to administer the reorganization or the liquidation” of Mr Slater’s assets or affairs.
Section 13 CBI Act
46 Section 13 of CBI Act requires that the application must be accompanied by a statement identifying:
(a) all proceedings under the Bankruptcy Act 1966 in respect of the debtor; and
(b) any appointment of a receiver (within the meaning of section 416 of the Corporations Act 2001), or a controller or a managing controller (both within the meaning of section 9 of that Act), in relation to the property of the debtor; and
(c) all proceedings under Chapter 5, or section 601CL, of the Corporations Act 2001 in respect of the debtor;
that are known to the foreign representative.
47 Paragraph 7 of the amended application purports to be a statement pursuant to s 13 of the CBI Act. However, instead of identifying proceedings that fall within paras 13(a) to (c), the statement purports to set out all other proceedings involving Mr Slater. In fact, the statement lists a mixture of judgments, proceedings and orders as well as proceedings involving “companies of Mr Slater”. The list includes the 2014 FCCA judgment.
48 The applicant’s evidence is that “there are no separate proceedings to identify under the [Bankruptcy Act] in respect of Mr Slater, and that there is no receiver who has been appointed in respect of Mr Slater … and there are no proceedings to identify under Chapter 5”. The applicant makes no reference to s 601CL of the Corporations Act 2001 (Cth) in respect of Mr Slater. Without more, I am not satisfied that the amended application is accompanied by a statement pursuant to s 13 of the CBI Act.
Rule 14.03 of the Federal Court (Bankruptcy) Rules 2016
49 Rule 14.03(1) requires an application by a foreign representative for recognition of a foreign proceeding under article 15 of the Model Law to be made by filing an application in accordance with Form B2. The amended application did not comply strictly with Form B2. Given the ex parte nature of the application, this was a matter that should have been drawn to the Court’s attention.
50 As to r 14.03(2)(a), although the amended application purported to include a statement in accordance with article 15 of the Model Law and s 13 of the CBI Act, it did not do so. It did not identify “foreign proceedings” within the meaning of the Model Law in respect of Mr Slater. Rather, it was a list comprising judgments, proceedings and orders which obviously includes items that are not “foreign proceedings”. Nor did it clearly identify the three types of proceedings and matters that are referred to in s 13 of the CBI Act.
51 The applicant did not comply with r 14.03(3). Again, given the ex parte nature of the application, this should have been drawn to the Court’s attention. The evident purpose of r 14.03(3) is to require the Court to give consideration of whether service is required and, if so, how it should be effected.
52 There is some evidence that Mr Slater is aware of the application, in the form of an email from an email address apparently given by him in the bankruptcy questionnaire. The email acknowledges receipt of an email and attachments sent to Mr Slater by Ms Nash on Monday, 6 June 2016 at 6.46 pm. However, the contents of Ms Nash’s email are not proved. In particular, those contents are not proved by Ms Lonnon’s affidavit because it does not state that she effected service by an email sent from Ms Nash.
Recognition of the UK proceeding as a foreign proceeding and a foreign main proceeding
53 There is nothing to suggest that article 6 applies to this case.
54 In Re Edelsten at [39], Beach J recognised that the question is where the debtor has the centre of his main interests at the time of the Court’s decision.
55 At [40], Beach J noted that there is no express definition in the Model Law of “centre of main interests” but article 16 contains a rebuttable presumption based upon the debtor’s habitual residence.
56 In his bankruptcy questionnaire, Mr Slater gave his home address as an address in the United Kingdom. The applicant gave evidence that this is where Mr Slater is currently residing. The bankruptcy petition states that the debtor resided within the district of the Croydon County Court during the six month period immediately preceding its presentation. The bankruptcy order refers to an address in Kent as Mr Slater’s residential address. There is no evidence to suggest that Mr Slater resides at the Ainslie property, which is the only real property identified as an asset of Mr Slater in his bankruptcy questionnaire. I infer from this evidence, on the balance of probabilities, that Mr Slater’s habitual residence in the United Kingdom.
57 Accordingly, on the available evidence, I would accept, if the UK proceeding is a foreign proceeding, then it is taking place in the State where Mr Slater has the centre of his main interests, being the United Kingdom.
Article 21 relief
58 The applicant seeks an order pursuant to article 21(1)(e) of the Model Law, entrusting administration and realisation of Mr Slater’s assets located in Australia to Mr Porter and Mr Moretti as local representatives of the applicant. A similar order was made by Beach J in Re Edelsten. Messrs Porter and Moretti have signed a Trustee Consent to Act declaration, by which they consent to act as the Australian representative appointed under the Model Law by Court order for the applicant.
59 The bankruptcy questionnaire indicates that there are assets of the bankrupt estate which are required to be administered or realised. Accordingly, I accept that the proposed order is necessary to protect the assets of Mr Slater and I would be prepared to grant this relief, provided that I am satisfied that the Model Law applies.
60 The applicant also seeks an order pursuant to article 21(1)(g) of the Model Law, subject to the provisions of the Bankruptcy Act, that all powers normally available to a trustee in bankruptcy appointed under the provisions of the Bankruptcy Act be made available to Mr Porter and Mr Moretti as local representatives of the applicant.
61 The applicant gave the following evidence:
17(c) [T]here are matters within Australia involving the financial dealings of Mr Slater after the commencement of proceedings against him by BWP which necessitate investigation in what I would describe in the sense of the BA as the “examinable affairs”. s. 5 BA, of Mr Slater upon which I may need to report or take steps following investigation to bring action for recovery, including in particular, but not limited to:
(i) Australian creditors, including MWP;
(ii) Bank and trust accounts, invoices and financial books and records howsoever relating to the litigation referred to in paragraph 12 above, as well as the terms of engagement, sources of payment and origin and propriety of funds paid, or promised to be paid to professional advisors and others, howsoever relating to. acting in or involved in such litigation;
(iii) any choses in actions, claims, debtors, trust. client or other monies or assets of the bankrupt in Australia, whether held directly or indirectly, including nominees and designates;
(iv) investigation of land, buildings, bank accounts, trust funds, property and all and any other assets howsoever acquired in the names of the bankrupts de-facto partner, Alexandra Sofia Neovius, and her mother Gunborg Neovius-Howe at 51 Bannerman Crescent, Rosebery, Mascot, NSW 2018, and comprising Lot 25, Detailed Plan 237387, or elsewhere, in which the bankrupt may have an interest. Annexed hereto and marked JAP-5 are true copies of documents relating to such property;
(v) shares, options, warrants and other interests howsoever held, and whether directly or indirectly, including without limitation in the PJT Group, comprising all of PJT International Pty., Limited (acting both in its own right and as Trustee of the Temujin Trust), PJT Corporate Services Pty Limited, the FOF Group, comprising all of FOF International Pty., Limited (acting in its own right and as Trustee of the FOF Trust) and FOF Consulting Services Pty., Limited, as well as all and any bank and credit card accounts and other assets and liabilities of all such entities. Annexed hereto and marked JAP-6 are true copies of ASIC searches relating to such companies;
(vi) all dealings with Ms Debra Marie Lighezzolo, the current nominee director and shareholder of the bankrupt in the PJT and FOF Groups, as well as her predecessors Messrs Weir, Pearson and Cole, and who also acted for him in relation to the formation of Lynus Develop. Co., Ltd and the Fencourt Foundation as found by the NSW Supreme Court and admitted by all of the defendants in the proceedings and judgments referred to above;
(vii) furniture and an art collection apparently held in a Grace Bros. storage unit in Australia;
(viii) superannuation, pension, income protection, life and other insurance policies and for other benefits; and
(ix) all documents relating to and dealings with, or involving Messrs Rothwell lawyers, T. P. Rothwell, Effective Recoveries Pty., Ltd, J. F. Emmott and their affiliates, nominees and designates.
62 This evidence does not demonstrate that the proposed order is “necessary to protect the assets of the debtor or the interests of the creditors”. In order to be satisfied of that matter, I would need evidence from the applicant that she holds the opinion, on reasonable grounds, that the proposed order is necessary to protect the interests of creditors of Mr Slater.
Conclusion
63 I will grant leave to the applicant to file a further amended application and any further evidence upon which she may seek to rely on or before Monday 11 July 2016, or such later date as the applicant may reasonably require.
64 I will direct the applicant to:
(a) serve any such further amended application and any further evidence, together with a copy of her affidavit of 28 June 2016 and a copy of these reasons, on Mr Slater by email to the email address nominated in his bankruptcy questionnaire;
(b) file an affidavit of service on or before Monday 11 July 2016.
65 I will otherwise reserve my decision on the amended application.
I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. |
Associate:
