FEDERAL COURT OF AUSTRALIA

Palmer (Trustee), in the matter of Slater (Bankrupt) (No 2) [2016] FCA 960

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 6 of the Cross Border Insolvency Act 2008 (Cth) (“Act”), article 15 and cl 1 of article 17 of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (“Model Law”) and r 14.03 of the Federal Court (Bankruptcy) Rules 2005 (Cth), the administration of the estate of David Ross Slater, a bankrupt, by the applicant pursuant to proceeding 0215 of 2015 in the Croydon County Court in the United Kingdom (“UK proceeding”) be recognised as a foreign proceeding within the meaning of article 2(a) of the Model Law within Australia.

2.    Pursuant to s 6 of the Act and cl 2(a) of article 17 of the Model Law, the UK proceeding be recognised as a foreign main proceeding within the meaning of article 2(c) of the Model Law within Australia.

3.    Pursuant to s 6 and article 21(1)(e) of the Model Law, the administration and realisation of all of the assets of David Ross Slater located in Australia be entrusted to Jason Lloyd Porter and Richard Moretti of SV Partners Insolvency (NSW) Pty Ltd, of Level 7, 151 Castlereagh Street, Sydney in the state of New South Wales, as the local representatives of the applicant (“Australian representatives”).

4.    Pursuant to s 6 of the Act and article 21(1)(g) of the Model Law, subject to the provisions of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”), all powers normally available to a trustee in bankruptcy appointed under the provisions of the Bankruptcy Act be made available to the Australian representatives.

5.    The costs of this proceeding be costs in and of the bankruptcy of Mr Slater and accorded the same priority as costs of proceedings incurred by a trustee in bankruptcy appointed under the Bankruptcy Act.

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

REASONS FOR JUDGMENT

GLEESON J:

1    This is an application for recognition of a foreign proceeding pursuant to the Cross-Border Insolvency Act 2008 (Cth) (“CBI Act”).

2    These reasons should be read with the reasons delivered on 4 July 2016: Palmer (Trustee), in the matter of Slater (Bankrupt) [2016] FCA 780. The abbreviations used in the earlier reasons are used in these reasons.

3    On 25 July 2016, the applicant filed a further amended application, amending the statements made to satisfy the requirements of article 15 of the Model Law and s 13 of the CBI Act.

4    On 25 July 2016, the applicant filed a “Consent to act as designated person” signed by Jason Lloyd Porter and Richard Moretti. The consent is “to be appointed by the Court and to act as the persons designated by the Court under article 19 or 21 of the Model Law to administer or realise all or part of the assets of David Ross Slater, or under article 21 to distribute all or part of the assets of David Ross Slater.” The consent document includes a statement that Messrs Porter and Moretti are “not aware of any conflict of interest or duty that would make it improper” for either of them to act as the persons designated by the Court.

5    The following additional affidavits were filed in support of the application:

(1)    Applicant’s affidavit sworn 22 July 2016;

(2)    Three affidavits of Christie Lonnon, two sworn 25 July 2016 and one sworn 27 July 2016.

Service of additional materials on Mr Slater

6    I am satisfied that the further amended application and materials relied on by the applicant in support of the application have been provided to Mr Slater. On 25 July 2016, Mr Slater wrote to the applicant’s solicitor, stating, relevantly:

My acknowledgement [of receipt of documents] is on the basis that you bring to the Court’s attention that the appointment of the proposed trustees represents a significant conflict of interest in that the proposed trustees are partners or employees in the same firm whose partners or employees act as trustees of the estate of Robert Colin Nicholls, a defendant in the NSW Proceedings and whose assets my estate has various claims against, including contribution.

On receipt of material from your previous email which I was required to acknowledge I brought this to the attention of my trustee in bankruptcy here in the United Kingdom.

Consideration

7    Based on the applicant’s further evidence, I am satisfied that:

(1)    The UK proceeding is a foreign proceeding within the meaning of article 2 of the Model Law;

(2)    The applicant is a duly appointed foreign representative within the meaning of article 2 of the Model Law.

8    The further amended application is accompanied by a statement that satisfies the requirements of article 15(3) of the Model Law and s 13 of the CBI Act.

9    Accordingly, article 17(1) of the Model Law requires that the UK proceeding be recognised as a foreign proceeding, subject to article 6. By article 17(2)(a), based on the finding in the earlier reasons at [57], the UK proceeding is required to be recognised as a foreign main proceeding, subject to article 6.

10    Article 6 of the Model Law 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.

11    I have considered whether Mr Slater’s statement set out above raises any issue under article 6. There is no other matter that might require the application of article 6.

12    In the absence of evidence and more explanation of the conflict of interest asserted by Mr Slater, I am not satisfied that the facts identified by him give rise to a conflict of interest in the event that Messrs Porter and Moretti are appointed as Australian representatives of the applicant. Accordingly, I am satisfied that I should not refuse to make orders of the kind sought on the ground that to do so would be manifestly contrary to the public policy of Australia.

Relief

13    In the earlier reasons, at [59], I accepted that the order proposed pursuant to article 21(1)(e) of the Model Law is necessary to protect the assets of Mr Slater.

14    Based on the further evidence of the applicant, I am satisfied that the proposed order pursuant to article 21(1)(g) of the Model Law is in the interests of creditors.

15    Accordingly, I will grant the relief sought.

Associate:    

Dated:    16 August 2016