Federal Court of Australia

Yit (Trustee), in the matter of Lee (Bankrupt) v Lee [2021] FCA 886

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding in the High Court of the Republic of Singapore styled “In the matter of Jannie Chan Siew Lee (NRIC No. S2176035H)” with High Court of Singapore case number HC/B 2648/2018 (the Foreign Proceeding), in relation to Jannie Chan Siew Lee be recognised as a foreign proceeding in relation to Jannie Chan Siew Lee as bankrupt pursuant to Art 17(1) of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (the Model Law) and s 6 of the Cross-Border Insolvency Act 2008 (Cth).

2.    The Foreign Proceeding be recognised as a foreign main proceeding pursuant to Art 17(2) of the Model Law.

3.    The administration, realisation and distribution of the respondent’s assets located in Australia be entrusted to the applicant pursuant to Art 21(1)(e) of the Model Law.

4.    All powers normally available to a trustee in bankruptcy appointed under the provisions of the Bankruptcy Act 1966 (Cth) be made available to the applicant pursuant to Art 21(1)(g) of the Model Law.

5.    The respondent’s right, title to and interest in the property situate at 6 Tay Court, Helensvale, in the State of Queensland, more particularly described as Title Reference 50136777, Lot 621 on Registered Plan 895611 be vested in the applicant as Registered Owner of an Estate in Fee Simple pursuant to Art 21(1) of the Model Law.

6.    There be liberty to apply upon 5 business days’ written notice.

7.    The applicant’s costs of and incidental to this proceeding be costs in the bankruptcy of the respondent.

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

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    Mr Yit Chee Wah is the trustee in bankruptcy of the respondent, Ms Jannie Chan Siew Lee, who was made bankrupt in Singapore by orders of the High Court of the Republic of Singapore (Case No. HC/B 2648/2018) on 27 May 2019 (the Singapore Proceeding). Mr Yit seeks orders from this Court recognising that proceeding as a “foreign main proceeding” in this country pursuant to r 14.03 of the Federal Court (Bankruptcy) Rules 2016 (Cth) (the Bankruptcy Rules), s 6 of the Cross-Border Insolvency Act 2008 (Cth) (the CBI Act) and Art 17 of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (the Model Law). He also seeks certain ancillary relief pursuant to Art 21 of the Model Law, contingent upon recognition of the Singapore Proceeding.

2    Following the filing of this application, Mr Yit applied for directions as to the service of the proceedings on Ms Lee. That application was heard on 14 June 2021 and orders were made that the bankrupt be served by email. The evidence now before the Court demonstrates that service was effected in accordance with those directions and, indeed, the bankrupt has subsequently corresponded with the trustee by email and indicated her receipt of the application and supporting documents. It follows that the Court can accept that the necessary service has occurred, that the bankrupt is aware of these proceedings, and that the trustee is entitled to make this application. It may also be noted that the bankrupt did not indicate in that correspondence that she opposed the orders sought in the present proceedings.

Background

3    Although the original bankruptcy order was made in the Singapore Proceeding on 27 May 2019, it was only on 9 June 2020 that the applicant was appointed as the private trustee of the bankrupt’s bankrupt estate. The effect in Singapore of the initial bankruptcy order and the subsequent order appointing Mr Yit as trustee was to vest all of the bankrupt’s property, whether inside or outside of Singapore, in him: see ss 23, 36, 39 and 327 of the Insolvency, Restructuring and Dissolution Act 2018 (SG) (the IRD Act).

4    It appears that the administration of the bankrupt estate is not greatly advanced. On present indications, the claims of creditors total approximately SGD 50 million and the value of the assets recovered to date is a little over SGD 5 million.

5    In the course of his administration of the bankruptcy, Mr Yit has become aware of the existence of property at 6 Tay Court, Helensvale, Queensland, more particularly described as Title Reference 50136777, Lot 621 on Registered Plan 895611 (the Helensvale Property). That property is co-owned by the bankrupt and two other persons. The trustee wishes to sell the bankrupt’s interest in it for the purpose of meeting the demands of her creditors. The present application is made to further that outcome.

Legislative background

6    The Model Law operates in Australia by reason of s 6 of the CBI Act. It has the force of law here as if it referred to, inter alia, the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) wherever it refers to “the law of the enacting State relating to insolvency”: CBI Act, s 8.

7    This Court is competent to perform the functions referred to in the Model Law relating to the recognition of foreign proceedings and cooperation with foreign courts: CBI Act, s 10. The jurisdiction of this Court to deal with the application is undoubted.

8    The provisions of the Model Law and the CBI Act relevant to applications such as the present were identified succinctly in Wong (Trustee), in the matter of Mackellar (Bankrupt) v Mackellar [2020] FCA 1151 [16] – [28] (Mackellar). I adopt that summary for the purposes of these reasons and set it out as follows:

16    By Art 1(a) of the Model Law it has application where assistance is sought in Australia by a foreign court or a foreign representative in connection with a foreign proceeding. Some of the terms used in Art 1(a) are defined by Art 2 as follows:

(a)    Art 2(a) defines “foreign proceeding” in the following terms:

(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)     Art 2(d) defines a Foreign Representative as follows:

(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.

17    Article 2 also provides definitions for other important terms:

  (a)    A “foreign main proceeding” is defined as:

“Foreign main proceeding” means a foreign proceeding taking place in the State where the debtor has the centre of its main interests;

(b)    The expression “foreign non-main proceeding” is identified as follows:

“Foreign non-main proceeding” means a foreign proceeding, other than a foreign main proceeding, taking place in a State where the debtor has an establishment within the meaning of subparagraph (f) of the present article.

18    The effect of Art 4, together with s 10 of the Act, is that the functions referred to in the Model Law relating to the recognition of foreign judgments and cooperation with foreign courts shall be performed by the Federal Court where the proceedings involve a debtor who is an individual.

19    Article 6 of the Model Law creates a public policy exemption to the obligation of a court to take action in relation to a matter arising under it. It provides:

Public policy exception

Nothing in the 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.

20    Article 15 of the Model Law makes provision for a foreign representative to apply for recognition of the foreign proceedings as follows:

Application for recognition of a foreign proceeding

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.

21    Section 13 of the CBI Act imposes additional requirements on the making of an application for recognition:

13     Application for recognition of foreign proceeding

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 of the Corporations Act 2001, section 601CL of that Act or Schedule 2 to that Act, in respect of the debtor;

that are known to the foreign representative.

22    Article 16 of the Model Law is a facilitative provision which assists in the proof of the matters required to be established under Art 15:

Presumptions concerning recognition

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.

23    The circumstances in which a foreign proceedings will be recognised are identified in Art 17:

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.

24    The expression “establishment” in Art 17 is defined by Art 2(f) as being:

(f) “Establishment” means any place of operations where the debtor carries out a non-transitory economic activity with human means and goods or services.

25    The effect of the above articles and provisions of the CBI Act is that if the prescriptive requirements are satisfied the foreign proceedings must be recognised by the court unless such recognition would be manifestly contrary to the public policy of Australia: Kapila, in the matter of Edelsten (2014) 320 ALR 506, 511 [22] (Re Edelsten).

26    The effect of the recognition of a foreign proceeding is stated by Art 20(1) which provides:

Effects of recognition of a foreign main proceeding

1.     Upon recognition of a foreign proceeding that is 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.

27    Article 21 grants power to the court to accord the foreign representative additional relief:

Relief that may be granted upon recognition of a foreign proceeding

1.    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:

…

(d)     Providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor’s assets, affairs, rights, obligations or liabilities;

(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;

28    Additional procedural requirements on the making of an application for recognition are imposed by r 14.03 of the Federal Court (Bankruptcy) Rules 2016 (Cth) (Federal Court Bankruptcy Rules) which provide:

(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.

9    It is also undoubted that Singapore is, for the purposes of s 29(5)(b) of the Bankruptcy Act, a prescribed country: see Bankruptcy Regulations 2021 (Cth), reg 7(d). Furthermore, the Singaporean High Court is a court of that country which has jurisdiction in bankruptcy: s 3 of the IRD Act; and, accordingly, the Singapore Proceeding in that court is a proceeding in respect of which orders may be made under s 29(2) of the Bankruptcy Act.

Should the Singapore Proceeding be recognised as a foreign proceeding?

10    A “foreign proceeding” must be recognised if the criteria set out in Art 17(1) of the Model Law are established. Those criteria have been recognising as falling within two broad categories: status-based criteria and procedural criteria: Hung (Trustee), in the matter of Farouk v Farouk (No 2) [2021] FCA 270 (Farouk (No 2)) [9]; Official Assignee in Bankruptcy of the Property of McCormick v McCormick [2018] FCA 410 [8] – [9] (McCormick).

11    The status-based criteria are:

(a)    the relevant proceeding must be a “foreign proceeding” within the meaning of Art 2(a) and Art 17(1) of the Model Law;

(b)    the applicant must be a “foreign representative” within the meaning of Art 2(d) and Art 17(1); and

(c)    the application must be made to a court designated for the purposes of Art 4.

12    The procedural criteria are:

(a)    the application must be made in compliance with paragraphs (2) and (3) of Art 15 of the Model Law; and

(b)    there must be compliance with s 13 of the CBI Act.

13    There must also be compliance with the applicable requirements of the Bankruptcy Rules concerning applications for recognition: see rr 14.03, 14.05, 14.06.

Fulfilment of the status-based criteria

14    The Singapore Proceeding is a “foreign proceeding” within Art 2(a) of the Model Law because it is a judicial or administrative proceeding in that jurisdiction pursuant to the IRD Act, being a law of Singapore relating, inter alia, to personal insolvency. In that proceeding, the assets and affairs of the bankrupt are subject to the control of a licensed accountancy practitioner, under the supervision of the Singaporean High Court, for the purpose of the reorganisation or liquidation of that estate.

15    As to the second status-based criteria, Mr Yit is a “foreign representative” within the meaning of Art 2(d) of the Model Law: he is authorised and is given broad powers to investigate the conduct and the affairs of the bankrupt under the IRD Act. He is also entitled to recover and realise her assets for the distribution to creditors.

16    Finally, as was referred to above, this Court has been designated for the purposes of Art 4 of the Model Law: CBI Act, s 10. Here, the Singapore Proceeding involves a debtor who is an individual: s 10(a). Accordingly, the trustee’s application is properly made to this Court.

Fulfilment of the procedural criteria

17    Mr Yit has also satisfied the procedural criteria required on an application of the present nature.

18    Article 15(2) of the Model Law requires an application for recognition to be accompanied by a certified copy of the decision commencing the foreign proceedings and appointing the foreign representative. Here, Mr Yit has produced as annexures to his affidavit sealed copies of the relevant bankruptcy order made by the Singaporean High Court on 27 May 2019 and the further order of 9 June 2020 appointing him as trustee of the bankrupt estate of the bankrupt. The evidence adduced by Mr Yit as to the existence of the foreign proceedings and his appointment as trustee in bankruptcy is acceptable to the Court.

19    Furthermore, Mr Yit has satisfied the requirements of Art 15(3) (as modified by s 13 of the CBI Act) by:

(a)    deposing that, to the best of his knowledge and belief, there are no other foreign proceedings in respect of the bankrupt and nor is the bankrupt currently the subject of any other known bankruptcy proceedings of any kind in Australia; and

(b)    causing his solicitors to depose that they have carried out electronic searches of the bankrupt on the Federal Law Courts search webpage, the AFSA National Bankruptcy database and the Queensland Courts webpage and identified that none of those searches have disclosed either any bankruptcy proceedings concerning the bankrupt or any court proceedings in the federal courts or in the Supreme Court or District Court of Queensland.

20    Unless dispensed with, there must also be compliance with the requirements of the Bankruptcy Rules. Under r 14.03(2), an application for recognition must be accompanied by an affidavit verifying the matters in paragraphs 2 and 3 of Art 15 and s 13 of the CBI Act. Here, the matters referred to above have been verified on oath by the affidavits filed in support of the application, thereby satisfying the procedural requirements of that rule. Rule 14.06 also requires notice be given of the filing of the application to each person claiming to be a creditor of the bankrupt (who is known to the applicant) and the publication of a notice of the application. In this regard, orders were made on 14 June 2021 for Mr Yit to undertake those steps and the Court is satisfied that the appropriate notices were given and notice of the proceedings published.

Recognition of the Singapore Proceeding as a foreign proceeding

21    In light of the satisfaction of the status-based and procedural criteria, Mr Yit has established that the Singapore Proceeding should be recognised as a “foreign proceeding”.

Should the Singapore Proceeding be recognised as a foreign main proceeding?

22    Pursuant to Art 17(2) of the Model Law, the Singapore Proceeding should be recognised as a “foreign main proceeding” if Singapore is where the bankrupt has her “centre of main interest”.

23    In the case of an individual, Art 16(3) provides that an individual’s habitual residence is presumed to be their centre of main interest in the absence of proof to the contrary.

Habitual residence

24    There is no need to reconsider here the concept of a person’s “habitual residence”. In Mackellar, the following useful discussion appears (at [50] – [54]):

50    In Re Edelsten Beach J discussed the concept of “habitual residence” in the following terms:

46    The concept “habitual residence” has been used in many international conventions and other instruments. To treat it as presenting just a question of fact is attractive, but wrong. First, its use and content must be read in the light of the specific convention being considered and its context. Second, objective criteria derived from or implicit in such a context may need to be identified so that the conclusionary composite phrase can be applied to the facts. Third, the composite phrase may usefully be divided in the first instance, although ultimately the whole phrase must be construed and applied. Where does the insolvent reside? A wide variety of circumstances may bear upon that question. Is that residence habitual? Again, a wide variety of circumstances may bear upon that question. Past and present intentions of the insolvent may bear on such questions. Such intentions may manifest themselves in terms of the duration of connection or residence with a particular place. But intention is not to be given controlling weight (see LK v Director-General, Department of Community Services (2009) 237 CLR 582 (LK) at [28]). Moreover, an insolvent’s intentions may be ambiguous.

51    His Honour also correctly observed that a person may not have any habitual residence in the sense that they lead a nomadic or peripatetic lifestyle. Similarly, a person may own more than one residential home between which they regularly move such that, whilst they usually reside in a home which they own, none of them can be said to be their habitual residence. However, conversely, a person may have a habitual residence but, given their profession or employment they be rarely found to be located there. The modalities of modern life are such that there are now many people whose home or permanent residence is in one country, yet they are absent for extended periods in another where they undertake employment.

52    The concept of the expression “habitual residence” in the context of cross-border insolvencies was recently considered by O’Callaghan J in Jong (Trustee) v Au, in the matter of Au [2020] FCA 585 (Jong v Au). His Honour noted that the concept is regularly used in international conventions and is repeatedly identified as a notion of fact rather than one of law. His Honour also referred to the elucidation of the concept by the High Court in LK v Director-General, Department of Community Services (2009) 237 CLR 582, 592 – 593 [22] – [25] (LK) where the Court observed that it is a composite phrase which refers to where a person resides and does so habitually. The High Court identified that in ascertaining where a person habitually resides a Court can consider “a wide variety of circumstances that bear upon where a person is said to reside and whether that residence is to be described as habitual”. It also noted that a person’s “past and present intentions will often bear upon the significance that is to be attached to particular circumstances such as the duration of a person’s connections with a particular place of residence”. Speaking in general terms the High Court said at 593 [25]:

Yet it may be accepted that ‘[h]abitual residence, consistent with the purpose of its use, identifies the center of a person’s personal and family life as disclosed by the facts of the individual’s activities’. Accordingly, it is unlikely, although it is not necessary to exclude the possibility, that a person will be found to be habitually resident in more than one place at the one time. But even if place of habitual residence is necessarily singular, that does not entail that a person must always be so connected with one place that it is to be identified as that person’s place of habitual residence. So, for example, a person may abandon a place as the place of that person’s habitual residence without at once becoming habitually resident in some other place; a person may lead such a nomadic life as not to have a place of habitual residence.

(citations omitted)

53    Although the decision in LK concerned the interpretation and operation of the Convention on the Civil Aspects of International Child Abduction, its application to the meaning of the concept of “habitual residence” in the Model Law has been accepted: Gainsford v Tannenbaum (2012) 216 FCR 543 at 554 [42]; Jong v Au [41].

54    Here it might possibly be discerned that Mr Mackellar presently resides in Australia. However, there is no evidence as to the duration of his residency, the permanence or otherwise of it, his modality of living or of his intentions. The reality is that all that is known is that he is physically located here at the present time and that he probably will not depart in the near future given the current pandemic. His directorship of a company called “Mackellar Industries Pty Ltd” adds very little to the issue. In these circumstances, it is not possible to find that he is “habitually resident” here with the result that the presumption in Art 16(3) is of no application in this matter.

25    Here, it can be readily concluded that the bankrupt’s habitual residence is in Singapore. The evidence establishes that she resides at the address from which she sends her correspondence, being #01-04, 15 Nassim Road, Nassim Park Residences, Singapore 258386. There is nothing to suggest that she has spent any significant amount of time outside of Singapore since the commencement of her bankruptcy. Further, apart from the land at Helensvale which the trustee seeks to recover and sell, there is nothing to suggest that the bankrupt does business in Australia or resides here for any length of time.

26    On this basis, the Court can accept that the bankrupt’s habitual residence is in Singapore.

Centre of main interest based on business activities

27    In the alternative, it was submitted on behalf of Mr Yit that the bankrupt’s centre of main interest is in Singapore. For present purposes, it can be accepted that whether that is so is to be determined as at the occasion on which the issue is to be decided, being on the hearing of the application: Mackellar [40] – [41]. Nevertheless, it must be kept in mind that, in applications of this nature, the respondent bankrupt will necessarily have ceased conducting any substantial business: Farouk (No 2) [22]. No doubt, that will have been within the contemplation of the drafters of the Model Law. It necessarily follows that, although the bankrupt may remain involved in activities in a foreign jurisdiction in the sense that their affairs had been administered, their actual day-to-day involvement may be limited. This is a contextual matter in the light of which the issue of the bankrupt’s centre of main interest needs to be ascertained.

28    In ascertaining where a debtor’s centre of main interest is located, it is necessary to reference criteria which are both objective and ascertainable by third parties. This is to ensure legal certainty and foreseeability in relation to the determination of a court with jurisdiction to open main insolvency proceedings: Akers v Saad Investment Company Ltd (in liquidation) (2010) 190 FCR 285 at 295 – 296 [49] following Re Eurofood IFSC Ltd [2006] Ch 508 [33] – [34].

29    The evidence before the Court adduced by Mr Yit supports the conclusion that the bankrupt’s centre of main interest is in Singapore. The following matters are particularly significant:

(a)    the applicant deposes that the bankrupt is, and has at all times relevant to this proceeding been, a citizen and habitual resident of Singapore;

(b)    the trustee has sent correspondence to the bankrupt’s residential address in Singapore which has been received and responded to by the bankrupt;

(c)    it appears that the bankrupt resides in Singapore at the address identified which appears to be her habitual residence;

(d)    the respondent was made bankrupt in Singapore by an order of the Singaporean High Court and the administration of her estate and business affairs is being conducted there;

(e)    the bankrupt previously carried on business in Singapore and has previously been a director of companies registered there which strongly suggests that her main business activities were carried in that country;

(f)    the bankrupt was served with the originating application and associated documentation in Singapore and, by correspondence on 25 June 2021, stated that she had retained a lawyer in relation to these matters who is based and practises in Singapore (although this lawyer subsequently denied having been retained); and

(g)    the material before the Court listing the proofs of debt obtained to date in the bankruptcy indicate that many of the bankrupt’s creditors are located in Singapore.

30    It follows that the objective and ascertainable facts which are available to third parties and which are relevant to the bankrupt’s connection to Singapore establish that her centre of main interest is in Singapore.

31    It is appropriate to observe that the bankrupt was served with the current proceedings, that she had apparently retained solicitors, and that she has not sought to oppose the making of the orders or adduce evidence which suggests that either her habitual residence or her centre of main interest is other than in Singapore.

32    The only conclusion open to the Court is that the bankrupt’s centre of main interest is in Singapore. That follows from the conclusion that her habitual residence is in Singapore and from a factual analysis of the objective and ascertainable facts concerning that topic.

Recognition of Singapore Proceeding as a main foreign proceeding

33    The necessary consequence is that the Court is satisfied that the Singapore Proceeding should be recognised as a “foreign main proceeding” under Art 17(2)(a) of the Model Law. Pursuant to Art 20 (as modified s 16 of the CBI Act), the effect of such recognition is that:

(a)    subject to Art 20(3) and (4), the commencement or continuation of individual actions or proceedings concerning the bankrupt’s assets, rights, obligations or liabilities in Australia are stayed, as is any execution against her assets in Australia; and

(b)    the right to transfer, encumber or otherwise dispose of any assets of the bankrupt in Australia is suspended.

Ancillary relief under Art 21

34    Mr Yit seeks additional or ancillary relief under Art 21 of the Model Law to place him in a position whereby he is entrusted with the administration, realisation and distribution of the bankrupt’s assets in Australia and is provided with all of the powers normally available to a trustee in bankruptcy appointed under the Bankruptcy Act. He also seeks to have the bankrupt’s interest in the Helensvale Property vested in him as the registered owner.

35    Article 21 of the Model Law makes provision, upon recognition of a foreign proceeding, for the making of appropriate orders necessary to protect the assets of a debtor or the interests of creditors. The power is wide and includes relief staying the commencement or continuation of proceedings or other enforcement actions not otherwise caught by the stay and restrictions imposed by Art 20, entrusting the administration or realisation of any part of the debtor’s assets located in Australia to the foreign trustee in bankruptcy, and granting any additional relief as may be available to a registered liquidator under the Bankruptcy Act. The powers identified in Art 21 are not intended to be exhaustive of the ability of the Court to grant further relief in the assistance of foreign trustees.

36    There is no doubt that the Court is empowered to make orders for the further relief sought by the foreign trustee at this hearing. That is so even though a subsequent application might be made. In McCormick, Rangiah J stated (at [38]):

Under s 11 of the Act, Art 21(1)(g) of the Model Law allows the Court to grant any additional relief that may be available to a trustee under the Bankruptcy Act. It is appropriate to grant the relief described in subparas (a) and (b) of [36] above. If this were an Australian bankruptcy, vesting of the bankrupt’s property would automatically occur under s 58 of the Bankruptcy Act and no further order would be needed for title to the property to be transferred to the trustee. It is also appropriate to grant the relief set out in subpara (c) of [36] above.

37    That approach was followed by Jagot J in Christie (Trustee), in the matter of Kian (Bankrupt) v Kian [2019] FCA 1141 [12].

38    In the circumstances of the present case, the relief sought by the trustee ought to be granted. As observed by Rangiah J, if the existing bankruptcy were an Australian bankruptcy, the vesting of the bankrupt’s property in the trustee would occur automatically under s 58 of the Bankruptcy Act and no further order would be required. There is also no suggestion that the interests of the bankrupt or of the creditors of her bankrupt estate, including those in Australia or in Singapore, would be adversely effected by the making of the orders sought. Further, it appears that there are a number of charges over the property at Tay Court and that, to some degree, prevents the proceeds of the sale of the property from being dispersed until those interests are appropriately considered.

39    It is appropriate to recall that the import of the CBI Act and the Model Law is that Australian courts should act in aid of foreign bankruptcy courts in order to facilitate the swift and efficacious administration of bankrupt estates. The orders sought by the trustee will assist in achieving that outcome.

40    Finally, pursuant to r 14.07 of the Bankruptcy Rules, if the relief sought by trustee is granted, he is required to, as soon as practicable:

(a)    have the order entered;

(b)    serve a copy of these orders on the respondent at the email address jannie.tay@elgroup.com;

(c)    within seven days, send a notice of the making of these orders in accordance with Form B21 under the Bankruptcy Rules to each person whose claim to be a creditor of the bankrupt is known to the trustee; and

(d)    within 14 days, publish a notice of the making of these orders in accordance with Form B21 under the Bankruptcy Rules in The Straits Times.

41    This further protects the interests of all creditors.

42    The trustee has established that it is appropriate to make orders conferring upon him the additional powers which he seeks.

Costs

43    The trustee asks for an order that the respondent pay his costs of the application. There is good reason why that should occur. Although the application was not opposed, it was necessitated by the bankrupt’s insolvency and her failure to comply with the requirements of Singaporean insolvency laws. It is appropriate that such an order be made.

44    Further, the trustee’s costs of the application ought to be his costs in the bankruptcy so as to be accorded appropriate priority as would be the position for any trustee appointed under the Bankruptcy Act.

Associate:

Dated:    2 August 2021