Radich V Bank of New Zealand

Radich v Bank of New Zealand, FCAFC, 10 September 1993 (1993)
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
FCAFC, 10 September 1993

Federal Court of Australia Full Court
Radich v Bank of New Zealand
Einfeld J, Foster J, Drummond J
Digest (4)
[1] Bankruptcy Courts acting in aid

Immovables — Enabling control by foreign trustee — Court's discretion
R lived in New Zealand until 1988 when he moved to Australia. In 1990 a New Zealand court gave judgment
in favour of the petitioning creditor for a debt owed by R. The judgment was registered in the Supreme Court of
Queensland. In 1991, R was made bankrupt by an order of the New Zealand court. Subsequently, the petitioning
creditor sought a further sequestration order, based on the same debt, from the Federal Court. A sequestration order
was made. Held: (allowing the appeal)
(1) The Australian court could act in aid of the foreign bankruptcy court under the Bankruptcy Act 1966
(Cth), s 29, to effectively put the foreign trustee in control of the bankrupt's immovables, even though
the foreign trustee's title to the immovables might not be recognised.
(2) The exercise by the trial judge of his discretion under s 29 of the Act had miscarried. R had shown
sufficient cause why a sequestration order should not be made.
2 Cases that cite this case on this point of law
[2] Bankruptcy Title of trustee

Bankrupt becoming domiciled in Australia — After-acquired property
was made. Held: (allowing an appeal)
(1) Hall v Woolf (1908) 7 CLR 207 does not go beyond denying to the foreign trustee recognition of
his title under the foreign bankruptcy laws to the bankrupt's movables in Australia acquired after the
bankrupt has ceased to be domiciled in the foreign country. Hall v Woolf is not determinative of the
question whether there is sufficient cause within the Bankruptcy Act 1966 (Cth), s 52(2)(b), to refuse to
make a sequestration order in Australia against a debtor already subject to a New Zealand bankruptcy,
merely because the New Zealand trustee's title will not be recognised here.
(2) The Australian court could act in aid of the foreign bankruptcy court under s 29 of the Act to effectively
put the foreign trustee in control of the bankrupt's immovables, even though the foreign trustee's title
to the immovables might not be recognised.
© Thomson Reuters. 1
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
[3] Bankruptcy Generally

Foreign bankruptcy — Bankrupt later domiciled in Australia — Where sequestration order not to be made in Australia
based on same debt — Whether after-acquired property in Australia vested in foreign trustee
was made. Held: (allowing the appeal)
(1) Hall v Woolf (1908) 7 CLR 207 does not go beyond denying to the foreign trustee recognition of his
title under the foreign bankruptcy laws to the bankrupt's moveables in Australia acquired after the
(2) The Australian court could act in aid of the foreign bankruptcy court under s 29 of the Act effectively
to put the foreign trustee in control of the bankrupt's immoveables, even though the foreign trustee's
title to the immoveables might not be recognised.
[4] Bankruptcy Change of domicile

Property acquired in new domicile
was made. Held: (allowing an appeal)
(1) Hall v Woolf (1908) 7 CLR 207 does not go beyond denying to the foreign trustee recognition of his
title under the foreign bankruptcy laws to the bankrupt's moveables in Australia acquired after the
(2) The Australian court could act in aid of the foreign bankruptcy court under s 29 of the Act to effectively
put the foreign trustee in control of the bankrupt's immoveables, even though the foreign trustee's title
to the immoveables might not be recognised.
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
Legislation Considered
Bankruptcy Act 1966 (Cth) s 29
Bankruptcy Act 1966 (Cth) s 60(3)
Bankruptcy Act 1966 (Cth) s 52(2)(b)
Legal Representatives
L O Bowden, for the appellant.; J O McKenna, for the respondent.
Opinion
Cur adv vult
10 September 1993
Einfeld J.
Introduction
This in an appeal from a sequestration order pronounced by Cooper J against the estate of the appellant (Radich)
in June 1992 on the application of the respondent (BNZ). Radich lived in New Zealand until April 1988 when he
moved to Queensland. On 8 June 1990, the High Court of New Zealand gave judgment in favour of BNZ for a
debt which Radich claims he was unable to repay due to falling values of real estate and high interest rates in New
Zealand. On 12 December 1990 this judgment was registered in the Supreme Court of Queensland in an amount of A
$128,474.32. On 4 February 1991, Radich was made bankrupt by an order of the New Zealand High Court. He will
remain an undischarged bankrupt in New Zealand until 4 February 1994 unless he obtains an early discharge. He
made an application for discharge before a master of the New Zealand High Court on 10 April 1992 but the master
was not satisfied that discharge was appropriate.
On 11 May 1991, a bankruptcy notice issued out of this Court was served on Radich. It was based on the same
debt and commercial circumstances. On 22 November 1991, BNZ filed a creditor's petition and two months later,
Radich filed a notice of intention to appear and oppose the making of a sequestration order. The grounds of opposition
included that a further sequestration order would be unreasonable, unnecessary and unjust. There were said to be other
procedures available for the administration of any estate and assets situated in Australia, although Radich actually
said that he has no assets here.
The argument mounted by Radich, at first instance and on appeal, was that if he is now made a bankrupt in Australia,
the term of his bankruptcy will extend beyond the date on which he will be discharged from the New Zealand
bankruptcy, thus prejudicing his income and capacity to work as a solicitor. He practises on the Gold Coast, but as a
consequence of his bankruptcy in New Zealand, is only permitted to practise on a restricted basis; the most significant
restriction being his inability to operate as a sole practitioner. His partner wishes to retire from the partnership at an
early date, and Radich is anxious to limit the term of his bankruptcy so that he is able to take over the practice entirely.
Early discharge from a second bankruptcy

Section 149X(b) of the Australian Bankruptcy Act 1966 (Cth) (the Australian Act) represents a bar to an early
discharge from an Australian bankruptcy notwithstanding a discharge from the New Zealand bankruptcy. It states:
“A bankrupt is disqualified from early discharge if:
(a) …
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
(b) he or she is or has been a bankrupt or insolvent … under the law of an external territory or of a
foreign country;
and the bankruptcy … occurred within the period of 10 years immediately preceding the bankruptcy from
which the bankrupt is applying for discharge.”
An inability to obtain an early discharge would lead to Radich remaining bankrupt in Australia until June
1995, well after his partner wishes to retire from the practice. Presumably the practice would then fall into
other hands or be dismantled, with resulting loss to Radich and perhaps his partner.
Section 149X was inserted by s 27 of Act No 9 of 1992 ( Bankruptcy Amendment Act 1991 (Cth) ), as an element in
a number of changes to the law governing applications for early discharge. While such applications were previously
heard by this Court, they are now determined by a bankrupt's trustee. The Explanatory memorandum to the Bankruptcy
Amendment Bill 1991 (Cth) said at p 131:
“The Bill will introduce an administrative early discharge system to make early discharge open to those
who have insufficient financial resources to mount a court application for early discharge, and will introduce
comprehensive eligibility and disqualification criteria which will ensure that those whose bankruptcy is
brought about by misfortune rather than misdeed have access to early discharge, whereas those whose
bankruptcies have occurred as a result of commercially reprehensible behaviour will not be entitled to early
discharge.”
In contrast to the previous system where the Court had to balance a number of factors, the present system involves
the trustee granting early discharge unless the bankrupt fails to fall within the criteria for eligibility or is disqualified
from applying. Section 149X(b) provides only one of a number of disqualifying factors. The other factors involve, or
are likely to involve, a degree of fault, such as failing to disclose certain information to the trustee: ss 149Z, 149ZA,
149ZB, 149ZC.
Australia is not alone in treating second-time bankrupts more harshly than first-time bankrupts. In England, automatic
discharge is generally available after two or three years, but is not available where a person was made bankrupt as
a result of a criminal bankruptcy order or where the bankrupt experienced an earlier bankruptcy within the 15 years
prior to the commencement of the second bankruptcy. In such cases, discharge requires a court order, and application
to the court cannot be made within five years from the commencement of the second bankruptcy: Insolvency Act
1986 (UK), ss 279, 280.
The rationale for such provisions appears to be that while one act of bankruptcy may be more easily understood as
resulting from a lack of business experience, or perhaps as plain bad luck, a second act of bankruptcy suggests a
greater degree of culpability. This reasoning is crude and would not be appropriate in many cases. As the Australian
Law Reform Commission noted in its report No 45,General Insolvency Inquiry (1988), Vol 1, par 555, a second
bankruptcy may be due to circumstances just as unfortunate as the first.
Yet with the present Australian Act, unlike the former legislation and the English statute, a prior bankruptcy appears
to operate as an absolute bar to early discharge from a later bankruptcy, as opposed to merely making discharge a
more onerous procedure. Parliament seems to have decided that the costs and uncertainty associated with judicial
consideration of the circumstances of the second bankruptcy were not justified, and that the crude rationale for treating
second bankruptcies so harshly does not cause injustice outweighing the advantages of the new regime.
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
The implicit assumption in the argument must be that the second bankruptcy is based on debts accrued after the first
bankruptcy. Where this is not the case, the legislative change is completely inexplicable. The application of s 149X
to a second bankruptcy where it is based on the same debt as the first bankruptcy is so harsh and unreasonable that
it is difficult to imagine that Parliament intended the total bar to early discharge it legislates. This raises the question
whether the Court should impose a narrow interpretation on s 149X by not applying it where the second bankruptcy
is based on the same debt as the first bankruptcy. This possibility was not subject to any real argument in this appeal
presumably because it would only arise if an application to the trustee for discharge was refused on the grounds that
it was statute barred. Given that this has not occurred and having regard to my ultimate conclusions, there is no need
to decide the question here.
Whether after-acquired property vests in foreign trustee

Radich's principal argument is that any Australian after-acquired property would vest in the New Zealand trustee.
Section 42(2)(a) of the New Zealand Insolvency Act 1967 (NZ) (the New Zealand Act) states, subject to
qualifications not relevant here, that:
“ … the property and powers of the bankrupt to vest in the Assignee and be divisible amongst his creditors
shall comprise the following:
(a) All property whatsoever and wheresoever situated belonging to or vested in the bankrupt at the
commencement of the bankruptcy, or acquired by or devolving upon him before his discharge;
… ”
Radich submitted that this includes property in Australia. He contended that the futility of further or
additional sequestration flows from the fact that discovery and administration of assets that the debtor
possesses in Australia can be achieved without further sequestration. If Radich's statement of the effect of
s 42(2)(a) is correct, this would be a clear instance where the Court should refuse sequestration, assuming
there was no question of property recoverable in Australia other than in aid of the New Zealand bankruptcy.
In this connection, s 29(2) of the Australian Act provides:
“In all matters of bankruptcy, the Court —
(a) shall act in aid of and be auxiliary to the courts of the external Territories, and of prescribed
countries, that have jurisdiction in bankruptcy; and
(b) may act in aid of and be auxiliary to the courts of other countries that have jurisdiction in
bankruptcy.”
New Zealand is a prescribed country: s 29(5)(a). As Lockhart J noted in Re Ayres; Ex parte Evans (1981) 51
FLR 395 at 406, affirmed by a Full Court in Ayres v Evans (1981) 56 FLR 235, the prescribed countries have
similar bankruptcy legislation to Australia. While par (a) uses mandatory as opposed to the discretionary
language of par (b), s 29(3) says:
“Where a letter of request from a court of an external Territory, or of a country other than Australia, requesting
aid in a matter of bankruptcy is filed in the Court, the Court may exercise such powers with respect to the
matter as it could exercise if the matter had arisen within its own jurisdiction.”
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
Courts have a discretion as to the assistance they give and may impose such conditions or require such undertakings
as they think proper: Re Osborn; Ex parte Trustee [1931-1932] B & CR 189 at 194. Lockhart J said in Re Ayres at
406 that the Court should give its aid unless there is an existing Australian bankruptcy or there are other discretionary
reasons for denying assistance, such as public policy.
Section 29 does not create new rights, but only creates new remedies for enforcing existing rights: Hall v Woolf
(1908) 7 CLR 207 at 212; Re Ayres at 405. Radich argued that BNZ should have used this procedure to ascertain if,
contrary to his evidence, there are assets which belong to the trustee, and if there are, to realise them.
Unlike other orders of foreign courts requiring consideration of such common law notions as domicile and submission
to jurisdiction to resolve questions of their recognition by Australian courts, s 29(2)(a) mandates this Court to
recognise the New Zealand sequestration order. Thus the only practical question to be considered is what effect will
be given by this Court to such orders. There is no dispute that movables in Australia belonging to Radich at the time
of the New Zealand order vest in the New Zealand trustee. Nor can it be doubted that property obtainable under
an Australian bankruptcy under such rules as relation back, the avoidance of settlements and the invalidity of certain
executions, vest in the New Zealand trustee: see Sykes and Pryles, Australian Private International Law (3rd ed,
1991), pp 792-793.
However, BNZ argued that it needs a sequestration order to reach any other property in Australia acquired by Radich
after he became bankrupt in New Zealand. This supports Cooper J's finding that:
“Irrespective of what rights the Official Assignee may have had in relation to after-acquired property wherever
situated while the respondent was domiciled in New Zealand, the Official Assignee cannot assert any title
to property not locally situated there, which was acquired after the respondent's domicile in New Zealand
came to an end: Hall v Woolf (at 211-212).”
Hall v Woolf
This was a case decided in 1908 by three judges of the High Court when each State had its own Act dealing with
bankruptcy, based on the English Acts. The appellant was a trustee under a liquidation arranged in Queensland in
1890 by a debtor named Horowitz under the Insolvency Act 1874 (Qld). The respondent was the trustee by a deed of
assignment executed by Horowitz in 1908 under the bankruptcy law of Western Australia. The appellant sought an
order requiring the respondent to deliver up to him all the property of the debtor in his hands. Horowitz was domiciled
in Queensland, but left in 1890, and became domiciled in Western Australia in 1902. He never returned to Queensland,
and never obtained a certificate of discharge from the liquidation.
This fact situation contrasts sharply with the present case, where the bankruptcy occurred recently, not 18 years
earlier, and there are no known Australian creditors who could compete with foreign creditors from an earlier foreign
bankruptcy. Moreover, Radich's change in domicile occurred before the New Zealand sequestration order, not as
in Hall after the first bankruptcy.
Delivering the judgment of the Court, Griffith CJ said (at 211-212):
“The foundation of the rule relied upon is the wider rule mobilia sequuntur personam (lit goods follow the
person), of the application of which it is a familiar instance. If the local law as to after-acquired property
ought to be recognised elsewhere, the reason must be that the law of the domicile of the bankrupt operates as
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
a statutory assignment of his movables, wherever situated, to the assignee in the bankruptcy, the assignment
taking effect automatically as soon as they are acquired by the bankrupt. If such a rule were to be accepted
by other countries, we are disposed to think that they would accept and apply it subject to a due regard for
the rights of their own citizens, and that it might well be held that a rule analogous to that laid down by the
Court of Appeal in Cohen v Mitchell (1890) 25 QBD 262 would be adopted as a qualification of it. But,
whatever may be thought of such a case, it is, in our opinion, quite clear that as soon as the debtor ceases
to be domiciled in the country of adjudication the law of that country ceases to have any application to his
after-acquired movables situated elsewhere. The same rule, mobilia sequuntur personam, still applies, but it
excludes the operation of that law.
We think, therefore, that, whatever might be the rule as to movables acquired by the debtor after the
commencement of the liquidation, and while he was still domiciled in Queensland, the Queensland trustee
cannot assert any title to movables not locally situated there which were acquired by the debtor after his
domicile in that Colony came to an end.”
The ratio of Cohen v Mitchell (1890) 25 QBD 262 is stated in its headnote:
“Where a bankrupt, who has not obtained his discharge, enters into transactions in respect of property acquired
after the bankruptcy, then, until the trustee intervenes, all such transactions, with any person dealing with
the bankrupt bona fide and for value, and whether with or without knowledge of the bankruptcy, are valid
against the trustee.”
Radich referred to the argument of the respondent in Hall v Woolf (reported at 209) that to apply Queensland law
would have the effect of working an injustice on the Western Australian creditors. Radich suggested that this injustice
explains the Court's decision. Radich thus argued that Griffith CJ's principle should be confined to the facts of the case.
The question of whether Hall v Woolf applies in this case is certainly complex. BNZ argued that it was not necessary to
determine the question here but that it was sufficient to accept that its application to the present case was arguable. BNZ
said that sequestration orders are made on the possibility not the probability of property existing. The argument was
that as Hall v Woolf might apply, the possibility of present or future property was sufficient to ground a sequestration
order.
There is a difficulty with the argument that the Court should grant a sequestration order in the case of mere possibilities
of the existence of property, in that a sequestration order places the creditors in a better position to investigate the
property and control the activities of the debtor. No argument can be made for permitting such a power in a case of
legal uncertainty. On an application for a sequestration order, the Court should determine any legal questions rather
than leave the parties uncertain of their position until a later proceeding such as when a trustee applies to the Court
for directions as to what steps he should take in the circumstances then existing.
Mobilia sequuntur personam

In Hall v Woolf, the High Court referred to the maxim, mobilia sequuntur personam; ie chattels, wherever situated,
follow the law of the owner's domicile. Thus where the domicile of the person is New Zealand at the time of the
acquisition or possession of property, a New Zealand order purporting to transfer movables to a trustee in bankruptcy
will have its full effect. However, if there has been a change of domicile, New Zealand law no longer governs the
validity of a purported transfer because Griffith CJ said the rule mobilia sequuntur personam excludes the operation
of the foreign law.
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
This is perhaps a rather confusing way of expressing the effect of the maxim. It does not in fact exclude the operation
of foreign laws, but merely determines whether the validity of transfers from the bankrupt to the foreign trustee is to
be governed by the foreign law or the law of the new domicile. Mobilia sequuntur personam says nothing as to the
validity of a particular assignment: it is merely a rule determining which law governs this question.
Dicey and Morris, The Conflict of Laws (11th ed, 1987), Vol 2, p 943, par 119, say that it may have been true in
earlier times that articles of personal estate were few and were usually situated in the owner's domicile. However, it
is entirely untrue in modern times and accordingly all modern writers and most modern judges have discarded the
test of domicile. Justice P E Nygh in Conflict of Laws in Australia (5th ed, 1991) supports Dicey and Morris (at p
454). His Honour agrees with Lord Devlin's statement in Bank voor Handel en Scheepvaart NV v Slatford [1953]
1 QB 248 at 257 that:
“There is little doubt that it is the lex situs which as a general rule governs the transfer of movables when
effected contractually. The maxim mobilia sequuntur personam is the exception rather than the rule and is
probably to be confined to certain special classes of general assignments such as marriage settlements and
devolutions on death and bankruptcy.”
Sykes and Pryles (p 666) view any rule applied rigidly as unsatisfactory. They admit (at p 668) that “the traditional
preference of textbook writers is for the lex situs”. However, they suggest that this should not be applied rigidly,
because in some circumstances, the situation of the movables may be temporary and fleeting. On the other hand, they
state (at p 667) that the lex domicilii has so many objections that no discussion of it seems worthwhile.
Nonetheless, to a greater or lesser extent, Hall v Woolf appears to support the maxim. Even if it seems likely that
the present High Court would overturn it, this Court is bound to apply Hall v Woolf if it is not distinguishable or
has not been ousted by legislation. The High Court approach involves two steps. First, there is the choice of law
question: the applicable law is to be determined, using the maxim. Secondly, there is the domestic rule which states the
consequences arising from the choice of law question: if the applicable law is the law of the country of adjudication,
Australian courts should give effect to the order made there. Otherwise, they will not.
It is useful to consider this approach further. Domicile is determined by physical and lawful presence in a country
(Ah Yin v Christie (1907) 4 CLR 1428 at 1431-1432), and an intention to make a home indefinitely in that country:
Domicile Act 1982 (Cth), s 10. Of course, with the ease of modern transport, the internationalisation of commerce
and the integration of the world economy, there are many people who do not easily fit within this definition in any
single country. Nevertheless, the law requires or assumes that every person has a domicile, and one domicile only. If
a person leaves a country with no intention of returning, under the common law the existing domicile is abandoned
and until a new one is acquired, domicile reverts to the country of origin. However, if a person's domicile has to be
determined at a date subsequent to 1 July 1982, s 7 of the Domicile Act applies, with the result that a person retains
the existing domicile until acquiring a new domicile.
Applying the principle in Hall v Woolf, if Radich had moved to Queensland with the intention of only staying for
a period of time before returning to New Zealand, the after-acquired property in Australia would vest in the New
Zealand trustee. However, if Radich was in fact born in England, his domicile changed to England while he was in
Queensland and only his pre-1982 property acquired after the New Zealand bankruptcy vested in the New Zealand
trustee.
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
This virtual nonsense indicates the unsatisfactory nature of Hall v Woolf as a mechanism to protect domestic creditors
where there are concurrent bankruptcies and a competition between creditors in a foreign country and the domestic
country. Domicile is in these circumstances a completely ineffective criterion for resolution of the conflict, especially
after the Domicile Act introduced its distinction between domicile before and after 1 July 1982. This arbitrariness,
not present in the law in 1908, may in itself be a sufficient ground to suggest that the High Court's decision has been
displaced by legislation.
The principle found by the High Court also seems to sit uncomfortably with s 29 of the Australian Bankruptcy Act,
a section which has existed in similar form for more than a century. Section 29(2)(a) is based on comity between
the courts of Australia and prescribed countries which are encouraged to aid each other in recovering property of
bankrupts. This support mechanism is reflected in s 135 of the New Zealand Act. It would appear to go against this
regime of mutuality and co-operation if our courts were to deny property to a New Zealand trustee for arbitrary
reasons.
Of course, the rule stated by Griffith CJ does not provide a unique limitation upon the authority of foreign courts.
For example, a foreign bankruptcy has by itself no effect on the bankrupt's title to immovable property situated in
the forum: Australian Mutual Provident Society v Gregory (1908) 5 CLR 615 at 623. This rule is replicated in the
jurisdiction of prescribed countries: for England, see Re Levy's Trusts (1885) 30 Ch D 119 at 123; for New Zealand,
see Ex parte Bettle (1895) 14 NZLR 129 at 134.
English cases and Hall v Woolf

There appear to be other difficulties with this rule. It was stated without explanation, and no authority was quoted to
support it either in the judgment itself or by counsel for BNZ here. There is at least one English case which seems to be
inconsistent with Hall v Woolf. Although cited in argument to the High Court, it was not referred to in the judgment:
Re Davidson's Settlement Trusts (1873) 15 Eq 383. Walter Davidson's parents had executed a settlement upon their
marriage. The settlement involved a sum of money being vested in trustees upon trusts for the children of the marriage
as the father should appoint, and in default of appointment, for the children equally. The father made no appointment.
Walter, who had first lived in England, later settled in Queensland where he became bankrupt in December 1866. In
1867 he visited England and died there in July 1868. At the time of his death, his domicile was England. In 1869, his
estate received a distribution of money from his father's settlement. The question before the Court was whether the
official assignee in the insolvency was entitled to the money obtained from the father's settlement.
James LJ said (at 385) that “[w]hether the domicile of the insolvent was English or colonial, for the purposes of
trading or otherwise, is immaterial”. Holding that the creditors who have proved are entitled to be paid and the fund
must be paid to the trustee for distribution, he said (at 386):
“I may add that it would be impossible to carry on the business of the world if courts refused to act upon
what have been done by other courts of competent jurisdiction; and the proceedings in the Court at Brisbane
conclusively show that the insolvent was largely indebted beyond the amount of the sum in question.”
While there is a somewhat confusing statement (at 384) that on 12 March 1868 an order was made “allowing the
certificate”, it is clear that the judgment proceeded on the footing that Walter Davidson was an undischarged bankrupt.
Radich relied upon this decision as authority that after-acquired property in England vested in the Queensland trustee,
even though the bankrupt's domicile had changed back to England. However, BNZ argued that the distribution of the
settlement did not involve after-acquired property, because it was property which the bankrupt had always had as a
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
contingent interest in the family trust. Under s 5(1) of the Australian Act, a contingent interest is “property”. This was
also the position under s 4 of the Bankruptcy Act 1869 (UK), 32 & 33 Vic c 71.
I reject BNZ's submission. In my opinion, the fulfilment of the contingency changes the nature of the property from a
contingent interest to possession of title to the goods, a greater and more valuable interest in property. The difference
in value between the two types of property represents the additional interest acquired after the contingency is met.
This interest was acquired after the bankruptcy and is, I think, after-acquired property. The case is authority for the
principle that after-acquired property vests in the foreign trustee, regardless of domicile.
In Hall v Woolf, the High Court did refer to Re Lawson's Trusts [1896] 1 Ch 175 where the judge regarded Davidson's
Settlement(supra) as on point and followed it. However, in Lawson's Trusts, the bankrupt did not change his domicile
from the one possessed when he presented a debtor's petition. Because there was no change in domicile, Griffith CJ
could reconcile this case with the rule he stated.
In Ex parte Robinson (1883) 22 Ch D 816 the Court refused to make a second sequestration order because it would
be futile, the main basis being that Robinson was an undischarged bankrupt resulting from a Scottish sequestration,
and had no assets in England. The Court did not consider the possibility of after-acquired property but this does not
seem to me to be indicative of a view by the Court that it did not need to be considered because it would obviously
vest in the foreign trustee. It is because the possibility of after-acquired property does not seem to have been raised
by the petitioning creditor. It is apparent from the outline of his argument (at 818) that his concerns encompassed
different matters.
While the principle of Hall v Woolf raises difficulties, the actual result seems to have been just. The case rested on
unusual facts, in particular, the 18 year time delay. The Queensland creditors had all those years to adjust to their losses,
while for the Western Australian creditors, an inability to recover money was more likely to have serious present
consequences. Of course, with today's federal legislation involving prescribed countries and automatic discharge, it
is highly unlikely that the fact situation in Hall v Woolf will be repeated. Furthermore, in general circumstances, there
seems no significant injustice in allowing after-acquired property to vest in a foreign trustee, even where there are
domestic creditors, and there appear to be good reasons of comity for the courts to allow this result. There is certainly
no injustice where, as in this case, there are no domestic creditors. But to use the existence of domestic creditors as a
basis for distinguishing cases would mean that the bankrupt could force a foreign trustee to the additional expense of
pursuing sequestration merely by creating a domestic creditor who notifies the foreign trustee of a debt.
On the possibility that Hall v Woolf can be distinguished because Radich's change in domicile occurred before the
New Zealand sequestration order, in contrast to Hall v Woolf itself where the change in domicile occurred after the
first bankruptcy, BNZ argued that the relevant time for considering domicile is when the property is acquired. This
view is supported by the earlier quoted passage from the judgment of Griffith CJ (at 212):
“ … the Queensland trustee cannot assert any title to movables not locally situated there which were acquired
by the debtor after his domicile in that Colony came to an end.”
I agree. In fact none of the factual circumstances furnish a satisfactory ground for distinguishing Hall v
Woolf. Griffith CJ did not limit or qualify his judgment by reference to any factual matrix such as a change
of domicile or injustice to domestic creditors by denial of access to the assets. The enunciated principle was
stated in broad terms as if it flowed directly from the maxim mobilia sequuntur personam.
Thus the law is concerned with whether the property vests in a foreign trustee. Where there are concurrent bankruptcies
as in Hall v Woolf, the property must vest immediately in one of the two trustees, and domicile determines which
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
one. Once the property has vested in a particular trustee, it would be strange if it revested merely because of a change
of domicile. The critical time for considering domicile must be when the property is acquired.
I said earlier, and it is obvious, that any general principle arising from the ratio in Hall v Woolf is binding on this
Court notwithstanding that it seems in need of change. However, along with Drummond J, whose judgment in this
matter I have had the benefit of reading, I am of opinion that at most only a very small area of general principle
is derivable from the decision. It is that regardless of the fact that the foreign law permits it, a foreign trustee in
bankruptcy cannot invoke Australian law to gain title to a bankrupt's after-acquired movables in Australia when the
bankrupt has abandoned the foreign domicile for Australia.
Sequestration orders and futility
The law
Radich's next ground of appeal, founded in s 52(2)(b) of the Bankruptcy Act, is that the learned primary judge failed
to find that there could be no property in Australia which would be caught by an Australian sequestration order and
to apply that finding to the discretion provided for in that enactment. The relevant part of the section provides:
“If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor —
(a) …
(b) that for other sufficient cause a sequestration order ought not to be made,
it may dismiss the petition.”
“Those matters” refers to matters stipulated in s 52(1) of which the Court requires proof before making a
sequestration order. In relation to par (b), a Full Court of this Court said in Clyne v Deputy Commissioner
of Taxation (1985) 5 FCR 1 at 5:
“The circumstances which may constitute ‘other sufficient cause’ for dismissing a bankruptcy petition are
extremely variable. It is not appropriate to attempt to catalogue or circumscribe them: see Cain v Whyte
(1933) 48 CLR 639 at 645.”
One such circumstance is if the making of a sequestration order is an exercise in futility. In Re Betts; Ex parte Betts
[1897] 1 QB 50, Lord Esher MR said (at 52):
“If the Court is clearly convinced, not merely by the statement of the debtor, but from all the circumstances of
the case, that there cannot be any assets or any prospect of any coming into existence, and that, if a receiving
order is made, the only effect will be a mere waste of money in costs, then in such a case the Court has a
discretion in the matter, and will be justified in exercising that discretion by refusing to make the order.”
Part of the reason why courts are reluctant to refuse a sequestration order on discretionary grounds is that it may only
be after sequestration, with a full investigation by a trustee in bankruptcy including a possible public examination
of the bankrupt and other persons, that assets come to light: Re Leonard; Ex parte Leonard [1896] 1 QB 473 at 475
approved in Bayne v Blake (No 2) (1909) 9 CLR 360 at 364. However, in Betts, the debtor was an undischarged
bankrupt and the petitioning creditor was a creditor in that bankruptcy. Any assets the debtor might have would go to
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
the trustee. As Lord Esher said, if the petitioning creditor thought there were any assets, he could have put the trustee
in funds to obtain the benefit of them.
A number of authorities in this area are cited in Darcey v Pre-term Foundation Clinic (unreported, Federal Court, 23
May 1988), a decision of a Full Court of this Court (Fox, Wilcox and French JJ). A sequestration order was opposed
on the ground that the debtor had joined a religious order the members of which made a vow of poverty requiring
that they have and continue to have no personal income or assets. The debtor's only occupation was his religious
life and he in fact had no assets. Speaking for the Court, French J said that the acceptance that the debtor did not
have personal assets does not dispose of the question whether there might be property available for distribution to his
creditors. Moreover, the fact that assets which have or might yet come his way have been or would be disclaimed or
assigned pursuant to his vows did not provide a complete answer. His Honour cited Re Field (A Debtor) [1978] Ch
371 where Megarry VC stated that there is considerable support for the doctrine that a court should dismiss a petition
where a debtor had no assets and no prospects of acquiring any. However, Megarry VC said (at 375) that the doctrine
is hedged about by important precautions:
“ … if it were open to a debtor to avoid having a receiving order made against him simply by alleging
utter destitution, both present and future, such pleas of destitution might become popular; and prospective
bankrupts might hasten to rid themselves of any assets or prospects which might hamper them in making
such a plea.”
This policy rationale suggests that the futility doctrine must be so circumscribed that it only applies to
situations which people cannot deliberately contrive to avoid bankruptcy. Perhaps self-denying religious
orders would become swamped with people seeking to avoid bankruptcy.
Apart from policy considerations, there were other reasons for ordering sequestration in Darcey. While the vows of
poverty taken by the debtor were evidence of a present lack of and no reasonable future prospect of obtaining assets,
it would have been possible for the bankrupt to renounce his vows of poverty within the term of the bankruptcy,
and return to paid employment. French J noted that the evidenced belief of the Brother General of the Order that the
bankrupt had no assets probably sprang from an acceptance of the bankrupt's integrity, rather than followed upon any
investigation or inquiry into his affairs.
In the present case, the evidence of no present assets and no reasonable prospect of future assets is not nearly as
strong as it was in Darcey. Radich has taken no vow of poverty, and is in fact working and presumably earning an
appreciable if truncated living as a senior solicitor. He has previously had business dealings in New Zealand. The
learned primary judge concluded:
“Although I am satisfied that the evidence of the respondent, his wife, his partner and the investigations
of the Official Assignee in New Zealand (notwithstanding any difficulties arising from the respondent's
presence in Australia) supports a conclusion that he presently does not have property in Australia beyond
some minimal household effects, that does not conclude the matter. Like French J in Darcey, I suspect that
in the end any sequestration in Australia will prove to be a fruitless and time wasting exercise. However,
the general principles established by the authorities are certain and it cannot be said that it is clear beyond
question that an Australian sequestration will produce no property divisible amongst creditors prior to the
discharge of the respondent from bankruptcy in Australia in the ordinary course.”
Indeed, according to BNZ it is not impossible that he may earn sufficient money to pay off part of the
judgment debt.
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
Radich suggested that three decisions support his case: Re Bendall and Bendall; Ex parte Langley and Vipond Pty
Ltd (1929) 1 ABC 167; Re C & C Sweetnam; Ex parte Australian Timber Co Ltd (In liq)(1931) 3 ABC 120 and
Re Mitchell; Ex parte South Australian Tractor Co Ltd (1967) 9 FLR 286. The facts and outcome of Re Bendall are
conveniently summarised in Re Mitchell (at 287):
“The debtors had assigned their estates by a deed of arrangement under Pt XII in August 1929. The trustee
under the deed had realised most of the assigned assets, but the notice of the deed which he had given to
the petitioning creditor was not in the prescribed form. That company had not assented to the deed and in
September 1929 lodged its petition for sequestration. Moule J considered that as the administration under
the deed was regular and was likely to result in as much benefit to the creditors as an administration under
a sequestration order which was likely to add to the expense, he was justified in refusing an order under the
petition … ”
Quoting from Moule J's decision (at 171):
“ … the fact that nothing has been suggested as to the dealings of the debtors or that there was any suspicion
that further assets might be discovered; the fact that the present trustee has gone so far into the collection of
the book debts that he would be the best man to finish the collection; and considering also that the trustee is
of opinion that the dividend will be 10s in the £, and that probably no further order for payment would be
made, I think, taking everything into consideration, I should dismiss the petition, and I so order.”
It was thus quite clearly futile to order sequestration. This is quite different to the present case where an Australian
trustee would be able to recover property apparently unavailable to the New Zealand trustee, if and when the
Australian trusteeship and any property comes into existence.
Re Mitchell dealt with an issue of costs and is not analogous to the present case. Re Sweetnam(supra) involved a
creditor who assented to and executed a deed of assignment with two debtors. However, the assets assigned turned out
to be far less valuable than originally estimated, through no fault of the debtors. Six years later sequestration orders
were sought. Lukin J held that the creditor had every opportunity of ascertaining whether the debtors had any other
assets. He found support for the suggestion that the creditor was seeking sequestration to force the relatives of the
debtors to come to their assistance. It appeared unlikely from the evidence that the debtors would acquire any property
in the future. The motive of the petitioning creditor seems a significant point of distinction from the present case: see
also Rozenbes v Kronhill (1956) 95 CLR 407, a case of extortion.
It is not open to doubt that the Court has jurisdiction to make an order of sequestration even though there is an
earlier foreign bankruptcy: Ex parte McCulloch (1880) 14 Ch D 716. Although the learned primary judge justifiably
considered it unlikely, his Honour was clearly correct in concluding that there is certainly a possibility of Radich
obtaining property in the future. I see no error in the exercise of his Honour's discretion to make the order here on
the basis of a factual possibility of assets.
However, the maximum principle derivable from Hall v Woolf, that the New Zealand trustee cannot by action in
Australia recover Radich's after-acquired movables here because of the change of domicile, is only one aspect of the
matters that fall for consideration as to whether the requirement of “other sufficient cause” is made out under s 52(2)
(b) of the Bankruptcy Act. It thus does not finally dispose of the point or points raised in this case. In my opinion, Hall
v Woolf does not support the pronouncement of a second bankruptcy, contemporaneously with the first, where there is
no evidence of any additional debts, and there is a reasonable basis for concluding that the first bankruptcy can access
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
any assets acquired in the place of new domicile after the first (foreign) bankruptcy. In this regard I respectfully adopt
and agree with Drummond J's reasons for concluding that notwithstanding Hall v Woolf the New Zealand trustee
can in fact secure any such property and apply it to the benefit of creditors in the New Zealand bankruptcy. In that
respect, I conclude along with his Honour, with due deference, that the learned primary judge's discretion miscarried.
It is therefore open to this Court to exercise the broad discretion in s 52(2)(b) anew. The provision certainly requires
consideration of the possibility of future assets and any difficulties that a foreign trustee may have in gaining access to
them. But there are few if any such aspects in this case where the second bankruptcy is sought by the same petitioner
on the same debt, and its making will be for the benefit of the same creditors as in the first bankruptcy. In this regard
I again agree with Drummond J's analysis of the particular facts and circumstances of this case, including the effects
of Divs 4A and 4B of Pt IV of the Act, as might affect the exercise of the discretion. Like his Honour, they impel
me to conclude that a “sufficient cause” is established by the oppression that a second bankruptcy would constitute
on the facts of this case.
I would allow the appeal, set aside the sequestration order, and dismiss the petition. The respondent should pay the
appellant's costs of the first instance hearing and the appeal.
Foster J.
I have had the advantage of reading in draft form the reasons for judgment of Einfeld and Drummond JJ. I agree with them that
the decision in Hall v Woolf (1908) 7 CLR 207 is not, as held by the learned primary judge, a bar to this Court's granting aid to the
New Zealand Official Assignee in realising the debtor's movable property in Queensland, even where such property is acquired
after the commencement of the New Zealand bankruptcy and after the acquisition by the debtor of a domicile in Queensland.
There are, in this case, no competing claims from Australian creditors or an Australian trustee. No question of conflicting
assertions as to title to the debtor's after-acquired property is involved. I consider, with respect, that the learned primary judge
erred in holding that Hall v Woolf necessarily prevented him from exercising his discretion in favour of refusing the sequestration
order. The exercise of discretion, accordingly, miscarried.
I agree that this Court is in a position to and should exercise the discretion afresh. I am satisfied, for the reasons expressed by
Drummond J, that the discretion should be exercised against the granting of the sequestration order sought by the respondent.
I agree with the orders proposed.
Drummond J.
The facts are set out in the judgment of Einfeld J which I have had the benefit of reading in draft.
Cooper J held that the requirements of s 52(1) of the Bankruptcy Act 1966 (Cth) were satisfied and that the Bank of New
Zealand thus had a prima facie right to a sequestration order. None of this is challenged. His Honour then considered how the
discretion conferred on him by s 52(2)(b) should be exercised. Here, he found against the debtor on two bases: first, although
there was nothing to suggest that the debtor had any relevant Australian property now, a possibility that he might acquire
property in Australia at some time in the future and before discharge from his New Zealand bankruptcy, on 4 February 1994,
must be assumed to exist. Secondly, his Honour held that since the debtor was now domiciled in Australia, the New Zealand
Official Assignee could not, on the authority of Hall v Woolf (1908) 7 CLR 207, claim any such after-acquired Australian
movables of the debtor.
If his Honour was in error in reaching either conclusion, the discretion under s 52(2)(b) the Bankruptcy Act would have
miscarried and it would be for this Court to exercise the discretion anew, if all necessary materials are before us.
The position in Hall v Woolf was this: Hall was appointed the debtor's trustee in his Queensland insolvency in 1890 while the
debtor was resident there. Soon after, the debtor left Queensland and by 1891, had settled in Western Australia. In 1908, while the
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
Queensland administration was still on foot, the debtor became insolvent in Western Australia. The Queensland trustee applied
to the Western Australian Court for possession of the debtor's property situate in Western Australia, all of which was property
acquired by the debtor after the commencement of his Queensland insolvency. Although the matter came before the Western
Australian Court following a letter of request from the Queensland Court pursuant to s 118 the Bankruptcy Act 1883 (Imp)
that the Western Australian Court assist the Queensland trustee to obtain possession of the debtor's West Australian property,
the High Court regarded s 118 as largely irrelevant to the matter on the ground that it did not create any new rights (at 212).
The decision is limited to consideration of the Queensland trustee's entitlement to the debtor's movables in Western Australia:
there is no reference in the report to any realty, although the Queensland adjudication operated as a universal vesting of all the
debtor's property in that trustee. The Court said that it was plain that if the debtor had ever had a Queensland domicile, he was
not domiciled there at any time after 1890 (at 210). Griffith CJ, delivering the judgment of the Court, said (at 211-212):
“We think, therefore, that, whatever might be the rule as to movables acquired by the debtor after the commencement
of the liquidation, and while he was still domiciled in Queensland, the Queensland trustee cannot assert any title to
movables not locally situated there which were acquired by the debtor after his domicile in that Colony came to an
end. [Emphasis added.]”
The High Court thus decided the case on the basis that, in order to make good his claim to possession of the debtor's West
Australian movable property, the Queensland trustee had to show that the Western Australian Court was required to recognise
his title to that property which Queensland law conferred on him.
I share Einfeld J's dissatisfaction with this decision as an acceptable statement of the modern law.
Once, the English and Australian courts would recognise a foreign bankruptcy adjudication as an assignment to the foreign
trustee of the bankrupt's local movables only if the debtor was domiciled in the foreign country when the adjudication was made
(and provided, of course, that the foreign decree extended to goods situate in the local jurisdiction). A V Dicey and J H C Morris,
The Conflict of Laws (11th ed, 1987), p 1116. This old rule was an instance of the application of the maxim, mobilia sequuntur
personam: see Freke v Lord Carbery (1873) 16 Eq 461 at 466 and Cockerell v Dickens (1840) 3 Moo 98 at 132; 13 ER 45 at
57. In Conflict of Laws in Australia (5th ed, 1991), P E Nygh refers to this application of the maxim (at p 490) as involving “a
theory, now exploded”. It has long been accepted that recognition will be given by English and Australian courts to the foreign
trustee's title to locally situate movables, as a title arising under a foreign decree, if the bankrupt submitted to the jurisdiction
of the foreign court, even though he was never domiciled there (although the extent beyond that, to which a foreign trustee's
title to local movables will be accorded local recognition, remains uncertain): Dicey and Morris, p 1116; Halsbury's Laws of
England (4th ed, 1974), Vol 8, par 701; Fletcher, The Law of Insolvency, p 574 and E I Sykes and M C Pryles, Australian
Private International Law (3rd ed, 1991), p 791. The cases cited include Re Davidson's Settlement Trusts (1873) 15 Eq 383; Re
Lawson's Trusts [1896] 1 Ch 175; Re Anderson [1911] 1 KB 896 and Re Craig; Catling v Esson (1916) 86 LJ Ch 62. While
Phillimore J in Re Anderson said he would not decide the case on the ground of the debtor's submission to the jurisdiction of
the foreign court (at 900) it is difficult to identify any other reason that would have justified his Honour recognising the New
Zealand trustee's title to the English movables of a bankrupt domiciled in England, particularly in view of what he said at 902.
In Hall v Woolf the High Court was prepared to assume that if a debtor not domiciled in the foreign country nevertheless
submitted to the jurisdiction of the foreign bankruptcy court, the foreign decree would be recognised as passing to the foreign
trustee all the movables, wherever situate, which the debtor owned at that time: see at 210-211. However, it held that this was
not sufficient to establish the Queensland trustee's title to the debtor's West Australian movables, saying (at 211):
“If the local law as to after-acquired property ought to be recognised elsewhere, the reason must be that the law of
the domicile of the bankrupt operates as a statutory assignment of his movables, wherever situated, to the assignee
in the bankruptcy, the assignment taking effect automatically as soon as they are acquired by the bankrupt. … [I]t is,
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
in our opinion, quite clear that as soon as the debtor ceases to be domiciled in the country of adjudication the law of
that country ceases to have any application to his after-acquired movables situated elsewhere. The same rule, mobilia
sequuntur personam, still applies, but it excludes the operation of that law.”
It is here asserted that the only basis upon which the foreign adjudication can have a claim to recognition in Australia in so far
as it applies to local movables is, first, that it is the law of the debtor's domicile and, secondly, that it operates in its terms to
assign the debtor's movables, wherever situate, to the foreign trustee in bankruptcy. But it is not only where the foreign law
happens to be the law of the debtor's domicile that the foreign adjudication can claim recognition in Australia: that law will give
the foreign adjudication exactly the same claim to recognition in Australia as an assignment of all the debtor's then existing
movables to the foreign assignee if it is the law of the jurisdiction to which the debtor has submitted, even though he has never
been domiciled there.
Given that the maxim mobilia sequuntur personam will be ignored and recognition extended to a foreign trustee's title to local
movables owned by the bankrupt at the date of the foreign order even though he is not then domiciled in the foreign country
provided only that he submitted to that court's jurisdiction, it is difficult to see why that maxim should suddenly become of
determinative importance in relation to the bankrupt's after-acquired goods and govern whether the foreign trustee's title will
be recognised as extending to such goods. In my view, there is an inconsistency in Hall v Woolf in so far as the decision would
grant recognition to a foreign trustee's title to local movables owned by the debtor at the date of adjudication even though he
was not then domiciled in the foreign country but would deny recognition to the trustee's same title to after-acquired goods
unless he was then domiciled there. Once it is accepted that a foreign sequestration order is entitled to local recognition as an
assignment to the trustee of the bankrupt's movables owned by him at the date of that order, wherever they are situate, even
though the bankrupt is not domiciled in the foreign country at that time, there seems to me no justification for saying that
the foreign order should not be accorded full local recognition as applying also to after-acquired property, irrespective of any
question as to the bankrupt's then domicile.
There is no trace in the English cases or textbooks of the distinction drawn in Hall v Woolf between locally situate movables
acquired by the bankrupt when domiciled in the country of adjudication and local movables acquired only after the bankrupt
has ceased to be so domiciled. The failure to notice this distinction is, I think, deliberate. A typical statement of the rule as
to when a foreign sequestration order will be recognised as an assignment to the foreign trustee of local movables is found in
Dicey and Morris, (at p 1119):
“Rule 166 — An assignment of a bankrupt's property to the representative of his creditors under the bankruptcy law
of any other foreign country [ie, other than Scotland and Northern Ireland] whose courts have jurisdiction over him in
accordance with Rule 164(2) is, or operates as, an assignment of the movables of the bankrupt situate in England.”
Rule 164(2) states that English courts will recognise that the courts of any foreign country, other than those of Scotland and
Northern Ireland, have jurisdiction over a debtor if he was domiciled in that country at the time of the presentation of the petition
or he submitted to the jurisdiction of its courts, whether by himself presenting the petition or by appearing in the proceedings.
The rule, so stated, is apt to require the English court to recognise the foreign trustee's title to after-acquired movables in England
even though the bankrupt was never domiciled in the foreign country: it is enough for full recognition of the foreign trustee's
title that the foreign order is entitled to recognition on some basis other than domicile, such as the bankrupt's submission to
the jurisdiction of the foreign court.
In Ayres v Evans (1981) 56 FLR 235, the Full Court of this Court followed Re Osborn; Ex parte Trustee [1931-1932] B &
CR 189 at 194, and held that the mandatory language of s 29(2)(a) of the Bankruptcy Act conferred upon the Federal Court
as an Australian bankruptcy court a jurisdiction which it was bound to exercise when the two requirements referred to were
satisfied, viz, when there was a request for assistance from a court of a prescribed country and that court had jurisdiction in
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
bankruptcy in the ordinary sense of that word; it was held, however, that the nature, extent and terms of the aid that the Australian
court provides remained a matter for the Australian court's discretion: see at 240-241, 246-247, 254. The dicta in these cases
might be thought to support the proposition that s 29(2)(a) of its own force requires unquestioning recognition to be given by
the Australian bankruptcy court to orders of bankruptcy courts of the external Territories and of prescribed countries, while
nevertheless reserving to itself a discretion as to the extent to which it will provide its aid under s 29(3). But the decision in
Hall v Woolf is inconsistent with that notion: see also Re A Debtor; Ex parte Viscount of the Royal Court of Jersey [1981]
Ch 384 at 401.
Notwithstanding what I think are unsatisfactory aspects of the reasoning in Hall v Woolf, it must be accepted as authority,
binding on this Court, for the proposition that even though the foreign law gives it that effect, a foreign sequestration order
will still not be recognised by an Australian court as vesting title in the foreign trustee to movables in Australia acquired by the
bankrupt after the commencement of the foreign bankruptcy if the debtor ceased to be domiciled in the foreign country before
acquiring those goods. But in my view, Hall v Woolf does not go beyond denying to the foreign trustee recognition of his title
under the foreign bankruptcy laws to the bankrupt's movables in Australia acquired after the bankruptcy and after the bankrupt
has ceased to be domiciled in the foreign country.
Hall v Woolf, so understood, is not in any way determinative of the question whether there is sufficient cause within s 52(2)(b)
of the Bankruptcy Act to refuse to make a sequestration order in Australia against a debtor already subject to a New Zealand
bankruptcy, merely because the New Zealand trustee's title will not be recognised here, ie, merely because he cannot sue in
his own name in Australia to recover movables acquired here, and despite s 42(2)(a) of the Insolvency Act 1967 (NZ), on the
ground that the debtor had ceased to be domiciled in New Zealand when he acquired that property. If, as I think is the case, the
New Zealand trustee can nevertheless obtain full control of all such after-acquired Australian movables and can apply them
in the New Zealand administration for the benefit of the bankrupt's creditors, that will be a powerful reason to refuse to order
a second bankruptcy.
It is well established that the assignment of all the bankrupt's property, real and personal and wherever situate, to the
representative of his creditors which is effected by the foreign law upon the making of an adjudication by a foreign court having
jurisdiction over the bankrupt's person will never be recognised in Australia as operating as an assignment of the bankrupt's
Australian lands. Australian Mutual Provident Society v Gregory (1908) 5 CLR 615 at 623, 625, and 628, 630; Dicey and
Morris, p 1121. Notwithstanding this, English and Australian bankruptcy courts, while not recognising the foreign trustee's title
to recover in his own name the bankrupt's lands locally situate, have long acted under provisions such as s 29 of the Bankruptcy
Act to make those lands available to the foreign trustee, so that they can be realised for the benefit of the creditors in the foreign
bankruptcy (always provided, of course, that the foreign sequestration order claims to reach the local lands).
In Re Greenaway (1910) 27 WN (NSW) 112 and Re Fogarty [1904] QWN 67, this was done by declaring the absent bankrupt a
trustee of his local lands for his foreign assignee in bankruptcy (presumably on the basis that after bankruptcy the bankrupt holds
his property as trustee for his creditors: Galbraith v Grimshaw [1910] AC 508 at 512) and by then making an order under the
local Trustee Act vesting the lands in question in the foreign assignee. In neither case was the foreign decree, despite its terms,
recognised as vesting title to the bankrupt's local lands in the foreign assignee. Nevertheless, this same result was achieved by
the local court acting in aid of the foreign bankruptcy court under s 118 of the Bankruptcy Act 1883 (Imp). A different approach
has been taken in other cases that achieves the same result of making local realty available to a foreign trustee for realisation
and distribution in the foreign bankruptcy, even though the local court will not recognise the foreign trustee's title to the land.
In Re Osborn(supra), Osborn was declared bankrupt by the Manx court. The Manx trustee obtained a letter of request from that
court pursuant to s 122 of the Bankruptcy Act 1914 (UK), equivalent to s 29 of the Bankruptcy Act 1966, seeking the aid of
the English court in obtaining the bankrupt's English property; he then applied to the English court for a declaration vesting
in him all the bankrupt's English realty and personalty and, in the alternative, for his own appointment as receiver of all this
English property, with power to sell the same and make the proceeds available for distribution in the Manx bankruptcy. Farwell
J did not consider it necessary to determine the domicile of the bankrupt: see at 193. His Honour refused to recognise the title
conferred by the Manx sequestration order on the trustee to the bankrupt's English property, including the English land: see
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
at 194-195. But, in the exercise of jurisdiction under s 122 of the 1914 Act, he still gave the Manx trustee full control of the
debtor's English land and goods, saying (at 195-196):
“That being so, is there any other alternative? … That I have jurisdiction to appoint a receiver in bankruptcy there can be
no doubt, and, fortified by the course which has been adopted by my predecessor, [Astbury J in Re Kooperman [1928]
WN 101] I think I am justified in adopting the same course.”
Farwell J appointed the applicant trustee to be receiver of the rents and profits of the bankrupt's interest in all real property in
England with liberty to sell the same and to deal with all such proceeds as trustee in the Manx bankruptcy as well as receiver of
the bankrupt's English personalty with power to sell the same, but subject to conditions, including a condition that he undertake
that all money or other property which he received in England would be applied in the due course of administration in the Manx
bankruptcy. Re Dunn and Edwards (1935) 8 ABC 168 and Re Livesey; Ex parte Richardson (1946) 14 ABC 59 reflect the
same view of the law. In Ayres v Evans(supra) at 240, Fox J I think acknowledged that there was one class of case in which
the foreign trustee's title would be recognised by an Australian court and another class of case in which, while that title would
not be accorded recognition, the Australian court would still assist the foreign trustee to get effective control of the bankrupt's
property in Australia.
If the Australian court, while not recognising the title to Australian immovables which the foreign trustee has under the foreign
law, will nevertheless act in aid of the foreign bankruptcy court under s 29 of the Bankruptcy Act 1966 to put the foreign
trustee in effective control of those immovables, there can be no reason why the Australian court should not adopt the same
approach when its aid is called upon by the foreign bankruptcy court to put the foreign trustee in effective control of after-
acquired movables in Australia, even though that trustee's title under the foreign sequestration order to those goods will not
be recognised by the Australian court.
The primary judge acknowledged a submission on behalf of the appellant that the New Zealand Official Assignee could use
s 29 to get control of any property the appellant might acquire here by having a receiver of that property appointed. But he
rejected the submission on the ground that s 29 does not create new rights, citing Hall v Woolf (at 212) and Re Ayres; Ex parte
Evans (1981) 51 FLR 395 at 405. It is true that s 29 of the Bankruptcy Act does not create any new rights in the foreign trustee
who enlists, through his own bankruptcy court, the assistance of the Australian court; it creates only new remedies for the
enforcement of the rights which that trustee already has. For an Australian bankruptcy court to act under s 29 to give the foreign
trustee effective control of the bankrupt's Australian immovables and after-acquired movables, while all the time refusing to
recognise the foreign trustee's title to any of that Australian property, does not involve the creation by the Australian Court of
new rights in the foreign trustee with respect to the bankrupt's property: he already has those rights under the foreign decree
when the foreign law operates as a universal assignment to him of all the bankrupt's property, wherever situate (as does the
New Zealand bankruptcy law here relevant). All the section gives the foreign trustee is a remedy, which he would not have
apart from the section, for enforcing those rights in Australia. If the statement in Hall v Woolf (at 212) is understood, as I think
it should be, as one made in the context of a case in which the Queensland trustee was asserting a right that was dependent
upon recognition by the Western Australian Court of his title to the bankrupt's local movables, the foreign trustee was asserting
a right that Western Australian law did not accept he had. The precursor of s 29 did not create such a right. The numerous
Australian and English cases in which foreign trustees have received local assistance under s 29 and equivalent provisions to
obtain control of local property, even though the title of those trustees is not accorded local recognition, are not therefore in
conflict with the decision in Hall v Woolf.
The jurisdiction the Australian court has under s 29(3) is a wide one. “Plainly one of the main uses of sections such as s 29
(and s 135 of the New Zealand Insolvency Act 1967) is to enable recourse to be had to a bankrupt's property in the country to
the courts of which the request for aid is made”: Re Ayres(supra) at 407-408. The Australian court is not limited in providing
assistance to a foreign court to cases in which the Australian and the foreign court have powers that mirror each other. If there
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
is a “matter of bankruptcy” within s 29(3) before the foreign court, the Australian court, in response to a request for aid, can
exercise any of the powers it has under the Bankruptcy Act if that same matter had arisen in Australia, being powers the exercise
of which will provide assistance to the foreign court in the circumstances of the particular case:
“ … the legislative scheme contemplates co-operation by Australian courts, and courts of external Territories [and of
prescribed countries], in bankruptcy matters. There are obvious advantages in such a provision. The scheme envisages
that, in the ordinary course of events, requests for aid will be made and honoured, subject to the need to modify these
administrative arrangements to meet the circumstances of a particular case by imposing appropriate conditions or the
like.”
Clunies-Ross v Totterdell (1988) 20 FCR 358 at 361-362. The extent to which provisions like s 29 enable the
Australian court to go in assisting a foreign bankruptcy court is demonstrated by Re Waters; Ex parte Waters (1922) 22
SR (NSW) 269 at 273, where Street CJ considered that the New South Wales court could assist a foreign court, where
the bankrupt was in contempt of an order of the foreign court requiring him to transfer his New South Wales land to the
foreign trustee, by making an order vesting that New South Wales land in the foreign trustee. Galbraith v Grimshaw
(supra) does not I think assist the respondent. It is not authority against s 29 being available to the appellant's New
Zealand assignee as an aid to gathering in his Australian property: the Court there held that the Scottish trustee took
that English property subject to prior claims that had arisen locally, in accordance with the rule of English law of
general application to all assignments, that the assignee acquires his title subject to equities existing at the moment
of acquisition. Section 117 of the Bankruptcy Act 1883 (Imp), which has no equivalent in the Bankruptcy Act 1966,
was said (at 511) by Lord Loreburn to affect procedure and not to enlarge this rule of English law. Lord MacNaghten
referred (at 511-512) to s 118 of the 1883 Act, to which s 29 of the 1966 Act is equivalent, saying that “the English
Court, no doubt, is bound to carry out the orders of the Scottish Court” but that the Scottish Court could only claim
the “free assets” of the bankrupt, ie, the assets in England with all the liabilities to which they were subject at the date
of the Scottish sequestration. Under s 29 the Australian court will, I think, assist a foreign trustee to gather in the “free
assets of the bankrupt”, even though it may not be prepared to recognise the trustee's title to those assets.
The primary judge rejected the debtor's principal argument for resisting the order, viz that he had no assets in Australia and
no probability of acquiring any, concluding:
“ … I suspect that in the end any sequestration in Australia will prove to be a fruitless and time wasting exercise.
However, the general principles established by the authorities are certain and it cannot be said that it is clear beyond
question that an Australian sequestration will produce no property divisible amongst creditors prior to the discharge
of the respondent from bankruptcy in Australia in the ordinary course. The respondent therefore fails to make out his
main ground of objection.”
I think his Honour reached this conclusion in the following way. He said:
“For the respondent to bring himself within the factual circumstances which moved the Court to dismiss the petition in
Re Betts; Ex parte Betts [1897] 1 QB 50, he must show not only that he has no assets within the jurisdiction but that any
after acquired property in Australia would not become available for an Australian bankruptcy because it would be taken
for the existing New Zealand bankruptcy: see Re Field (A Debtor) [1978] Ch 371 at 376. That is, the respondent must
show that the making of an order is a futility because there is presently no property and will be no property available
in a second bankruptcy: see Bayne v Blake (No 2) (1909) 9 CLR 360 at 365.”
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
His Honour then noted that the appellant relied on the universal effect of the New Zealand sequestration order and the
availability of s 29 of the Bankruptcy Act 1966 as a means by which the New Zealand Official Assignee could gather in all of
the appellant's Australian assets to discharge this onus. He rejected this argument, saying:
“Section 29 of the Bankruptcy Act 1966 does not create new rights, but only creates new remedies for enforcing existing
rights: Re Ayres; Ex parte Evans (at 405); Hall v Woolf (at 212). Thus the Official Assignee in New Zealand may not
by recourse to the acting in aid provisions of either the New Zealand or Australian bankruptcy legislation acquire or
enforce rights in relation to property of the respondent which he does not have in law or equity. …
… If the respondent has acquired a domicile of choice in Queensland, and the material suggests that he has done so, that
circumstance operates to limit the rights of the Official Assignee in respect of property acquired after the respondent
abandoned his New Zealand domicile. Irrespective of what rights the Official Assignee may have had in relation to
after-acquired property wherever situated while the respondent was domiciled in New Zealand, the Official Assignee
cannot assert any title to property not locally situated there, which was acquired after the respondents domicile in New
Zealand came to an end: Hall v Woolf (at 211-212). In consequence, as a matter of probability, any after-acquired
property of the respondent coming into his hands after settling in Australia, would not pass to the New Zealand Official
Assignee and become available for the purpose of the New Zealand administration. Such property, should it come into
existence would be available for an Australian administration if the sequestration order is made. It is not possible at this
point in time for the Court to say whether as a matter of probability such property will or will not come into existence.”
There is authority that where the debtor has no assets, that may justify a refusal to make a sequestration order. But the consistent
trend of the modern cases has been to make it increasingly difficult, as a matter of practicality, for a debtor to avoid bankruptcy
on this ground. In Re Field [1978] Ch 371, Megarry VC said: “A man may indeed be too poor to be made bankrupt: but the
burden of proof is heavy.” This Court, in Clyne v Deputy Commissioner of Taxation (1985) 5 FCR 1 at 6 said: “[T]his course
has been regarded as appropriate only in cases where the lack of assets is clear beyond question so that the presentation of
the petition amounts to oppression.” See also Darcey v Pre-term Foundation Clinic (unreported, Federal Court, Full Court, 23
May 1988) and Bayne v Blake (No 2) (1909) 9 CLR 360 at 364. The reason for this approach is obvious: when a petition is
presented, it will not normally be possible for the court to know whether there will prove to be assets or not if the bankruptcy
goes ahead: Clyne (supra) at 6- 7.
But Hall v Woolf is, for the reasons given, no impediment to the New Zealand assignee taking all the property the appellant may
acquire in Australia before discharge from his bankruptcy in New Zealand. The justification for the reluctance of the courts to
accept the “no assets” defence to a petition, by a debtor who is not already in bankruptcy has, in my opinion, less significance
where the Court is asked to make a sequestration order when the debtor is already in bankruptcy than it has where the Court
is asked to put a debtor into bankruptcy for the first time. Here, there is no suggestion that the appellant has any Australian
creditors who might benefit from his bankruptcy in Australia; it is only his New Zealand creditors who will so benefit. In
such circumstances, if the trustee under a foreign bankruptcy that is already on foot when the Australian court is asked to make
another sequestration order against the same debtor, is himself well placed to ascertain what property the debtor has here and
is well able to take control of any such property, together with any property the debtor may acquire here in the future, there is
in my view little justification for adopting the approach taken in cases in which the plea of “no assets” is raised in answer to
the only petition that has ever been presented against the particular debtor.
Re Betts; Ex parte Betts [1897] 1 QB 51, upon which his Honour also relied, was a case in which the court was asked to
make a sequestration order against a debtor who was already in bankruptcy in England. Although the position under s 59 of
the Bankruptcy Act is quite different, the law at that time was that, where a debtor was subject to two concurrent English
bankruptcies, property acquired by the bankrupt after the first sequestration order vested in the trustee of the first bankruptcy and
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
it was only if there was a surplus in the first bankruptcy that the second trustee took anything for distribution in the subsequent
bankruptcy: see Williams' Law and Practice in Bankruptcy (12th ed, 1921), pp 242-244. A second sequestration order would
thus only serve a purpose if there were sufficient assets, including assets acquired after the first sequestration order, to produce
a surplus in the first bankruptcy. But Lord Esher's judgment does support what his Honour here did in equating the claim of the
appellant that he had no assets to a similar claim by a debtor who is facing bankruptcy for the first time, although the appellant
is still subject to the New Zealand sequestration. It is difficult to see why Lord Esher MR adopted that test when, as he noted (at
53), the petitioning creditor would obtain the benefit in the first still-continuing bankruptcy of any property the bankrupt might
acquire in the future, without the need for a second sequestration simply by proving in the first-mentioned bankruptcy. In any
event, I do not think Re Betts (supra) can be regarded as laying down a rule that the discretion to refuse to make a sequestration
order against a debtor who is already in bankruptcy should only be exercised in favour of the debtor if he proves he has no assets
and no likelihood of obtaining any that will be available in a second bankruptcy. As Megarry VC noted in Re Field (supra) at
375, the judgments emphasise the special circumstances of the case and that it should not be regarded as a precedent for any
other case unless the circumstances are the same: see Re Betts at 53 and 54.
I think that the exercise by the primary judge of his discretion under s 52(2)(b) of the Bankruptcy Act miscarried because he
treated the decision in Hall v Woolf as barring access by the appellant's New Zealand assignee to any property the appellant may
acquire in Australia before the New Zealand bankruptcy comes to an end and because of his view as to the limited effect of s 29.
These conclusions were central to his Honour's decision to make the sequestration order. I also think the discretion miscarried
because his Honour wrongly regarded the appellant's defence of “no assets” to the petition seeking a second sequestration order
as requiring proof of the same matters that must be established where a “no assets” answer is made to a petition by a debtor who is
not already in bankruptcy, before such an answer can justify a refusal to make a second sequestration order. If, as is the case here,
there is no suggestion that a person under administration in a foreign country has incurred debts in Australia in circumstances
which would justify sequestration here and if there are good grounds for thinking that any existing and future assets the debtor
may have here can be effectively gathered in, in the existing foreign bankruptcy, a proper exercise of the discretion conferred
by s 52(2)(b) of the Bankruptcy Act will require the Australian court to weigh carefully these and all the other circumstances
of the case before it will be able to conclude that a second bankruptcy administration of the debtor's estate, which will be solely
for the benefit of the same creditors who have proved in the on-going foreign administration, should be established.
Since the discretion reposed in his Honour by s 52(2)(b) of the Bankruptcy Act miscarried, it is open to this Court to exercise
that discretion anew, provided the necessary materials are before us. There being no suggestion to the contrary, I think this
Court should dispose of the matter.
I therefore proceed to a consideration of what I regard as the matters relevant to the exercise of the discretion under s 52(2)
(b) of the Bankruptcy Act.
I have already referred to the existence of the New Zealand bankruptcy, to the absence of any evidence that there are Australian
creditors who would benefit from an Australian bankruptcy and the fact that any Australian bankruptcy would therefore benefit
only the same New Zealand creditors who are interested in the existing New Zealand administration. I have referred to the
wide powers of the New Zealand assignee to gather in, in reliance upon s 29 of the Bankruptcy Act, all the appellant's existing
and after-acquired movables and immovables in Australia for distribution in his administration.
The New Zealand Deputy Official Assignee, in supporting the petitioning creditor, rather overstated the difficulties he says he is
experiencing in conducting the New Zealand administration. He says he cannot examine the appellant. But in view of s 81 of the
Bankruptcy Act and s 69 of the Insolvency Act 1967 (NZ), there is no reason to doubt that he could have the appellant examined
here if he made application to the Australian court under s 29: cf Re Turnbull (1886) 2 QLJ 131; Re Nall (1899) 20 LR (NSW)
B & P 25 and Re Dunn and Edwards(supra). I also note that the appellant, without contradiction, has sworn to a willingness to
return to New Zealand for examination if he were asked, something that has not occurred. The Deputy Official Assignee said
that, because there are no assets in the New Zealand administration, he has not been able to apply to have the Official Receiver
for Queensland appointed receiver of the appellant's property in Australia. There is no explanation, either from him or from the
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
petitioning creditor, why the latter is prepared to incur the expense of instituting bankruptcy proceedings against the appellant
here, but apparently is not prepared to make funds available to the New Zealand Assignee for the purpose indicated.
The evidence showed that the appellant was in receipt of a modest income only as a solicitor in practice on the Gold Coast
and that there was no reason to think that there would be any substantial increase in his earnings so long at least as current
economic conditions continued. No doubt was cast on what the appellant had to say about his limited prospects. But that the
appellant may obtain a substantial income prior to his discharge from the New Zealand bankruptcy from his work as a solicitor
was understandably a matter of significant concern to the petitioning creditor. The Deputy Official Assignee also says that he
has still to ascertain what contributions the appellant can make to his New Zealand creditors from his Australian earnings as a
solicitor: however, it appears that 13 months before the Assignee filed the affidavit in which he said this, the appellant, at the
Assignee's request, gave him information as to his Australian earnings and he has not had any further request for information
in that regard. None of this is contradicted. In any event, the Official Assignee can, in my opinion, invoke the Australian court's
aid to gather in for the appellant's New Zealand creditors any surplus income that the appellant may acquire up to the time
of discharge from his New Zealand bankruptcy. The solicitor for the petitioning creditor, a New Zealand practitioner, gave
evidence as to the reach of New Zealand bankruptcy law in this regard. He said:
“6. … Property, including income, acquired by the abovenamed debtor after his adjudication in bankruptcy and
before his discharge from bankruptcy vests in the Official Assignee.
7. To secure payment of the after acquired income, pursuant to Section 45 of the Insolvency Act, the High Court
may order a bankrupt to pay a sum of money to the Official Assignee or to make periodic payments, when the
court is satisfied that the various criteria set out in Section 45(1) are established. While the High Court may
have jurisdiction to hear such an application when a debtor is outside New Zealand, the Court is unlikely to
make an order under Section 45(1) unless the Court can be satisfied that the order will be effective. The Court's
powers to enforce orders under Section 45 are in its inherent jurisdiction to commit for contempt of court for
disobedience of an order of the court. Such a power would be ineffective against a person living overseas.
Accordingly, Section 45 is unlikely to be available to require the debtor to pay any money for his debtors.”
On this evidence, after-acquired income of a bankrupt is, by New Zealand law, property divisible among his creditors in the
New Zealand administration, save to the extent that the Court makes a reasonable allowance for the maintenance of himself
and his family out of such income. It does not I think matter that s 131 of the Bankruptcy Act, a provision similar to s 45 of the
New Zealand Act, was replaced in 1992 by a scheme that transferred power over a bankrupt's after-acquired income from the
Court to the trustee in bankruptcy. The Australian court has full power to ensure that after-acquired property of an Australian
bankrupt that vests in the Australian trustee can be recovered by that trustee. Section 29 would therefore provide ample power
to the Australian court to assist the New Zealand Official Assignee, on a suitable request from a New Zealand court, to obtain
for the benefit of the New Zealand administration such part of the appellant's after-acquired property made up of his Australian
income as the New Zealand court might require to be paid to the Official Assignee pursuant to s 45 of the Insolvency Act 1967
(NZ). I do not accept that (as the respondent's solicitor asserts) if the New Zealand court were to order the appellant to pay
portion of his income to his New Zealand Assignee, that order could not be carried into effect by application under s 29 for
control of the relevant part of the appellant's income: see Re Waters(supra) at 273.
It is true that the 1992 changes to Australian bankruptcy law arm an Australian trustee with wider powers than a New Zealand
trustee appears to have to gather in property which third parties have accumulated with the assistance of the bankrupt: see Div
4A of Pt VI of the Bankruptcy Act. The Australian trustee now also has, as I have mentioned, wider powers than a New Zealand
trustee to take surplus income of a bankrupt: see Div 4B of Pt VI. But I do not think that such matters are by themselves such
as to compel the Australian court, when confronted with a petition by a creditor, who has proved in an existing New Zealand
bankruptcy, to exercise the discretion under s 52(2)(b) against the debtor. They are but two of the considerations that the court
must take into account in performing that exercise. Where, as here, there is no evidence to suggest that there will be any scope
(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
for either Div 4A or 4B of Pt VI of the Bankruptcy Act to operate and where, so far as Div 4B is concerned, the evidence points
positively to there being no such scope, that deprives the fact that an Australian trustee would have wider powers in these two
areas than the New Zealand Official Assignee of a good deal of its significance.
The question whether the appellant has concealed assets from the New Zealand Official Assignee, either in New Zealand or
Australia, was litigated before the New Zealand master and determined unequivocally in the appellant's favour. His Honour
noted that the appellant was cross-examined as to his assets and affairs in the proceedings before the master and said, in this
regard:
“It is not suggested that I am bound by or should necessarily accept the conclusions drawn by the master on the evidence
before him. The important feature of the New Zealand proceedings before the master is that, notwithstanding the
proceedings and cross-examination of the [appellant], there is no suggestion that the [appellant] in fact has any assets in
New Zealand or Australia of which the Official Assignee is unaware or that the [appellant] is being other than truthful
when he deposes in these proceedings to having no assets.”
It was suggested to his Honour, by the petitioning creditor, that earnings were wrongfully diverted from the New Zealand
Official Assignee by the appellant and that there was a want of frankness on his part in his dealings with that official which,
when coupled with the respondent's professional employment and the need to protect the Australian financial community, justify
the making of a sequestration order. Cooper J rejected these suggestions and found that the appellant “presently does not have
any property in Australia beyond some minimal household effects”; that his interests in a number of Australian companies, not
disclosed to the New Zealand Official Assignee, were acquired as an incident of his practice as a solicitor on the Gold Coast and
were not held beneficially but for others; that the entitlement of the appellant's wife as trustee of the family trust to an interest
in a New Zealand property from which the appellant and his former New Zealand law partners carried on their practice was
assigned by her to those partners without any payment being made and probably as a set-off against an alleged indebtedness of
the appellant to that partnership. Of the rejection by the New Zealand Supreme Court master of the appellant's application for
early discharge, his Honour observed that it was refused not because any adverse finding was made with respect to the appellant
or his affairs or because of any misconduct on his part prior to or after his bankruptcy, but only because the master was not
satisfied that the appellant had shown substantial reasons why a discharge was appropriate earlier than the automatic discharge
provided for by New Zealand law. His Honour also found that there was nothing in the appellant's conduct as a solicitor in
Queensland demonstrated on the material which would suggest that he is placing his clients' interests or the Australian financial
community at risk. There is no suggestion that the appellant's New Zealand insolvency was brought about by commercial
misconduct or profligacy, rather is the evidence to the contrary.
None of these findings is challenged. I think the appellant has shown sufficient cause why a sequestration order should not
be made.
I would allow the appeal, set aside the sequestration order and dismiss the petition.
Orders accordingly
Reported by Kristen Walker
All Citations
FCAFC, 10 September 1993, (1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960
End of Document © 2023 Thomson Reuters.

Radich V Bank of New Zealand

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Radich V Bank of New Zealand

Uploaded by

Copyright:

Available Formats

Radich v Bank of New Zealand, FCAFC, 10 September 1993 (1993)

(1993) 45 FCR 101, (1993) 116 ALR 676, 1993 WL 1406960

FCAFC, 10 September 1993

Radich v Bank of New Zealand

Einfeld J, Foster J, Drummond J

[1] Bankruptcy Courts acting in aid

2 Cases that cite this case on this point of law

[2] Bankruptcy Title of trustee

2 Cases that cite this case on this point of law

[3] Bankruptcy Generally

[4] Bankruptcy Change of domicile

6 Cases that cite this case on this point of law

Early discharge from a second bankruptcy

“A bankrupt is disqualified from early discharge if:

Whether after-acquired property vests in foreign trustee

“In all matters of bankruptcy, the Court —

Delivering the judgment of the Court, Griffith CJ said (at 211-212):

Mobilia sequuntur personam

English cases and Hall v Woolf

Sequestration orders and futility

it may dismiss the petition.”

Quoting from Moule J's decision (at 171):

Reported by Kristen Walker

End of Document © 2023 Thomson Reuters.

You might also like