Case: Re Alafaci; Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262
Outcome: discussed
The decision of the learned magistrate made on the application for summary judgment was based upon the "threshold requirement" as identified by Riley J in Re Alafaci; Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262 at 268. It is that the Court should first be satisfied that on the grounds and facts before it a case had been made out for inquiry into the trustee's conduct under s 179 of the Bankruptcy Act 1966 (Cth). As his Honour said at [18], he needed to be satisfied before embarking upon an inquiry under s 179 that sufficient grounds had been demonstrated for the inquiry to be conducted. No ground of appeal attacks that analysis of the legal approach as incorrect. 28 His Honour then addressed the evidence adduced by Mr Moore, together with that adduced by Mr Macks, and referred to the decisions of Lander J in the primary judgment. He noted the role of Mr Macks as a director and shareholder of Manna Hill Mining Co Pty Ltd, and also as its administrator and as its administrator under a Deed of Company Arrangement entered into apparently in May 2000 and which Mr Moore maintained until he resigned as deed administrator in September 2001. One of the other creditors of Manna Hill Mining Co Pty Ltd (as well as Mr Moore) was apparently Ms Dubois. Ms Dubois was also a bankrupt, and Mr Macks was also the trustee of her estate. His Honour considered Mr Moore's contentions as to the role of Mr Macks in the administration of that company in 2000 and 2001 and his role as trustee of the bankrupt estate of Ms Dubois. He concluded that there was nothing in that conduct which provided any sufficient basis to embark upon an inquiry under s 179 of the Bankruptcy Act 1966 (Cth). His Honour also concluded that there were no communications between Mr Macks and Mr Moore which provided any basis for the Court to infer that Mr Macks had some significant animosity towards Mr Moore. Beyond that, as his Honour noted, the conflict of interest assertion had not been particularised. He described Mr Moore's contentions as being no more than inviting his Honour to speculate about Mr Macks' general attitude towards Mr Moore or about the reasons why Mr Macks should presently, as Mr Moore's trustee, have a conflict of interest. His Honour was not prepared simply to speculate about those matters in the absence of any material to support them. 29 The next category of matters which were said to provide the basis for an inquiry concerned certain alleged conduct of Mr Macks through communications with Mr Moore. Although there were significant allegations of improper conduct on the part of Mr Macks, they were extremely general. His Honour concluded that there was no foundation for any of those allegations. His Honour rejected those allegations. He indicated that there was no material of any substance to establish any impropriety in the professional relationship between Mr Macks and his legal advisers, nor any foundation for the serious allegation Mr Moore had made against those legal advisers. They were rejected "unambiguously" as providing any basis for the Court to embark upon an inquiry under s 179 of the Bankruptcy Act 1966 (Cth). 30 Dealing generally with the significant factual conclusions asserted by Mr Moore, his Honour said at [36]: I accept the submission of the respondent that it is inappropriate to order an inquiry on the strength of allegations which have no factual basis and agree that to do otherwise would encourage disaffected bankrupts to make baseless allegations which would have the effect of requiring trustees to needlessly expend time and costs in defending their position. 31 Nor was Mr Macks' decision to defer his decisions in relation to the conduct of the appeals from the primary judgment until his status as the trustee of Mr Moore was finally determined (by the judgment of 10 February 2006) indicative of any conduct which would warrant such an inquiry. That part of the application was then referred to this Court and determined by Besanko J as referred to above. 32 His Honour at [40] then referred to "the miscellany of other complaints raised by Mr Moore against Macks" and said that they all fall into the same category of "unsubstantiated assertion." 33 In my view, there is nothing which has been identified by Mr Moore which shows that any of his assertions contained within the grounds of his appeal have any prospect of success. They are discursive, general and remain unsubstantiated by any cogent reference to evidence or reasoning. The same may be said of his submissions of 27 March 2007. 34 The application for summary dismissal of the proceeding before Lindsay FM was filed on 14 June 2005 and ultimately argued on 2 December 2005. Mr Moore had ample opportunity to prepare for it. His proposed evidence, even in its assertive form, was received and considered. Subsequent to that hearing, the learned magistrate received further evidence from Mr Moore on his application and had regard to it. There is nothing to indicate that Mr Moore was not given an opportunity to present to the Court such material as he was properly entitled to present, or was not given the opportunity to make submissions on the matters which he sought to make submissions upon. His allegations of not being accorded procedural fairness, or of the Magistrate having demonstrated a closed mind towards his application, are simply unfounded on the material before me. 35 I take into account that the appeal in this matter has no apparent prospects of success. 36 There has been a delay in bringing the application for security for costs in respect of this appeal. The notice of appeal was filed on 17 May 2006. The notice of motion seeking security for costs was filed only on 14 February 2007, following correspondence shortly before that time. However, I do not regard that delay as sufficiently significant in the present circumstances to affect the view which, on balance, I have otherwise reached in relation to the application. That is because (as noted above) the conduct of that appeal had been delayed whilst Besanko J heard that part of the proceeding which had been referred to this Court. The appeal is inter-related with the matter before Besanko J which is now the subject of appeal SAD 7/2007. As is apparent from the orders which have been made, it is appropriate that both appeals be heard together. There is nothing to suggest that Mr Moore's position has been adversely affected by the limited action in respect of his appeal up to the present time, and indeed he has not pressed for this appeal to have been listed for hearing earlier. 37 In respect of the appeal from the judgment of Besanko J (SAD 7 of 2007), the notice of appeal states the grounds assertively as follows: 1. The legal principles governing the evidence and procedures were not properly applied. 2. Admissible evidence was excluded. The Judge acted unfairly and was biased. 3. See attached document of further grounds of appeal number 3 to 39. 38 I have read the subsequent paragraphs numbered 3 to 39. Apart from assertions without any identified basis (e.g. the judge did not consider properly), Mr Moore complains of having insufficient time to present his evidence. The complaint seems to be that he could not adduce the "evidence concerning mining joint venture, my credibility, Lawton not being credible and Wilson not being credible witnesses." 39 He also complains of Lawton and Wilson being represented and being allowed to appear at the hearing through counsel. He asserts that the appeals from the primary judgment were not part of his bankrupt estate. He asserts that the learned judge overlooked the existence of the appeals from the primary judgment. That is patently wrong. Nothing more need be said about it. He asserts that the learned judge should have found that Mr Macks had a relevant, but unspecified, conflict of interest which should have precluded him from taking any decision about the fate of the appeals from the primary judgment.