Case: Commonwealth v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394
Outcome: cited
have not overlooked the expense which CBFC and the CBA have clearly incurred in the proceedings under the Absconding Debtors Act . It was their choice to bring those proceedings. They did so to take advantage of the different, and lower, threshold for a warrant for arrest under the Absconding Debtors Act . They did so in the light of the risk of Mr Sim applying for an order under s 60 of the Bankruptcy Act. That he did not bring this application earlier no doubt has increased the costs they have incurred, and that is a factor I have put into the balance. But I do not consider his defence of the proceedings in the NTSC involved him acting in a manner consistent only with Mr Sim having chosen not to exercise his right to apply under s 60 of the Bankruptcy Act, either generally or in the light of the reasons for judgment: cf Commonwealth v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394. There is also no evidence from CBFC or from the CBA that they continued to conduct the proceedings under the Absconding Debtors act relying upon any assumption of fact induced by Mr Sim's continued defence of those proceedings. One matter which counsel for CBFC and the CBA raised, which I reject, is that there was insufficient opportunity to make an application to this Court or to the FMC for an order under s 78 of the Bankruptcy Act at or immediately after the hearing of the petition, and so the application was made under the Absconding Debtors Act . The Registry of this court is open during normal hours and has an after-hours number. It is well known that a judge of the Court can be available at very short notice, if necessary, to hear any urgent application. That is not to say that it was inappropriate to have instituted the proceedings in the NTSC under the Absconding Debtors Act that was a matter for CBFC and the CBA but simply to reject one explanation for having done so. The reason for having done so, as appears from the transcript of the hearing in the SCNT and in his Honour's reasons at [63], is the judicial advantage under the Absconding Debtors Act compared to s 78 of the Bankruptcy Act that, as his Honour accepted, the Absconding Debtors Act does not require proof that Mr Sim was about to abscond with a view to avoiding payment of his debts. However, as I have sought to point out, that judicial advantage also illustrates a difference from the policy of the Bankruptcy Act in circumstances such as the present. Another matter raised by counsel for CBFC and the CBA which I reject is that Mr Sim has improperly delayed in making this application. In fact, he did so within a day of the reasons for judgment of the SCNT being published. As the factual issues before his Honour included whether Mr Sim did intend to abscond so as to avoid paying his debts, it was sensible for Mr Sim to await the reasons to see what factual finding was made on the issue. I have also had regard to Mr Sim's preparedness to undertake to the Court to return to Australia (by inference within a reasonable time) to assist his trustee in the event that he is made bankrupt. He is prepared to offer a surety for his return, Thomas Winter, in the sum of $15,000 and Mr Winter too has deposed to his preparedness to offer that surety and to his having assets sufficient to meet it. I propose to accept that undertaking, but to impose upon Mr Sim the time limit of three calendar months from this date, or such later date as may be agreed in writing by his trustee. He will, upon his return to Australia, have to surrender his passport to his trustee. His trustee, assuming Mr Sim is made bankrupt, will then have sufficient time to investigate Mr Sim's affairs in such manner as the trustee may consider appropriate, and to arrange for Mr Sim to be examined under s 81 of the Bankruptcy Act. The trustee will control Mr Sim's capacity to travel overseas so as to allow an adequate time to complete with Mr Sim such inquiries as he wishes. I am more disposed to accept that undertaking, supported by the surety, as Mr Sim has extensive family in Australia: an elderly parent, three children and seven grandchildren. Finally, I note (largely by way of an aside) that the Chief Minister on 22 November 1978 said of the Absconding Debtors Bill: '[I]t is really only a power that is exercised when the person will not comply with the order of the court. It is virtually imprisonment for contempt of the court's orders, not imprisonment for debt.' (Northern Territory, Parliamentary Debates, 22 November 1978, p 428-432). As the decision in the NTSC indicates, the power is exercisable in much wider circumstances, but for that reason its exercise may be vulnerable to an order under s 60 of the Bankruptcy Act. For those reasons, I order under s 60(1)(a) of the Bankruptcy Act that upon the written undertaking of Mr Sim to the Court to be filed in a form approved by the District Registrar that, in the event that a sequestration order is made against his estate, he will return to Australia within three calendar months of the making of the sequestration order and will cooperate with his trustee in respect of all inquiries and procedures which his trustee requires in relation to his bankruptcy, and upon Thomas Harry Edward winter providing to and filing in the Court a surety in the sum of $15,000 in a form approved by the District Registrar to the effect that, in the event that Mr Sim does not fully comply in every respect with his undertaking, Mr Winter will forfeit to the Crown the sum of $15,000, and that process may be executed against his property for the said sum of $15,000, the orders of the NTSC made on 10 July 2006 and extended on 4 August 2006 under the Absconding Debtors Act in respect of Mr Sim be discharged.