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Bankrupts and International Travel - A Tale of Tinkler's Travel Triumph

You may have seen the case involving Nathan Tinkler and his Trustee in Bankruptcy with respect to Mr Tinkler’s application for travel[1]. In that case, provided conditions were met, the Court ordered that the bankrupt be allowed to travel overseas. As such I thought that it was a fitting time for a reminder as to the issues surrounding international travel for bankrupts.

Section 272 of the Bankruptcy Act 1966 (“Act”) details the circumstance around a bankrupt “Leaving Australia” and provides that a person leaving Australia with intent to defeat creditors or without consent of their trustee is guilty of an offence. In particular:-

“A person who …after he or she has become a bankrupt and before he or she is discharged from the bankruptcy, without the consent in writing of the trustee of his or her estate, leaves Australia, or does an act preparatory to leaving Australia…Is guilty of an offence and is punishable, on conviction by imprisonment for a period not exceeding three years.”

The Act further notes that a Trustee can impose conditions on a bankrupt’s travel including conditions in relation to unpaid income contributions. Any contravention of the conditions imposed may attract a prison term, upon conviction, of up to one year.

In the abovementioned case, Mr Tinkler requested permission from his Trustee to travel to the United States of America between 29 January 2017 to 8 April 2017 to attend a job interview and to spend time with his children. The Trustee in Bankruptcy denied the request as he believed that the bankrupt may be a “flight risk”. It is important to note that Mr Tinkler sought permission to travel on a number of occasions during his bankruptcy which had been refused. Accordingly, the bankrupt applied to the Court pursuant to Section 178 of the Act seeking a review of the Trustee’s decision.

Whilst Nicholas J ultimately ordered that the Trustee in Bankruptcy’s decision refusing the bankrupt consent to travel to the USA be set aside, it is interesting to note his comments that “At the conclusion of the hearing on 27 January 2017 I indicated to the parties that I was not satisfied that the applicant should be permitted to travel on 29 January 2017 as he proposed. In particular, I was not satisfied that there was any reason why the arrangements made in relation to both the job interview in New York and the care of the children in Hawaii could not be modified to accommodate a later departure date.

On reading the case it is apparent that the administration of the Bankrupt Estate had not been straightforward and the bankrupt had been less than co-operative throughout the course of same. There were also creditors of $554m in the Estate. Accordingly, the decision of the Trustee to allow the bankrupt to travel was not straightforward.

In Mr Tinkler’s case, Nicholas J referred to Re Hicks; Ex Parte Lamb[2] in which Heery J suggested that there were three questions “at the forefront in the exercise of the Court’s discretion in reviewing the trustee’s decision”:-

  1. Is the proposed visit genuine?

  2. Is the bankrupt likely to return to Australia as promised?

  3. Will the visit hamper the administration of the estate?

Nicholas J also stated that a significant consideration may be the “the extent to which the bankrupt has complied with his or her obligations under the Act”. His honour also noted that in some instances it might be relevant to consider how candid a bankrupt had been about their travel, for example, how the trip had been funded.

In addition, Official Trustee Practice Statement 3 “Overseas travel in bankrupt estates administered by the Official Trustee” notes that there are four factors that the Official Trustee will take into account when considering international travel requests, namely:-

  1. Has the bankrupt provided all of the information requested by the Official Trustee?

  2. Are there any outstanding matters that require the bankrupt’s presence in Australia for their resolution?

  3. Has the bankrupt been assessed as liable to make contributions from his/her income and, if so, are contributions payments up-to-date?

  4. Is there any reason to suspect that the bankrupt will fail to return to Australia?

On the reading of the Tinkler Case it appears as though the trustee had outstanding issues or queries concerning most, if not all of the above factors.

Whilst Nicholas J did not accept the Trustee’s assertion that Mr Tinkler was a flight risk, he did note that it was likely that further information was required from the bankrupt before the Trustee could finalise the income assessment. His Honour acknowledged the bankrupt’s absence from Australia for several months could possibly hamper the ability of the Trustee to obtain the information required to attend to same. However, instead of refusing the bankrupt’s international travel, His Honour advised that he would be satisfied that the bankrupt’s absence from Australia would not hamper the administration of the Bankrupt estate if the Bankrupt were to give an undertaking to the Court to provide the Trustee with relevant information, as requested, during the period he would be overseas.

In addition, the Trustee sought payment from the bankrupt equal to the outstanding income contribution prior to his proposed travel. His Honour, however, accepted evidence provided by the bankrupt that he did not receive any wages during the relevant period and that he did not have the means to pay the proposed income contribution liability.

The Trustee sought to obtain a “security” from the bankrupt in the amount of $500K which would be forfeited should Mr Tinkler not return to Australia by 8 April 2017. His Honour, however, did not deem that it was necessary, just or equitable to impose same, instead seeking an undertaking from the bankrupt that he will return to Australia by no later than 8 April 2017 and, as soon as practicable thereafter, return his passport to his Trustee.

Subject to the undertakings in relation to the provision of information, and return to Australia being provided by the bankrupt, His Honour made orders setting aside the Trustee’s decision refusing the bankrupt’s travel.

As noted by Nicholas J “The authorities recognise that a trustee’ decision to refuse a bankrupt permission to travel overseas is in a special category because it affects the freedom of movement of a person who may not have committed or been charged with any offence”.

If you have any queries in relation to bankrupts’ rights and obligations in relation to travel, or in relation to insolvency generally, please send me an email on

This article is intended to provide general information only in summary format on relevant issues. It does not constitute legal or financial advice, and should not be relied on as such.


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