Hie Bankruptcy Law (Cap.7)(1997 Revision) and in I MF. Matter of Patricia II. Millard, A Debtor and William H. Millard, A Debtor
| Jurisdiction | Cayman Islands |
| Judgment Date | 26 November 2013 |
| Date | 26 November 2013 |
| Docket Number | FSD Nos. 60 and 61 of 2013 (AJJ) |
| Court | Grand Court (Cayman Islands) |
The Mon Mr Justice Andrew J. Jones QC
This is an application fur directions made by Messrs Kenneth Kays amd Margo Maclnnis in their capacity as joint agents for the Trustee in Bankruptcy in respect of the bankruptcies of Patricia H. Millard and her husband William H. Millard, whom I shall refer to as ‘theTrustee's Agents’ and ‘the Debtors’ respectively. They ask for a direction that the Auditor General shall not be required to audit the accounts of the Trustee in Bankruptcy in respect of these estates, essentially on the ground that it would service no useful purpose in circumstances where the administration has been delegated to professional insolvency practitioners. The Auditor General's position is that he has a statutory duty to audit these accounts and that this Court has no power to relieve him from the performance of his duty. I agree with him for the following reasons.
The office of Auditor General is established under the Constitution of the Cayman Islands, section 114(3) of which states that –
‘The Auditor General shall hare the power und responsibility to audit the public accounts of the Cayman Islands and the accounts and financial dealings of all authorities, offices and departments of Government and of all courts…’
By section 60 of the Public Management and Finance Law (2005 Revision) the Auditor General has a duty to audit the annual financial statements of the Judicial Administration, but this provision does not expressly include auditing the accounts maintained by or on behalf of the Trustee in Bankruptcy (which are of course wholly different from the departmental financial statements). However, I think that auditing the Trustee's accounts must fall within the scope of his constitutional responsibility because Trustee in Bankruptcy is, by section 12 of the Bankruptcy Law (1997 Revision), a public office attached to the Grand Court.
Section 94 of the Bankruptcy Law (1997 Revision) states that –
“The Trustee shall submit his accounts for audit at such times and in such manner as may be prescribed.’
Rules 58 and 79 of the Grand Court (Bankruptcy Rules), 1977 prescribe the timing and the manner in which this shall be done, as follows —
‘58 The accounts of the Trustee shall he submitted to the Clerk, audited by the Auditor of the Islands and approved and passed by the Judge in Chambers and before submission of the accounts to the Judge, the Clerk shall examine the Record Book and shall note thereon any matter which, in his opinion, calls for enquiry or explanation in connection with the due administration oJ The estate, and the Record Rook, with notes, if any, of the Clerk thereon, shall be laid before the Judge for examination on the passing of the accounts.
“79.The Record Book. Cash Book and the Trustee's hank account shall be submitted to the Auditor of the Islands during the fu st week in January and the first week in July each rear for audit.’
The Trustee's Agents accept that the Auditor General has authority to audit the accounts of the Trustee in Bankruptcy relating to every bankrupt debtor's estate, but their case is that the Court has an overriding discretionary power, arising under section 5 of the Bankruptcy Law (1997 Revision), to direct that the accounts prepared iu respect any particular estate need not be audited. Section 5 states that –
‘5. Subject to this Law, the Court has fuil power to decide all questions of priorities, and all other questions whatsoever whether of law or of fact, arising in any case of bankruptcy coming with the cognizance of such Court, or w hich such Court may deem it expedient or necessary to decide for the purpose...
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