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30 August 1994
WITHOUT PREJUDICE
Hon Michael Lavarch MP
Attorney-General
Parliament House
CANBERRA ACT 2600
Dear Attorney-General
I write to you on behalf of Mr & Mrs Raymond Latona of 52 Old Northern Road, Baulkham Hills 2153. At least one of your predecessors, the Hon Lionel Bowen MP, would have received earlier representations on behalf of Mr & Mrs Latona including from the writer.
Mr & Mrs Latona are currently involved in legal proceedings against the Official Trustee in Bankruptcy in the Supreme Court of NSW, claiming damages against the Official Trustee arising out of the handling of their estates during their respective bankruptcies in the 1980s (Raymond Richard Latona no 472 of 1982- 4 [Al], Mary Elizabeth Latona no 252 of 1983-6 [Al]).
It is a gross understatement to say that this is an extraordinary case -
Mr & Mrs Latona have good reason to believe that their original bankruptcies were obtained through perjured evidence and there is a strong presumption that fraudulent documents were used.
The summary of assets and liabilities filed in Mr Latona's estate showed a surplus of assets over liabilities of $746,262. Prima facie this must have raised some doubts about the basis on which the bankruptcy was originally obtained
The facts were that the Latonas were not insolvent at the time of Mr Latona's bankruptcy. The Bankruptcy petition against Mr Latona was based on an alleged debt of $11,000 which was heavily disputed.
At the time of the bankruptcy of Mr Latona finance of $540,000 from Midland Credits Limited had been arranged to pay out creditors and a mortgage signed to secure this loan. Other finance companies Standard Chartered Finance Limited, Email Finance Limited and Custom Credit Corporation Limited, as creditors, were concerned that the matter had proceeded to bankruptcy and had been prepared to wait for some kind of scheme of arrangement in lieu of bankruptcy.
I am told that, even after the bankruptcy, Charter Mortgage Corporation Limited had been willing to lend money to pay out both secured and unsecured creditors.
The basis of Mr Latona's claim that his bankruptcy was obtained improperly is that the petition was based on a default judgement obtained by Wattawa Constructions Pty Ltd whereas if any liability had existed it would have been to a Mr Butcher, a principal of Wattawa.
Butcher was examined before the Registrar in Bankruptcy on 12 March 1986 and I am advised that there is a clear conflict between what Butcher said under examination and what was said at the hearing of the bankruptcy petition.
Angry though they were at the way in which the bankruptcy was originally obtained it is as nothing compared with their anger out the negligent way in which their bankrupt estates were administered by the Trustee in Bankruptcy.
They believe that the appointed Trustee, a Mr Aitken, negligently managed their estates and in particular disposed of many of the assets of the estate at a gross undervalue.
Mr & Mrs Latona regularly complained about Mr Aitken. The Official Receivers Office will have records of these complaints which were directed to Mr Noel Bluett and to Mr Pigeon, one of his senior officers.
Aitken was subsequently removed from the Trustees list, became bankrupt himself, and I am told that findings adverse to him emerged from the judgement of the Supreme Court in the TransTasmnan Timbers Case.
Such was the concern of the Latonas at one stage concerning the administration of their estates that they placed caveats on the titles of certain properties to prevent their sale at gross undervalue only to see the caveats removed by Mr Aitken in his then capacity as Trustee.
This matter has been the subject of earlier representations. Some of those came from my colleague Mr Alan Cadman MP and I am informed that at one stage the former Attorney-General, the Hon Lionel Bowen, indicated that some kind of act of grace settlement could be available however proceedings would need to be initiated.
In 1988 Mr & Mrs Latona commenced proceedings in the Supreme Court of NSW seeking damages for inter alia the negligent way in which their estates had been handled by the Trustee in Bankruptcy.
The Statement of Claim was duly served and as no defence had been filed a default judgement was entered against the Trustee in Bankruptcy. It subsequently transpired that the Statement of Claim had been inadvertently archived, or at the very least "put into the wrong file" and an application was made by the Trustee in Bankruptcy to have the default judgement set aside.
The Latona's then solicitor apparently consented to the setting aside of the judgement in the belief that an order to that effect would be obtained in any event. I am told that the solicitor did not at the time have instructions from Mr & Mrs Latona to consent to the setting aside of the judgement. It should be noted that the statement of claim had been served on the official trustee on 27 October 1988, judgement ended in May 1989 and the judgement set aside on 22 September 1989.
Even more misfortune was to occur for Mr & Mrs Latona. The default judgement against the official Trustee attracted considerable press publicity and they were inundated with offers of interim finance from banks and finance companies.
The National Australia Bank eventually concluded a loan arrangement based entirely on the personal guarantee of Mr & Mrs Latona. They had a default judgement and were awaiting assessment of damage. They themselves were quite ignorant of the possibility, so I am informed, that the judgement could be set aside.
As indicated the judgement was set aside and the unfortunate Latonas were again made bankrupt on the basis of their failing to meet their personal guarantee to the National Bank(or it may have been one of its :finance subsidiaries). These second bankruptcy proceedings were P806 of 1991 and W1526 of 1992.
To make matters even worse Mr & Mrs Latona have had a number of changes of solicitors in recent years. One of the solicitors died and two others saw their practices go into receivership. Their current solicitors Messrs Haskard & Co have only been recently instructed and are well and truly hamstrung because the Law Society Trustee administering the practice of the former solicitor has not yet delivered all of the papers nor been in a position to fully account for trust monies paid by the Latonas.
The court proceedings currently stand adjourned. The Official Trustee has filed a motion to strike out the Latonas proceedings for want of prosecution. The next call over of the matter is likely in October or November.
My purpose in writing is to put it too you, in the strongest possible terms, that this matter is deserving of a sensible negotiated settlement.
It has many bizarre features but it cannot be disputed that there is plenty of evidence regarding the dubious way in which the Latonas were originally made bankrupt. Equally, the evidence regarding negligent administration of their estates is extremely compelling.
In this latter connection I enclose a document prepared by B W Walker Actuarial Services Pty Ltd which attempts to assess compensation for Mr & Mrs Latona. This was originally prepared in November 1986 but a note attached to it updates the amount of compensation to the 5th of March 1993.
The amount in the document may appear a staggering sum but it should be remembered that at the time of their original bankruptcy the Latonas were quite wealthy people in their mid-40s with every expectation of continued affluence and many productive working years ahead of them.
Various aspects of this whole matter have been before the courts and details of these proceedings will undoubtedly be held by your department. In particular, I draw your attention to proceedings in the Federal Court before Ellicott, J where evidence was given by Mr Humphrey Reeve, a handwriting expert from the United Kingdom, that documents organised between Mr Butcher and other players in this unhappy saga had been forged and prepared on Butcher's own typewriter.
I believe great injustice has occurred. Mr & Mrs Latona do not have the resources to properly litigate the matter. They both remain in undischarged bankruptcy following the unfortunate circumstances I have just mentioned.
I ask that you give sympathetic consideration. I, along with Mr & Mrs Latona's solicitor, would be happy to attend any conference you might suggest with an appropriate senior officer in your department or your goodself.
Yours sincerely
John Howard
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