Bankruptcy – insolvency – evidence law

The process of inferential reasoning – Jones v Dunkel where a witness has already been subjected to a compulsory examination

In El-Debel v Micheletto (Trustee) [2021] FCAFC 117 (30 June 2021), the trustees in bankruptcy of the bankrupt (trustees) alleged that all or part of the purchase price for four properties, registered in the names of parties associated with the bankrupt, had been provided by him.

On that basis, the trustees claimed that the whole or part of the interests of those associated parties in the properties were held on resulting trust for the bankrupt.

The trustees sought declarations pursuant to s31(f) of the Bankruptcy Act 1966 (Cth) to the effect that each of the properties formed part of the property that was divisible among the creditors of the bankrupt.

The primary judge upheld the claims by the trustees. Appeals were brought by the bankrupt and associated parties to him.

One of the many issues raised on appeal concerned the primary judge’s use of the bankrupt’s absence as a witness, as a basis for concluding that the bankrupt funded the certain properties, in circumstances where reasoning in that manner was impermissible (at [95(3)]).

This and other issues led the Full Court to state legal principles and authorities concerning the process of inferential reasoning in civil proceedings (at [98]-[107]).


The Full Court considered the rule in Jones v Dunkel, namely that the unexplained failure by a party to call a witness may, in appropriate circumstances, support an inference that the uncalled evidence would not have assisted the party’s case (at [105]).

Relevantly, the court considered the application of Jones v Dunkel in circumstances where a party has been required to submit to a compulsory examination, concerning matters the subject of subsequent proceedings, and the transcript of the examination has been relied on in those proceedings (at [207]-[217]).

Markovic, Derrington and Colvin JJ stated: “It may be that the fact that a party has submitted to a compulsory examination in which questions were directed to the matters in issue, could be advanced as a particular reason why there is no reasonable expectation that the party would again give evidence as to the same matters, the evidence having already been given and tested” (at [211]).

However, the court rejected the submission that Jones v Dunkel should not be applied in any case where the witness had already been subjected to a compulsory examination (at [212], [216]-[217]).

Dan Star QC is a Senior Counsel at the Victorian Bar, ph 03 9225 8757 or email The full version of these judgments can be found at Numbers in square brackets refer to a paragraph number in the judgment.

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