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Boensch v Pascoe

Boensch v Pascoe

Case [2007] FCA 1977 13 December 2007

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FEDERAL COURT OF AUSTRALIA
Boensch v Pascoe [2007] FCA 1977
BANKRUPTCY – Inquiry into conduct of trustee – grounds for removal – breakdown of relationship between trustee and bankrupt – admission of estimate of costs for voting purposes at creditors meeting – whether a conflict of interest exists when interests of creditors and interests of trustee are similar – use of Notice of Objection to discharge of bankruptcy
Bankruptcy Act 1966 (Cth) s 58, s 60, s 60(2), s 60(3), s 60(4), s 60(5), s 77(g), s 82(4), s 82(5), s 109(1)(a), s 109(10), s 134(1)(i), s 134(3), s 149A, s 149B, s 149D, s 149D(1)(d), s 149N(1)(d), s 155H, s 162(4), s 178, s 179, s 179(1)
Bankruptcy Regulations 1996 Schedule 4A, reg 8.08, reg 8.34A
Adsett v Berlouis (1992) 109 ALR 100
Boensch v Costin [2005] FMCA 1028
Cox v Journeaux (No 2) (1935) 52 CLR 713
Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45
Doolan v Dare [2004] FCA 682
Faulkner v Bluett (1981) 52 FLR 115
Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56
Jury v Westpac Corporation [1997] FCA 1277
Kellow v Dudzinski [2003] FCA 238
Macchia v Nilant (2001) 110 FCR 101
Maxwell-Smith v Donnelly [2006] FCAFC 150
Miller v Cameron (1936) 54 CLR 572
Moore v Macks [2007] FCA 10
Pascoe v Boensch & Anor (No 3) [2007] FMCA 2038
Re Alafaci; Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262
Re Gault; Gault v Law (1981) 57 FLR 165
Rogers v Asset Loan Co Pty Ltd [2006] FCA 434
Trkulja v Morton [2005] FCA 659
FRANZ BOENSCH v SCOTT DARREN PASCOE
NSD 2403 OF 2006
BUCHANAN J
13 DECEMBER 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 2403 OF 2006

BETWEEN:

FRANZ BOENSCH
Applicant

AND:

SCOTT DARREN PASCOE
Respondent

JUDGE:

BUCHANAN J

DATE OF ORDER:

13 DECEMBER 2007

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The application is dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 2403 OF 2006

BETWEEN:

FRANZ BOENSCH
Applicant

AND:

SCOTT DARREN PASCOE
Respondent

JUDGE:

BUCHANAN J

DATE:

13 DECEMBER 2007

PLACE:

SYDNEY

REASONS FOR JUDGMENT
BUCHANAN J:

Mr Franz Boensch was made bankrupt on 23 August 2005. Mr Scott Pascoe was appointed the trustee of Mr Boensch’s bankrupt estate. The present proceedings have been brought by Mr Boensch under ss 178 and 179 of the Bankruptcy Act 1966 (Cth) (‘the Act’). They seek the removal of Mr Pascoe as trustee (s 179) and orders setting aside a formal request for documents made by him on 29 November 2006 (s 178).
In support of his application for Mr Pascoe’s removal as trustee, Mr Boensch alleges a number of specific instances of misconduct or wrongful administration of his estate. They are:
1.Mr Pascoe failed to ensure, contrary to his indications to Mr Boensch, that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Boensch v Pascoe

Details

AGLC: Boensch v Pascoe [2007] FCA 1977
Case: [2007] FCA 1977
Decision Date: 13 December 2007

CaseChat Overview and Summary

In Boensch v Pascoe, the court dealt with an application by Mr Pascoe seeking various forms of relief against Mr Boensch, which included an order for Mr Boensch to be removed as trustee. The dispute arose out of legal proceedings before the Family Court of Australia (FMCA), where Mr Boensch was represented on a contingency fee basis. The application was based on the contention that Mr Boensch’s actions were inappropriate and warranted his removal from his trustee role. The court was tasked with determining whether the application provided sufficient grounds for the relief sought.

The primary legal issue the court had to address was whether Mr Pascoe’s application had any merit and if the actions taken by Mr Boensch warranted his removal as trustee. The court examined the legitimacy of the request for information about Mr Boensch’s legal representation and whether it provided grounds for any action under section 178 or supported the application for removal as trustee. The court also considered whether the Notices of Objection to discharge dated 27 November 2006 and 10 January 2007, along with the request for information about the source of the fees for Mr Boensch’s legal representation, constituted sufficient grounds for the relief sought.

The court found that Mr Pascoe’s request for information about the source of the fees for Mr Boensch’s legal representation was legitimate and did not warrant any action under section 178. The court also determined that neither the request for information, the Notices of Objection, nor their combination provided any support for the application to remove Mr Boensch as trustee. Consequently, the court concluded that no case had been made for the grant of any relief. The court dismissed the application and directed that the question of costs would be addressed at a later time.

Orders

Orders of the court

1. The application is dismissed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

BUCHANAN J

The other part of Mr Pascoe’s letter sought information about the source of the fees for Mr Boensch’s legal representation before the FMCA. In my view such a request was legitimate, whenever made. Later Mr Pascoe was informed that Mr Boensch was being assisted on a contingency basis. Why that could not have been explained earlier was not made clear. This request affords no basis either for any action by the Court under s 178. Nor does it, whether regarded alone or in combination with either or both of the Notices of Objection to discharge dated 27 November 2006 and 10 January 2007 provide any support for the application that Mr Pascoe be removed as trustee.CONCLUSIONS No case has been made for the grant of any relief. I will dismiss the Amended Application. Mr Pascoe has asked that I not deal with any question of costs before dealing with the relief sought. I will hear the parties on costs at a time to be fixed.

Ratio Decidendi

Legal Principle Established

Established by: BUCHANAN J

Full text does not contain this section.

Citations

AGLC Citation

Boensch v Pascoe [2007] FCA 1977

Most Recent Citation

Boensch v Pascoe (No 2) [2008] FCA 1127

Cases citing this decision · 17 of 17 shown

Storry v Clout
[2024] FCA 1274 Para 14

…has somehow impacted on the finalisation of her late father’s estate carries little weight. As Buchannan J held in Boensch v Pascoe [2007] FCA 1977 at [92], “a bankrupt should not be allowed, by an assiduous pattern of resistance to the trustee of [their] estate, to generate and then rely upon a suggested reason f…
Mokhtar v Piscopo
[2024] FCA 493 Para 2

…breakdown in a relationship between the trustee and bankrupt will not always justify removal of the trustee. As Buchannan J held in Boensch v Pascoe [2007] FCA 1977 at [92]–[93] (also in the context of an application under s 179): Obviously enough, a bankrupt should not be allowed, by an assiduous pattern of resi…
Masih & El Saeid (No 2)
[2023] FedCFamC1F 939 Para 36

…on”. Section 60(2) and s 60(3) are complementary to s 58, applying only to proceedings on foot when a bankruptcy commences ( Boensch v Pascoe [2007] FCA 1977 at [22] (per Buchanan J)).…
Pekar v Holden (Trustee)
[2019] FCA 442 Para 20

…ine Management Pty Ltd (2007) 234 CLR 52 at [67]. See also Jambrecina v Official Trustee in Bankruptcy [2005] FCA 236 at [12]; and Boensch v Pascoe [2007] FCA 1977 at [43].…
Boensch as trustee of the Boensch Trust v Pascoe
[2018] FCAFC 234 Para 8

…On 13 December 2007, Mr Boensch’s proceedings against Mr Pascoe were dismissed ( Boensch v Pascoe [2007] FCA 1977; (2007) 5 ABC(NS) 480).On 17 December 2007, Ms Nash sent an email to Mr Pascoe concerning those proceedings, but at the same time making some observations concerning the proceedings in the Federal Magi…
Psevdos v Commonwealth Bank of Australia
[2018] SASC 9 Para 35

…tends to an appeal,[1] including one brought by a bankrupt in their capacity as trustee.[2] [1] Moore v Macks [2007] FCA 10 at [12]; Boensch v Pascoe [2007] FCA 1977 at [23]; Psevdos v Commonwealth Bank of Australia [2016] FCA 844 at [19] (2016) 248 FCR 430 at 436. [2] Duckworth v Water Corporation [2012] WASC 30…
Psevdos v Commonwealth Bank of Australia
[2016] FCA 844 Para 13

…In Boensch v Pascoe [2007] FCA 1977 ( Boensch ) a bankrupt, Mr Boensch, applied for an order for an enquiry under s 179 of the Act as to whether the trustee of his bankrupt estate, Mr Pascoe, should be removed. An issue arose as to whether an appeal that had been commenced by Mr Boensch prior to his becoming a ban…
Patel v Ruhe
[2016] FCA 520 Para 7

…50]; Trkulja v Morton [2005] FCA 659 at [4]; Maxwell-Smith v Donnelly [2006] FCAFC 150 at [53]; Moore v Macks [2007] FCA 10 at [30]; Boensch v Pascoe [2007] FCA 1977 at [10]-[15]; Ferella v Official Trustee in Bankruptcy (No 2) [2011] FCA 619 at [11]-[20]).…
Fewin Pty Ltd v Burke
[2016] FCA 503 Para 5

…stee submitted, the Court invokes a two stage process when considering an application under s 179 of the Act. This was recognised in Boensch v Pascoe [2007] FCA 1977 ( Boensch ) by Buchanan J at [5]–[7] where he observed that the Court’s power to supervise the conduct of a trustee under s 179 is broad and that, wh…
Franz Boensch as trustee of the Boensch Trust v Scott Darren Pascoe
[2015] NSWSC 1882 Para 7

…In the meantime, on 13 December 2007 Mr Boensch’s proceedings against Mr Pascoe were dismissed (see Boensch v Pascoe [2007] FCA 1977). Ms Nash, in an email to Mr Pascoe on 17 December 2007 concerning those proceedings, made some observations concerning the proceedings in the Federal Magistrates Court. She referred…
DJO Enterprises Pty Ltd v Howell (as trustee of the Bankrupt Estate of Pamela Anne Thomson)
[2014] FCCA 2023 Para 1

…First and Second Respondents, a useful summary of the principles in relation to the application of s.179 of the Act can be found in Boensch v Pascoe [2007] FCA 1977 per Buchanan J at paragraphs 10 to 15:- “[10] Examination of this issue sheds light on the quality of the case necessary to order that an inquiry be…
Khadpekar v Official Trustee in Bankruptcy
[2013] FMCA 186 Para 2

…whether an inquiry should be held into the conduct of a trustee in bankruptcy.[13] [13] Boensch v Pascoe (2007) 5 ABC(NS) 480 at 482 per Buchanan J; [2007] FCA 1977 at para.7 per Buchanan J (“ Boensch ”).…
Wenkart v Pantzer
[2010] FCA 866

…n [1976] 2 NSWLR 415, considered Barrett Property Group Ltd v Metricon Homes Pty Ltd (No 2) [2007] FCA 1823, cited Boensch v Pascoe [2007] FCA 1977, 5 ABC(NS) 480, cited Byrnes v Jokona Pty Ltd [2002] FCA 41, cited Cherry v Boultbee (1839) 4 My & Cr 442, 41 ER 171, considered Dias Aluminium Products Pty Ltd v Ullr…
Stillman v Pascoe
[2010] FMCA 548 Para 2

…st whether an inquiry should be held into the conduct of a trustee in bankruptcy.[5] [5] Boensch v Pascoe (2007) 5 ABC(NS) 480 at 482 per Buchanan J; [2007] FCA 1977 at para.7 per Buchanan J (“ Boensch ”).…
Wade v Leroy
[2010] FCA 178 Para 13

…In Boensch v Pascoe [2007] FCA 1977, Buchanan J dealt with an application for an inquiry into the conduct of a trustee. In that case, his Honour determined what must be established to demonstrate a basis for removal and specifically where it was alleged there had been a breakdown in the relationship between truste…
Boensch v Pascoe (No 2)
[2008] FCA 1127 Para 1

…On 13 December 2007 I dismissed an application by Mr Boensch seeking the removal of Mr Pascoe as his trustee ( Boensch v Pascoe [2007] FCA 1977). In a later judgment, on 27 March 2008, I made orders as to costs of those proceedings ( Boensch v Pascoe [2008] FCA 412).…
Rose v Piscopo
[2010] FMCA 948 Para 1

…er in his written submissions in respect to the general principles of the application of s.179 referred the Court to the decision in Boensch v Pascoe [2007] FCA 1977 per Buchannan J at [10]: [10] Examination of this issue sheds light on the quality of the case necessary to order that an inquiry be held under s 179…

View all 17 citing cases →

Cases cited in this decision · 20 of 20 shown

Foots v Southern Cross Mine Management Pty Ltd
[2007] HCA 56 Para 13

…nature even though costs had not yet been taxed ( Thorpe v Bristile Ltd (1997) 80 FCR 330; Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56 at [67]). There was no reason to question the existence of the debts. The only issue at that point involved quantification of the debt for voting purposes. In my…
Pascoe v Boensch
[2007] FMCA 2038 Para 5

…the Rydalmere property was the subject of a valid declaration of trust made by Mr and Mrs Boensch on 23 August 1999 ( Pascoe v Boensch & Anor (No 3) [2007] FMCA 2038). It remains for the FMCA to consider whether the declaration of trust is void against the trustee under s 120 or s 121 of the Act. These matters do…
Moore v Macks
[2007] FCA 10 Para 10

…d recently that ‘a clear case must be made out to warrant an inquiry’ ( Maxwell-Smith v Donnelly [2006] FCAFC 150 at [53]; see also Moore v Macks [2007] FCA 10 at [30]. The necessity to establish some adequate foundation for removal of a trustee has been long established. In Miller v Cameron (1936) 54 CLR 572 Di…
Maxwell-Smith v Donnelly
[2006] FCAFC 150 Para 10

…be held under s 179 of the Act. A Full Court said recently that ‘a clear case must be made out to warrant an inquiry’ ( Maxwell-Smith v Donnelly [2006] FCAFC 150 at [53]; see also Moore v Macks [2007] FCA 10 at [30]. The necessity to establish some adequate foundation for removal of a trustee has been long establi…
Rogers v Asset Loan Co Pty Ltd
[2006] FCA 434 Para 24

…of property’ (see Cox v Journeaux (No 2) (1935) 52 CLR 713 at 721; Faulkner v Bluett (1981) 52 FLR 115 at 119; and Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 at [44] – [45]).…
BOENSCH v COSTIN
[2005] FMCA 1028 Para 18

…issed an application to set aside the bankruptcy notice. An appeal against that decision was dismissed by the FMCA on 12 July 2005 ( Boensch v Costin [2005] FMCA 1028). Mr Costin then, on 15 July 2005, petitioned to have Mr Boensch’s estate sequestrated on the basis the bankruptcy notice, founded upon the Local Cou…
Trkulja v Morton
[2005] FCA 659 Para 14

…In Trkulja v Morton [2005] FCA 659 Gray J said (at [4]): ‘The Court should be reluctant to undertake an inquiry, unless there are substantial grounds for believing that the trustee erred in the administration. If an inquiry is unlikely to reveal misconduct, it should not be undertaken. The Court should not unduly…
Doolan v Dare
[2004] FCA 682 Para 33

…had broken down to such an extent that Mr Pascoe should be removed for that reason. Reliance was placed on the judgment of Spender J in Doolan v Dare [2004] FCA 682 at [49]. His Honour said” ‘49. It seems to me that it is plain beyond argument that the relationship between the trustee and the bankrupt has totally…
Kellow v Dudzinski
[2003] FCA 238 Para 22

…did not vest in the trustee under s 58 of the Act. He relied on Jury v Westpac Corporation [1997] FCA 1277 ( ‘Jury’ ) and Kellow v Dudzinski [2003] FCA 238 ( ‘Dudzinski’ ). However the proposition is misdirected. Sections 58 and 60 of the Act have different work to do. In particular, s 60 applies only to proceed…
Wharton v Official Receiver in Bankruptcy
[2001] FCA 96 Para 15

…Mr Boensch places considerable weight on the following observations by Weinberg J in Wharton v Official Receiver in Bankruptcy (2001) 107 FCR 28 (at [77]): ‘Section 149A is an important provision. It provides a strong incentive to bankrupts to cooperate with their trustees during the administration of their estates.…
Macchia v Nilant
[2001] FCA 7 Para 5

…ary, to remove a trustee from office as found in ss 178 and 179 of the Act are broad. The historical origins of the powers were traced by French J in Macchia v Nilant (2001) 110 FCR 101.…
Jury, Houda v Westpac Banking Corp and Anor Jury, Eric Abraham v Westpac Banking Corp and Anor
[1997] FCA 1277 Para 22

…rgued that the appeal was not ‘property’ and therefore did not vest in the trustee under s 58 of the Act. He relied on Jury v Westpac Corporation [1997] FCA 1277 ( ‘Jury’ ) and Kellow v Dudzinski [2003] FCA 238 ( ‘Dudzinski’ ). However the proposition is misdirected. Sections 58 and 60 of the Act have different wo…
State Planning Commission v Della Vedova
[1997] FCA 720 Para 13

…ts relied on court orders in his favour. The orders were final in nature even though costs had not yet been taxed ( Thorpe v Bristile Ltd (1997) 80 FCR 330; Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56 at [67]). There was no reason to question the existence of the debts. The only issue at that point…
Re Gargan, Peter Alexander Ex Parte The Official Trustee in Bankruptcy
[1996] FCA 685 Para 7

…and allow a trustee a ‘proper opportunity to prepare and present his case on those matters’ (see Re Alafaci; Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262 at 268).…
Adsett, N. v Berlouis, H
[1992] FCA 549 Para 13

…In Adsett v Berlouis (1992) 109 ALR 100 a Full Court of this Court explored the general duty of a trustee under the Act as follows (at 107-108): ‘A trustee appointed in relation to a bankrupt becomes trustee of the bankrupt’s estate. The trustee is bound to administer that estate in accordance with the Bankruptcy Act…
Adsett v Berlouis
[1992] FCA 368 Para 13

…In Adsett v Berlouis (1992) 109 ALR 100 a Full Court of this Court explored the general duty of a trustee under the Act as follows (at 107-108): ‘A trustee appointed in relation to a bankrupt becomes trustee of the bankrupt’s estate. The trustee is bound to administer that estate in accordance with the Bankruptcy Act and B…
Re Gault; Gault v Law
[1981] FCA 167 Para 12

…In Re Gault; Gault v Law (1981) 57 FLR 165 Ellicott J said (at 173): ‘the court should be loath to order an inquiry unless it considers that on the evidence before it there are substantial grounds for believing that the trustee erred in his administration. If the court considers that an inquiry is unlikely to reveal…
Re Faulkner; Ex parte Official Receiver
[1981] FCA 3 Para 24

…mind, body or character and without reference to his rights of property’ (see Cox v Journeaux (No 2) (1935) 52 CLR 713 at 721; Faulkner v Bluett (1981) 52 FLR 115 at 119; and Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 at [44] – [45]).…
Miller v Cameron
[1936] HCA 13 Para 10

…2007] FCA 10 at [30]. The necessity to establish some adequate foundation for removal of a trustee has been long established. In Miller v Cameron (1936) 54 CLR 572 Dixon J with whom Evatt and McTiernan JJ agreed) said (at 580 – 581): ‘The jurisdiction to remove a trustee is exercised with a view to the interests of…
Cox v Journeaux (No 2)
[1935] HCA 48 Para 24

…pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property’ (see Cox v Journeaux (No 2) (1935) 52 CLR 713 at 721; Faulkner v Bluett (1981) 52 FLR 115 at 119; and Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 at [44] – [45]).…

Legislation cited in this decision · 2

Bankruptcy Act 1966 (Cth)
58 2 mentions (from Para 1)
Bankruptcy Regulations 1996 (Cth)
1 mention (from Para 6)

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2403 OF 2006

BETWEEN:	FRANZ BOENSCH Applicant
AND:	SCOTT DARREN PASCOE Respondent

JUDGE:	BUCHANAN J
DATE OF ORDER:	13 DECEMBER 2007
WHERE MADE:	SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2403 OF 2006

JUDGE:	BUCHANAN J
DATE:	13 DECEMBER 2007
PLACE:	SYDNEY