Delic v Kazar and Slaven as Joint Trustees in the Bankrupt Estate of Delic (No 3)

The proceeding concerned an application by the bankrupt, Mr Delic, for an order that the joint trustees of his bankrupt estate, Mr Kazar and Mr Slaven, be removed. The application was brought pursuant to s 153A of the *Bankruptcy Act 1966* (Cth). The matter came before Manousaridis J in the Federal Court of Australia.

The primary legal issue before the Court was whether the conduct of the trustees, specifically their failure to provide a satisfactory explanation for the delay in administering the bankrupt estate and their alleged failure to provide adequate information to the bankrupt, constituted grounds for their removal under s 153A of the *Bankruptcy Act*. The bankrupt also sought orders for the trustees to provide a full and frank account of their dealings with the estate.

Manousaridis J considered the principles governing the removal of trustees, noting that the Court has a broad discretion to remove a trustee where it is just and equitable to do so. His Honour found that while there had been some delays in the administration of the estate, these were not of such a nature as to warrant removal. Crucially, the Court determined that the trustees had not acted improperly or in bad faith. The evidence did not establish that the trustees had failed to provide adequate information or had otherwise acted in a manner that would justify their removal. The Court also noted that the bankrupt had not demonstrated that the trustees had failed to discharge their duties in accordance with the *Bankruptcy Act*.

The application for the removal of the trustees was dismissed.