Doolan v Dare

Case [2005] FCAFC 69

FEDERAL COURT OF AUSTRALIA
Doolan v Dare [2005] FCAFC 69

BANKRUPTCY – remuneration of trustee – power of creditors to fix trustee’s remuneration –whether subject to election by trustee to be remunerated at the prescribed rate

Bankruptcy Act 1966 (Cth) ss 30, 64(1), 64(2), 64B(4), 64G, 64G(1), 64U(1)-(8), 109(1)(a), 161B, 162(1),162(4), 162(6A), 180
Judiciary Act 1903 (Cth) s 39B(1A)

Bankruptcy Regulations 1996 (Cth) reg 8.08, 8.09, 8.12

Adsett v Berlouis (1992) 37 FCR 201 cited
Australian Communications Exchange Ltd v Deputy Commissioner of Taxation (2003) 201 ALR 271 cited
Cakmak v Minister for Immigration & Multicultural & Indigenous Affairs (2003) 135 FCR 183 cited

Jefferson v Official Trustee in Bankruptcy (2000) 175 ALR 671 cited

Korda; In the matter of Stockford Limited (Subject to Deed of Company Arrangement) (2004) 52 ACSR 279 cited
Mayne v Jaques (1960) 101 CLR 169 cited

Re Palmer; ex parte Taylor (1988) 18 FCR 271 cited

WILLIAM EDWARD DOOLAN v TRACEY JOY DARE

Q210 of 2003

LEE, MERKEL & HELY JJ
4 MAY 2005
PERTH (Heard in Brisbane)


IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

Q210 OF 2003

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

WILLIAM EDWARD DOOLAN
APPELLANT

AND:

TRACEY JOY DARE
RESPONDENT

JUDGES:

LEE, MERKEL & HELY JJ

DATE OF ORDER:

4 MAY 2005

WHERE MADE:

PERTH (Heard in Brisbane)

THE COURT ORDERS THAT:

1.The appeal be dismissed. 

2.Within seven days the parties file submissions on the costs of the appeal otherwise there be no order as to costs.

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


IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

Q210 OF 2003

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

WILLIAM EDWARD DOOLAN
APPELLANT

AND:

TRACEY JOY DARE
RESPONDENT

JUDGES:

LEE, MERKEL & HELY JJ

DATE:

4 MAY 2005

PLACE:

PERTH (Heard in Brisbane)

REASONS FOR JUDGMENT

THE COURT:

  1. This is an appeal from a judgment of a judge of this Court (Kiefel J) in which her Honour, inter alia, declared that the respondent, as trustee of the bankrupt estate of the appellant, “may claim remuneration in accordance with” reg. 8.08 of the Bankruptcy Regulations 1996 (Cth) (“the Regulations”) and s 162(4) of the Bankruptcy Act 1966 (Cth) (“the Act”).

  2. The relevant facts were as follows.

  3. On 2 June 1999 a sequestration order was made against the estate of the appellant and the respondent became trustee of the estate.  The appellant was discharged from bankruptcy on 24 June 2002. 

  4. The first meeting of creditors of the appellant was held on 11 October 1999. Section 64U(1) of the Act required the President of that meeting to ask the respondent to state the basis on which the respondent wished to be remunerated. The President, described by her Honour as “a representative of the [respondent]”, did not ask that question and the respondent did not inform the meeting of the basis on which she wished to calculate…

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Doolan v Dare [2005] FCAFC 69
Case
[2005] FCAFC 69
Decision Date

CaseChat Overview and Summary

In Doolan v Dare, the respondent, a registered trustee, appealed against a decision by the President of the Bankruptcy Division of the Federal Court. The dispute centred around the remuneration of the trustee in the context of bankruptcy proceedings, specifically in relation to the provisions of s 64U of the Bankruptcy Act 1966 (Cth). The legal issue before the court was whether the new subsection 5A, inserted by the Bankruptcy Legislation Amendment Act 2002, applied to meetings held before the effective date of the amendment, 18 December 2002.

The court considered the language of the Amending Act and whether it demonstrated an intention to apply retrospectively. The court noted that the new subsection 5A was not retrospective in nature and was intended to apply only to meetings held after the 18 December 2002. The court found that the statutory language did not indicate any intention to make the amendment retrospective, and therefore, the new requirements did not apply to meetings held before that date.

Accordingly, the appeal was dismissed. The court ordered that within seven days, the parties were to file submissions on the costs of the appeal, otherwise there would be no order as to costs.

Orders

Orders of the court

1. The appeal be dismissed.

2. Within seven days the parties file submissions on the costs of the appeal otherwise there be no order as to costs.

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

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Ratio Decidendi

Legal Principle Established

As at 11 October 1999 s 64U of the Act read as follows: ‘64U Remuneration of registered trustee(1) If the meeting is the first meeting of the bankrupt’s creditors and the trustee is a registered trustee, the President must then ask the trustee to state the basis on which the trustee wishes to be remunerated. (2) If the trustee states that he or she wishes to be remunerated as prescribed by the regulations, the minutes secretary is to record that statement in the minutes of the meeting. (3) If the trustee states a different basis for the fixing of his or her remuneration, the following provisions of this section have effect. (4) The President must invite the creditors and their representatives to propose a motion that the trustee be remunerated in accordance with the statement and, if no such motion is proposed, the trustee may propose such a motion. (5)A statement to be made by the trustee as mentioned in subsection (3) must: (a) if the trustee proposes to charge on a time-cost basis: (i)if there is only one rate at which the remuneration is to be calculated—state that rate; or (ii)otherwise—state the respective rates at which the remuneration of the trustee and the other persons who will be assisting, or will be likely to assist, the trustee in the performance of his or her duties are to be calculated; or (b)if the trustee proposes to charge on the basis of a commission upon money received by the trustee —state the rate of that commission; and must also state the periods at which the trustee proposes to withdraw funds from the bankrupt’s estate in respect of the trustee’s remuneration. (6) Any of the creditors and their representatives may ask the trustee questions about the proposed remuneration of the trustee and, if such a question is asked, the trustee must answer it. (7) Any of the creditors and their representatives may move an amendment to a motion proposed in accordance with subsection (4) so as to change in any way the basis on which the trustee is to charge or the periods at which the trustee may withdraw funds in respect of his or her remuneration or to refer the fixing of the trustee’s remuneration to a committee of inspection. (8)If the meeting is not the first meeting of the bankrupt’s creditors and the trustee is a registered trustee, the President must request the trustee to lay before the meeting a statement of the amount of remuneration drawn by the trustee from the funds of the bankrupt’s estate before the meeting was held and the trustee must comply with the request.’ A new subsection 5A was inserted in s 64U by the Bankruptcy Legislation Amendment Act 2002 (Cth) (“the Amending Act”) and was said to apply to meetings held after the 18 December 2002. The new subsection read as follows: ‘(5A) The statement under subsection (3) must also include: (a) an estimate of the total amount of the trustee’s remuneration; and (b) an explanation of the likely impact of that remuneration on the dividends (if any) to creditors.’