Harberger, H.G. v Jas Smith Pty Ltd

[1982] FCA 118

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IN THE FEDERAL COURT OF AUSTRALIA )

1

VICTORIA DISTRICT REGISTRY	)	S . A .	No. 71 of 1980
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DIVISION GENERAL 1

Re: H. G. HARBERGER, a bankrupt

BETWEEN:

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JAS SMITH PTY. LTD. Applicant

and

!

B. K. TAYLOR (trustee of the
Of the estate of K. B. HARBERGER

a bankrupt) and tlhe Official

Bankruptcy Receiver in Respondents

ORDER

JUDGE MAKING ORDER:	Northrop J.
WHERE MADE:	Melbourne
-	DATE :	3 0 June 1982

accordance with the Bankruptcy Act 1966.

i	THE COURT ORDERS THAT:
1. The application be dismissed.
l	2. B. K. Taylor pay the applicant's costs of the

application and the costs of the Official Receive? in T.

Bankruptcy, a l l costs to be taxed and paid in

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IN THE FEDERAL COURT OF AUSTRALIA ) -

VICTORXA DISTRICT REGISTRY	)	S.A. No. 71 of 1980
1
GENERAL DIVISION

Re:  H. G. HARBERGER, a bankrupt

BETWEEN:

JAS SMITH PTY. LTD. Applicant

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and

B. K. TAYLOR (trustee of the
of the estate of K. B. HARBERGER

a bankrupt) and the	Official
Receiver in Bankruptcy	Respondents

NORTHROP J. REASONS FOR JUDGMENT 30 JUNE 1982

On 7 July 1981 Jas Smith Pty. Ltd., the applicant, made an application in matter No. 71 of 1980 (S.A.) seeking the following orders:

"1. An Order that the Respondents pay to the Applicant such dividend or dividends out of the property of the Bankrupt as the Court deems appropriate, together with interest on the said dividend, and the	cogts of this Application.
2.	A Declaration tnat the Respondents or one
or other of them:-
(a) Failed to send to the Applicant

reasonable, or any notice	of their
intention to declare	a dividend

before so declaring the dividend;

(b) Failed to make any or any adequate

provision for the Applicant's

provable debt in the calculation	and
distribution of the dividend:

(c)	Failed and continues to fail to declare and distribute a dividend
amongst he Creditors of the
Bankrupt with all convenient speed or at all.

3 . Such Orders as the Court considers

necessary for the pxposes of paying to

the Applicant a Sividend out of the

Bankrupt's properry and for such

directions, enquiries and accounts as the

Court considers necessary."

The two respondents to the application are Barry Keith

Taylor, who is sued as the trustee o€ the estate of K. B.

Harberger, a bankrupt,	and	the	Official	Receiver	in
Bankruptcy.

On 25 January 1980, the Court of Insolvency of the State of South Australia, exercising federal jurisdiction in
bankruptcy in the bankruptcy district	of South Australia,

made a sequestration order against the estate of Keith George Harberger. As a result of the order, the property of the

bankrupt forthwith vested in the Official Receiver of L

Bankruptcy, see s.58 of the Bankruptcy Act 1966 as then in force.

The applicant was a creditor of the bankrupt. By

letter dated	7 March	1980 the acting official receiver in
Adelaide forwarded a letter	to	the applicant's solicitors

stating, by implicacion, that the applicant may be	a creditor
in the estate of the bankrupt and forwarding a proof	of debt

form to enable a claim to be submitted. Formal parts of the letter can be ignored, but the final paragraph of the letter

is set out:

"The form must be sworn before a Justice of

the Peace, a Commissioner for taking

Affidavits or a Bank Manager. It is essential that the completed form be returned zo this office if you desire to participate in any dividend which may be paid in the estate."

The letter was headed "Department of Business and Consumer

Affairs" and the address of the office was given as

'Bankruptcy Branch, Official Receiver's Office, 8th Floor,

A.M.P. Building, 1 King William Street, Adelaide, S.A. 5000'."

The statement of affairs filed by the bankrupt in	the Registry
did not name the applicant as a creditor.	The letter to the

applicant's solicitors had been forwarded following a

telephone enquiry from the solicitors.

Under cover of a letter dated 31 March 1980 the

applicant's solicitors forwarded the completed proof of debt

form to the official receiver at the relevant address. The proof ok debt was received at the office of the official receiver but the date of receipt is not certain. it appears

from the proof of debt card kept in the office of the official

receiver that it was received after 24 March 1980, but before 5 May 1980. The official receiver compiles a proof of debt

card with respect to the estate of each bankruptcy being

administered by him. The names of creditors lodging proofs of

debt are placed in sequential order in order of receipt and a

number is allocated to each proof of debt. The date of

receipt is not recorded on the proof of debt card. In the	.
present case proofs of debt nombered 12 and 13 respectively have marked on them a stamp showing that each' had been received at the office of the official receiver on 24 March

1980.    On the proof of debt card the applicant's claim is

numbered 14 indicating that its proof of debt had been numbered 14. Proof of debt numbered 15 is marked as having

been received in the office of the official receiver on 5 May

1980 and that proof of debt had been forwarded from Melbourne

under letter dated 30 April 1980.

On l1 March 1980 a meeting of creditors of the bankrupt appointed the respondent, Nr. Taylor, of 5 7 6 St.

Kilda Road, Melbourne, the trustee of the bankrupt's affairs and gave him the discretion to realise whatever assets were necessary to discharge the creditors in the sum of 100 cents

in the dollar. Under cover of a letter dated 3 April 1980,

the .official receiver forwarded to Mr. Taylor the proofs of debt he had received to that date together with a copy of the proof of debt card. The card showed creditors numbered 1 - 13

inclusive, but proof of debt numbered 2 had been withdrawn and

re-lodged as proof of debt numbered 6 in the name of a

different creditor. Accordingly, twelve only proofs	of debt
were forwarded. Mr.	Taylor admits receiving the twelve proofs

of debt numbered 1 and 3 - 13 inclusive, but denies receiving the proof of debt card. He took no steps to query the absence of the proof of debt card. On the balance of probabilities I find that Mr. Taylor did receive the proof of debt card but placed no reliance on it. As appears later, on the evidence it seems that Mr. Taylor did not maintain a proof of debt card in a similar form to that kept by the official receiver. The

twelve proofs of debt with the numbers recorded	on them at the
office of the official receiver were produced by Mr.	Taylor

and appear in a file containing documents relating to the

proofs of debt lodged in the estate of the bankrupt. In that file there appears a document which is headed “List of proof of debt forms for Keith George Harberger“. In that document the proofs of debts are not numbered and there are errors contained in it, particularly as to the date on which some of

the proofs of debt forms were received. It appears that this

document had been prepared at the one time and subsequent to

the events giving rise to the present application.

Joseph Ronald Verrall, a realization officer

employed in the officerof the official receiver in Adelaide, gave evidence that on some date between 3 April 1980 and 13

May 1980 he caused to be forwarded under cover of a “with

compliments" card to Mr. Taylor the applicant's proof of debt being numbered 14 on the official receiver's proof of debt

card an2 being marked with the number 14. Mr. Taylor denies

receiving that proof of debt. Two employees of M?. Taylor

who, in the normal course of business would have seen that

proof of debt, each denies receiving it. At the time, one of

those employees was inexperienced in the work she was
performing. As appears hereafter, I find that the proof of

debt was forwarded to and received by Mr. Taylor. The proof

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of debt was received in the office of the official receiver,

was numbered l4 and its receipt recorded on the proof of debt

card. Proofs of debt from other creditors of the bankrupt

were received subsequently in the office of the official receiver and numbered 15 and 16 respectively and were forwarded separately to Mr. Taylor and each was received by him. The proofs of debt numbered 1 and 3 - 1 3 inclusive were not re-numbered in any way in the office of Mr. Taylor, the

original numbers only being used. A proof of debt dated 24

April 1980 was forwarded directly to Mr. Taylor by the

creditor concerned and was stamped as having been received on

28 April 1980. It is numbered 14 in red biro, but the " 4 " has been superimposed over another number also in red biro which has been partially erased. The erased number is either " 3 " or

"5". The earlier proof of debt in the file produced by Mr.

Taylor is numbered 13 in black biro and was placed thereon by an officer in the office of the official receiver. The

applicant's proof of debt would have had number 14 written on

it, together with the receipt stamp of the official receiver,
and either a pro-forma stamp or a printed form relating to the
registered number of the proof of debt, the amount and the

schedule number. If the applicant's proof of debt had been

placed on the file in Mr. Taylor's office, an employee of Mr.

Taylor, on receiving the next proof of debt, would have placed

the number "15" i n red biro on that proof.	The fact that the
original number, being either 13	or 15, has been erased and

the number 14 superimposed gives rise to suspicion.

The next proof of debt is numbered 16 in red biro

and is stamped as having been received in the	office of Mr.
Taylor on 24 June 1980.	The number 16 has been superimposed

upon the number 15 in blue biro. This supports the view that the previous proof of debt had been numbered 15 in the office of Mr. Taylor.

The proof of debt numbered 15 in the office of the

official receiver is stamped as having been received in that

That proof of debt was forwarded to Mr. Taylor under cover of	office on 5 May 1980. The creditor is the National Bank.
a letter dated 13 May 1980. The number 15 appearing on that
proof of debt should have warned Mr. Taylor that in all
probability there was a proof of debt numbered 14. Mr. Taylor
took-no step to seek an explanation from the office of the
official receiver. That proof: of debt form has not been
re-numbered by Mr. Taylor. It has written on it in red biro
the words "Cance l led . Pa id n f u l l " . T h i s m u s t r e f e r t o
subsequent events . By le t te r d a t e d 14 November 1980 t h e
Nallional Bank wrote t o Mr. Tay lo r enc los ing a proof of d e b t
da ted 12 November 1980 which o the rwise is i n i d e n t i c a l f o r m
w i t h t h e e a r l i e r p r o o f o f d e b t , a copy of t h e l e t t e r t o t h e
o f f i c i a l r e c e i v e r d a t e d 30 A p r i l 1 9 8 0 , and s t a t i n g t h a t t h e
Bank u n d e r s t o o d t h a t Mr. Taylor had paid a d iv idend of 9 0
c e n t s i n t h e d o l l a r and r eques t ing paymen t o f t ha t d iv idend .
No e x p l a n a t i o n was g iven by Mr. T a y l o r a s t o why a d iv idend
had no t been pa id zo t h e N a t i o n a l Bank i n J u l y 1980 s i n c e a t
t h a t time Mr. Taylor had t h e proof of d e b t forwarded from the
o f f i c i a l r e c e i v e r t o h im. Mr. Taylor has g iven no e x p l a n a t i o n
a s t o why he ad n o t c o n t a c t e d the Na t iona l Bank p r i o r
there to , even though h e had r ece ived t he p roo f o f deb t f rom
t h e o f f i c e o f t h e o f f i c i a l r e c e i v e r . The proof d e b t
f o r w a r d e d d i r e c t l y t o Mr. Tay lo r has wr i t t en on it i n r e d b i r o
t h e number 14 which has been crossed o u t and p a r t i a l l y
o b l i t e r a t e d and t h e words " r e f e r 15" a n d " c a n c e l l e d " w r i t t e n
on it. No e x p l a n a t i o n was g i v e n a s t o when t h i s was done. To

complete t h i s p a r t o f t h e h i s t o r y , Mr. Taylor forwarded a

cheque	in	t h e sum of	$763.20,	being 9 0 c e n t s	i n	t h e d o l l a r	o	f
t h e amount owed	t o t h e Bank,	under	cover	of	a	l e t t e r	d a t e d	25

November 1980, bu t he cheque was re turned under cover o f a

l e t t e r d a t e d 3 December 1980 s i n c e t h e f u l l d e b t had been paid

from	o t h e r	sources.	-The	cheque	was	c a n c e l l e d .	The	copy
le t te r	d a t e d	17	December	1980	from	Mr.	Taylor	acknowleding
t h o s e	f a c t s	h a s	r e c o r d e d	o n	it number	15 i n a	red	c i r c l e

overwritten by the number 16 in blue biro and has written on it the words "Please cancel proof (admitted) for the National Bank".

The next proof of debt in the file had been received originally by the official receiver in Melbourne on 13 January

1981 and forwarded to Adelaide and received there on 19

January 1981. It was numbered 16 in blue biro, presumably in the office of the official receiver, and 17 in red biro by an

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employee in the office of Mr. Taylor. A new proof of debt dated 27 January 1981 from the applicant was received in the office of Mr. Taylor on 2 February 1981 and is numbered 18 in

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green biro. It was admitted	in full, the	amount	being
$3 ,472 .20 .

I find that the procedures carried out in the office

of Mr.	Taylor in relation to the proofs of debt were
unsatisfactory. There is	no register of proofs of debt
similar to the proof	of debt card kept by the official
receiver. The alterations to the numbers on some of the
proofs of debt is unsatisfactory and in the absence	of any

satisfactory explanation as to how it came about that those alterations were made, I find that the applicant's first proof of debt was received into the office of Mr. Taylor. Further,

I find that from the other material received by him, Mr.

Taylor, if he had acted as a prudent man, would have enquired

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from the Official Receiver as to the existence of proof of debt numbered 14 in the records of the office of the official receiver.

In addition, I considered Mr. Taylor to be an

unreliable witness. His recollection of matters was not good and I would have expected him to have had a better knowledge

of the matters in dispute. His office system was

unsatisfactory. Either one or both of two employees opened

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incoming mail and placed the contents on his desk. Mr. Taylor

looked at the contents, sorted them and distributed them among

members of staff for action. In appropriate cases this

involved placing proofs of debt in appropriate files. The

relevant employee wrote the number on the proof of debt,

having regard to the numbers already in that file, buc no

proof of debt register, entered as the proofs of debt were received and numbered sequentially, was kept by Mr. Taylor. He stated that he had his own numbering system and did not

rely upon the numbering system of the official receivzr.

Nevertheless, he did not re-number the first twelve proofs of

debt received from the official receiver. There was no adequate explanation concerning the alteration to the number written on the proof of debt eventually numbered 14. On a l l the evidence I find that the proof of debt received by the

official receiver from the applicant	was posted by ordinary
mail to the office of Mr. Taylor.	I do not accept the denial

by Mr. Taylor that he did not receive it. I find on the balance of probabilities that the proof of debt was received

into the office of Mr. Taylor.	In addition, I find that 011
the material admitted to have been received by Mr. Taylor,	he

should have been put on guard and made enquiries of the official receiver concerning the proof of debt numbered 14 jn the official receiver's records. If he had done this, Mr.

Taylor would have had knowledge	of the proof of debt lodged by
the applicant.

The official receiver did not acknowledge the

-	receipt of the proof of debt and letter from the applicant's solicitors dated 31 March 1980. By letter dated 25 November
1980 the applicant's solicitors wrote a second letter to the
official receiver in Adelaide enquiring as to the current position and as to when a distribution was likely to be made.
By letter dated 1 December 1980 the official receiver
suggested the solicitors contact Mr. Taylor. They did this by
letter dated 10 December 1980. Mr. Taylor replied by letter
dated 19 January 1981 stating that he could find no proof of debt and that a new claim should be lodged. The letter stated that to date dividends totalling 90 cents in the dollar had
been paid. In fact, that dividend had been paid in July 1980.
The solicitors replied by letter dated 21 January 1981
expressing their concern as to the whole matter and requesting
payment of the dividend. Particulars of the debt were
enclosed with the letter. Mr. Taylor replied by letter dated
30 January 1981 suggesting that a fresh proof of debt be
forwarded. The letter contained the statement that "the
Official Receiver's Office in Adelaide has no record of
receiving your client's Proof of Dcbt form". In fact that
office had received that proof of debt form, had recorded
receiving it and had forwarded it to Mr. Taylor. A fresh
proof of debt form was then forwarded to Mr. Taylor.
Thereafter correspondence ensued between the solicitors and
Mr. Taylor . Likewise, telephone conversations took place
between them. These were all unsatisfactory to the solicitors
for the applicant. By letter dated 2 5 March 1981 legal
proceedings were threatened unless the account was paid within
seven days. No dividend was paid and the application was taken out on 7 July 1981. The dividend was paid in September
1981. Mr. Taylor states that that was the earliest practical

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date	on which the dividend could have been paid in the
circumstances and that he had	no knowledge or notice of the
applicant's claim until	11 December 1980.

In the result the only issue remaining unresolved

between the parties is whether the applicant is entitled to

interest on the unpaid dividend fron July 1980 to September

1981 and whether it is entitled to the costs of the

application and if so, who should pay those costs. In

opening, counsel for the	applicant stated that he was not
seeking interest, but during the	course of the hearing he

informed the Court that he was instructed to claim interest. This matter will be adverted to later in these reasons. It is

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most unfortunate that the matter has gone as far as it has.

There have been a number of appearances by counsel. A large number of affidavits have been filed. One witness was brought

from Adelaide. The amount of costs incurred hzs escalated.

It is unfortunate that common sense did not prevail at an early stage. If a principle is involved, the Court is

required to express	an opinion but at the expense of the
person required to pay	CGSt.5.

- The sequestration order was made by the Court of

Insolvency of the	State of South Australia on 25 January 1980.
That court	was a court having jurisdiction in bankruptcy, s . 2 7

of the Bankruptcy Act 1966 as then in operation. The facts

giving rise to the present application occurred between March
1980 and September 1981 when Mr. Taylor paid the dividend to
the applicant. The first dividend was paid to creditors who
had proved in the estate by 14 July 1980 and was paid about

that date. Notice of the intention to pay that dividend was

duly advertised in "The Age" newspaper of 23 June 1980. Mr.

Taylor forwarded a notice dated 19 June 1980 to all creditors

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set out in the statement of affairs o€ the bankrupt Oi

otherwise known to him of his intention to pay the first dividend and requiring proofs of debt tc be delivered to hin prior to 14 July 1980. Mr. Taylor did not forward a copy Of

that notice to the applicant. The Court has found that before

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19 June 1980 Mr. Taylor either knew of the proof of debt

lodged by the applicant	or should have known that the
applicant claimed to	be a creditor of the bankrupt.

The Bankruptcy Amendment Act 1980 was assented to On

8 April 1980. That Act effected substantial amendments to the

Bankruptcy Act 1966. Some of the amendments effected by that Act came into operation on 8 April 1980 while otherscame into operation on 1 February 1981. Hereafter references to the

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Bankruptcy Act 1966 as amended, hereinafter called "the Act", will be to the provisions of the Act as in operation at the relevant time.

On 7 July 1981 the applicant made the application herein to the Federal Court. That application is a proceeding

under the Act and	thus this Court has jurisdiction to hear and
determine the application, see definitions	of the words

"bankruptcy" and "the Court" in s . 5 of the Act and sections

27, 28 and 30 of the Act. The dividend was in fact paid by

Mr. Taylor to the applicant in	September 1981 and the only
issues to	be decided on the application are whether the

applicant is entitled to interest on the dividend unpaid and

whether the applicant is entitled .to its costs of the

application and if so who is liable to pay the interest and

costs.

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The application is made under sections 147 and 179

of the Act and in support of the application reliance was

placed upon sections 30 and 140 of the Act. Prior to	8 April
1980, s.147 of the Act read as follows:

"147. An action for a dividend does not lie against a trustee in bankruptcy but, if 2 trustee neglects or refuses to pay a dividend to a creditor, the Court, on the application of the creditor, may, if it thinks fit, order him to pay it and may also order that he pay, out of his own money, interest on it for the time that it is withheld and the costs of the application."

That section was repealed on and after 8 April 1980 and the

new section reads as follows:

"147.	(1) An action for a dividend does not
lie against the trustee	of the estate of a

bankrupt but, if the trustee neglects or
refuses to pay a dividend to a creditor, the
Court, on the application of the creditor,

may, if it thinks fit, order the trustee to

pay the dividend and may also order	that the
trustee pay	interest on the dividend for the

time that it is withheld and the costs of the

application. ( 2 )

Where the Court orders the trustee of the estate of a bankrupt to pay interest on

a dividend or to pay the costs o f an application under sub-section (l), the trustee is personally liable for, and is not entitled to be reimbursed by the estate in respect of, the payment of that interest or those costs."

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For present purposes the relevant provisions of the Act are:

,I ... if the trustee neglects or refuses to pay

a dividend to a creditor, the Court, on the
application of the creditor, may, if it thinks

fit, order the trustee to pay the dividend	and
may also order	that the trustee pay interest
on the dividend for the	time that it was

withheld and the costs of the application."

At all relevant times the relevant provisions of

s.179 of the Act read:

"179. (1) The Court may, on the application of the Registrar, a creditor or the bankrupt, inquire into the conduct of a trustee in relation to a bankruptcy and may do one or

both of the following:-

( a ) remove the trustee from office; and

(b) make such order as it thinks proper."

The general powers of the Court conferred by s.30 of the Act

are extremely wide. They include the power to make

declaratory orders.

By his notice of opposition, Mr. Taylor denied that

the applicant lodged any proof	of debt before January 1981
and says that if it had lodged	a proof earlier it had not

lodged it with him. He denies that he had any notice of the applicant's claim prior to December 1980 and he relies upon

s.140 o f t h e A c t a n d s a y s t h a t p r i o r t o d e c l a r i n g and

d i s t r i b u t i n g t h e f i r s t d i v i d e n d h e c o m p l i e d w i t h t h e

requi rements of t h a t s e c t i o n .

S e c t i o n 1 4 0 of t h e Act i n o p e r a t i o n i n J u l y 1980 is

set o u t :

“140.	(1)	The t rustee of t h e e s t a t e of a
b a n k r u p t	s h a l l ,	s u b j e c t o s u b - s e c t i o n ( 7 ) of

t h i s	e c t i o n ,	w i t h	a l l	c o n v e n i e n t	s p e e d ,
d e c l a r e	and	d i s t r i b u t e	dividends	amongst	t h e

c r e d i t o r s who have proved the i r d e b t s .

( 2 ) S u b j e c t t o t h e r e t e n t i o n o f s u c h

s u m s as a r e n e c e s s a r y t o meet t h e c o s t s o f

a d m i n i s t r a t i o n	or	t o	g i v e	e f f e c t	t o	t h e
p r o v i s i o n s	o f	t h i s	Act,	t h e	t r u s t e e	s h a l l

d i s t r i b u t e a s d i v i d e n d a l l moneys i n hand.

( 3 ) T h e t r u s t e e s h a l l , b e f o r e

d e c l a r i n g a d iv idend (be ing a d iv idend of n o t

less t h a n F i v e c e n t s i n t h e d o l l a r ) -

( a ) c a u s e n o t i c e o f h i s i n t e n t i o n t o d o SO

t o be p u b l i s h e d i n t h e p r e s c r i b e d

manner; and

(b) send r easonab le no t i ce of h i s i n t e n t i o n

d e c l a r e t o t h e d i v i d e n d e a c h t o

c r e d i t o r known t o h i m who h a s n o t

lodged a p r o o f o f h i s d e b t and whose

a d d r e s s is known t o t h e trustee.

( 4 ) The t rustee s h a l l s p e c i f y i n t h e

n o t i c e of i n t e n t i o n t o d e c l a r e a d iv idend

publ ished under t h e l a s t p r e c e d i n g s u b - s e c t i o n

t h e l a t e s t d a t e on which c r e d i t o r s may lodge

t h e i r p r o o f s of d e b t .

(5) When t h e t rus tee has dec l a red a

d iv idend, h e s h a l l , s u b j e c t t o t h e n e x t two

s u c c e e d i n g s u b - s e c t i o n s , s e n d t o e a c h c r e d i t o r

who has proved h i s d e b t a cheque fo r t he

amount due t o him and a s t a t e m e n t i n t h e

prescr ibed form as t o t h e r e a l i z a t i o n and

d i s t r i b u t i o n o f t h e e s t a t e . ”

The remaining sub-sections need not be set out.	Amendments
to s.140 which came into	operation on 1 February 1981 are not

relevant for present purposes.

On the findings of fact made, Mr. Taylor did not

comply with the requirements of s.l40(3)(b) in that he either

knowing, or in the circumstances where he ought to have

known, that the applicant was a creditor whose address	was
known to him, did not send reasonable notice	of his intention
to declare the dividend to the applicant.	In the result he

neglected or refused to pay the dividend to the applicant.

On the evidence I find that the applicant acted reasonably in commencing its application in the Court.	It
was receiving no satisfaction from	Mr. Taylor and in those

circumstances was justified in instituting those proceedings.
Subsequently, the dividend was paid. Having regard to all

the circumstances of the cese there is no reason why Mr.

Taylor should not pay the applicant's	costs and that order
will be made.

Different considerations apply with respect to the claim for interest. Following the disclaimer for interest, witnesses were examined-on their affidavits. The question of the amount of dividend and what that amount would have been

if the applicant's proof of debt had been accepted prior to

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payment of the dividend was not pursued in evidence, the issue not being relevant. It was only after the evidence was concluded and the witnesses had departed that the claim for interest was reserrected. In those circumstances I find that there is not sufficient evidence to justify an order being

made for interest.

On the evidence I find that the applicant acted

reasonably in joining the official receiver in bankruptcy as

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a respondent. While acting as trustee of the estate of the bankrupt the official receiver had forwarded a proof of debt form to the applicant's solicitors and directed that it be

completed and returned to him if the applicant desired to

participate in any dividends which may be paid. The

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applicant's solicitors did this. The official receiver did

not acknowledge receipt of the proof of debt form nor did it notify the applicant's solicitors of the fact that Mr. Taylor had been appointed trustee. Subsequently Mr. Taylor asserted

that the official receiver's office had no record of

receiving the applicant's proof of debt. Faced with all

these uncertainties it was reasonable and proper that the

applicant make its claim against both respondents.

Nevertheless, the applicant's claim against the official

receiver was doomed to failure.

In cases of this kind the Court commonly makes an order !mown as a "Bullock order", see Johnson's Tyre Foundry

Pty. Ltd. v . Maffra Corporation (1948) 77 C.L.R. 544 per

Williams J. at 5 7 2 . The present application is one where it is appropriate that such an order be made, namely that Mr. Taylor pay the costs of the official receiver in bankruptcy, and that order will be made.

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