Harrison in his capacity as Trustee of the property of Beck, a Bankrupt v Beck (No 2)

[2021] FedCFamC2G 315

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Harrison in his capacity as Trustee of the property of Beck, a Bankrupt v Beck (No 2) [2021] FedCFamC2G 315

File number(s):

SYG 1247 of 2021

Judgment of:

JUDGE CAMERON

Date of judgment:

17 November 2021

Catchwords:

BANKRUPTCY – Trustee’s remuneration – trustee’s application for a remuneration determination – reimbursement from estate.

Legislation:

Bankruptcy Act 1966 (Cth), s 5, 183

Insolvency Practice Schedule (Bankruptcy) 2016 (Cth), ss 5-30, 90-15, 90-20

Cases cited:

Harrison in his capacity as Trustee of the property of Beck, a Bankrupt v Beck [2021] FedCFamC2G 59

Division:

General

Number of paragraphs:

9

Date of hearing:

17 November 2021

Place:

Sydney

Counsel for the Applicant:

Ms J. Gatland of Counsel

Solicitor for the Applicant:

Mr G. Pignone, Church & Grace

Counsel for the Respondent:

No appearance by or on behalf of the Respondent

ORDERS

SYG 1247 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

BRETT RICHARD GEOFFREY HARRISON

Applicant

AND:

MARIANNE ROSE BECK

Respondent

ORDER MADE BY:	JUDGE CAMERON
DATE OF ORDER:	17 NOVEMBER 2021

THE COURT ORDERS THAT:

1.Order 3 of the orders made on 21 September 2021 be set aside.

2.The costs of this proceeding be part of the costs of the applicant’s administration of the respondent’s estate.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors, or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT

JUDGE CAMERON

1. The applicant is the trustee (“Trustee”) of the bankrupt estate of Marianne Rose Beck. On 5 July 2021, he filed an application under s.183 of the Bankruptcy Act 1966 (Cth). On 21 September 2021 the first judgment in this proceeding, Harrison in his capacity as Trustee of the property of Beck, a Bankrupt v Beck [2021] FedCFamC2G 59, was delivered. The application was successful, other than in respect of the Trustee’s application for additional remuneration. The Trustee’s application for additional remuneration was refused on the basis that it was misconceived and he was denied his costs of the proceeding to the extent that those costs related to that aspect of the proceeding.

2. The possibility that such an order might be made had not been canvassed during the hearing of the application.  Relevantly, the Court ordered on 21 September 2021 that:

   …

   3.The costs of this proceeding, other than the costs of and incidental to the application for approval of additional remuneration of the applicant, be part of the costs of the applicant’s administration of the respondent’s estate.

   …

   6.The applicant have leave to apply within 28 days to make submissions in relation to the order that the costs of and incidental to the application for approval of additional remuneration of the applicant not be part of the costs of the applicant’s administration of the respondent’s estate.

3. These reasons concern the Trustee’s exercise of the liberty granted by the latter order. The application for additional remuneration was refused principally for the reasons given in Harrison in his capacity as Trustee of the property of Beck, a Bankrupt v Beck [2021] FedCFamC2G 59 at [18] and [19]. However, at [20] it was further stated that by virtue of the combined operation of ss.90-15 and 90-20 of theInsolvency Practice Schedule (Bankruptcy) (“Schedule”), the Trustee was not a person mentioned in s.90-20, and so had no standing to make an application under s.90-15.

4. On that basis, it was concluded that the Trustee’s application to the Court for additional remuneration was misconceived. However, the finding that the application for additional remuneration was misconceived was incorrect. Section 90-20 of the Schedule provides:

   90-20   Application for Court order

   (1)Each of the following persons may apply for an order under section 90-15:

   (a)a person with a financial interest in the administration of the regulated debtor’s estate;

   (b)if the committee of inspection (if any) so resolves – a creditor, on behalf of the committee;

   (c)the Inspector-General.

   (2)If an application is made by a person referred to in paragraph (1)(b), the reasonable expenses associated with the application are to be taken to be expenses of the administration of the estate.

5. In his written submissions filed on 29 October 2021 the Trustee has drawn my attention to 

   
   

   s.5-30 of the Schedule, which relevantly provides:

   5-30Persons with a financial interest in the administration of a regulated debtor's estate

   A person has a financial interest in the administration of a regulated debtor's estate:

   (a)       if the person is one of the following:

   (i)        the regulated debtor;

   (ii)       a creditor;

   (iii)       the trustee; or

   …

6. The Schedule is sch.2 to the Bankruptcy Act 1966, s.5 of which relevantly states:

   the trustee means:

   (a)  in relation to a bankruptcy – the trustee of the estate of the bankrupt; … 

7. The Trustee, therefore, did have standing to make the application for additional remuneration and so the finding that he was not entitled to claim his related costs from the estate was mistaken.  In those circumstances, I accept the Trustee’s submission that it was reasonable of him to have made the application at the same time as he applied for other orders concerning the bankrupt estate and that was an efficient use of resources. 

8. It was, therefore, reasonable of the Trustee to have exercised the liberty granted on 21 September 2021.

9. In those circumstances, I set aside order 3 made on 21 September 2021 and instead now order that the costs of this proceeding be part of the costs of the Trustee’s administration of the respondent’s estate.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron.

Dated:       1 December 2021