Jefferson v Official Trustee in Bankruptcy
[2000] FCA 990
•26 JULY 2000
FEDERAL COURT OF AUSTRALIA
Jefferson & Stevenson v Official Trustee in Bankruptcy, in the matter of Dunwoody (Bankrupt) [2000] FCA 990
BANKRUPTCY – remuneration of trustee - application by former trustee – declaration sought that former trustees entitled to be remunerated in accordance with section 162(4) of the Bankruptcy Act 1966 (Cth) – resolutions for remuneration proposed by trustee rejected by creditors – resolution by creditors to fix remuneration on a commission basis – work already performed by trustees – held not open to creditors to arbitrarily compel former trustees to accept remuneration on a commission basis for work already performed – operation of section 162(4) enlivened.
Bankruptcy Act 1966 (Cth), par 134(1)(g); subs 30(1), 30(2), 101(1), 161B(1), 162(1), 162(2), 162(4)
Judiciary Act 1903 (Cth), s 39BMayne v Jacques (1959-1960) 101 CLR 69
Adsett v Berlouis (1992) 37 FCR 201
In Re Colgate (A Bankrupt), Ex parte Trustee of the Property of the Bankrupt [1986] 1 Ch 439
Re Smith, Ex parte Hamilton v Muir (1986) 66 ALR 175philIP gregory jefferson & jay arscott stevenson v The Official trustee in bankruptcy as trustee of the estate of john ernest dunwoody (a bankrupt)
Q 7407 OF 1999
DOWSETT J
26 JULY 2000
BRISBANE
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
Q 7407 OF 1999
BETWEEN:
PHILIP GREGORY JEFFERSON & JAY ARSCOTT STEVENSON
APPLICANTSAND:
THE OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE OF THE ESTATE OF JOHN ERNEST DUNWOODY (A BANKRUPT)
RESPONDENTJUDGE:
DOWSETT J
DATE OF ORDER:
26 JULY 2000
WHERE MADE:
BRISBANE
THE COURT DECLARES THAT:
1.The applicants as former trustees of the bankrupt estate of John Ernest Dunwoody (“the estate”) are entitled to be remunerated out of the estate in accordance with section 162(4) of the Bankruptcy Act 1966.
THE COURT ORDERS THAT:
2.The parties have liberty to apply.
3.(a) The parties, including Peter Dunwoody, have liberty to make further submissions as to the proposed orders as to costs;
(b)Relevant submissions should be reduced to writing and communicated to the other parties; and
(c)Such submissions, together with any responses thereto, are to be forwarded to the Court within fourteen days of publication of these reasons for judgment.
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
Q 7407 OF 1999
BETWEEN:
PHILIP GREGORY JEFFERSON & JAY ARSCOTT STEVENSON
APPLICANTSAND:
THE OFFICIAL TRUSTEE IN BANKRUPTCY AS TRUSTEE OF THE ESTATE OF JOHN ERNEST DUNWOODY (A BANKRUPT)
RESPONDENT
JUDGE:
DOWSETT J
DATE:
26 JULY 2000
PLACE:
BRISBANE
REASONS FOR JUDGMENT
On 9 October 1998 the applicants consented to act as trustees of the estate of John Ernest Dunwoody (“the bankrupt”), who later that day presented his own petition in bankruptcy. Shortly before that date, John Lawrence Sherry and Carmel Mary Delores Sherry had obtained a judgment against the bankrupt in the District Court at Mackay. There is reason to suspect that the petition and actions taken by the bankrupt and other persons associated with him since its presentation were designed to assist him to avoid having to meet that judgment. The circumstances which might give rise to such a suspicion appear in the affidavit of Jay Arscott Stevenson filed on 22 September 1999. I mention this matter only because it will assist in understanding the rather unusual circumstances which have led to the present application. It is not necessary that I determine whether that suspicion is justified. I expressly refrain from so doing. The question is not relevant to the substantive matters with which I am presently concerned.
The applicants convoked a meeting of creditors on 10 December 1998. Prior to the meeting they provided a report dated 30 November 1998 in which they claimed remuneration in the sum of $61,340.70 for acting as trustees in the period ending 22 November 1998. They also indicated that further substantial sums would be incurred in the administration, although the amount would vary, depending upon whether the creditors agreed to a composition which was to be proposed by the bankrupt. The applicants also claimed re-imbursement of outgoings totalling approximately $20,000, indicating that further substantial outgoings would be incurred. In addition, they estimated legal expenses to date at $50,000 with a total of $110,000 anticipated in the event that the bankruptcy ran its course. The applicants proposed that at the meeting on 10 December 1998, the creditors consider the following resolutions:
·That the remuneration of the Trustees of the bankrupt estate from 9 October, 1998 to 22 November, 1998 be hereby approved and be fixed in the sum of $61,340.70.
·That the remuneration of the Trustees of the bankrupt estate from 23 November, 1998 to either 31 December, 1998, or the date on which the bankrupt’s proposal for a Composition is accepted, whichever date occurs first, be hereby approved and be limited to the sum of $20,000.
They also suggested that should the proposed composition be accepted, the following resolution be adopted:
That the remuneration of the Trustees of the Composition for the period from the date of acceptance of the bankrupt’s proposal for a Composition by creditors until the date on which the Trustees’ administration of the Composition is completed, be hereby approved and be limited to the sum of $15,000.
At the meeting Mr Jefferson (one of the applicants) asked if any creditor wished to propose either of the first two motions, but no motion was forthcoming. The proposed composition was then considered and rejected. Mr Jefferson suggested two other possible motions concerning funding of the bankruptcy, but again none was forthcoming. Finally, Mr Hickman, who appears to have been closely associated with the bankrupt, moved:
That the trustee circularise to creditors, the proposal for external funding and the terms thereof to be circulated to creditors for their consideration.
This was carried.
The applicants called another meeting to be held on 31 March 1999. In a report to creditors dated 22 March 1999, the applicants claimed remuneration to 7 March 1999 in the amount of $145,990. They indicated that a further amount of $12,500 would be incurred prior to 31 March 1999 and that further substantial claims for remuneration were anticipated if the applicants continued to act in the administration. They also claimed out-of-pocket expenses (excluding legal expenses) totalling $15,424, with additional sums to be incurred. The applicants gave notice that at the meeting they would ask creditors to consider the following resolution:
That the remuneration of the Trustees of the bankrupt estate and of the Composition be hereby approved in the sum of $173,490 and be fixed in the sum of $147,467.
Alternatively it was proposed that should the composition be rejected, the creditors consider the following resolution:
That the remuneration of the Trustees of the bankrupt estate from 9 October 1998 to 7 March, 1999 be calculated in accordance with the guide to fees recommended from time to time by the Insolvency Practitioners Association of Australia be hereby approved and fixed in the sum of $145,990.
It will be appreciated that the applicants were offering a reduction in their fees. On 25 March 1999 the applicants forwarded to creditors a circular explaining the basis for their claim. In that report (signed by Mr Jefferson) the following passage appears:
… As Trustee, I will not be proposing any motions at the forthcoming meeting concerning approval of my remuneration. Creditors should note that I attempted to have my remuneration fixed at the first meeting of creditors on 10 December, 1998, however the resolution was not moved by any creditor. Accordingly, pursuant to s 162(4) of the Bankruptcy Act, 1966 (“the Act”), where the remuneration is not fixed by creditors, the Trustees are to be remunerated in accordance with the regulations. That is, at a level of 85% of my remuneration incurred, calculated in accordance with the IPAA scale of charges, as referred to above …
Therefore, creditors are not required to consider the resolutions set out on pages 23 and 24 of my Third Report prior to the meeting.
As a result of certain unforseen developments, the meeting scheduled for 31 March was adjourned for fourteen days. On 14 April, the meeting was again adjourned. On 18 June 1999 the applicants forwarded to creditors a further circular concerning their possible removal as trustees. They also invited the creditors to negotiate concerning their remuneration and outgoings. In a circular dated 16 July 1999, the applicants advised that there had been no response to their previous invitation to negotiate. They advised that their fees to 30 June 1999 totalled $228,950 with additional unpaid legal fees of $80,000. The circular then continued:
Given the failure of creditors to avail themselves of my previous offer in relation to remuneration, I intend to rely on s 162(4) of the Bankruptcy Act1966.
There was a meeting of creditors on 9 August 1999. At that meeting, without prior notice, a creditor moved a lengthy motion, purporting to fix the applicants’ remuneration. It is attached to these reasons as annexure “A”. The resolution was carried. It was then resolved that the applicants be removed as trustees and thereafter, it would seem, the Official Trustee commenced to act. The purported effect of the resolution concerning remuneration was to fix the amount thereof on a commission basis pursuant to s 162(2) of the Bankruptcy Act, calculated as a proportion of the moneys recovered by the applicants during their trusteeship, with further commission payable upon any moneys subsequently received in the administration. The resolution also provided that should such resolution be held to be invalid, the committee of inspection should fix the remuneration. Payment, in any event, was to be made “when funds become available …”.
The provisions of the Bankruptcy Act1966 (Cth) (the “Bankruptcy Act”) concerning remuneration are somewhat elliptical. Sub-section 161B(1) provides:
If the total remuneration payable to the trustee under section 162 would be less than $1,109, the trustee is entitled to be paid additional remuneration equal to the shortfall.
Section 162 provides relevantly as follows:
(1)Subject to s 161B, the remuneration of the trustee of the estate of a bankrupt may be fixed, from time to time, by resolution of the creditors or, if the creditors so resolve, by the committee of inspection.
(2)Where the remuneration of the trustee is to be, in whole or in part, a commission upon moneys received by the trustees, the trustee is entitled to commission upon all moneys received by the trustee (other than moneys received in the carrying on of a business of the bankrupt by him or her or under his or her supervision) at a rate not exceeding the rate prescribed by the regulations for the purposes of this sub-section.
(3) …
(4)Where the remuneration of the trustee is not fixed by the creditors or the committee of inspection, the trustee is to be remunerated as prescribed by the regulations.
…
I should say that the Official Trustee accepts that the applicants are entitled to reimbursement of their outgoings. The only question for present purposes is the effect of the creditors’ purported fixing of the applicants’ remuneration. The effect of the resolution is to limit the immediate remuneration of the applicants to a small sum because only a small amount has been recovered. Further, to the extent that total remuneration depends upon subsequent recovery, that process is beyond the applicants’ control as they have been removed from office. This unsatisfactory state of affairs (from the applicants’ point of view) was forced upon them after they had expended substantial time and effort in the administration of the estate. If the creditors’ determination is valid, then it has produced a most unfair outcome. However it is clear to me that the creditors had no authority to proceed as they did.
As with many other matters arising under the Bankruptcy Act, the meaning of s 162 is obscure unless one has regard to the history of the bankruptcy jurisdiction. For present purposes, the decision of the High Court in Mayne v Jaques (1959-1960) 101 CLR 169 is informative. That case concerned the entitlement of the personal representative of a deceased trustee in bankruptcy to ask the Federal Court of Bankruptcy to fix the amount of remuneration which would have been payable to the trustee had he not died. At that time the relevant legislation provided that the trustee’s remuneration was to be fixed by resolution of the creditors or, should they fail to do so, by the Court, “… on the application of the trustee …”. The creditors had not so resolved prior to the trustee’s death, nor had there been any such application.
In resisting a claim by the personal representative to have the remuneration fixed by the Court, it was submitted that the right to so apply was personal to the trustee and died with him. The High Court rejected that view. At 171, Fullagar J said:
The Act presupposes and contemplates throughout that the trustee is entitled to remuneration for work and labour done by him – unless, no doubt, there is some specific reason why he should not receive remuneration, such as that he has had no work to do, or that he has misconducted himself in some way. … The court could, no doubt, as could the creditors, refuse to fix any remuneration for such good reason as is suggested above. But, if work has been done and remuneration earned, the court is bound to fix “the remuneration” at such sum as it considers reasonable. To say in such cases that the word “may” means “shall” is to state a practical result but not to present a correct legal analysis. The true position is that a jurisdiction is conferred, and, if the conditions of the jurisdiction exist, the common law requires the jurisdiction to be exercised. For a refusal to exercise it mandamus will lie, though here the appellant has pursued the alternative course of proceeding by way of appeal under s. 26 of the Act.
At 173-4, Kitto J said:
In the present case there is no dispute that Mr. Mayne’s trusteeship was not intended, either by him or by the creditors who appointed him, to be gratuitous. In such a case the section deals, as I have said, with the fixing, that is to say the quantifying, of the remuneration. It assumes that a qualified person who accepts appointment as the trustee of an estate on the footing that he will be remunerated is entitled as of right to have his remuneration fixed. The provisions which it makes in that behalf, so far as they are material to this case, are that the creditors may either fix the remuneration themselves by resolution or empower the committee of inspection to do so …, and if they “fail” to fix it (that is, either themselves or through the committee of inspection) “the court may on the application of the trustee fix the remuneration” … . The use of the word “fail” excludes the case of a gratuitous trusteeship, and makes clear the intention of the section that in other cases the right of the trustee to remuneration is to be perfected by a proper fixation, if not by the creditors as the body primarily entrusted with the power to do so then by the court.
For the proper understanding of the section as a whole, however, it is necessary to bear in mind that the fixing of the trustee’s remuneration where the trusteeship is not intended to be gratuitous has another aspect also. It is a necessary preliminary to the ascertainment of the proper mode of application of the assets. By s. 84(1) the estate is made applicable in an order of priority which is set out, and first in the order of payment come the costs of the administration, including the remuneration of the trustee. This means, of course, the remuneration fixed under the Act, and s. 133(7) is therefore in a sense complementary to s. 84(1) because it provides one of the means by which that provision may be made effectual. Accordingly, where the creditors have appointed a trustee on the footing that he will be paid for his work, the amount available for distribution amongst creditors (or, as the case may be, the surplus to be paid to the bankrupt under s. 118) cannot be arrived at unless and until the remuneration has been fixed. Sub-section (7) of s. 133 is therefore not a provision made solely in the personal interests of the individual: it is a provision ancillary to s. 84(1), ensuring that if the creditors fail to fix the remuneration the court may cure the omission, and by so doing may enable the estate to be administered as the Act intends.
Sub-section 109(1) of the Bankruptcy Act is relevantly similar to the former subs 84(1).
Finally, Windeyer J said at 181:
General doctrines of equity concerning the remuneration of express trustees have little bearing upon the question. Nevertheless, it is worthwhile noticing some of the exceptions to the rule that trustees must derive no profit from their trust, and therefore, generally speaking, are not entitled to remuneration for performing the duties of the trust. The rule itself is clear; and it makes no difference that a trustee’s exertions in the duties of his office have produced great advantages for the cestui que trust … . But a trustee who, before assuming office, stipulates with the beneficiaries, being sui juris, that he shall be paid for his services is entitled to the agreed remuneration. And courts of equity have an inherent jurisdiction to make an allowance out of the trust property to a trustee for his services… . … Here the evidence is meagre. But we must, I think, assume that Mr Mayne did not forego his rights, whatever they were, to remuneration; that the creditors did not expect him to work for nothing; and that the reason why they failed to fix the remuneration was probably because they chose to reserve the question. They have had the benefit of his exertions. They cannot justly expect to profit by his untimely death.
This decision was followed in Adsett v Berlouis (1992) 37 FCR 201 at 210, where the Court (Northrop, Wilcox and Cooper JJ) said:
Where a trustee in bankruptcy is appointed in the expectation that he or she will be remunerated, and there is no prior agreement to act gratuitously, the Act assumes the existence of a right to be remunerated. Section 162 provides a mechanism for fixing the quantum of the remuneration: see Mayne v Jaques … . The right to remuneration for work done is enforceable by the trustee by calling a meeting of creditors to fix the remuneration by resolution or, if the creditors so resolve, to have the remuneration fixed by the committee of inspection, if any: s 162(1). Where remuneration is not fixed by the creditors or the committee of inspection, the Registrar may fix the remuneration: s 162(4). The remuneration to which the trustee is entitled is to be just and proper (Mayne v Jaques (supra) at 183), or reasonable remuneration in all the circumstances (Re Palmer; Ex parte Taylor (1988) 18 FCR 271 at 283-284), for the work carried out by the trustee. The right to payment is only lost for a specific reason, as, for example, if no work was done or needed to be done or misconduct by the trustee … .
The Bankruptcy Act no longer provides for default determination by the Court or the Registrar. Rather, where the creditors do not act, remuneration is to be fixed by reference to the regulations. Nonetheless, it is clear that underlying the provisions of s 162 in its present form is the assumption that a trustee is legally entitled to reasonable remuneration, which entitlement is not dependent upon an exercise of the creditors’ power pursuant to s 162. That section prescribes a method for fixing the remuneration for the purposes of the administration of the estate, but it neither confers, nor in any way compromises the trustee’s entitlement to remuneration.
In the present case, notwithstanding the applicants’ attempts to have the remuneration fixed at an early stage, the creditors declined to do so. They eventually purported to fix such remuneration at the same time as they removed the applicants from office. The creditors’ power pursuant to s 162 was to fix the reasonable remuneration for work performed prior to such removal. The applicants indicated their assessment of its value. It was for the creditors to determine whether or not to accept that assessment. In the absence of any allegation of disentitling circumstances, that determination required an assessment of the amount of work done and the appropriate rate of remuneration for that work.
The creditors appear to have assumed that they could, at that stage, force the applicants to accept remuneration on a commission basis. Although subs 162(2) contemplates the possibility that remuneration will be calculated on that basis, there is no apparent authority for the proposition that creditors may compel a trustee to accept it in respect of remuneration for past work. It obviously has potential advantages and disadvantages, the net effect of which will be very much a matter of business judgment. No doubt the creditors and the applicants could have agreed to remuneration on a commission basis. No doubt, too, the creditors could have told the applicants that any future work would be remunerated on that basis. The applicants could then have chosen to continue in the administration or to withdraw. However, in my view, it was not open to the creditors arbitrarily to compel the applicants to accept the uncertainties inherent in remuneration on a commission basis for work already performed. They were entitled to fix the appropriate remuneration. They did not do so. The resolution of 9 August 1999 provided for the remuneration to be fixed by the committee of inspection in the event that the creditors’ resolution was found to be invalid. There is no suggestion that the committee has taken any step to do so. It was not suggested in argument that the matter should now be left to the committee. Clearly, that would serve no useful purpose. The fact is that neither the creditors nor the committee has acted to fix the remuneration and so the default provision contained in s 162(4) has been activated.
There may be a further problem in the practical application of subs 162(1). It is unclear how any bona fide disagreement between creditors and a trustee as to remuneration is to be resolved. It might be argued that the creditors are, in effect, to act in the capacity of arbitrator, but this seems unlikely. It is more probable that any dispute is to be resolved by use of the procedure prescribed by subs 162(4). The procedure prescribed by regulation 8.09-8.11 may also be of assistance. It is not presently necessary to resolve this difficulty.
I have not, to this point, considered the jurisdiction of the Court in this matter. Quite apart from s 39B of the Judiciary Act 1903 (Cth), subs 30(1) of the Bankruptcy Act provides:
The Court:
(a)has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Pt IX, X or XI coming within the cognizance of the Court; and
(b)may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.
In Re Colgate (A Bankrupt), Ex parte Trustee of the Property of the Bankrupt [1986] 1 Ch 439 is a decision of the English Court of Appeal concerning a similar matter. The relevant legislation provided that the creditors or the committee of inspection should fix the trustee’s remuneration. The trustee, on numerous occasions, sought to convoke a meeting for that purpose, but the creditors refused to attend. Sub-section 105(1) of the relevant act provided:
Subject to the provisions of this Act, every court having jurisdiction in bankruptcy under this Act, shall have full power to decide all questions of priorities, and all other questions whatsoever, whether of law or fact, which may arise in any case of bankruptcy coming within the cognizance of the court, or which the court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case …
At 445-6, May LJ said:
In my judgment the object of section 105 is to give this court or the bankruptcy court wide powers of doing justice in a particular case, and in the particular circumstances of the instant appeal one must invoke those powers to do justice because the machinery laid down by section 82 of the Act of 1914 has in the event, and after numerous attempts to make it work, broken down. With all respect to the registrar, in my view the remedy does not lie in the hands of the creditors themselves. They have been offered six opportunities to deal with this question of remuneration of the trustee, and on each occasion none of them has seen fit to attend at the meetings called. In my judgment the remedy for that situation lies in the hands of the court pursuant to its general powers under section 105 of the Act.
The grant of jurisdiction in s 30(1) of the Bankruptcy Act is sufficient to authorize this Court to proceed in the same way. Having determined that the applicants’ remuneration is to be fixed pursuant to the regulations, the only remaining question is as to the method to be used in so doing. In Re Smith, Ex parte Hamilton v Muir (1986) 66 ALR 175 at 179, Sheppard J, after following Colgate in other respects, held that he had power pursuant to subs 30(1) to refer the matter to the registrar for the purpose of fixing remuneration. I could also direct an inquiry pursuant to subs 30(2). However I do not presently see that it is necessary to involve the Court further in this matter. The Official Trustee has power to deal with it pursuant to par 134(1)(g) of the Act. Should there be any matter which cannot be resolved in that way, then s 30 offers a mechanism for doing so. There will be a declaration in terms of the first prayer in the application. The parties will have liberty to apply.
I come to the question of costs. Formally, this is a dispute between the applicants as former trustees and the Official Trustee who now represents the estate, although the latter has not opposed the application. All other things being equal, the applicants’ success should lead to their having their costs out of the estate. The Official Trustee should also have his costs from the estate. However the matter is rather more complex. The application was issued on 22 September last year, and both affidavits upon which Mr Savage relied were also filed on that date. However, on 8 October one Peter Dunwoody (a brother and creditor of the bankrupt) was given leave to participate in these proceedings and did so, as I am informed, until Wednesday 5 April this year when he advised the other parties that he would be withdrawing. The relevant hearing took place on 10 April. The matter had originally be listed for hearing on 7 February but was not disposed of on that day because of difficulties concerning subpoenas duces tecum issued by the applicants against persons associated with the bankrupt. After taking evidence concerning the subpoenas and hearing argument, it became clear that the matter could not be disposed of at that time, and it was adjourned. When the matter came on for hearing today Mr Dunwoody was represented, but his solicitor played no part in proceedings other than to make submissions concerning costs. Counsel for the applicants and for the Official Trustee now submit that Mr Dunwoody, being the only person who has opposed the application, should pay those parties’ costs, at least to the extent that they have been increased by such opposition.
Had Mr Dunwoody not intervened in the proceedings, it is likely that shortly after 22 September, the matter would have been listed for determination. In the absence of any opposition from the Official Trustee, and after a cursory reference to the authorities to which I have referred, the relevant order would have been made. It is reasonable to infer that substantial additional costs have been incurred as a result of Mr Dunwoody’s intervention. As, in the end, he did not seek to vindicate his intervention, it is proper that he pay so much of the costs as may be attributable to it. It is not easy to ascertain that extent. A major aspect of concern to the applicants and the Official Trustee is the costs of the hearing on 7 February. Although I am not entirely clear about the matter, my understanding is that the subpoenas in question were issued, at least in part, to obtain evidence to support an allegation by the applicants that the creditors’ resolution was made in bad faith. Presumably, Mr Dunwoody proposed to resist that assertion. In the end, the issue became irrelevant because the resolution is defective for the reasons which I have given. However, had the allegation of bad faith been made out, the applicants would probably have recovered their costs of that issue, notwithstanding their success on other grounds. Mr Dunwoody’s withdrawal from the matter rendered the resolution of the issue of bad faith irrelevant because the Official Trustee accepted that the resolution is invalid. The extent to which the costs of the delay caused by the difficulty with the subpoenas are attributable to Mr Dunwoody’s intervention depends upon the relevance of the subpoenas to that issue. That question can be decided in the course of the taxation.
In the circumstances I propose the following orders:
1.That the applicants’ costs of these proceedings be paid by the Official Trustee as trustee of the bankrupt estate and by the respondent Peter Dunwoody, provided that:
(a)to the extent that such costs are payable by the Official Trustee, they are to be, for the purposes of s 109 of the Bankruptcy Act 1966, expenses of the administration of the bankruptcy;
(b)the liability of the said Dunwoody pursuant to this order is to be limited to the amount by which costs incurred by the applicants between 8 October 1999 and 5 April 2000 were increased by his opposition to the application; and
(c)to the extent that the Official Trustee pays any amount in whole or partial satisfaction of this order, it is to be entitled to recover from the said Dunwoody any such amount, subject to the express limitation upon his liability hereinbefore stated.
2.That the Official Trustee’s costs of these proceedings be paid by the respondent Peter Dunwoody, provided that:
(a)the liability of the said Dunwoody pursuant to this order is to be limited to the amount by which costs incurred by the Official Trustee between 8 October 1999 and 5 April 2000 were increased by the said Dunwoody’s opposition to the application; and
(b)to the extent that such costs are not recovered or reasonably recoverable from the said Peter Dunwoody, they are to be, for the purposes of s 109 of the Bankruptcy Act 1966, the Official Trustees’ expenses of the administration of the bankruptcy.
Because of the rather complex nature of the proposed costs orders, it is appropriate that the parties, including Peter Dunwoody, have liberty to make further submissions as to them. Should any party wish to do so, relevant submissions should be reduced to writing and communicated to the other parties. Such submissions, together with any responses thereto, are to be forwarded to the Court within fourteen days of publication of these reasons for judgment.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate:
Dated: 26 July 2000
Counsel for the Applicant: Mr D Savage Solicitor for the Applicant: Bowdens Solicitor for the Respondent: Barwicks Wisewoulds Solicitor for Mr P Dunwoody: Bennett & Philp Counsel for Mr A Bennett &
Mr M HickmanMr B O’Donnell QC Solicitor for Mr A Bettett &
Mr M HickmanBennett & Philp Date of Hearing: 10-11 April 2000 Date of Judgment: 26 July 2000
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