LOMBE (TRUSTEE) IN THE MATTER OF RAHMAN (BANKRUPT)

This matter concerned an application by the trustee in bankruptcy of Mr. Rahman's estate for directions regarding the distribution of dividends amongst creditors who had proved their debts. Mr. Rahman, the bankrupt, had not filed a statement of affairs. The application was heard in the Federal Court of Australia before Judge Barnes.

The primary legal issue before the Court was whether the trustee could distribute dividends to creditors pursuant to section 146 of the *Bankruptcy Act 1966* (Cth) in circumstances where the bankrupt had failed to file a statement of affairs. A secondary issue arose from an application by the bankrupt for the recusal of Judge Barnes, who had granted the bankrupt leave to be heard in the proceedings.

Judge Barnes determined that section 146 of the *Bankruptcy Act* did not require the filing of a statement of affairs as a prerequisite to the distribution of dividends. The Court reasoned that the purpose of section 146 was to facilitate the orderly distribution of available funds to proved creditors, and that the absence of a statement of affairs did not prevent the trustee from identifying and verifying the debts of creditors who had already lodged proofs of debt. Regarding the recusal application, the Court found that the grounds advanced by the bankrupt did not establish any actual or apprehended bias, and therefore the application was dismissed.

The Court made orders directing the trustee to proceed with the distribution of dividends to the creditors who had proved their debts in the bankrupt estate.