Mackay(Trustee), In the Matter Of the Bankrupt Estate OfPhillips

[2016] FCCA 915

FEDERAL CIRCUIT COURT OF AUSTRALIA

MACKAY (TRUSTEE), IN THE MATTER OF THE BANKRUPT ESTATE OF PHILLIPS [2016] FCCA 915

Catchwords:
BANKRUPTCY – Application for order under s.183 of the Bankruptcy Act 1966 (Cth) releasing applicant from trusteeship of bankrupt estate – bankrupt joined proceeding as interested party – draft minutes of consent orders provided to the Court.

Legislation:

Bankruptcy Act 1966 (Cth), ss.181, 183

Federal Circuit Court (Bankruptcy) Rules 2006 (Cth), r.8.02

Applicant: RODERICK MACKAY SUTHERLAND IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF LAURENCE PHILLIPS

Interested Party: LAURENCE PHILLIPS

File Number: SYG3465/2015

Judgment of: Judge Dowdy

Delivered at: Sydney

Delivered on: 21 April 2016

REPRESENTATION

Counsel for the Applicant: Mr S Golledge

Solicitors for the Applicant: Tresscox Lawyers

Counsel for the Interested Party: Mr J Johnson

Solicitors for the Interested Party: Proctor Phair Lawyers

ORDERS

1. The Court notes that subject to the payment, of the Applicant Trustee’s costs of this proceeding, the Trustee has completed the administration of the bankruptcy of Laurence Phillips and is otherwise in a position to issue a certificate of annulment pursuant to s.153A(2) of the Bankruptcy Act 1966 ( “the Act”).

2. Further, the Court notes that, so as to enable the issue of a certificate of annulment, and re-vesting of property in Laurence Phillips pursuant to s.154(1)(c ) of the Act, the Trustee and Laurence Phillips :

   a)  each consent to the making of the Orders in paragraph 3 below; and

   b) have made the agreement recorded in paragraphs 4 and 5 below.

3. By Consent the Court orders that:

   a)The Applicant’s costs of this proceeding are fixed in the sum of $18 000 inclusive of GST;

   b)The Trustee is entitled to pay those costs from funds held by him in the bankrupt estate; and

   c)Upon the Trustee paying those costs and thereafter distributing the surplus in the estate to Laurence Phillips,

   the Applicant is released as trustee of the bankrupt estate of Laurence Phillips.

4. The application filed on 22 December 2015 be otherwise dismissed.

   AND the Court notes the agreement between the Trustee and Laurence Phillips as follows:

5. The Trustee will within 7 days of the making of these Orders:

   a)pay the surplus in the bankrupt state to Laurence Phillips or as he Directs and

   b)provide to the Official Receiver a signed written certificate setting out the former bankrupt’s name and bankruptcy number and date of annulment under s. 153A of the Act

6. The Trustee will, at the time of delivery of the certificate of annulment, request the Official Receiver to cause details of the annulment to be entered in the National Personal Insolvency Index.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG3465/2015

RODERICK MACKAY SUTHERLAND IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF LAURENCE PHILLIPS

Applicant

And

LAURENCE PHILLIPS

Interested Party

REASONS FOR JUDGMENT

1. By an application filed in this Court on 22 December 2015, Mr Sutherland sought an order under s.183 of the Bankruptcy Act 1966 (Cth) (Act) releasing him from the trusteeship of the bankrupt estate of Mr Laurence Phillips and an order for his costs of that application.

2. A sequestration order had been made against the estate of Mr Phillips on 20 December 2006. Mr Sutherland had become the trustee of Mr Phillips’ bankrupt estate on 20 September 2012 under s.181 of the Act.

3. The full history of the administration of the bankrupt estate is set out in Mr Sutherlands’ affidavit of 21 December 2015 and it is unnecessary here to give further details of it.

4. As at the date of the application it appeared to be the case that all of Mr Phillips’ debts had been paid in full, resulting in a surplus of approximately $450,000 to be distributed and paid to Mr Phillips after the estimated costs of Mr Sutherland’s application. By the time the proceeding first came before the Court on 25 January 2016, a dispute had broken out concerning the quantum and reasonableness of such costs and Mr Phillips had filed a Notice of Appearance as an opponent to Mr Sutherland’s application under s.183. On the first return date of the proceeding before me it was indicated that Mr Phillips disputed the quantum of costs sought by Mr Sutherland.

5. On 25 January 2016 I stood the proceeding over to 17 March 2016 to see if a satisfactory agreement could be reached and on that date Mr Golledge of Counsel appeared for Mr Sutherland and Mr Johnson of Counsel appeared on behalf of Mr Phillips. 

6. On 17 March 2016 I was informed by Mr Golledge and Mr Johnson, both experienced insolvency Counsel, that there had been a settlement in principle agreed between their respective clients and I was asked to stand the matter over generally for a short time to allow that proposed settlement to be consummated and for the re-surfaced claim of a small remaining creditor to be dealt with.

7. I have now since been provided in chambers with orders, signed by the respective solicitors for Mr Sutherland and Mr Phillips, being the only interested parties in relation to Mr Phillips’ bankrupt estate, and am asked to make them by consent.  I regard those orders as reasonable, appropriate and such as ought to be made.

8. I am further satisfied that the Applicant has complied with the requirements of r.8.02 of the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth) in relation to the application made by him under s.183.

9. Accordingly, I make the following orders by consent:

   1. The Court notes that subject to the payment, of the Applicant Trustee’s costs of this proceeding, the Trustee has completed the administration of the bankruptcy of Laurence Phillips and is otherwise in a position to issue a certificate of annulment pursuant to s.153A(2) of the Bankruptcy Act 1966 ( “the Act”).

   2. Further, the Court notes that, so as to enable the issue of a certificate of annulment, and re-vesting of property in Laurence Phillips pursuant to s.154(1)(c ) of the Act, the Trustee and Laurence Phillips :

   a)  each consent to the making of the Orders in paragraph 3 below; and

   b)  have made the agreement recorded in paragraphs 4 and 5 below.

   3.  By Consent the Court orders that:

   a)  The Applicant’s costs of this proceeding are fixed in the sum of $18 000 inclusive of GST;

   b)  The Trustee is entitled to pay those costs from funds held by him in the bankrupt estate; and

   c)  Upon the Trustee paying those costs and thereafter distributing the surplus in the estate to Laurence Phillips,

   the Applicant is released as trustee of the bankrupt estate of Laurence Phillips.

   4.  The application filed on 22 December 2015 be otherwise dismissed.

   AND the Court notes the agreement between the Trustee and Laurence Phillips as follows:

   5.  The Trustee will within 7 days of the making of these Orders:

   a)  pay the surplus in the bankrupt state to Laurence Phillips or as he Directs and

   b) provide to the Official Receiver a signed written certificate setting out the former bankrupt’s name and bankruptcy number and date of annulment under s. 153A of the Act

   6.  The Trustee will, at the time of delivery of the certificate of annulment, request the Official Receiver to cause details of the annulment to be entered in the National Personal Insolvency Index.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Judge Dowdy

Date: 21 April 2016