Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith)

[2007] FCA 1005

FEDERAL COURT OF AUSTRALIA

Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 1005

INGE MAXWELL-SMITH AND EUGENE MAXWELL-SMITH v MAX CHRISTOPHER DONNELLY (IN THE MATTER OF INGE AND EUGENE MAXWELL-SMITH)
NSD 1672 OF 2004

ALLSOP J
6 JULY 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1672 OF 2004

BETWEEN:

INGE MAXWELL-SMITH
First Applicant

EUGENE MAXWELL-SMITH
Second Applicant

AND:

MAX CHRISTOPHER DONNELLY (IN THE MATTER OF INGE AND EUGENE MAXWELL-SMITH)
Respondent

JUDGE:	ALLSOP J
DATE OF ORDER:	6 JULY 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Order 1 made on 8 June 2007 be replaced by “Order 1” set out below:

Having inquired into the conduct of the respondent trustee, Max Christopher Donnelly, in relation to the matters in order 3 of the orders of the Full Court of the Federal Court on 27 October 2006 and finding no basis for criticism of the conduct of the said trustee or of his manager, Mrs Angela Margaret Gallucci, the applicants, Mr Eugene and Mrs Inge Maxwell-Smith pay the costs, charges and expenses of the respondent, Max Christopher Donnelly, of this inquiry as taxed in accordance with the Bankruptcy Act 1966 (Cth) and that the costs, remuneration and expenses of the respondent trustee of this inquiry before Allsop J form part of the respondent trustee’s costs charges and expenses of the administration of the former bankrupt estate of Mr and Mrs Maxwell-Smith.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1672 OF 2004

BETWEEN:

INGE MAXWELL-SMITH
First Applicant

EUGENE MAXWELL-SMITH
Second Applicant

AND:

MAX CHRISTOPHER DONNELLY (IN THE MATTER OF INGE AND EUGENE MAXWELL-SMITH)
Respondent

JUDGE:	ALLSOP J
DATE:	6 JULY 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. Pursuant to order 3 made on 8 June 2007 counsel for Mr Donnelly in written submissions sought certain amendments to the orders. The trustee not only sought his costs of the inquiry, but also that he should receive remuneration for the steps taken in defending himself in the inquiry. No other submissions have been received. From communications had by my associate it was apparent that Mrs Maxwell-Smith and her counsel had Mr Donelly’s submissions and had an opportunity to respond to them.

2. Reference was made in the further submissions of Mr Donnelly to s 154(1)(b) of the Bankruptcy Act 1966 (Cth) (the “Act”) and Pantzer v Wenkart (2006) 153 FCR 466 at [43] and [44].

3. Left to decide the issue free of authority, I would have characterised Mr Donnelly’s position as successfully defending himself against allegations in litigation.  As such, like any other litigant, Mr Donnelly should be entitled to his legal costs, but not compensation or remuneration for lost time.

4. I am bound, however, to decide the matter in accordance with what was said in Pantzer 153 FCR at [40]-[46]. Mr Donnelly was drawn into the litigation in defending himself in his capacity as trustee. This being so, on the authority of Pantzer v Wenkart 153 FCR 466, Mr Donnelly is entitled to his charges, expenses and remuneration as contended for on his behalf.

5. Thus, order 1 made on 8 June 2007 will be amended by inserting into it the terms emboldened below:

   Having inquired into the conduct of the respondent trustee, Max Christopher Donnelly, in relation to the matters in order 3 of the orders of the Full Court of the Federal Court on 27 October 2006 and finding no basis for criticism of the conduct of the said trustee or of his manager, Mrs Angela Margaret Gallucci, the applicants, Mr Eugene and Mrs Inge Maxwell-Smith pay the costs, charges and expenses of the respondent, Max Christopher Donnelly, of this inquiry as taxed in accordance with the Bankruptcy Act 1966(Cth) and that the costs, remuneration and expenses of the respondent trustee of this inquiry before Allsop J form part of the respondent trustee’s costs charges and expenses of the administration of the former bankrupt estate of Mr and Mrs Maxwell-Smith.

I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop

Associate:
Dated:        6 July 2007

Counsel for the Applicant:	Mr S Brennan & Ms S Oman-Hales
Counsel for the Respondent:	Mr B Skinner
Solicitor for the Respondent:	Church & Grace
Date of Hearing:	7 June 2007
Date of final Submission:	14 June 2007
Date of Judgment:	6 July 2007