FEDERAL COURT OF AUSTRALIA
Maxwell-Smith v Donnelly (No 2) [2011] FCA 259
Citation: Maxwell-Smith v Donnelly (No 2) [2011] FCA 259 Parties: EUGENE MAXWELL-SMITH and INGE MAXWELL-SMITH v MAX CHRISTOPHER DONNELLY and S & E HALL PTY LTD File number: NSD 198 of 2004 Judge: NICHOLAS J Date of judgment: 25 March 2011 Catchwords: BANKRUPTCY – trustee’s costs, charges and expenses of administration of former bankrupts’ estates – taxation of trustee’s costs, charges and expenses – whether judgment should be entered in favour of trustee against former bankrupts for sum of such costs, charges and expenses – trustee not entitled to judgment but declaration made specifying sum of trustee’s entitlements
BANKRUPTCY – application by former bankrupts under s 179(1) of the Bankruptcy Act 1966 (Cth) claiming orders for inquiry and for payment of compensation by trustee – application unjustifiably vexatious and oppressive to trustee – application an abuse of process – application dismissed save as to one particular issue
Legislation: Bankruptcy Act 1966 (Cth) s 179
Federal Court Rules O 20 r 5, O 46 r 7A, O 62 r 45
Bankruptcy Regulations 1966 (Cth) Pt 8, Div 4Cases cited: Maxwell-Smith v Donnelly [2010] FCA 474
Donnelly v Maxwell-Smith [2010] FCAFC 154
Hardoon v Belilios [1901] AC 118
Pantzer v Wenkart (2006) 153 FCR 466
Walton v Gardiner (1993) 177 CLR 378Date of hearing: 2 February 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 40 The second applicant appeared in person and on behalf of the first applicant Counsel for the First Respondent: BJ Skinner Solicitor for the First Respondent: Church & Grace Solicitor for the Second Respondent: The Second Respondent did not appear
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 198 of 2004
BETWEEN: EUGENE MAXWELL-SMITH
First ApplicantINGE MAXWELL-SMITH
Second ApplicantAND: MAX CHRISTOPHER DONNELLY
First RespondentS & E HALL PTY LTD
Second Respondent
JUDGE:
NICHOLAS J
DATE OF ORDER:
25 MARCH 2011
WHERE MADE:
SYDNEY
THE COURT DECLARES THAT:
1.The sum of the entitlements of Maxwell Christopher Donnelly (the Trustee) to remuneration, costs and expenses of his administration of the former bankrupt estates of Eugene Maxwell-Smith and Inge Maxwell-Smith (the Applicants) for the period 16 September 2003 to 21 May 2008 is $273,717.41.
THE COURT ORDERS THAT:
2.The Applicants give vacant possession of the property known as 8B Surf Circle, Tura Beach, New South Wales (the Tura Beach Property) to the Trustee, or his duly authorised servants or agents, within 60 days of the date of this order.
3.The trustee file and serve an affidavit within 21 days of today specifying his estimate of such other amount as the Applicants might reasonably be required to pay on account of any additional remuneration, costs and expenses incurred in the administration of the Applicants’ former bankrupt estates to which the Trustee may be found to be entitled including any additional remuneration, costs and expenses referable to the proposed sale of…
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- AGLC
- Maxwell-Smith v Donnelly (No 2) [2011] FCA 259
- Case
- [2011] FCA 259
- Decision Date
CaseChat Overview and Summary
The central legal issues before the court were whether the applicants' claims were justified and whether the application was vexatious and an abuse of process. Specifically, the court needed to determine the appropriate amount of costs and expenses owed by the applicants to the trustee and whether the application for compensation and inquiry was properly brought. The court also had to consider the trustee's request for vacant possession of the Tura Beach Property and the taxation of the trustee's costs.
In its decision, the court found that while the applicants were not entitled to a judgment against them for the trustee's costs, charges, and expenses, a declaration was appropriate specifying the sum owed by the applicants. The court dismissed the applicants' application as vexatious and an abuse of process in relation to several claims but stood over the application concerning the alleged unreasonable refusals. The court ordered the applicants to provide a statement of particulars regarding the alleged refusals and directed the trustee to provide details on the proposed sale of the Tura Beach Property. The court also directed a Registrar to tax the trustee's costs and expenses, including those related to the notices of motion and further administration costs.
The final orders mandated the applicants to give vacant possession of the Tura Beach Property within 60 days, required the trustee to file affidavits regarding additional remuneration, costs, and expenses, and outlined specific timelines and directives for further proceedings. The court also dismissed the application for costs related to the taxation before the Registrar.
Orders
Orders of the court
2. The Applicants give vacant possession of the property known as 8B Surf Circle, Tura Beach, New South Wales (the Tura Beach Property) to the Trustee, or his duly authorised servants or agents, within 60 days of the date of this order.
3. The trustee file and serve an affidavit within 21 days of today specifying his estimate of such other amount as the Applicants might reasonably be required to pay on account of any additional remuneration, costs and expenses incurred in the administration of the Applicants’ former bankrupt estates to which the Trustee may be found to be entitled including any additional remuneration, costs and expenses referable to the proposed sale of the Tura Beach Property.
4. The Trustee file and serve an affidavit within 28 days of today:
(a) exhibiting a copy of any valuation obtained by him of the Tura Beach Property;
(b) outlining the steps which he proposes to take in relation to the marketing and promotion of the Tura Beach Property.
5. There be no order as to costs of the taxation before the Registrar.
6. The Trustee’s costs in the administration of the former bankrupts’ estates include eighty-five percent (85%) of the Trustee’s costs, charges and expenses of and incidental to the notices of motion filed 5 May 2009 (including as amended on 16 October 2009) and 20 August 2009.
7. Each party have liberty to apply on 5 days notice for the purposes referred to in paras 13, 15 and 16 of the reasons for judgment delivered today.
8. The application filed in Court on 2 February 2011 (the 2 February 2011 application) be dismissed in so far as it claims relief under s 179 of the Bankruptcy Act 1966 (Cth) in relation to the matters raised in paragraphs 1 – 5 (inclusive) and paragraphs 7 and 8 on pages 2 and 3.
9. The 2 February 2011 application, in so far as it claims relief under s 179 of the Act in relation to the matter raised in paragraph 6 on page 2, be stood over for directions to a date to be fixed.
10. The Applicants file and serve within 14 days a statement of particulars that specifies:
(a) the details of the requests referred to in para 6 of the 2 February 2011 application (including whether those requests were written or oral or partly written and partly oral);
(b) the details of the refusals referred to in para 6 of the 2 February 2011 application (including whether those refusals were written or oral or partly written and partly oral); and
(c) the reasons why such refusals are alleged to have been unreasonable.
THE COURT DIRECTS THAT:
11. A Registrar of the Court tax any further costs, charges and expenses of the Trustee incurred in administering the former bankrupt estates of the Applicants, including the costs specified in Order 6 above, as if it were a taxation in accordance with Part 8, Division 4 of the Bankruptcy Regulations 1966 (Cth).
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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