McDonald v Sanders
[2008] FMCA 1341
•25 September 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| McDONALD v SANDERS | [2008] FMCA 1341 |
| BANKRUPTCY – Fixing of a trustee’s remuneration for the administration of an estate – assessment of the trustee’s claim. |
| Bankruptcy Act 1966, s.30 Bankruptcy Regulations Federal Magistrates Court Rules 2001 (Cth) |
| McDonald (as former trustee of the bankrupt estate of Basil Charles Sanders) v Sanders [2007] FMCA 649 |
| Applicant: | GEOFFREY DAVID McDONALD as former trustee of the bankrupt estate of Basil Charles Sanders |
| Respondent: | BASIL CHARLES SANDERS |
| File Number: | SYG 2460 of 2005 |
| Judgment of: | Driver FM |
| Hearing date: | No oral hearing |
| Delivered at: | Sydney |
| Delivered on: | 25 September 2008 |
ORDERS
The remuneration of Geoffrey David McDonald as the trustee in the administration of the estate of Basil Charles Sanders is fixed in the sum of $51,699.43, inclusive of disbursements of $6,629.53, pursuant to s.30 of the Bankruptcy Act 1966 (Cth) and having regard to regulation 8.09 of the Bankruptcy Regulations.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2460 of 2005
| GEOFFREY DAVID MCDONALD as former trustee of the bankrupt estate of Basil Charles Sanders |
Applicant
And
| BASIL CHARLES SANDERS |
Respondent
REASONS FOR JUDGMENT
Introduction and background
On 3 May 2007 in the principal proceedings[1] I made the following order:
Pursuant to rule 18.01 of the Federal Magistrates Court Rules 2001 (Cth), the application filed on 13 November 2006 for orders fixing the remuneration of the applicant trustee in the administration of the estate of Basil Charles Sanders, together with the material filed in support of that application are referred to a registrar of the Court for investigation, report and recommendation, having regard to the terms of Regulation 8.09 of the Bankruptcy Regulations, with a view to the Court fixing the remuneration of the applicant trustee pursuant to s.30 of the Bankruptcy Act 1966 (Cth).
[1] McDonald (as former trustee of the bankrupt estate of Basil Charles Sanders) v Sanders [2007] FMCA 649
The applicant trustee filed an affidavit on 27 March 2007 in support of his claim for remuneration. He had filed an earlier affidavit on 4 September 2006. Both were relied upon by the Registrar in preparing his report pursuant to my order.
By letter dated 26 June 2007 the Registrar requested further information from the applicant trustee in relation to his claim. It appears that the trustee responded. By letter dated 26 August 2008 the Registrar gave a further invitation to the applicant trustee to provide information. No response was received.
I have received the following report and recommendation from the Registrar dated 19 September 2008:
PERIOD OF REMUNERATION CLAIMED
The Applicant is claiming remuneration for the period from 17 September 2004 to 17 February 2007. The Applicant was appointed the trustee to the estate pursuant to a composition under section 73 of the Bankruptcy Act 1966, on 17 September 2004. The date of effect of the appointment is 17 September 2004. I note that a meeting of creditor held on 17 February 2006 voted to remove the Applicant, however, no trustee was appointed in his place.
The period therefore that the trustee is able to claim is from 17 September 2004 to 17 February 2006. Although in his affidavit filed on 27 March 2007 the Applicant claims in paragraph 4 to “Remuneration sought from 17 September 2004 to date”, I do not think that he is entitled to remuneration beyond 17 February 2006.
I note that in Annexure “A” to the affidavit sworn by the Applicant on 26 March 2007, the correct period is referred to and it is from this annexure that I have based my calculations.
CLASSIFICATION OF WORK
I am aware that it is common practice for trustees to claim remuneration according to various levels of responsibility according to the grade of officer undertaking the particular task.
In this matter work is graded from such levels as Partner to Associate/Manager to Senior 2 down to Junior/Word Processor at various declining rate.
The allocation of responsibilities that have been undertaken by the various categories by the Applicant and his staff according to the description of the work performed on pages 61 to67 to the exhibit to the affidavit of the Applicant appears reasonable.
RATE CLAIMED
The rate to be allowed is 85% of the amounts published in the IPAA Guide. The trustee has claimed in his affidavit for amounts in excess of the scale. I recommend that they be allowed them as follows:
$
$
Classification
Hours
Rate
Allowed
Partner
48.2
377
18171.40
Associate/Manager
31.2
242
7550.40
Senior 2
168.70
112
18894.40
Intermediate
33.2
89
2954.80
Junior/WP
12.9
49
632.10
$48,203.10
$48,203.10 x 85% = $40,972.64 + GST $4,097.26 = $45,069.90
HOURS CLAIMED
I am satisfied that the hours claimed by the trustee for the various items of work undertaken in administering the estate outlined in the affidavit filed on 27 March 2007 are reasonably claimed considering the nature of the matter and the period undertaken to do the work.
DISBURSEMENTS
GST
This will be a payment that is required to be made by law to the Deputy Commissioner of Taxation.
FACSIMILE
I do not recommend that this charge be allowed as a reasonable disbursement.
FILING FEE
The claim of $288.00 is the filing fee paid to the Court for filing the Application and is recommended to be allowed as claimed.
MEETING ROOM COSTS
The Tax invoice that was submitted by the applicant following my requisition appears to be an internal invoice. There does not appear to have been a real cost to the Applicant for this disbursement. In the circumstances it is recommended that it be disallowed.
PHOTOCOPYING
Photocopying has been charged at $1.10 per page [ie $1.00 plus GST of $0.10]. This is reasonable and I recommend that it be allowed in full at $5,333.13.
POSTAGE & HANDLING
$742.60 is recommended to be allowed as claimed as a disbursement.
SEARCH FEES
$265.80 is recommended to be allowed as a disbursement.
PROFESSIONAL FEES OF LAWYERS
In paragraph 21 of his affidavit filed on 27 March 2007 the Applicant claims as a disbursement fees for his lawyer as a disbursement, being in the sum of $68,000.00 plus $1,988.86 GST.
I am unable to recommend this for approval without more detailed information as to the nature of the advice sought, the work that was performed and rates charged by the lawyer. The Applicant has not provided me with this information.
RECOMMENDATION
I recommend that the Applicant’s remuneration be approved as follows:
Trustee’s Remuneration: $45,069.90
Disbursements: $6,629.53
Total: $51,699.43
I accept the Registrar’s recommendation for the reasons given in the report. I will order that the applicant trustee receive administration for the administration of the estate accordingly.
I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 25 September 2008