McDonald v Sanders

[2007] FMCA 649

FEDERAL MAGISTRATES COURT OF AUSTRALIA

McDONALD v SANDERS [2007] FMCA 649

BANKRUPTCY – Fixing of a trustee’s remuneration for the administration of an estate – consideration of the Court’s jurisdiction to fix a trustee’s remuneration.

Bankruptcy Act 1966 (Cth), ss.30, 62, 64U, 153B, 161B, 162, 178, 181A, 222C
Bankruptcy Legislation Amendment Act 1996 (Cth)
Bankruptcy Regulations
Corporations Act 2001 (Cth), s.511
Federal Magistrates Court Rules 2001 (Cth)

ACN 004 323 184 Pty Ltd v Spark [2002] VSC 353
Adsett v Berlouis (1992) 109 ALR 100; 37 FCR 201
Brake v Townsend [2006] FCA 1156
Dare (as trustee in bankruptcy of Doolan) v Doolan [2003] FCA 1451
Doolan v Dare [2005] FCAFC 69
Jefferson and Stevenson v Official Trustee in Bankruptcy (2000) 175 ALR 671; [2000] FCA 990
Mayne v Jaques (1960) 101 CLR 169; (1960) ALR 289
Pattison (as trustee of the bankrupt estate of Bellin) v Bellin [2000] FCA 1167
Re Colgate; Ex parte Trustee of the Property of the Bankrupt [1986] Ch439; [1986]1 All ER 419
Re Ladyman (1981) 38 ALR 631
Re Smithp Ex prate Hamilton v Muir (1986) 11 FCR 341; 66ALR 175
Re Walker and Anor (as liqs of One.Tel Ltd) (in liq) (2005) 221 ALR 320
Townsend v Brake [2005] FMCA 533

Applicant:

GEOFFREY DAVID McDONALD

As former trustee of the bankrupt estate of Basil Charles Sanders

Respondent: BASIL CHARLES SANDERS

File Number: SYG2460 of 2005

Judgment of: Driver FM

Decided on written submissions

Date of Last Submission: 27 March 2007

Delivered at: Sydney

Delivered on: 3 May 2007

REPRESENTATION

Solicitors for the Applicant: Mr M Shortall
Clinch Neville Long

ORDERS

1. 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).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG2460 of 2005

GEOFFREY DAVID McDONALD

Applicant

And

BASIL CHARLES SANDERS

Respondent

REASONS FOR JUDGMENT

Introduction and background

1. This judgment deals with an application made under s.162(4) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) for orders fixing the remuneration of the applicant trustee in relation to the administration of the estate of Basil Charles Sanders. The trustee is the former trustee of a composition made under s.73 of the Bankruptcy Act. The applicant trustee seeks approval of his costs and disbursements to be paid from the respondent’s estate, any further or other order the Court deems fit and costs of the application.

2. The application arises out of orders made by me on 31 October 2006. At that time I gave liberty to the applicant to apply for orders fixing his remuneration in the administration of the respondent’s estate following orders made by me on 15 September 2006 terminating the composition pursuant to ss.222C(1)(e) and (g) of the Bankruptcy Act and the making of a sequestration order pursuant to s.222C(5) of the Bankruptcy Act. The Official Trustee is now the trustee of the bankrupt estate.

3. Further orders were made by me and Federal Magistrate Raphael altering the timetable for the filing of material in support of the present application. 

4. The application is supported by the affidavit of Mr McDonald made on 26 March 2007 and filed on the following day. Mr McDonald deposes as to his appointment as trustee pursuant to s.181A of the Bankruptcy Act on 17 September 2004 and his various attempts to secure the agreement of creditors for his remuneration and other matters. Those attempts were unsuccessful. A meeting of creditors on 17 February 2006 purported to remove Mr McDonald as trustee but made no alternative appointment.

5. Mr McDonald deposes that he has alerted creditors to their option under s.162 of the Bankruptcy Act and Regulation 8.09 of the Bankruptcy Regulations (“the Bankruptcy Regulations”) to request a taxation of his costs of the administration. It appears that no such request has been made. The position therefore is that Mr McDonald has been unable to secure approval of his remuneration as trustee by the creditors, no steps have been taken for taxation of his costs in accordance with the Bankruptcy Act and Regulations and his position as trustee has now been overtaken by the sequestration order.

6. I required documents in relation to this application to be served on the respondent debtor, Mr Sanders, and on the Insolvency and Trustee Service Australia.  Nothing has been filed in relation to this matter by anyone other than the applicant.  The applicant has requested that I deal with the application without the need for an oral hearing.

7. On 27 March 2007 the applicant filed submissions in support of the application. In those submissions, the applicant asserts that the Court has power to fix the former trustee’s remuneration pursuant to s.162(4) of the Bankruptcy Act and Regulations 8.09 and 8.12 of the Bankruptcy Regulations. The applicant submits that the circumstances warrant the Court exercising its power to fix his remuneration.

Reasoning

1. I accept the applicant’s submission that, all attempts to have the creditors approve the former trustee’s remuneration having proved fruitless, and no step being taken in accordance with the Bankruptcy Act and Regulations to have his costs taxed, the exercise of power (if the Court has such power) to fix the trustee’s remuneration is properly called for. The real question is whether the Court has such power?

2. On the question of the power of the Court to make the orders sought, the authorities are not consistent.  In Pattison (as trustee of the bankrupt estate of Bellin) v Bellin [2000] FCA 1167 Goldberg J considered that the Federal Court did not have the power to fix a trustee’s remuneration. This Court is in no better position than the Federal Court.

3. In Pattison the applicant trustee sought orders that he be paid an amount for remuneration and costs and expenses incurred in the administration of the bankrupt estate in addition to the remuneration he had already received. The trustee sought in the hearing to have those additional amounts fixed pursuant to s.162 of the Act, either under the Regulation or by resolution of the creditors of the bankrupt or by the Court. Importantly for the present application, his Honour considered to be pivotal to his decision the amendment made to the previous s.162 in 1996 which expressly removed the power of the Court or the Registrar to fix a trustee’s remuneration. Given both the cases provided by the applicant in its present submissions to the court were decided some time before the amendments were made to s.162 the comments made by Goldberg J, set out below, indicate little to no weight should be afforded to them. In Pattison a resolution had been passed by the creditors allowing for certain remuneration to be provided to the trustee from the estate of the bankrupt which the respondent argued precluded any further remuneration being fixed.

4. His Honour’s reasoning begins at [22]:

   It is not disputed that the Trustee is entitled to be reimbursed from, or indemnified out of, the trust estate in respect of the costs and expenses properly incurred by him administering the estate and that he is ordinarily entitled to receive remuneration: Re: Ladyman (1981) 38 ALR 631 at 643; Mayne v Jaques (1959) 101 CLR 169 at 173, 178, 180; Adsett v Berlouis (1992) 109 ALR 100 at 109-110. The manner in which the Trustee's remuneration is to be determined is found in s 162 of the Act which, relevantly, provides…

   Section 161B of the Act is not relevant for present purposes.

5. His Honour then concludes at [24]-[27] that there is no statutory basis for the Court to fix or determine a trustee’s remuneration:

   No provision is made in the Act for the Court itself to fix or determine the remuneration of a trustee. This was not always the position. Prior to 1996, s 162 relevantly provided:

   (1) Subject to section 161B, the remuneration of the trustee of the estate of a bankrupt may be fixed, from time to time, by resolution of the creditors or, if the creditors so resolve, by the committee of inspection.

   ...

   (4) Where the remuneration of the trustee is not fixed by the creditors or the committee of inspection, the Registrar may fix the remuneration.

   (5) The Registrar may, on the application of a creditor or the trustee or of his own motion, review the amount of the trustee's remuneration and may confirm, reduce or increase the remuneration.

   Subsection 162(4) was amended, and subs 162(5) was omitted, by the Bankruptcy Legislation Amendment Act 1996(Cth). The Explanatory Memorandum which accompanied the Bankruptcy Legislation Amendment Bill 1996 explained the proposed amendments to s 162 in the following terms:

   Where the remuneration of a registered trustee is not fixed by resolution of creditors or by the committee of inspection, the Registrar is empowered to determine the trustee's remuneration. Item 301 proposes an amendment to subsection 162(4) so that it will provide that where the trustee's remuneration has not been fixed by resolution of the creditors or by the committee of inspection, then the trustee is to be remunerated in accordance with the regulations. The regulations could, for example, provide for the trustee to be remunerated in accordance with the scale of fees payable to the Official Trustee, or could provide for a separate scale of remuneration for registered trustees.

   Item 302 also proposes the omission of subsection 162(5) which enables the Registrar to review the remuneration of the trustee. Section 178 of the Act enables a person who is affected by any act, omission or decision of a trustee to appeal to the Court. It is considered that a person who considered that the remuneration taken by a trustee was excessive could make an application under section 178 for an order relating to the remuneration."

   Section 178 of the Act provides:

   If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable.

   As I have noted earlier, there is no specific provision in the Act which entitles or empowers the Court to fix or determine the remuneration of a trustee. The nature of the amendments to s 162 in 1996 confirms the conclusion that there was not a legislative intention that the Court would, in any situation, fix the remuneration of a trustee. Rather, the fixing or determination of a trustee's remuneration is to be made by the creditors, the committee of inspection or by reference to the IPAA scale.” [Emphasis added]

6. Pattison has been later considered by the FCA only in Dare (as trustee in bankruptcy of Doolan) v Doolan [2003] FCA 1451. Kiefel J in Dare considered Pattison, which she did not find extended to the proposition put forward that the decision stands for the principle that only the creditors may fix the trustee’s remuneration. Dare was not a case where the trustee sought to have the Court fix her remuneration at another rate; rather, the trustee sought an order, by way of declaration, to the effect that she was entitled to claim her remuneration at the rate provided for in the regulation. The respondent argued that any such declaration “would be cutting across a statutory procedure by which remuneration is to be considered and fixed as credtiors think appropriate” and called for a creditors’ meeting to be called to consider the claim.

7. Her Honour states at [17]-[22]:

   There have been amendments in recent years to s 162 and other provisions concerning the way in which a trustee’s remuneration is to be fixed. Prior to 1996, s 162 provided that where the remuneration of a trustee was not fixed by the creditors or the committee of inspection, the registrar may fix the remuneration. The registrar was given powers, on the application of a creditor or the trustee or of his own motion, to review the amount of the remuneration and to confirm, reduce or increase the remuneration (sub-s (4) and (5)). That power has been removed. Section 162 in its present form refers only to remuneration being fixed by creditors or by regulation. Goldberg J in Pattison v Bellin (2000) 103 FCR 590 observed that there remains no express provisions involving the Court in fixing or determining the trustee’s remuneration. Mr Doolan relies upon the decision as confirming that it is for the creditors alone to consider and determine remuneration. I do not consider the decision goes that far.

   It is of some importance that the new statutory regime provides for the automatic application of the rates of remuneration prescribed by regulation where creditors have not fixed remuneration and, it would follow, where it is not intended to seek such a resolution. The new regime involves creditors where the basis for remuneration is to be different from the rates prescribed by the regulations (see s 64U(3)). Where that is the case details of the proposed methods of charge have to be supplied by the trustee, as required by s 64U, to enable proper consideration to be given to the trustee’s proposal by creditors. As counsel for Mr Doolan pointed out, further amendments resulting in s 162(6A) and reg 8.12 confirm that it is now also intended that creditors be given notice of how a trustee seeks to be remunerated. These provisions would also appear relevant to proposals which have some basis other than regulation rates. Either creditors or the trustee can propose a motion as to the basis of remuneration. Section 64U(7) also permits creditors or their representatives to move amendments to any motion with respect to the trustee’s proposal. The section is however silent about the position of the trustee faced with a resolution which is unacceptable to the trustee.

   In Jefferson v Official Trustee in Bankruptcy (2000) 175 ALR 671 at [21] Dowsett J observed that there was no mechanism provided for the resolution of any bona fide disagreement between creditors and a trustee, but that it seemed unlikely that creditors were intended to be the arbiters of it. I respectfully agree. His Honour did not have to resolve the difficulty. There the creditors had resolved to fix the trustee’s remuneration on a commission basis when the trustee had wished to be remunerated in accordance with the regulations. The wide powers of s 30 were considered sufficient, in his Honour’s view, to resolve the dispute which had arisen. It was appropriate to use those powers where there was no other statutory mechanism provided. His Honour’s earlier observation, that it was not open to the creditors to compel the trustee to accept remuneration on some basis other than s 162(4) for work performed (at [20]), is also relevant to these proceedings.

   It seems to me to be intended that creditors be better informed as to the basis upon which remuneration will be charged by a trustee and in a timely way. Their participation is however only required where a trustee seeks remuneration to be charged on a basis other than as provided for in the regulations. In such cases the creditors will often be asked to approve rates of charges which are higher than those prescribed by reg 8.08 or to approve methods of charging different from those based upon hourly or other rates.

   The removal of the registrar’s review and the provision of an alternative rate set by regulation would also appear designed to promote efficiency and reduce the likelihood of dispute. These objects may be seen as achieved to an extent by permitting a trustee to elect for remuneration based upon regulation rates.

   There is nothing in the statutory provisions which would entitle a creditor to deny or contest a trustee’s decision to claim remuneration under s 62(4). This is a matter entirely for the trustee. The trustee’s decision to seek remuneration by that route and not to ask the creditors to fix some other basis for it leaves no room for debate or negotiation as between the trustee and the creditors. The regulation will simply apply.

8. Further guidance has more recently been provided by the Federal Court in Brake v Townsend [2006] FCA 1156. In Brake Greenwood J considered an appeal from orders made by Coker FM fixing the remuneration of a trustee. His Honour concluded that such a power may be supported by the Act, but it would depend on the circumstances of each case. The facts of the case were complex, and involved allegations of improper administration of the estate. Greenwood J considered the exercise of his Honour’s discretion to have miscarried on the grounds his Honour failed to have regard to the burden of the evidence in deciding that ‘unprofessional conduct’ and the incurring of excessive charges in the administration of the estate should affect the remuneration of the trustee, which he then fixed. Coker FM had considered “the Court certainly had power to ‘fix a sum in relation to the costs in respect of the administration of the estate’[1] although the source of that power was not identified”. At [96]-[98] Greenwood J goes on to state:

   As to the source of the power, it cannot be found in s 153B or any provision of Division 5 of Part VII of the Act. Division 4 of Part VIII of the Act addresses the topic of ‘Control over trustees’. Section 178 of the Act within Division 4 contains the heading ‘Appeal to court against trustee’s decision’ and is in these terms:

   178(1) [Right of appeal] If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the court, and the court may make such order in the manner as it thinks just and equitable.
   
   178(2) [Time limit] The application must be made not later than 60 days after the day on which the person became aware of the trustee’s act, omission or decision.’

   Plainly enough, the application to the court made by Ms Townsend on 24 February 2004 did not expressly raise the notion of an appeal from a decision of the trustee. …Although the precise character of an ‘act, omission or decision of the trustee’ is not clear, s 178(1) may well be sufficiently broad in its formulation to confer power upon the court to make such order as the court thinks just and equitable in relation to the request by the trustee for the provision of further monies in respect of costs (both expenses and remuneration) incurred from 13 December 2003 to 10 February 2004 and in respect of those costs to be incurred in undertaking steps necessary to complete the administration.

   Because his Honour failed to have regard to the evidence, no proper foundation subsisted for the exercise of a power to fix costs. The discretion has miscarried but to the extent that the source of the power might need to be identified, it seems to me that s 178(1) may well confer a power to determine or fix the quantum of the costs (both expenses and remuneration) in respect of an administration. In addition, s 30(1)(b) of the Act confers a power upon the court to make such orders as the court considers ‘necessary for the purposes of carrying out or giving effect to the Act in any case or matter’. The intersection, however, between the exercise of such powers directed to the subject matter of the trustee’s remuneration and the proper application of s 162 of the Act which specifically addresses the mechanisms by which the trustee’s remuneration is to be determined, must be carefully considered in any particular case. The trustee’s remuneration might be determined by resolution of the creditors or, by a committee of inspection. Where the remuneration of the trustee is not so determined, the trustee is to be remunerated as prescribed by the regulations (s 162(4)). The making of an order to fix or otherwise determine the remuneration of the trustee in the exercise of a power which properly comprehends such subject matter, notwithstanding the preparation of an itemised Bill of Costs and the taxation of those costs, could only arise out of an exposed process of reasoning identifying a proper basis for recourse to such power. There is no such process of exposed reasoning identified.” [Emphasis added]

   [1] Townsend v Brake [2005] FMCA 533 at [8]

1. Brake v Townsend has not yet been considered in another case.

2. Further, the position of trustees under the Corporations Act 2001 (Cth) (“the Corporations Act”) may be considered as analogous to that of trustees under the Bankruptcy Act. The question of whether the Court can fix the remuneration of liquidators under s.511(1)(a) and (b) of the Corporations Act 2001 (Cth) was considered by Barrett J in the NSW Supreme Court in Re Walker and Anor (as liqs of One.Tel Ltd) (in liq) (2005) 221 ALR 320. Section 511 holds that the liquidator or any contributory creditor may apply to the court to determine any question arising in the winding up of a company. His Honour began at [6] with the principle that a liquidator is entitled to remuneration; the position being the same in relation to bankruptcy:

   Before addressing the question whether there is jurisdiction to make the orders sought and, if so, whether they should be made, I should emphasise an important point. A liquidator in a creditors’ voluntary winding up, as in any other winding up, has an entitlement to be remunerated and an entitlement to have the remuneration fixed. In any type of winding up, the situation is not one in which the remuneration fixing function includes a discretion to decide that no remuneration will be allowed. The right to remuneration is not subject to negotiation or discretionary withdrawal. Statutory provisions about to be mentioned say that a liquidator is “entitled to receive such remuneration … as is determined” in a particular way; or speak of fixing “the remuneration to be paid” to a liquidator. The decision-making to be undertaken by the body or authority given by the Act the function of determining or fixing remuneration is decision-making as to quantum only. The position of a liquidator in any type of winding up is, as to remuneration, the same as that of a trustee in bankruptcy: see Mayne v Jaques (1960) 101 CLR 169 ; (1960) ALR 289; Adsett v Berlouis (1992) 37 FCR 201 ; 109 ALR 100; Doolan v Dare [2005] FCAFC 69 (4 May 2005). The entitlement, in this respect, of the liquidator in a voluntary winding up was recognised by Dodds-Streeton J in ACN 004 323 184 Pty Ltd v Spark [2002] VSC 353.

3. His Honour noted at [11] that the Corporations Act provides for three different methods to determine a liquidator’s costs, including expressly under s.504, a power for the court to review and fix the remuneration of the liquidator upon application to the Court.

4. Barrett J considers the analogous situation of the trustee’s remuneration in bankruptcy at [26]:

   The first of the bankruptcy cases is Re Colgate; Ex parte Trustee of the Property of the Bankrupt [1986] Ch 439 ; [1986] 1 All ER 419. The court was asked to fix the remuneration of a trustee in bankruptcy where the direct power to do so was, by s 82 of the Bankruptcy Act 1914 (UK), vested in a meeting of creditors. On no less than six occasions, the trustee duly gave notice of a meeting of creditors but no creditor attended. There was therefore no resolution of creditors fixing the trustee’s remuneration. The trustee made application to the court for directions under a provision enabling him to do so and also called in aid s 105(1) of the Act of 1914:

   Subject to the provisions of this Act, every court having jurisdiction in bankruptcy under this Act, shall have full power to decide all questions of priorities, and all other questions whatsoever, whether of law or fact, which may arise in any case of bankruptcy coming within the cognizance of the court, or which the court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case …

   [27] The trustee thus invoked what May LJ, in the Court of Appeal, called “the wide general powers given to the court by s 105(1)”. The similarity between that provision and s 511(1)(a) of the Corporations Act 2001 is obvious. The trustee’s application first came before a registrar and was refused. That decision was reversed by the Court of Appeal. May LJ (with whom Lloyd LJ and Sir David Cairns agreed) said (at Ch 445–6; All ER 422):

   In my judgment the object of section 105 is to give this court or the bankruptcy court wide powers of doing justice in a particular case, and in the particular circumstances of the instant appeal one must invoke those powers to do justice, because the machinery laid down by section 82 of the Act of 1914 has in the event, and after numerous attempts to make it work, broken down. With all respect to the registrar, in my view the remedy does not lie in the hands of the creditors themselves. They have been offered six opportunities to deal with this question of remuneration of the trustee, and on each occasion none of them has seen fit to attend at the meetings called. In my judgment the remedy for that situation lies in the hands of the court pursuant to its general powers under section 105 of the Act.

   [28] It is also pertinent to quote in full the concurring judgment of Lloyd LJ (at Ch 446; All ER 422):

   I agree. Where the machinery under s 82 of the Act of 1914 for fixing the trustee’s remuneration is available, it must be used. The power of the court under s 105 in such a case is excluded by the opening words of the section. But where the machinery under s 82 has broken down, as it has here, or is not available for any reason, then I have no doubt that the court has residual power under the wide words of s 105 to fix the trustee’s remuneration, despite the opening words of s 82. Otherwise there would be an impasse. I agree that the appeal should be allowed and that we should fix the remuneration in the sum which May LJ has proposed.

   [29] The other bankruptcy cases are both decisions of the Federal Court under the Bankruptcy Act 1966 (Cth). In Re Smith; Ex parte Hamilton v Muir (1986) 11 FCR 341; 66 ALR 175, the trustee’s remuneration had been fixed by the registrar under a provision enabling the registrar to act where there had been no determination by the creditors or the committee of inspection. There was a dispute as to whether the registrar had had power to make a determination. The court (Sheppard J) decided that s 30 of the Bankruptcy Act 1966 (corresponding, in material respects, with the provision relied upon in the Colgate case) provided a basis that the matter be referred to the registrar for redetermination by the court.

   [30] The second Australian case is Jefferson and Stevenson v Official Trustee in Bankruptcy (2000) 175 ALR 671 ; [2000] FCA 990. The trustees of the estate of a bankrupt made several attempts to secure proper remuneration through the normal statutory channels. After referring to these events, the decision in the Colgate case and s 30 of the Bankruptcy Act 1966, Dowsett J held that that section provided a sufficient basis for the court to review a decision of the creditors denying adequate remuneration.

   [31] These bankruptcy cases recognise and endorse the principle that statutory mechanisms for determining or fixing remuneration are concerned with the quantum to be paid in satisfaction of a statutory right to be remunerated which exists independently of those mechanisms. The cases show that where the prescribed statutory mechanism for deciding quantum proves unworkable in practice, the court’s general power (also statutory) to determine any question arising in the particular administration extends to deciding the question of quantification.

5. Barrett J concluded (at [33]) that if it were to be ultimately shown that the statutory means to set the liquidator’s remuneration were unworkable the parties could apply to the court to itself determine the quantum of remuneration pursuant to s.511(1)(a).

6. I draw the following conclusions from the authorities:

   a)the Court has no power pursuant to s.162(4) of the Bankruptcy Act to fix the remuneration of a trustee. However, the Court does have power to assess and determine a trustee’s remuneration pursuant to ss.30 and 178 of the Bankruptcy Act; and

   b)the exercise of the Court’s power to intervene is only enlivened when the prescribed statutory mechanism for dealing with a trustee’s remuneration proves unworkable.

7. In the present case I am satisfied that the prescribed statutory mechanism has proved unworkable.  Because of division between creditors hostile and friendly to the debtor, it proved impossible over more than a year to obtain the agreement of the creditors to the trustee’s remuneration.  The administration of the estate under the composition effectively lapsed when a meeting of creditors purported to oust the applicant trustee.  His position was overtaken when I made a sequestration order, upon which the official trustee became the trustee of the bankrupt estate.  The applicant, as the former trustee of the composition, is entitled to relief to have his remuneration assessed and fixed.

8. In my view, this requires more than a simple acceptance of the applicant’s claim for remuneration.  It requires a detailed examination of that claim.  As Greenwood J observed in Brake at [98], there can be no proper foundation for the exercise of the Court’s powers without regard to the available evidence. 

9. In my view, the proper approach to the application is to consider the trustee’s claim to remuneration in the same way as if the Court were dealing with a taxation of those costs pursuant to Regulation 8.09 of the Bankruptcy Regulations.  The appropriate course, in my view, is for that task to be undertaken by a registrar with experience in the taxation of such costs. 

10. Rule 18.01 of the Federal Magistrates Court Rules 2001 (Cth) (“the Federal Magistrates Court Rules”) provides as follows:

    (1) The Court may refer to a Registrar, including in relation to assessment of damages or taking accounts, any claim or application for, or relating to, any matter before the Court for:

    (a)    investigation; and

    (b)    report; and

    (c)    recommendation.

    (2)A Registrar to whom a claim or application is referred for investigation may:

    (a)    take evidence on oath or affirmation; and

    (b) obtain and receive in evidence a report from a family and child counsellor or welfare officer; and

    (c)    summon witnesses for the purpose of giving evidence or producing documents.

11. I will order that the application and supporting material be referred to a registrar of the Court for investigation, report and recommendation for the purposes of the Court making an appropriate order to fix the remuneration of the trustee.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate: 

Date:  3 May 2007