Pascoe v Fleming

[2010] FMCA 637

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PASCOE v FLEMING [2010] FMCA 637

BANKRUPTCY – Acceptance of resignation of one of two joint trustees of a number of bankrupt estates – observations on whether court acceptance of a trustee’s resignation is necessary or appropriate.

Bankruptcy Act 1966 (Cth), ss.134, 156A, 180, 181A
Federal Magistrates Court Rules 2001 (Cth)
Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth)

Condon v Watson [2009] FCA 11
Coshott v Coshott [2010] FCA 300
Official Trustee in Bankruptcy [2009] FCA 850

Applicant: Scott Darren Pascoe

Respondent: Elizabeth Ann Fleming

File Number: SYG 1764 of 2010

Judgment of: Driver FM

Hearing date: 24 August 2010

Delivered at: Sydney

Delivered on: 24 August 2010

REPRESENTATION

Solicitors for the Applicant: Ms S Nash
Sally Nash & Co

No appearance by the Respondent

ORDERS

1. Pursuant to s.180 of the Bankruptcy Act 1966 (Cth), the resignation of the respondent, Elizabeth Ann Fleming as one of two trustees of each estate be, and the same is hereby, accepted.

2. Pursuant to rule 1.06 of the Federal Magistrates Court Rules 2001 (Cth), compliance with rule 8.02(1) and rule 8.02(2) of the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) be dispensed with.

3. Pursuant to s.134(4) of the Bankruptcy Act 1966 (Cth), the Court directs that from the date of these orders, Scott Darren Pascoe is the sole trustee of each estate in each bankrupt matter in the schedule attached and is obliged to act as such trustee in bankruptcy.

4. The applicant and respondent each pay their own costs of this application.

Schedule

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT Sydney

SYG 1764 of 2010

Scott Darren Pascoe

Applicant

And

Elizabeth Ann Fleming

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. I have before me an unusual application seeking orders pursuant to s.180 of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”), that the resignation of the respondent, Elizabeth Ann Fleming, as one of two trustees of each of a list of estates in the schedule, be accepted by the Court. There is also a procedural order sought in relation to dispensing with compliance with the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth), which is of no great moment. 

2. Although Ms Fleming is the respondent to the application there is in reality no contradictor.  Ms Fleming wishes to resign and Mr Pascoe has no objection.

3. Section 180 of the Bankruptcy Act is not a section which I have previously been called upon to consider. It provides that the Court may, subject to such terms and conditions as it thinks just, accept the resignation of a registered trustee from the office of trustee of an estate. The provision is a curious one because, subject to the exception in s.156A(5) of the Bankruptcy Act, the Court does not appoint a trustee. Neither is a trustee an officer of the Court.

4. A registered trustee generally becomes the trustee of a bankrupt estate by the operation of s.156A(3) in consequence of giving consent pursuant to s.156A(1). The official trustee is the trustee of estates where there is no registered trustee by force of s.160 of the Bankruptcy Act. It is probable that s.180 is a hangover from the legislation that existed prior to 1966 when the Court did appoint trustees.

5. More recently, section 181A was enacted to provide a streamlined method for replacing trustees. That method would be somewhat cumbersome in the present circumstances where there are a number of estates involved. There is a question in my mind whether consideration should be given to reviewing s.180 in order to provide an alternative administrative process for circumstances which are not appropriately covered by s.181A. This is such a circumstance.

6. The application is supported by the affidavit of Ms Fleming made on 18 August 2010 and the affidavit of the continuing trustee, Mr Pascoe, made on the same day.  The circumstances, in short, are that Ms Fleming is leaving the practice that she shared with Mr Pascoe and, in the circumstances, wishes to resign her trusteeship of the estates that were administered jointly with Mr Pascoe. 

7. The facility for having joint trustees was considered by the Federal Court in Condon v Watson [2009] FCA 11 by Lindgren J, and I note, in particular, his Honour’s findings at [33] to [36]. I understand that form 14, for the giving of consent, was amended in the light of that decision to provide for joint trusteeships. I have also had regard to the decisions of the Federal Court in Coshott v Coshott [2010] FCA 300 and Official Trustee in Bankruptcy [2009] FCA 850.

8. I am satisfied on the basis of the evidence of Mr Pascoe and Ms Fleming that it is appropriate to make orders providing for an acceptance of Ms Fleming’s resignation.  I am satisfied, in particular, that there will be no disruption to the administration of the several bankrupt estates and that there will be no disadvantage to creditors or to the bankrupts concerned.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Driver FM

Date:  26 August 2010