Peets and Inspector General in Bankruptcy - [2002] AATA 486

DECISION AND REASONS FOR DECISION [2002] AATA 486

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2002/39

GENERAL ADMINISTRATIVE DIVISION          )
            Re     ROBERT PEETS
  Applicant
            And INSPECTOR GENERAL IN BANKRUPTCY

Respondent

DECISION

Tribunal Ms J Cowdroy, Member

Date21 June 2002
PlaceBrisbane (heard in Maroochydore)

Decision The decision under review is set aside and in substitution thereof the Tribunal decides to waive the Official Trustee's fees in the sum of $5,174.03.

…………(Sgnd)……………….
Ms J Cowdroy
MEMBER

CATCHWORDS
BANKRUPTCY - whether discretion should be exercised to remit or waive fees - whether exceptional circumstances or undue hardship

Bankruptcy Act 1966
Bankruptcy Regulations
Bankruptcy (Estate Charges) Act 1997

Re Excell and Inspector-General of Bankruptcy [2000] AATA 13
Re Faulkner and Inspector-General of Bankruptcy (AAT 12950, 13 June 1998)

REASONS FOR DECISION

21 June 2002 Ms J Cowdroy, Member
HEARING

The matter was heard in Maroochydore on 2 May 2002. The applicant appeared in person and Ms C Cameron of Australian Government Solicitor appeared for the respondent.
Before the Tribunal were the T-documents, which were admitted into evidence as Exhibit E1, and Exhibits E2 (a letter from Mrs Peets) and E3 (an Insolvency Dividend Summary). The applicant gave evidence. For the respondent's part, Mr P Aburn of Insolvency and Trustee Service Australia (ITSA) gave evidence. Both parties made oral submissions.

BACKGROUND TO THE APPLICATION

The applicant became bankrupt on his own application on 28 October 1999. The Official Trustee in Bankruptcy was the trustee of his estate. He was discharged from bankruptcy on 9 May 2000. All debts to creditors were repaid and subsequently the applicant's bankruptcy was annulled on 26 August 2000.
The applicant applied for waiver of the Official Trustee's fee of $5,461.29 on 19 September 2001 and this was refused by ITSA on 17 December 2001. He lodged an application for review of that decision on 14 January 2002.
APPLICANT'S CASE
The applicant provided a written statement in support of his application for waiver. Essentially he referred to the state of his health and that of his wife as well as his financial circumstances, which he contended, constituted "hardship".
In oral evidence, Mr Peets stated that he and his wife have three children, aged 19, 14 and 8 years. They reside with him and Mrs Peets. The two younger girls are dependent children. In August of 1997, he entered into a partnership with Mr Ross Mitchell and the partnership undertook sub-contracting painting work. He said they only had basic tools and were working out of their cars, consequently a loan was arranged from Suncorp Metway for $10,000, of which $4,000 was expended on a utility. At that stage, the partnership had some debts and these were paid. The balance remaining from the $10,000 was kept in the bank for the purpose of meeting the expenses of the business.
He said that after paying all the debts of the business, including paint supplies, he found he had no income, consequently family and friends provided financial assistance from time to time. It became clear that the business was not viable and it ceased trading on 25 June 1998. The applicant had sole responsibility for repayment of the loan to Suncorp Metway, as it was in his name. He also tried to meet all other business debts, including fuel costs, paint and material costs. The partner incurred no financial responsibility whatsoever, and nor has he provided any form of financial support.
The applicant endeavoured to meet the loan repayments however, he found this increasingly difficult and eventually he was unable to make regular payments. He decided, after speaking with Mr G Lockey, a financial counsellor at Life Line, that he had no choice but to enter into bankruptcy.
At the time of lodging his application for bankruptcy, he was not aware that fees associated with the administration of the bankruptcy would be imposed, nor was he aware that if he was to receive any money during the course of his bankruptcy, the Official Trustee could claim it and utilise it to repay his debts.
The applicant contended that he borrowed money from relatives and friends both before and during his bankruptcy. His relatives included his brother, sister, his wife's sister, a close friend, Keith Stubbing and his mother. He estimated that the debts totalled nearly $13,500. This amount was borrowed from the time shortly after the business commenced and continued up until the time that he received money from his mother's estate. He said that he used the money from his mother's estate for living expenses, repairs to his motor vehicle, and the purchase of a television.
In respect to his wife's health, the applicant said that she suffers from rheumatoid arthritis and underwent a bone graft and fusion of her ankle shortly prior to Christmas of 2001. During the recovery period, which the Tribunal understood to be for a period of three months, her mobility was considerably restricted and she relied on a wheelchair initially, and then crutches. In order to attend medical appointments at Noosa Hospital following surgery, she walked to the bus stop, which placed her in considerable pain. Mrs Peets no longer needs to use crutches.
During the convalescent period, Mr Peets had to attend to many of the household tasks, as well as care for his wife. He referred to medical certificates in respect of his wife's health, and that of his own health, which appear at T3. His wife is under treatment by Dr J Winstanley, orthopaedic surgeon.
In respect to his own state of health, he suffers from back pain, with spondylolisthesis at L4/5. He said that a recent CT scan reveals marked progression.
His eight year old daughter is asthmatic and he is concerned that he may need a vehicle if she was to become unwell. He says that she is breathless by the time she walks to school, and has to use Ventolin. She experiences difficulties at school because other students perceive her as "different". He explained that the constant stress and worry about his situation has caused marital disharmony.
He rents a property at Coolum Beach for $150 week, which he considers to be a modest rental, and that his landlord is sympathetic to his financial position. He has resided in those premises for the past five years on the basis of cumulative six-monthly leases. For the past two years, the landlord has indicated he wants to sell the house, and while Mr Peets would like to buy the house, he is not in a position to do so. He does not believe that he will be able to remain in his present accommodation once the current lease expires.
He is still repaying life insurance policies that were taken out through Suncorp Metway. His normal repayment is $50, and the debt is about $200 plus interest. The policies had lapsed and had no value.
The applicant's evidence was that he not had a reliable motor vehicle for some time. The utility purchased for use in the business was sold for $150. He explained it had travelled long distances, it had been used for heavy work and it was in poor condition at the time of its sale. Subsequently, his daughter purchased a Toyota motor vehicle for the family's use, but it is not roadworthy and it is only used for emergencies, although it is still registered. The last time the vehicle was used was about a month earlier, when he transported his wife to Coolum for a medical appointment.
He said that some mechanical work had been performed to keep it running, however it had reached the point where it was beyond repair and that a mechanic had described it as a "death trap". A statement from Coolum Mufflers and Modification Centre dated 17 November 2001 describes the vehicle as "extremely unsafe structurally and totally beyond repair" (T3).
The applicant emphasised the difficulty in seeking work, given that he did not have any transport. He lives in an area where public transport does not run frequently. He considered that if he had a reliable motor vehicle he would be able to seek and maintain work. If waiver of the fee occurred, he intended to use the money for the purchase of a reliable second-hand vehicle.
Under cross-examination, Mr Peets acknowledged he had had a back condition for the past 20 years. His wife had health problems, mainly involving pain, for the past 10 years. His youngest daughter, aged 8, had whooping couth as a baby and has suffered from asthma for a number of years. The eldest daughter pays board of $50 per week.
Mr Peets acknowledged that in June of 2000 he had had a conversation with Mr Aburn, who subsequently provided a statement of fees involved in administering the bankruptcy. He also recalled receiving a booklet which set out information about the bankruptcy process, however, he said he did not read "all the small print". He had known since about June 2000 that fees would be charged by the Official Trustee, however he did not realise how much these fees would be.
He conceded that when he sought waiver of the Official Trustee's fees, the family was receiving income support from Centrelink in the sum of about $1,130 per fortnight. He agreed that he commenced receiving Centrelink payments on 6 October 1999 and applied for bankruptcy on 29 October 1999.
The applicant was questioned in respect to his statement on the Statement of Affairs that there were no contributions to insurance and superannuation policies (T7). He said that he understood that the policies he had held were "defunct" at the time he lodged his statement of assets and liabilities, however he had incurred a liability for unpaid premiums.
He acknowledged that the only debts he declared on his Statement of Affairs were those relating to Suncorp Metway and Optus. Although he had debts to friends and relatives and some partnership debts, he did not declare these and stated that the debts that he declared were "all I could think of". He said the Statement of Affairs was completed with the assistance of a person from Life Line and he acknowledged that probably a lot more debts could have been included. He realised now that if he had disclosed those debts, he would be discharged from the responsibility of repaying them.
He said that when his mother died, which was whilst he was bankrupt, he thought it might be the case that any inheritance might be claimed by the Official Trustee. He said he had a "pretty good suspicion that they might get the money". His mother died on 14 February 2000. Towards the end of April 2000 he wrote to ITSA and sought an early discharge from bankruptcy. He acknowledged that he did not advise the Official Trustee that he had an interest in his mother's estate. He was discharged on 10 May 2000.
In response to questioning, Mr Peets agreed that he had received three payments from the Public Trustee of Queensland, totaling approximately $15,000, such payments being his share in the distribution of his mother's estate. The largest payment was $12,646.11 (T8). He said "none of it went anywhere". He said that it was used to repay debts to friends and family members. He had not kept written records of his debts. His family and friends had consequently disowned him, as they were tired of him always borrowing money. The applicant said he had been in a desperate financial situation since 1999 and that this had caused considerable conflict with his wife.
EVIDENCE OF MR P ABURN
Mr Aburn, a case manager at ITSA had been employed by that organisation since 1982. His evidence assisted the Tribunal in an overview of the relevant legislative provisions governing remuneration of the Official Trustee.
Section 153 of the Bankruptcy Act 1966 provides that the Official Trustee is to be remunerated as prescribed by the regulations. Regulation 8.12 prescribes that the remuneration is to accord with Regulation 16.07 and Schedule 10. That schedule sets out the fees to which the Official Trustee is entitled and covers such matters as the sending of notices, dealing with proof of debts, sending of cheques, holding of meetings etc, as well as stationery and postage costs.
Regulation 16.07 sets the minimum fee for Schedule 10 matters at $265.00, which is increased by the imposition of the goods and services tax (GST) to $287.26. That regulation also sets out the rate at which the remuneration of the Official Trustee is to be calculated.
A Dividend Summary, which forms Exhibit E3, discloses that the minimum Schedule 10 fee was imposed in the present matter. The Official Trustee's fee, which is calculated according to the application of a formula set out in the regulations, is $5,174.03, which, when added to the Schedule 10 fee of $287.26, produces a total fee of $5,461.29.
In addition to the above costs, the Official Trustee is empowered to levy a realisation charge pursuant to section 6 of the Bankruptcy (Estate Charges) Act 1997 ("the Bankruptcy Charges Act"), which imposes a tax on all realisations. Section 6(2) of the Bankruptcy Charges Act states that the charge is payable by the trustee to the Commonwealth and section 7 states that the charge is at eight per cent of the amount on which the charge is payable. The amount required to discharge Mr Peets from the debt to his creditor, and the costs associated with administering his estate was $15,886.19, consequently the realisation fee was $1,270.90.
Section 283 of the Bankruptcy Act 1966 deals with remission or waiver of that charge. The applicant has not made application for remission of this charge, and in any event, the respondent pointed out that an application for remission may only be made by the person liable to pay the charge.
Mr Aburn gave evidence in respect to the levels of bankruptcy in this State, as well as a generalised description of what could be described as "typical bankruptcies". He also provided information about bankruptcy procedures. Usually, discharge of a bankrupt from bankruptcy occurs three years after bankruptcy has occurred. There is a provision for early discharge six months from the date of filing of the bankrupt's statement of affairs. One of the criteria for eligibility to apply for early discharge relates to the bankrupt's income. Mr Peets satisfied all the eligibility criteria for early discharge.
In the last calendar year, there were 7,184 bankruptcies in Queensland. About 80 per cent of bankruptcies are treated administratively, with no distributions being made to creditors and no fees being imposed by the Official Trustee. Although there is no minimal monetary amount for the imposition of bankruptcy, the incidence of bankruptcy tends to occur when debtors have debts in the $50,000 to $60,000 range.
Section 58 of the Bankruptcy Act 1966 contains provisions relating to the vesting of property upon bankruptcy. That section needs to be read in conjunction with section 116(1) which states that property that belonged to the bankrupt at the commencement of the bankruptcy, has been acquired by the bankruptcy or has devolved upon the bankruptcy after the commencement of the bankruptcy but before discharge of bankruptcy, is property which is available for division among the creditors of the bankrupt.
The office of the Official Trustee did not become aware of the applicant's interest in his deceased mother's estate until 30 May 2000 when it was informed by the Public Trustee of Queensland that that office was administering the estate, in which the applicant was a beneficiary. By that time, the applicant had been discharged from bankruptcy. Applying the above provisions, as Mr Peets was an undischarged bankrupt at the time of his mother's death, Mr Peets' interest in his mother's estate vested in the Official Trustee.
In respect to non-disclosure of an asset, Mr Aburn stated that that if the Official Trustee became aware of non-disclosure during the course of a bankruptcy, there was an ability on the part of the Official Trustee to lodge an objection to the bankrupt's discharge, which could result in the bankrupt remaining bankrupt for a period of up to eight years.
In answer to a question from Mr Peets, Mr Aburn acknowledged that only in those circumstances where the Official Trustee receives funds from the bankrupt's estate, are the fees imposed. In the majority of cases, no fees are imposed because the bankrupt does not have any assets.
APPLICANT'S SUBMISSIONS
Mr Peets essentially contended that the fees recovered by the Official Trustee in Bankruptcy were disproportionate to the amount received by his estate. He had calculated that the fees and charges in respect to the administration of his bankruptcy were $2,422 less than his total indebtedness.
40. He pointed out that the family had been in great hardship from since 1999 and he had relied heavily on the generosity of family and friends in order to meet the costs of everyday living. Although he received income support from Centrelink, he was still endeavouring to repay all his debts. He had not disclosed those debts on his statement of assets and liabilities, as he did not consider they were part of the bankruptcy.
The applicant pointed out that if he had the ability to purchase a second hand motor vehicle, this would enhance his ability to seek work, as well as provide a better standard of living for his family. In particular, his wife has ongoing medical problems, which were not assisted by the fact that she has to rely mostly on public transport. He sought waiver of the Official Trustee's fees in the sum of $5,461,29. He did not claim that the realisation fee should also be waived.
RESPONDENT'S SUBMISSIONS
The respondent contended that there was no justification for waiver or remission of any part of the Official Trustee's fees. Mr Peets was advised in June of 2000 that fees would be involved in the administration of his estate and he was given confirmation of this in August of 2000.
Relief of payment of fees can be given under Regulation 16.10. As to whether this is appropriate, it was pointed out that in his Statement of Affairs, the applicant did not disclose all his creditors, nor did he advise he had an asset in the form of a policy of insurance. Although it was acknowledged that, given that the policy had lapsed at that time, it may not have been of value, such omissions, it was contended, call into question the openness and honesty of the applicant in his dealings with the Official Trustee. The respondent also made much of the fact that the applicant had not informed ITSA that he had an interest in his mother's estate.
The respondent pointed out that the applicant applied for waiver of the fees some 15 months after the annulment of bankruptcy had occurred. Although he referred to unemployment, health problems, domestic difficulties and straitened financial circumstances, it was contended that there was no evidence that the applicant's circumstances changed at the date of the imposition of the fees in August 2000. Therefore, it was argued these factors could not constitute evidence of the imposition of the fee causing "undue hardship". Although eviction from his rental premises had been raised during the course of the applicant's evidence, this was no more than a possibility.
Further, it was submitted that there was no evidence of "exceptional circumstances" which would make it proper and reasonable to waive the whole or part of the fee. The Tribunal was asked to give considerable weight to the fact that the applicant had not indicated that he had an interest in his deceased mother's estate. It was pointed out that the applicant could have declared this interest and would still have been eligible to apply for early discharge. He had also received funds from the distribution of his mother's estate, approximating $15,000. In respect to the evidence concerning indebtedness to family and friends, no documentary evidence had been adduced to support the claim that the majority of the funds from his mother's estate had been expended in repaying debts.
46. In respect to the financial circumstances, it was pointed out that throughout the period of his bankruptcy and thereafter, the family has been in receipt of income support. The fact that Mr Peets has had and continues to experience financial difficulties does not, of itself, take his circumstances out of the usual or ordinary situation in which bankrupts and discharged bankrupts find themselves. The Tribunal was referred to the judgments in the matters of Re Excell and Inspector-General in Bankruptcy [2000] AATA 13 and Re Faulkner and Inspector-General in Bankruptcy (AAT 12950, 3 June 1998). Excell concerned waiver of the realisations charge under section 283 of the Bankruptcy Act on the basis of "hardship" and Faulkner was concerned with waiver of the Official Trustee's fees pursuant to Regulation 16.10 on the grounds of either "undue hardship" or "exceptional circumstances".
THE LEGISLATION AND ITS APPLICATION

The sole issue for the Tribunal is to determine whether the fees paid by the applicant to the Official Trustee should be waived or remitted, either in whole or in part. The realisations fee is not the subject of an application for waiver, and in any event, it would appear that, as the Official Trustee is responsible for that fee, the applicant would not have the requisite status to seek waiver.
For present purposes, the relevant part of Regulation 16.10 of the Regulations made under the Bankruptcy Act 1966 is as follows:
"(1)Subject to sub regulation (2), the Inspector-General may waive or remit the whole or part of any fee.
(2)A fee may only be waived or remitted, whether wholly or in part, if the Inspector-General is reasonably satisfied that:
(a)payment of the fee by the person liable to pay it has imposed, or would impose, undue hardship on the person; or
(b) because of other exceptional circumstances, it is proper and reasonable to do so."
Essentially, Mr Peets' circumstances must fall within either subsection (2)(a) or (2)(b). Subsection (2)(a) relates to waiver where payment of the fee has imposed undue hardship, whereas (2)(b) requires satisfaction that because of other exceptional circumstances, it is proper and reasonable to do so. The respondent argues that the applicant has not suffered undue hardship by payment of the fee, in that his financial situation has remained the same since before bankruptcy, and that payment of the fee in August of 2000 neither caused a change in the applicant's circumstances, "let alone 'undue hardship'" (par 14 of the respondent's submissions).
It was contended that at the time of his bankruptcy, the applicant was unemployed and in receipt of Centrelink benefits, and that while he, his wife and daughter suffer from medical conditions, these had their onset prior to the applicant's bankruptcy. No information was available about the condition of the motor vehicle in October 1999, which is the date of bankruptcy, or in August 2000, which is the time the fees were imposed and paid.
I do not accept the principle that a person who is already suffering financial hardship before a fee is paid, is necessarily excluded from the benefit of the waiver provision. The evidence before me is that the applicant's financial situation has been precarious and ongoing, and that the payment of the fee has caused protraction of that situation. Although there is no direct evidence on the condition of the Toyota vehicle at the time of bankruptcy or at the time of the imposition of the fee, it is implicit that an 1984 Toyota vehicle which is described in November of 2001 as "extremely unsafe structurally and totally beyond repair due to the subframe and body of the vehicle being rusted out completely" (T3), has reached that state of deterioration and dangerousness over a considerable time, rather than it being a recent occurrence.
In relation to the applicant's lack of personal transport, I consider that this has impacted on him in a far more drastic manner than an applicant who is living in a major city, where avenues of public transport are available. I am also mindful of Deputy President Forrest's comment in Excell (at page 8) that hardship may impact in a number of ways.
It was pointed out by the respondent that the applicant did not seek waiver of the fees for some 15 months after they were paid, consequently it is difficult to make a relevant connection between undue hardship and the payment of the fees. However, there is evidence that the applicant's health problems and those of his wife were at their most severe in the latter part of 2001, consequently the delay is explicable in the sense that when the applicant's wife underwent surgery, he then realised the full extent of the hardship imposed on the family members by the lack of reliable personal transport. This was particularly so when his wife was recovering from surgery and her mobility was extremely restricted. One might argue that the payment of the fees exacerbated an escalating state of impoverishment, from which the applicant may have had some relief, if the fees had not been paid.
The Tribunal had been referred to the matter of Faulkner in which Senior Member Ettinger declined to exercise the discretion to waive on the basis she was not satisfied that Mr Faulkner's hardship could "be characterised as more 'unusual, uncommon or exceptional' than that of any other person who has been through a marriage breakdown and bankruptcy, and is living on a pension" (at paragraph 32).
The term "undue hardship" is not defined in the Bankruptcy Act or the Regulations. The discretion to exercise the power of waiver gives the decision-maker the ability to take into account all manner of circumstances in arriving at its decision as to whether a person is suffering undue hardship.
Having had regard to all the matters put to me, I am satisfied that the following factors, in combination, persuade me that the payment of the fee has caused the applicant "undue hardship":
·     The applicant does not reside in a city where public transport is readily available;
·     The applicant's wife has undergone surgery, which restricted her mobility;
·     The lack of transport contributes in a detrimental manner to the applicant's ability to seek work as, even if were to obtain work, it would be virtually impossible for him to travel to and from work via public transport. Further, the applicant has skills as a painter and if he was successful in obtaining work, he would most likely be required to attend various sites, which would necessitate him having his own transport;
·     At least 50 per cent of the windfall in the form of an inheritance which might in usual circumstances have enabled the applicant to make a fresh start and retrieve some degree of financial security has been dissipated, not only in the discharge of his bankruptcy debts, but to a significant degree, in the payment of fees and charges
·     The applicant's interaction with relatives and friends is virtually non-existent and he is thereby deprived of a level of support which he would have otherwise enjoyed;
·     The applicant's relationship with his wife is disharmonious due to their financial situation.
Leaving aside the hardship provisions, I consider that the applicant's circumstances also meet the second criteria for waiver, namely the existence of exceptional circumstances. Such exceptional circumstances give rise to the principle that it is proper and reasonable to waive.
Apart from the matters I have referred to above as constituting "undue hardship", I consider that the circumstances surrounding the sequelae arising from Mr Peets' bankruptcy fulfil the definition of "exceptional".
Firstly, it is significant that the applicant's bankruptcy resulted from a debt to one creditor in the sum of $9,154. Having heard the evidence of Mr Aburn in relation to bankruptcies in Queensland, the fact that there is only one creditor places the applicant's bankruptcy in quite a different category to the vast majority of bankruptcies. Much was made by the respondent of the applicant's failure to declare liabilities in regard to cash loans made by relatives and friends. That he felt a moral obligation to discharge those debts is evidenced by the fact that much of the money he received from his mother's estate was used to reduce that indebtedness.

60. There are other features which make Mr Peets' bankruptcy quite different. Mr Aburn gave evidence that most of the incidents of bankruptcy relate to debts in the range of $50,000-$60,000. Mr Peets' situation again falls outside the normal range. Additionally, Mr Aburn's evidence was that in 80 per cent of bankruptcies, creditors do not receive any distribution of funds. In the present matter, Mr Peets' discharged his total indebtedness to his sole creditor which again sets his situation apart from others.

However, of even greater significance to the Tribunal's mind relates to the fees associated with administering his bankruptcy. Firstly, there is the amount of $287.26, which is a minimum fee to cover the costs of stationery and postage involved in sending out notices, issuing cheques to creditors, etc. Bearing in mind that there is only one creditor and one distribution cheque involved, even the imposition of the minimum fee is not commensurate with the actual cost involved.
A perusal of the amount of fees associated with administering Mr Peets' estate reveals as follows:
$287.26 for Schedule 10 fees,
Realisations Charge of $1270.90
Official Trustee's Fee of $5,174.03

63. When those charges are combined, they amount to $6,732.18. On my calculations this means that, in administering the bankrupt's estate, the charges imposed are more than 70 per cent of the amount required to discharge the debt on which the bankruptcy rests. This is quite an extraordinary state of affairs, and I do not know of any other commercial situation where the costs of administering funds are so grossly disproportionate to the amount of funds being administered.

In making this comment, I am cognizant of the fact that the charges are correctly calculated. There is also no contention that the realisations charge should be waived. However, viewed in totality, the fees and charges are oppressive, when one considers that they are raised in connection with the administration of what can only be described as a very simple bankruptcy.
The amount of $15,886.19 which was used to discharge the applicant's bankruptcy was derived from an inheritance, due to the death of the applicant's mother. The evidence is that the applicant received about $15,000 from his mother's estate. Whilst the respondent contends that this places the applicant in a better position than most bankrupts, regard must be had to the fact that the receipt of this money did very little to improve his financial situation.

66. From the applicant's point of view, his mother's inheritance came at a critical time, occurring as it did reasonably close to the commencement of bankruptcy, and at a time when he had already borrowed substantial funds from relatives and friends, including his mother. Rather than being able to utilise those funds to provide some measure of financial recovery, he paid out not only his sole creditor, but additionally, $6,732.18 for fees.

The respondent suggested that the applicant should not receive favourable consideration in regard to waiver, as he did not notify ITSA of the interest in his mother's estate. That he did not do so is not denied, however it is explicable in the sense that he could see that the potential for achieving some measure of financial stability was likely to have been taken from him. I also got the impression from the applicant that such a windfall is not an event which is likely to occur again. Taking all matters into consideration, I do not believe his conduct in this matter should be given any weight, as ultimately part of his inheritance was used to discharge his bankruptcy debt. It is not the case that he has, due to the omission to advise, received any benefit.
In summary, the applicant has suffered financially through the collapse of the business, as is the case of all those who go through bankruptcy. However, he has discharged the bankruptcy debt, and not unreasonably he had an expectation that the majority of the funds from his mother's estate could be utilised in his financial recovery, in the sense that he would be able to purchase a modestly priced motor vehicle, which is roadworthy. That he cannot do so is largely due to the imposition of the fee, which is so is so vastly disproportionate to the service rendered, that it produces exceptional circumstances.
Accordingly, having considered all of the evidence and submissions, I am satisfied that there are "exceptional circumstances" which justify waiver of the Official Trustee's fees in the sum of $5,174.03.   Whilst I considered waiving the Schedule 10 fees, I decline to do so on the basis that by so doing, the applicant has at met some of the costs associated with his bankruptcy and in any event, his application for waiver is based on his need to purchase a motor vehicle for an amount in the vicinity of $5,000.
I certify that the 69 preceding paragraphs are a true copy of the reasons for the decision herein of Ms J Cowdroy, Member
Signed:           Denise Burton
   Administrative Assistant
Date of Hearing   2 May 2002
Date of Decision   21 June 2002
The Applicant Appeared in Person
Solicitor for the Respondent    Ms Cameron, Solicitor
  Australian Government Solicitor