Pitman v Pantzer (Trustee of the Bankrupt Estate of Thomas Richard Wenkart)

[2001] FCA 838

FEDERAL COURT OF AUSTRALIA

Pitman v Pantzer (Trustee of the Bankrupt Estate of Thomas Richard Wenkart) [2001] FCA 838

BANKRUPTCY –  security for undertaking as to damages – potential for creditors to have suffered loss – where delay in final resolution of proceedings

ALAN PITMAN V WARREN PANTZER (TRUSTEE OF THE BANKRUPT ESTATE OF THOMAS RICHARD WENKART)

N7752 OF 2000

BEAUMONT J
SYDNEY
15 JUNE 2001

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N7752 OF 2000

BETWEEN:	ALAN PITMAN APPLICANT
AND:	WARREN PANTZER (TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART) RESPONDENT
JUDGE:	BEAUMONT J
DATE OF ORDER:	15 JUNE 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The existing injunction be discharged unless, on or before 25 June 2001, the applicant files and serves a written undertaking to the Court to provide security to support his undertaking as to damages and that security to be in such amount, if any, as the Court may determine. 

2.The notice of motion be stood over until 4 July 2001 with costs to be reserved in this connection.

3.Liberty to apply on such notice, if any, as the Court may allow.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N7752 OF 2000

BETWEEN:	ALAN PITMAN APPLICANT
AND:	WARREN PANTZER (TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART) RESPONDENT

JUDGE:	BEAUMONT J
DATE:	15 JUNE 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

BEAUMONT J:

1. Before the Court is a notice of motion filed on 1 June 2001, par 1 of which seeks an order that the applicant provide security for his undertakings as to damages given on 31 January 2001; that undertaking as to damages being the usual undertaking which was given as a condition of a grant of an interim injunction restraining the holding of a meeting of creditors to consider a proposal under section 73 of the Bankruptcy Act 1966 (Cth) (“the Act”).

2. For the reasons given in my reasons for judgment dated 4 May 2001, my initial hope and expectation that the principal proceedings in this matter would be resolved by an early final hearing have not been realised.  As those reasons indicate, a substantial proportion of the blame for this course of events arose out of the circumstances which occurred on the resumption of the hearing on 23 February 2001.  The matter is now fixed before me for final hearing on 3 and, if necessary, 4 July 2001 and I have indicated to the parties that they may expect a judgment from me by way of final determination of the matter by no later than the end of that week ending 6 July 2001.

3. I have considered the evidence in the affidavit of Mr G A Holden sworn on 29 May and in particular, annexure A to that affidavit being a letter written by the Trustee to him dated 8 May 2001.  It is not possible on the material before me to ascertain the exact quantum of any loss that might have been suffered by the general body of creditors as a result of the extension of the term of the administration of the Estate and the inevitable consequence that additional remuneration at least would have been incurred by the Trustee in that period by virtue of the failure of the matter to be resolved, as I had hoped and expected, by the end of February.  That is to say, I am satisfied that there is at least a potential for the general body of creditors to have suffered some form of loss by reason of the administration of the Estate extending beyond the end of February, as I have mentioned, until the end of the first week of July, a period of around four months.

4. It is true that the Trustee elected not to continue to appear in the proceedings and specifically gave to the Court as a reason for abstention from the proceedings, the prospect of incurring additional costs and remuneration.  However, I am prepared to accept at this stage (this being an interlocutory hearing only) that it is probable that remuneration, additional to that which would have been incurred by the end of February, has been incurred in the months of March, April, May and June.  I am also prepared to assume for the reasons given on 4 May 2001 that the main factor in this delay in the final resolution of the proceedings is the failure of the applicant’s legal representatives to present their submissions on 23 February 2001. 

5. Instead, as I have noted in my earlier reasons, it was not until a fortnight later, namely on or about 7 March 2001, that those submissions were received in the form of written argument (some fifty-five pages in length) and which submissions raised an issue which had previously not clearly emerged, having, as I have said, the consequence that the earlier order for separate determination of a preliminary question needed to be rescinded.  Given the relatively short period of time that remains between now and the final hearing of the matter, I have come to the view that, on the balance of convenience and dealing with the matter as I must as an interim application only, the appropriate course is to give the applicant the election of retaining the existing injunction upon terms that he files and serves within ten days, a written undertaking to the Court to provide security to support his undertaking as to damages but in such amount, if any, as the Court may determine.  I am simply not in a position to determine that now or even to estimate it.

6. I would, however, give the parties liberty to make written submissions on that question to a Registrar and I will ask my associate to arrange with the Registrar to make an informal report expressing an opinion as to that amount;  such report to be presented on the footing that it is, as I have said, quite informal.  It will be provided to the parties for the benefit of their submissions.  It is, of course, not in any way conclusive and the whole issue of the amount of such damages is a matter that may be fully argued before me at an appropriate stage. 

   ORDERS

7. The formal orders I make, therefore, are as follows:

   1.I order that the existing injunction be discharged unless on or before 25 June 2001 the applicant files and serves a written undertaking to the Court to provide security to support his undertaking as to damages and that security to be in such amount, if any, as the Court may determine. 

   2.I stand the notice of motion over until 4 July 2001 and reserve all costs in this connection. 

   3.Liberty to apply on such notice if any as the Court may allow.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Oral Reasons for Judgment herein of the Honourable Justice Beaumont.

Associate:

Dated:             4 July 2001

Counsel for the Applicant:	Mr A Ogborne
Solicitor for the Applicant:	The Bruce & Stewart Commercial Practice
Counsel for the Intervening Creditors:	Mr J K Chippindall
Solicitor for the Intervening Creditors:	Andersen Legal
Date of Hearing:	15 June 2001
Date of Judgment:	15 June 2001