Quinlivan v Prentice

[2005] FMCA 1996

FEDERAL MAGISTRATES COURT OF AUSTRALIA

QUINLIVAN v PRENTICE & ANOR [2005] FMCA 1996

BANKRUPTCY – Costs of bankruptcy proceedings as costs of the administration of the bankrupt estate.

Bankruptcy Act 1966 (Cth), s.139W

Quinlivan v Prentice & Anor [2004] FMCA 1

Applicant: ANTHONY PHILIP QUINLIVAN

First Respondent: MAXWELL WILLIAM PRENTICE

Second Respondent: COMMISSIONER OF TAXATION

File No: SYG1753 of 2003

Delivered on: 20 June 2005

Delivered at: Sydney

Hearing dates: 20 June 2005

Judgment of: Driver FM

REPRESENTATION

Counsel for the Applicant: Mr M F Holmes, QC

Solicitors for the Applicant: Horton Rhodes

Counsel for the Respondent: Mr D Pritchard

Solicitors for the Respondent: Henry Davis York

ORDERS

1. There is to be no order as to costs.

2. Order 4 made on 17 February 2004 is discharged.

3. The Court declares that the trustee was and is entitled to be indemnified out of the estate in respect of legal costs and expenses incurred in these proceedings.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG1753 of 2003

ANTHONY PHILIP QUINLIVAN

Applicant

And

MAXWELL WILLIAM PRENTICE

First Respondent

COMMISSIONER OF TAXATION

Second Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. I have before me a motion filed on 21 September 2004 by Anthony Philip Quinlivan arising out of my judgment in the substantive proceedings between Mr Quinlivan and his trustees in bankruptcy. 

   
   

   My principal judgment, Quinlivan v Prentice & Anor [2004] FMCA 1, contained four orders. The first required the trustees to complete any outstanding compulsory income contribution assessments required pursuant to s.139W of the Bankruptcy Act 1966 (Cth). The second required the trustees at the end of the income assessment period to pay any surplus income contributions to the Commissioner of Taxation on account of taxation liabilities incurred by Mr Quinlivan since the commencement of the bankruptcy. Order three reserved costs and order four was as follows:

   Pending further order of the Court as to costs, the trustee may retain sufficient funds in the estate to meet his costs incurred in these proceedings as expenses incurred in the course of the administration of the estate.

2. I will deal with the last matter first.  It is an issue of concern to Mr Quinlivan that in fact the trustees have not retained any money in the estate in respect of potential costs, that the money in the estate has been disbursed either as part of the costs of the administration of the estate or to the Commissioner of Taxation following the completion of the compulsory income assessment process required by order 1 and order 2.  That course of action involved some risk on the part of the trustees inasmuch as initial costs remained outstanding until today.  However, I did not intend by order 4 to require the trustees to retain funds in the estate and I did intend that order 4 would be discharged once the issue of costs had been resolved.

3. Mr Quinlivan's motion sought various declarations which, as I indicated to the parties many months ago, I regarded as an attempt partly to…