Re Bendel, David; Bendel, David v Pattison, Paul Anthony (as Trustee of the Bankrupt Estate of David Bendel) Summary

IN THE FEDERAL COURT OF AUSTRALIA
NOT FOR GENERAL
DISTRIBUTION

VICTORIA DISTRICT REGISTRY

VB 1083 of 1996

RE: DAVID BENDEL

EX PARTE: DAVID BENDEL
APPLICANT

AND:             PAUL ANTHONY PATTISON (AS TRUSTEE OF THE
  BANKRUPT ESTATE OF DAVID BENDEL)
  RESPONDENT

RE: DAVID BENDEL

EX PARTE: SASH INVESTMENTS PTY LTD
ACN: 004 667 565
APPLICANT

AND:             PAUL ANTHONY PATTISON (AS TRUSTEE OF THE
  BANKRUPT ESTATE OF DAVID BENDEL)
  RESPONDENT

RE: DAVID BENDEL

EX PARTE: SKILLMARK INVESTMENTS PTY LTD
ACN: 004 008 457
APPLICANT

AND:             PAUL ANTHONY PATTISON (AS TRUSTEE OF THE
  BANKRUPT ESTATE OF DAVID BENDEL)
  RESPONDENT

RE: DAVID BENDEL

EX PARTE: ORBACH HOLDINGS PTY LTD
ACN: 004 363 213
APPLICANT

AND:             PAUL ANTHONY PATTISON (AS TRUSTEE OF THE
  BANKRUPT ESTATE OF DAVID BENDEL)
  RESPONDENT

JUDGE:

HEEREY J

DATE OF ORDER:

16 DECEMBER 1997

WHERE MADE:

MELBOURNE

REASONS FOR JUDGMENT

I think it is appropriate in the case of Sash Investments Pty Ltd that there be an order for costs on an indemnity basis. There was substantial fraud, as I find, not merely in the subject matter of the litigation but in the way the case was presented to the Court. It is true that I have directed the matter be referred to the prosecuting authorities, but that seems to me quite separate from the justified claim of the trustee not to be out of pocket when litigation has been pursued against him on a fraudulent basis. It is a matter for discretion, as counsel rightly concedes, but the case of Australian Guarantee Corporation Limited v De Jager [1984] VR 483 at 502 provides a good example of an award of costs other than party and party costs on a similar basis.

I think it is appropriate that I order in the Orbach case that the costs of the applicant, Orbach Holdings Ltd, be paid out of the estate and rank as costs of administration.

I certify that this and the preceding page are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey

Associate:

Dated: 16 December 1997

Counsel for the Applicant: T Irlicht

Solicitor for the Ap plicant: Irlicht & Broberg

Counsel for the Respondent: J Delany

Solicitor for the Respondent: Cornwall Stodart

Date of Hearing: 16 December 1997

Date of Judgment: 16 December 1997

CaseChat Overview and Summary

In the Federal Court of Australia, Justice Heerey heard a case involving David Bendel, who had been declared bankrupt, and Paul Anthony Pattison, the trustee of Bendel's bankrupt estate. Four applicants, each a company associated with Bendel, sought to challenge decisions made by Pattison in his capacity as trustee. The central issue before the court was whether the companies were entitled to challenge the trustee's decisions, particularly given the backdrop of Bendel's bankruptcy and the potential for fraudulent activity.

The legal issues the court needed to resolve included whether the applicants had standing to bring their claims and whether the litigation was being pursued in good faith. Additionally, the court had to consider the implications of any potential fraud on the costs associated with the litigation, specifically whether the trustee should bear the costs of the applicants' unsuccessful claims.

Justice Heerey concluded that there was substantial fraud involved in the litigation, both in the subject matter and in the manner in which the case was presented. He found that the applicants' claims were not made in good faith and that the trustee was justified in not bearing the costs of the litigation. Based on the precedent set in Australian Guarantee Corporation Limited v De Jager, the court awarded costs on an indemnity basis against Sash Investments Pty Ltd and ordered that the costs of Orbach Holdings Pty Ltd be paid out of the estate and ranked as costs of administration.

Re Bendel, David; Bendel, David v Pattison, Paul Anthony (as Trustee of the Bankrupt Estate of David Bendel)

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE FEDERAL COURT OF AUSTRALIA	NOT FOR GENERAL DISTRIBUTION
VICTORIA DISTRICT REGISTRY	VB 1083 of 1996

JUDGE:	HEEREY J
DATE OF ORDER:	16 DECEMBER 1997
WHERE MADE:	MELBOURNE

Counsel for the Applicant:	T Irlicht
Solicitor for the Ap plicant:	Irlicht & Broberg
Counsel for the Respondent:	J Delany
Solicitor for the Respondent:	Cornwall Stodart
Date of Hearing:	16 December 1997
Date of Judgment:	16 December 1997