Wenkart v Pantzer

Case [2007] FCA 1589

FEDERAL COURT OF AUSTRALIA

In the matter of Thomas Richard Wenkart, Wenkart v Pantzer [2007] FCA 1589

BANKRUPTCY – trustee – remuneration and costs to which trustee lawfully entitled – work undertaken post-annulment – taxation of costs – impact of consent orders – enforcement of charge over property – court ordered sale of property – Held: trustee to be awarded amount for remuneration, costs, charges and expenses to which legally entitled

Bankruptcy Act 1966 (Cth) ss 11(4), 73, 74(5), 161B-167, 162(5A), 170(2), 173 178, 179
Federal Court of Australia Act 1976 (Cth) ss 22, 43
Conveyancing Act 1919 (NSW) s 111

Bankruptcy Regulations 1996 regs 8.09(1), 8.11(5)
Federal Court Rules O 62 r 4(1)
High Court Rules 2004 (Cth) O 69A, r 12(1)

Guardian Mortgages Pty Ltd v Miller [2004] NSWSC 1236 - cited
Pantzer v Wenkart (2006) 153 FCR 466 - cited
Pantzer v Wenkart [2007] FCAFC 27 - cited
Wenkart v Pantzer (2003) 132 FCR 204 - cited
Wenkart v Pantzer (No 2) (2003) 132 FCR 273 - considered
Wenkart v Pantzer (2005) 223 ALR 384 - considered
Wenkart v Pantzer (No 3) (2004) 135 FCR 422 - considered
Wenkart v Pantzer (No 6) [2003] FCA 1210 – cited

Wenkart v Pantzer [2003] FCA 471 - cited
Wenkart v Pantzer [2003] FCA 364 - cited
Widgery v Tepper (1877) 6 Ch D 364 - cited
Wilkie v Wilkie & Anor [1905] VR 80 - cited

THOMAS RICHARD WENKART v WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART, HAPDAY HOLDINGS PTY LTD (ACN 001 185 253), MACQUARIE HEALTH CORPORATION LIMITED (ACN 003 531 860) AND THROVENA PTY LIMITED (ACN 001 738 763), WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART, THOMAS RICHARD WENKART AND HAPDAY HOLDINGS PTY LTD (ACN 001 185 253)

NSD 7051 OF 2002

BRANSON J
16 OCTOBER 2007
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 7051 OF 2002

BETWEEN:

THOMAS RICHARD WENKART
Applicant

AND:

WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART
First Respondent

HAPDAY HOLDINGS PTY LTD (ACN 001 185 253), MACQUARIE HEALTH CORPORATION LIMITED (ACN 003 531 860) AND THROVENA PTY LIMITED (ACN 001 738 763)
Second Respondents

WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART
Cross Claimant

THOMAS RICHARD WENKART
First Cross Respondent

HAPDAY HOLDINGS PTY LTD (ACN 001 185 253)
Second Cross Respondent

JUDGE:

BRANSON J

DATE OF ORDER:

16 OCTOBER 2007

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The proceeding be stood over to a date to be fixed for the purpose of the making of orders giving effect to these reasons, including orders as to costs.

2.The parties provide to the Associate to Justice Branson, by 26 October 2007, an agreed minute of the orders to be made (including the orders to be made as to costs) and if agreement has not by then been reached, the minutes of orders for which they will respectively contend and brief…

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AGLC
Wenkart v Pantzer [2007] FCA 1589
Case
[2007] FCA 1589
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Wenkart v Pantzer involved Dr Wenkart, the bankrupt, suing Mr Pantzer, the trustee of Dr Wenkart’s bankrupt estate, over various issues related to the administration of the estate post-annulment of the bankruptcy. The central disputes included whether Mr Pantzer was entitled to any remuneration, costs, charges, and expenses after the annulment of the bankruptcy, whether Mr Pantzer’s legal costs post-annulment should be taxed on a solicitor/client basis, and whether Mr Pantzer could recover certain sums from Dr Wenkart under the Bankruptcy (Estate Charges) Act 1997. Additionally, the case addressed whether Mr Pantzer needed to give an accounting of Dr Wenkart's estate and whether there were any surplus funds to be returned to Dr Wenkart.

The court had to determine several key legal issues. The first issue was the extent to which Mr Pantzer could lawfully claim remuneration, costs, charges, and expenses after the annulment of Dr Wenkart’s bankruptcy. The second issue was whether Mr Pantzer’s legal costs after 21 October 2003 should be taxed on a solicitor/client basis. The third issue was whether Mr Pantzer was entitled to recover $20,000 from Dr Wenkart. The fourth issue was whether Mr Pantzer was required to account for the property and affairs of Dr Wenkart and pay any surplus moneys from the administration of the estate. The fifth issue was to ascertain the amounts, if any, to which Mr Pantzer had established he was "lawfully entitled." Lastly, the court needed to decide whether orders should be made to facilitate the enforcement of the security provided by the consent orders made on 11 March 2002.

The court concluded that Mr Pantzer could lawfully claim remuneration, costs, charges, and expenses for work undertaken after the annulment of Dr Wenkart’s bankruptcy if the work was reasonably and bona fide performed for administering the estate or performing a public duty under the Act. The orders made by Lindgren J on 21 October 2003 did not limit Mr Pantzer’s entitlement to remuneration, costs, charges, and expenses to which he was lawfully entitled. The court also determined that Mr Pantzer’s legal costs after 21 October 2003 should be taxed on a solicitor/client basis, and Mr Pantzer was entitled to recover $20,000 from Dr Wenkart. The court found that Mr Pantzer was not required to give an accounting of Dr Wenkart’s estate or pay any surplus moneys. Finally, the court decided that any orders facilitating enforcement of the security provided by the consent orders would be made on a later date.

Orders

Orders of the court

1. The proceeding be stood over to a date to be fixed for the purpose of the making of orders giving effect to these reasons, including orders as to costs.

2.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

BRANSON J
Dr Wenkart submitted that Mr Pantzer made admissions during his cross-examination of failure to comply with s 173 of the Act. I do not accept that Mr Pantzer made admissions of this character. Mr Pantzer gave evidence that an electronic cash book was maintained in respect of Dr Wenkart’s bankruptcy although he did not personally make entries in it. In any event, s 173(1) of the Act creates an offence of strict liability. Mr Pantzer was not charged in this proceeding with failing to comply with s 173(1). It would therefore be inappropriate for any finding of a contravention of that subsection to be made.CONCLUSION The parties will be heard on a date to be fixed as to the orders appropriate to be made in the light of the above reasons for judgment.

Ratio Decidendi

Legal Principle Established

Established by: BRANSON J

Having regard to the matters outlined above, the following are the principal issues that require determination in this proceeding:(1)The extent, if any, to which Mr Pantzer is lawfully entitled to remuneration, and his costs, charges and expenses for work done after the annulment of Dr Wenkart’s bankruptcy, and in particular the significance, if any, in this regard of the orders made by Lindgren J on 21 October 2003?(2)Whether Mr Pantzer’s legal costs after 21 October 2003 to the completion of the administration of Dr Wenkart’s bankrupt estate are to be taxed on a solicitor/client basis?(3)Whether Mr Pantzer is lawfully entitled to recover from Dr Wenkart the sum of $20,000 owing pursuant to the Bankruptcy (Estate Charges) Act 1997 (Cth)?(4)Whether Mr Pantzer is required to give an accounting concerning the property and affairs of Dr Wenkart in compliance with s 170 of the Act and to pay to Dr Wenkart surplus moneys (if any) from the administration of his bankrupt estate?(5)What are the amounts, if any, to which Mr Pantzer has established that he is “lawfully entitled”?(6)Whether orders should be made to facilitate the enforcement, either immediately or deferred, in respect of the security provided by the consent orders made on 11 March 2002?Post-Annulment Remuneration, Costs, Charges and Expenses Dr Wenkart has contended in this and other proceedings that Mr Pantzer, as trustee of the bankrupt estate of Dr Wenkart, cannot claim any entitlement to remuneration, costs, charges or expenses under the Act in respect of any steps taken after the annulment of Wenkart’s bankruptcy. I rejected that contention in the taxation judgment at first instance at [40]‑[47]. The Full Court on the appeal from the taxation judgment at first instance accepted that Mr Pantzer was entitled to claim under the Act remuneration, costs, charges and expense referable to work reasonably and bona fide undertaken after the annulment of the bankruptcy for the purpose of administering the estate or performing any public duty imposed by the Act (at [43]). It is no longer open to Dr Wenkart to argue in this Court that Mr Pantzer cannot claim any entitlement as the trustee of Dr Wenkart’s bankrupt estate beyond 15 March 2002, the date of the annulment of Dr Wenkart’s bankruptcy. Dr Wenkart contended, in the alternative, that Lindgren J, by the orders made on 21 October 2003, required Mr Pantzer to make his claim for remuneration, costs, charges and expenses “once and for all”. Consequently, he argued, the agreement to pay recorded in order 1 of the orders made by consent by Beaumont J on 11 March 2002 (see [15] above), and the concession noted by Lindgren J on 21 October 2003 (see [22] above), are limited to bills of costs and claims for remuneration properly made earlier than 21 October 2003 or pursuant to the order made on that day. As mentioned above, I gave consideration in the taxation judgment at first instance to the issue of whether, and to what extent, the orders made by Lindgren J on 21 October 2003 limited the amount Mr Pantzer could claim as remuneration, costs, charges and expenses to which he is lawfully entitled within the meaning of the consent orders made on 11 March 2002. At [82]-[84] I observed:“Order 1 of these orders placed Mr Pantzer under an obligation by 22 October 2003 to require ‘any person’ (other than the firm Cutler Hughes and Harris) who had provided services with respect to the estate in bankruptcy of Dr Wenkart to supply a bill of costs for those services pursuant to s 167 of the Act. Order 2 required Mr Pantzer by 23 October 2003 to notify Dr Wenkart of his claim for remuneration in respect of work undertaken by him after the date of the annulment of Dr Wenkart’s bankruptcy. It appears that as at 21 October 2003 there was no issue between the parties as to Mr Pantzer’s claim for remuneration in respect of work undertaken by him on or before the date of the annulment of Dr Wenkart’s bankruptcy.I conclude that, no application having been made for the orders made by Lindgren J on 21 October 2003 to be varied or set aside, Mr Pantzer’s entitlement to recover remuneration, costs, charges and expenses from Dr Wenkart, and if necessary to enforce the charge against the land and improvements known as 47 Union Street, Paddington, is an entitlement to recover:(a) remuneration which satisfies both of the following requirements:(i)it is remuneration to which Mr Pantzer is lawfully entitled in respect of work properly undertaken by him in carrying out his duties under the Act after the date of the annulment of Dr Wenkart’s bankruptcy; and(ii)it is remuneration covered by a claim of which Mr Pantzer notified Dr Wenkart by 23 October 2003; and(b)the amounts for which bills of costs supplied pursuant to requirements made by Mr Pantzer on or before 22 October 2003 by persons who had provided services with respect to Dr Wenkart’s estate have been taxed by a taxing officer; and(c)the amount for which the bill of costs of the firm Cutler Hughes and Harris was taxed.I do not understand that the firm Cutler Hughes and Harris has provided to Mr Pantzer a bill of costs dated later than the bill considered by Beaumont J in Wenkart v Pantzer (2003) FCA 471.”