Wenkart v Pantzer (No 2)

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FEDERAL COURT OF AUSTRALIA

Wenkart v Pantzer (No 2) [2013] FCAFC 136

Citation: Wenkart v Pantzer (No 2) [2013] FCAFC 136
Appeal from: Wenkart v Pantzer (No 2) [2010] FCA 1408; Wenkart v Pantzer (No 3) [2010] FCA 1423
Parties: THOMAS RICHARD WENKART v WARREN PANTZER – FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART and HAPDAY HOLDINGS PTY LIMITED (ACN 001 185 253); WARREN PANTZER – FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART v THOMAS RICHARD WENKART and HAPDAY HOLDINGS PTY LIMITED (ACN 001 185 253); HAPDAY HOLDINGS PTY LIMITED (ACN 001 185 253) v THOMAS RICHARD WENKART and WARREN PANTZER – FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART
File number: NSD 26 of 2011
Judges: DOWSETT, MCKERRACHER AND FOSTER JJ
Date of judgment: 4 December 2013
Catchwords: BANKRUPTCY – whether, in light of the Full Court’s determination of the Appeal and the Cross-Appeals, the Full Court should make declarations and orders giving effect to certain claims for remuneration and reimbursement of expenses made by the former trustee of a bankrupt estate and, if so, in what form – consideration of appropriate orders for sale to be made in order to give effect to an equitable charge given in favour of the said former trustee to secure his claims for remuneration and reimbursement of expenses
Legislation: Bankruptcy Act 1966 (Cth), ss 162, 165 and 167(1)
Bankruptcy (Estate Charges) Act 1997 (Cth)
Bankruptcy Regulations 1996 (Cth), reg 8.09(1)
Cases cited: Wenkart v Pantzer [2013] FCAFC 81 related
Wenkart v Pantzer (No 10) (2007) 5 ABC(NS) 642 related
Wenkart v Pantzer (2003) 133 FCR 204 related
Date of hearing: Decided on the Papers
Date of last submissions: 28 August 2013
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 58
Counsel for the Appellant: Mr WG Muddle SC and Mr M Green
Solicitor for the Appellant: Bruce Stewart Dimarco Lawyers
Counsel for the First Respondent: Ms EA Collins SC
Solicitor for the First Respondent: Bartier Perry
Counsel for the Second Respondent: Ms EM Peden
Solicitor for the Second Respondent: S Moran & Co

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 26 of 2011
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

THOMAS RICHARD WENKART
Appellant
AND:

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

HAPDAY HOLDINGS PTY LIMITED (ACN 001 185 253)
Second Respondent
AND BETWEEN:

WARREN PANTZER – FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART
Cross-Appellant in the First Cross-Appeal
AND:

THOMAS RICHARD WENKART
First Cross-Respondent in the First Cross-Appeal

HAPDAY HOLDINGS PTY LIMITED (ACN 001 185 253)
Second Cross-Respondent in the First Cross-Appeal
AND BETWEEN:

HAPDAY HOLDINGS PTY LIMITED (ACN 001 185 253)
Cross-Appellant in the Second Cross-Appeal
AND:

THOMAS RICHARD WENKART
First Cross-Respondent in the Second Cross-Appeal

WARREN PANTZER – FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART
Second Cross-Respondent in the Second Cross-Appeal

JUDGES:

DOWSETT, MCKERRACHER AND FOSTER JJ

DATE OF ORDER:

4…

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Details
Case
[2013] FCAFC 136
Decision Date

CaseChat Overview and Summary

The case of Wenkart v Pantzer (No 2) involved parties Dr Wenkart, Mr Pantzer, and Hapday Holdings Pty Limited. The dispute centred around claims for remuneration and reimbursement of expenses made by the former trustee of a bankrupt estate. The Full Court of the Federal Court of Australia was required to decide on the form of declarations and orders to be made in order to give effect to certain claims and to consider appropriate orders for the sale of property to satisfy an equitable charge in favour of the former trustee. The court was also tasked with determining whether the Full Court should make declarations and orders giving effect to certain claims for remuneration and reimbursement of expenses made by Mr Pantzer, and if so, in what form.

The Full Court found that it was unable to finally determine all claims made by Mr Pantzer against Dr Wenkart for remuneration and reimbursement of expenses. The court noted that some claims may not have been claimed by 24 December 2010, and some amounts which had been claimed by that date may not have been finally quantified by that date. For these reasons, the principal judgment and formal declarations and orders made in order to give effect to that judgment would not finally determine all claims made by Mr Pantzer. The court also found that claims made after 24 December 2010 could not be addressed at all.

The Full Court contemplated that the order for payment which it would make would be for one single sum. However, the court also considered that, by making several declarations which explained the way in which that one single sum had been arrived at, future disputation about the subject matter and effect of the principal judgment would be avoided.

The court ordered that the legal representatives of the parties confer and, to the extent possible, agree upon the figures to be inserted into paragraphs 9 and 10 of Attachment A (Proposed Orders) to Reasons for Judgment, with interest to be calculated up to and including 19 December 2013. In the event that agreement is reached on the said figures, the legal representatives of the parties communicate the agreed figures to the Associate to Foster J. If agreement on the said figures is not reached, each party is to send to the Associate to Foster J the figures which that party submits ought to be inserted into paragraphs 9 and 10 of Attachment A (Proposed Orders) together with calculations which explain the manner in which the submitted figures have been arrived at. Thereafter, the form of declarations and orders to be made in order to give effect to Reasons for Judgment be determined on the papers.

Orders

Orders of the court

1. By 11 December 2013, the legal representatives of the parties confer and, to the extent possible, agree upon the figures to be inserted into paragraphs 9 and 10 of Attachment A (Proposed Orders) to Reasons for Judgment published this day (Wenkart v Pantzer (No 2) [2013] FCAFC 136), with interest to be calculated up to and including 19 December 2013.

2. In the event that agreement is reached on the said figures, by 13 December 2013, the legal representatives of the parties communicate the agreed figures to the Associate to Foster J.

3. In the event that agreement on the said figures is not reached, by 13 December 2013, each party is to send to the Associate to Foster J the figures which that party submits ought to be inserted into paragraphs 9 and 10 of Attachment A (Proposed Orders) together with calculations which explain the manner in which the submitted figures have been arrived at.

4. Thereafter, the form of declarations and orders to be made in order to give effect to Reasons for Judgment published on 30 July 2013 (Wenkart v Pantzer [2013] FCAFC 81) and Reasons for Judgment published this day (Wenkart v Pantzer (No 2) [2013] FCAFC 136) be determined on the papers.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

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

On 30 July 2013, we delivered Reasons for Judgment in these matters (Wenkart v Pantzer [2013] FCAFC 81) (the principal judgment). On that day, we made the following orders:THE COURT ORDERS THAT:1.By 9 August 2013, Warren Pantzer file and serve Short Minutes of Declarations and Orders which he proposes in order to give effect to the Reasons for Judgment of the Full Court published this day together with a Written Submission of no more than six (6) pages in length in which he explains the basis for his proposed declarations and orders (including all necessary calculations) and supports that proposal to the extent that he may be advised. 2.By 23 August 2013, Dr Wenkart and Hapday Holdings Pty Limited (Hapday) each file and serve a Written Submission of no more than six (6) pages in length in which they make such submissions as they may be advised in answer to Mr Pantzer’s submissions and proposed declarations and orders.3.By 27 August 2013, Mr Pantzer file such Reply Submission (if any) as he may be advised to make in answer to Dr Wenkart’s and Hapday’s submissions, such submission not to exceed three (3) pages in length.4.Thereafter, the form of Declarations and Orders is to be determined on the papers. Each of Dr Wenkart, the former trustee of Dr Wenkart’s bankrupt estate (Mr Pantzer) and Hapday Holdings Pty Limited (Hapday) availed themselves of the opportunity to make submissions in writing as to the appropriate form of declarations and orders to be made in order to give effect to the principal judgment. At [362] of the principal judgment, we said:Therefore, subject to the observations made below concerning the form of the declarations and orders to be made, the orders which we have in mind making are: THE COURT ORDERS THAT:1.The appeal be allowed in part only.2.The First Cross-Appeal be allowed.3.The Second Cross-Appeal be dismissed. 4.The order made on 16 September 2008 whereby the Court dismissed the Notice of Motion filed on 5 June 2008 by the cross-appellant in the First Cross-Appeal (Warren Pantzer) (Mr Pantzer) be set aside.5.The orders and declarations made by Flick J in paragraphs 1, 2, 3, 4, 5, 6, 7 and 8 on 24 December 2010 be set aside.In lieu of the said orders and declarations made by Flick J, THE COURT:6.ORDERS that the trustee have leave to reopen his case in order to tender in evidence the letter dated 25 January 2002 from Cutler Hughes & Harris to Hunt & Hunt.7.ORDERS that a true copy of the said letter be marked as Exhibit “A” in the Cross-Appeal. 8.DECLARES that, as at 24 December 2010, the following sums were monies to which Mr Pantzer was lawfully entitled within the meaning of paragraph 1 of certain Consent Orders and Notes made by Beaumont J on 11 March 2002 in the proceedings below (Consent Orders):(a)The sum of $98,095.16, being remuneration earned by Mr Pantzer in the period ending on 15 March 2002 in his capacity as trustee of the bankrupt estate of Dr Wenkart;(b)The sum of $163,477.54, being the net amount due to Mr Pantzer as at 15 March 2002 as expenses to be reimbursed to him on account of fees and disbursements rendered to him by his lawyers, Cutler Hughes & Harris, in his capacity as trustee of Dr Wenkart’s bankrupt estate;(c)The sum of $169,955.94 certified by Ms Anne Sexton by Certificate of Taxation dated 13 December 2004 as being due and payable by Dr Wenkart to Mr Pantzer, being remuneration earned and expenses incurred by him in the period from 15 March 2002 to 21 October 2003 in his capacity as trustee of Dr Wenkart’s bankrupt estate;(d)The sum of $33,295.95 certified by Ms Anne Sexton by Certificate of Taxation dated 12 January 2005 as being due and payable by Dr Wenkart to Mr Pantzer, being further expenses incurred by him in his capacity as trustee of Dr Wenkart’s bankrupt estate;(e)The sum of [to be precisely quantified], being the fees rendered by Ms Anne Sexton to the trustee for carrying out several taxations of Mr Pantzer’s remuneration earned and expenses incurred in his capacity as trustee of Dr Wenkart’s bankrupt estate; and(f)[In this and succeeding subparagraphs, insert such other claims as had been made and quantified as at 24 December 2010.]9.DECLARES that Mr Pantzer is entitled to interest on each of the sums specified in the declaration made in paragraph 8 above pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) assessed as at the date of these declarations and orders [to be precisely quantified]. 10.ORDERS that Dr Wenkart pay to Mr Pantzer [the amount is to be precisely quantified], being the total of the amounts specified in the declarations made in paragraphs 8 and 9 above.11.Pursuant to O 37 of the Federal Court Rules and s 30 of the Bankruptcy Act 1966, as amended, in aid of the Consent Orders, if the order for payment made in paragraph 10 of these Orders is not satisfied within 28 days of the date of these declarations and orders:11.1ORDERS that David Young, official liquidator, be appointed as trustee (the trustee) for sale of the whole of the land and improvements in Certificate of Title Folio Identifier G/33817 known as 47 Union Street, Paddington (the property) for the purpose of realising the property to enable payment to the trustee of the amounts to which the trustee is or may become lawfully entitled. 11.2DIRECTS Hapday Holdings Pty Ltd (Hapday) and the applicant (Dr Wenkart) forthwith to deliver to the trustee for the purpose of the sale of the property Certificate of Title Folio Identifier G/33817 and a Discharge of Mortgage No 3965299 in registrable form.11.3ORDERS Dr Wenkart forthwith to give vacant possession of the property to the trustee.11.4ORDERS that a writ of possession of the property issue at the expiration of 28 days after the date of these declarations and orders.11.5ORDERS that the trustee have the following powers:(a)To sell the property by public auction after marketing it for not less than four (4) weeks in a manner recommended by a real estate agent retained by the trustee to procure the sale of the property.(b)To set a reserve.(c)To negotiate with the two highest bidders if the property is passed in at the public auction.(d)To sell by private treaty (or public auction again) if the property is passed in and there is no negotiated sale.(e)To act and do all things in a manner appropriate to a trustee for sale in the marketing and sale of the property.(f)To sign a transfer and all other documents required to convey good title to the property.(g)To forthwith deduct and pay from the proceeds of sale:(i)the commission and other expense of any real estate agent retained by the trustee to procure the sale of the property;(ii)the legal expenses of the trustee in respect of the sale of the property;(iii)the other costs, expenses and outgoings (including rates and taxes charged on the property) incurred by the trustee in transferring the property to the purchaser;(iv)the remuneration and expenses of the trustee and his agents and employees incurred in relation to the sale of the property; (v)all other amounts by way of remuneration or reimbursement of expenses to which Mr Pantzer is or may become lawfully entitled which have not been paid (including the amounts ordered to be paid pursuant to Orders 8, 9 and 10 above).11.6DIRECTS that the trustee hold in trust the balance of the proceeds of sale of the property for 60 days after completion of the sale of the property pending determination of any further amounts to which Mr Pantzer may become lawfully entitled within the meaning of the Consent Orders which have not been determined as at the date of completion of the said sale;11.7DIRECTS the trustee to pay any surplus to Hapday after he has accounted for all of the monies referred to in these orders.11.8DIRECTS the trustee to file with the Court and serve on Dr Wenkart, on Hapday and on Mr Pantzer an affidavit deposing to his receipts and payments as trustee for sale of the property on or before the later of 120 days after completion of the sale of the property and the date of payment of the surplus pursuant to the direction in paragraph 11.7 of these Orders.

Ratio Decidendi

Legal Principle Established

We will address each issue in the order raised by Dr Wenkart in his Written Submissions.CONSIDERATIONIssue 1—Finality and One Money Judgment Dr Wenkart submitted that the Court should not make multiple declarations as contemplated by par 8 of the proposed declarations and orders set out at [362] of the principal judgment and as accepted by Mr Pantzer. He submitted that the Court should make only two declarations: One declaring the amount of the principal sum due and the other declaring the amount of interest payable thereon. He said that there should then be a consequential order for payment of a single sum. The final amount arrived at should make due allowance for the amount of $205,762.46 paid by Dr Wenkart to Mr Pantzer on 3 February 2011. Dr Wenkart submitted that the amount which he should now be ordered to pay to Mr Pantzer was $685,541.51. Dr Wenkart arrived at that sum by adding the specific amounts referred to at [343] of the principal judgment which, according to him, are: It was our intention at the time of delivering the principal judgment that the declarations and orders which we would ultimately make in order to give effect to that judgment would require Dr Wenkart to pay to Mr Pantzer all monies claimed by Mr Pantzer prior to 24 December 2010 which had been quantified and become due and payable under the Consent Orders as at that date (see esp [343], proposed Order 8(f) in [362] and [363] of the principal judgment). While it was hoped that the declarations and orders when made would cover most of Mr Pantzer’s outstanding claims for remuneration and reimbursement of expenses incurred by him in his capacity as trustee of Dr Wenkart’s bankrupt estate, it was always understood by us that some claims made by Mr Pantzer prior to 24 December 2010 and all claims made by him after that date could not be determined by declarations and orders to be made as a consequence of the principal judgment and would have to be put aside for determination at a later date. Some amounts may not have been claimed by 24 December 2010 and some amounts which had been claimed by that date may not have been finally quantified by that date. For those reasons, it was expected that, in all probability, neither the principal judgment nor the formal declarations and orders to be made in order to give effect to that judgment would finally determine all claims made by Mr Pantzer against Dr Wenkart for remuneration and for reimbursement of expenses prior to 24 December 2010. Claims made after that date could not be addressed at all. Dr Wenkart submitted that the Court should now finally determine all such claims. For reasons which we have explained at [11]–[13] above, the Court is unable to do so. In the principal judgment, the Court contemplated that the order for payment which it would make would be for one single sum. However, the Court also contemplated that, by making several declarations which explained the way in which that one single sum had been arrived at, future disputation about the subject matter and effect of the principal judgment would be avoided.