Wenkart v Pantzer (No 7) - [2003] FCA 1211

FEDERAL COURT OF AUSTRALIA
Wenkart v Pantzer (No 7) [2003] FCA 1211
BANKRUPTCY – ‘realisations charge’ under Bankruptcy (Estate Charges) Act 1997 (Cth) – whether that Act imposes realisations charge on monies received by a former trustee in bankruptcy after annulment of the bankruptcy by the operation of subs 74(5) of the Bankruptcy Act 1966 (Cth) upon passing of special resolution of creditors to accept a proposal by the bankrupt for composition or scheme of arrangement – whether answer differs according to whether circumstances giving rise to former trustee’s entitlement occurred before or after the annulment.
Bankruptcy (Estate Charges) Act 1997 (Cth) ss 6, 8
THOMAS RICHARD WENKART v WARREN PANTZER & ANOR
N 7051 of 2002
LINDGREN J
30 OCTOBER 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 7051 of 2002

BETWEEN:

THOMAS RICHARD WENKART
APPLICANT

AND:

WARREN PANTZER
FIRST RESPONDENT

THE COMMONWEALTH OF AUSTRALIA
SECOND RESPONDENT

JUDGE:

LINDGREN J

DATE OF ORDER:

30 OCTOBER 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The following questions which the Court, on 12 August 2003, ordered to be decided separately from any other question in the proceeding, be answered as follows:
Questions:

‘Does s 6(1)(a) of the Bankruptcy (Estate Charges) Act 1997 (Cth) impose a charge in respect of amounts of the remuneration, costs, charges and expenses of Warren Pantzer (“Mr Pantzer”) as trustee in bankruptcy of the estate of Thomas Richard Wenkart (“Dr Wenkart”), received by Mr Pantzer after the annulment on 15 March 2002 of Dr Wenkart’s bankruptcy by force of subs 74(5) of the Bankruptcy Act 1966 (Cth):
(a)being amounts to which Mr Pantzer was or is lawfully entitled by reason of circumstances, all of which occurred prior to the annulment?
(b)being amounts to which Mr Pantzer was or is lawfully entitled by reason of circumstances, all or some of which occurred after the annulment?’
Answers:
(a)No
(b)No

2.The second respondent pay the applicant’s and the first respondent’s costs of the determination of the separate questions.

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

N 7051 of 2002

BETWEEN:

THOMAS RICHARD WENKART
APPLICANT

AND:

WARREN PANTZER
FIRST RESPONDENT

THE COMMONWEALTH OF AUSTRALIA
SECOND RESPONDENT

JUDGE:

LINDGREN J

DATE:

30 OCTOBER 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT (No 7)
(Realisations charge under Bankruptcy
(Estate Charges) Act 1997)
INTRODUCTION

On 12 August 2003, by consent, I ordered that the following questions be decided separately from any other question in the proceeding (see O 29 r 2 of the Federal Court Rules):
‘Does s 6(1)(a) of the Bankruptcy (Estate Charges) Act 1997 (Cth) impose a charge in respect of amounts of the remuneration, costs, charges and expenses of Warren Pantzer (“Mr Pantzer”) as trustee in bankruptcy of the estate of Thomas Richard Wenkart (“Dr Wenkart”), received by Mr Pantzer after the annulment on 15 March 2002 of Dr Wenkart’s bankruptcy by…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2003] FCA 1211
Decision Date: 30 OCTOBER 2003

CaseChat Overview and Summary

In Wenkart v Pantzer (No 7), the applicant, Thomas Richard Wenkart, sought answers from the Federal Court of Australia regarding the applicability of section 6(1)(a) of the Bankruptcy (Estate Charges) Act 1997 (Cth) to the remuneration, costs, charges, and expenses of Warren Pantzer, who was the trustee in bankruptcy of Wenkart's estate. The specific issue revolved around whether these amounts were subject to a charge if received by Mr Pantzer after the annulment of Wenkart's bankruptcy, which was ordered by the Bankruptcy Act 1966 (Cth). The court was asked to decide whether such charges applied to amounts lawfully entitled before or after the annulment.

The court considered the legal framework provided by the Bankruptcy Act and the Bankruptcy (Estate Charges) Act. It was established that the annulment of bankruptcy divests the trustee of their authority, which aligns with the provisions of section 74(6) of the Bankruptcy Act. The court reasoned that a trustee in bankruptcy would not consent to an annulment without first being paid their remuneration or ensuring adequate provision for payment post-annulment. Given this, the court found that the suggested avoidance device of postponing the receipt of amounts until after annulment was overemphasised. The court concluded that neither of the two questions posed would be answered in the affirmative, thus ruling that the charges did not apply to the amounts received by Mr Pantzer.

The court's decision was clear: the charges under section 6(1)(a) of the Bankruptcy (Estate Charges) Act did not apply to the amounts received by Mr Pantzer as trustee in bankruptcy of Wenkart's estate. Both questions regarding whether these charges applied to amounts received before or after the annulment were answered 'No'. The court also ordered that the second respondent, Mr Pantzer, would pay the costs of the determination of these separate questions to the applicant and the first respondent.

Orders

Orders of the court

1. The following questions which the Court, on 12 August 2003, ordered to be decided separately from any other question in the proceeding, be answered as follows:

Questions:

‘Does s 6(1)(a) of the Bankruptcy (Estate Charges) Act 1997 (Cth) impose a charge in respect of amounts of the remuneration, costs, charges and expenses of Warren Pantzer (“Mr Pantzer”) as trustee in bankruptcy of the estate of Thomas Richard Wenkart (“Dr Wenkart”), received by Mr Pantzer after the annulment on 15 March 2002 of Dr Wenkart’s bankruptcy by force of subs 74(5) of the Bankruptcy Act 1966 (Cth):

(a) being amounts to which Mr Pantzer was or is lawfully entitled by reason of circumstances, all of which occurred prior to the annulment?

(b) being amounts to which Mr Pantzer was or is lawfully entitled by reason of circumstances, all or some of which occurred after the annulment?’

Answers:

(a) No

(b) No

2. The second respondent pay the applicant’s and the first respondent’s costs of the determination of the separate questions.

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

LINDGREN J

The suggested avoidance device of postponing the receipt of amounts until after annulment can be overemphasised. Annulment brings about the divesture for which subs 74(6) of the Act provides. In these circumstances a trustee in bankruptcy would be unlikely to acquiesce in an annulment without first being paid the amount of his or her remuneration, or (as in the present case) ensuring that suitable provision is made for payment following the annulment.CONCLUSION For the above reasons, the questions ordered to be separately will both be answered ‘No’.

Ratio Decidendi

Legal Principle Established

Established by: LINDGREN J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 7051 of 2002

BETWEEN:	THOMAS RICHARD WENKART APPLICANT
AND:	WARREN PANTZER FIRST RESPONDENT THE COMMONWEALTH OF AUSTRALIA SECOND RESPONDENT
JUDGE:	LINDGREN J
DATE OF ORDER:	30 OCTOBER 2003
WHERE MADE:	SYDNEY

JUDGE:	LINDGREN J
DATE:	30 OCTOBER 2003
PLACE:	SYDNEY