FEDERAL COURT OF AUSTRALIA

Wenkart v Pantzer [2003] FCA 456

BANKRUPTCY – Trustee’s remuneration – where amount of remuneration challenged – whether bankrupt notified of the amount in writing – whether bankrupt made aware of the amount – where bankrupt informed of an hourly rate of charge.

Bankruptcy Act 1966 (Cth) s 162

Bankruptcy Regulations (Cth) 8.09

THOMAS RICHARD WENKART V WARREN PANTZER (FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART)

N 7051 OF 2002

BEAUMONT J

5 MAY 2003

SYDNEY

THE COURT RULES THAT:

The applicant, on 15 March 2002, was made aware of a formulaic claim, rather than a claim for an amount.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR RULING

BEAUMONT J:

1                      These are my reasons for ruling on the respondent’s claim that, on 15 March 2002, the applicant was notified in writing, or became aware, of the amount of the respondent’s claim for remuneration.

2                     Regulation 8.09(1) relevantly provides that where a trustee claims remuneration under s 162 of the Bankruptcy Act 1966 (Cth) (“the Act”), a bankrupt, who is dissatisfied with the amount of the claim may, by notice in writing lodged within 14 days “of being notified in writing or becoming aware of the amount of the claim”(my emphasis), request the taxing officer to tax a claim.

3                     On behalf of the respondent, it is submitted that such a notification, or a state of awareness, occurred on 15 March 2002 when, at a meeting then held, the creditors considered the applicant’s proposal under s 73 for a composition.

4                     The minutes of this meeting record, relevantly, that the meeting was attended by, inter alia, the applicant and Mr Ray Tolcher, the respondent’s representative. 

5                     Under the marginal note “Statement of Remuneration drawn before the Meeting”, this is recorded:

“Mr Tolcher as the Trustee’s Representative tabled a statement of remuneration drawn before the meeting and noted that the remuneration was drawn in accordance with creditor approval from earlier meetings of creditors.  There was discussion as to when creditor approval [of] remuneration had been given on previous occasions.  Mr Holden questioned whether any creditor approval had been given to date.  Mr Tolcher stated that creditor approval could be established by reference to the minutes of previous creditors meetings.  There was also some discussion as to the interpretation of the court orders of 1 March 2002 in regard to Trustee’s remuneration.”

6                     The President, having noted that the applicant’s proposal provided (in par (a)(i)) for the payment of a cheque in the amount of $105,000 to the respondent, put a motion to this effect, and this was carried. 

7                     The minutes then record the following:

“Mr Tolcher tabled an account of the Trustee’s outstanding and unpaid remuneration, costs and expenses and advised creditors that an inspection was available.  He noted that there were outstanding and unpaid remuneration, costs and expenses not accounted for by the Bankrupt’s proposal.  He also noted that on 11 March 2002 consent orders were entered into by the Bankrupt and Hapday Holdings Pty Ltd (in proceedings to which Throvena Pty Ltd and Macquarie Health Limited were parties) to secure Trustee’s remuneration, costs and expenses not provided for by the Bankrupt’s proposal.  The following motion was put to the meeting:

‘That the remuneration of the Trustee and that of his partners and staff to 15 March 2002, additional to the amount of $105,000.00 provided for by the Bankrupt’s proposal, be approved on a time basis in accordance with rates of Lawler Partners, being those rates formerly recommended by the Insolvency Practitioners’ Association of Australia, in the sum of $115,406.07 including GST.’

Moved by:                   Dermot Maxwell (Gadens/Solomon Garland)

Seconded by:               Noone

The President abstained from voting.  Not carried on the voices.  Mr Tolcher stated that the Trustee would therefore claim 85% of the IPAA Guide to Hourly Rates pursuant to Section 162(4) and Reg 8.08 of the Bankruptcy Act.  Mr Holden stated that it was his understanding that the Trustee could obtain the approval or payment of remuneration in three ways:  by creditor approval, by claiming 85% pursuant to Section 162(4) and Reg 8.08 of the Bankruptcy Act, and on court approval.”

8                     The minutes went on to record this:

“Mr Tolcher noted that there were a number of matters that the Trustee had to attend to for the purpose of finalising the administration of the Bankrupt estate consistent with the terms of the Bankrupt’s proposal.  These include:

§         withdrawal of caveats

§         lodgement of a final BAS

§         cancellation of GST registration

§         arranging the dismissal of certain proceedings with no order as to costs (Richard Walter, Hapday Holdings, Bella Christina proceedings)

§         lodgement of a caveat over the Paddington property

§         accounting for realisations and interest charges

§         closing the bank account

§         notifying the Official Receiver of the annulment

§         preparation of a number of documents such as minutes of meeting, certificate that resolutions passed

§         giving the Bankrupt a certificate of annulment

§         determination of the issue of outstanding and unpaid Trustee’s remuneration, costs and expenses

§         returning the Bankrupt’s passport

Mr Tolcher also noted that no allowance was made by the Bankrupt’s proposal for the payment of such remuneration.  The following motion was put to the meeting:

‘That the future remuneration of the Trustee and that of his partners and staff for the purpose of attending to matters arising from the finalisation of the administration of the Bankrupt estate be approved on a time basis in accordance with rates of Lawler Partners, being those rates formerly recommended by the Insolvency Practitioners’ Association of Australia, in the sum of $22,000.00 including GST.’

Moved by:                   Ray Tolcher (Trustee’s Representative)

Seconded by:               Noone

Mr Tolcher abstained from voting. Not carried.  Mr Tolcher stated that the Trustee would therefore claim 85% of the IPAA Guide to Hourly Rates pursuant to Section 162(4) and Reg 8.08 of the Bankruptcy Act.”

9                     Although apparently not annexed to the minutes, there has been tendered a document in these terms:

“Thomas Richard Wenkart

(Bankrupt)

Outstanding Remuneration as at 15 March 2002

10                  Given the dates and the amount mentioned, i.e. 15 March 2002 and $115,406.07, I can infer that this was the document tabled at the meeting by Mr Tolcher in this behalf. 

11                  The first question then is whether, at this meeting, the applicant was “notified in writing ... of the amount of the trustee’s claim”?

12                  In my opinion, the applicant was not then notified of the amount of the claim.  As the minutes record, the applicant was notified that the respondent “would therefore [i.e. given the rejection of the motion] claim 85 per cent of the IPAA Guide to Hourly Rates pursuant to s 162(4) and Reg 8.08 ... ”. 

13                  (Section 162(4) provides as follows:

“(4)     Where the remuneration of the trustee is not fixed by the creditors or the committee of inspection, the trustee is to be remunerated as prescribed by the regulations.”

14                  Regulation 8.08 provides:

“8.08   For the purposes of subsection 162(4) of the Act, the remuneration of a trustee is to be:

(a)               in accordance with the scale of charges that is:

(i)                 set out in the IPAA Guide to Hourly Rates published by the Insolvency Practitioners Association of Australia;  and

(ii)               applicable to the work to be remunerated;  and

(b)       at the level of 85 percent of those charges.”)

15                  In my opinion, this is a formulaic claim, rather than a claim which specifies an amount. 

16                  The next question is whether, on 15 March 2002, the applicant “became aware of the amount of the claim”.  It must follow here also that, on that date, the applicant was made aware of a formulaic claim, rather than a claim for an amount. 

17                  I rule accordingly.

Associate:

Dated:              19 May 2003