FEDERAL COURT OF AUSTRALIA

Wenkart v Pantzer [2003] FCA 471

BANKRUPTCY – Trustee’s entitlement to disbursements – appeal from taxing officer – where appeal is out of time.

Bankruptcy (Estate Charges) Act 1997 (Cth) s 167

Bankruptcy Regulations (Cth) 8.09, 8.10, 8.11

Boothe v Commonwealth of Australia [2002] FCA 1101 followed

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

N 7051 OF 2002

BEAUMONT J

6 MAY 2003

SYDNEY

THE COURT RULES THAT:

1.                  The respondent is lawfully entitled to disbursements claimed by Cutler, Hughes and Harris.

2.                  The respondent is lawfully entitled to be reimbursed for expenses incurred under the Bankruptcy (Estate Charges) Act 1997 (Cth).

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 whether the respondent is “lawfully entitled” to disbursements claimed by Cutler Hughes & Harris, solicitors, and to be reimbursed for expenses incurred under the Bankruptcy (Estate Charges) Act 1997 (Cth) (“the Act”).

2                     Although, following upon rulings I have previously given, the respondent accepts that his claim for remuneration (i.e. for his own professional fees) must now be taxed pursuant to Reg 8.09(1) of the Bankruptcy Regulations, the question of the respondent’s entitlement to disbursements and expenses incurred remains for resolution.

3                     It will be recalled that by cl 1 of the consent order dated 11 March 2002, it was relevantly provided that the respondent “may recover his ... costs, charges and expenses to which he is lawfully entitled ... .”

4                     The relevant statutory scheme is as follows:

5                     The trustee (on his initiative, or at the request of the bankrupt or a creditor) may require a bill of costs for services provided in relation to the estate to be taxed by a taxing officer (appointed by the Inspector General (s 167(1)).

6                      A bill may contain detailed items or be for a gross sum (s 167(3)).  If for a gross sum, the taxing officer shall be furnished with such details as are required (s 167(4)).

7                     Before passing a bill, the taxing officer shall be satisfied that the employment of the person in respect of the particular matters out of which the costs arise “was duly authorised and was reasonable and necessary” (my emphasis) (s 167(5)).

8                     A person interested may appeal to the Court from the decision of the taxing officer (s 167(8)).

9                     Trustees’ remuneration is also dealt with by Division 4 of the Regulations. 

10                  Regulations 8.09, 8.10 and 8.11 prescribe procedures in this connection, including the need for the trustee to show separately any claim for disbursements (Reg 8.10(1)(c)(ii)).

11                  By letter to the respondent dated 24 April 2002, the solicitors then acting for the applicant wrote to the respondent’s solicitor on behalf of the applicant and some of his creditors, citing s 167, and asking that Cutler Hughes & Harris tax their costs for work done for the respondent. 

12                  The taxation was carried out by Ms Ann Sexton, who gave a certificate of taxation on 17 February 2003.

13                  Although the solicitor then for the applicant was present at the commencement of the taxation (which took place over a substantial period), no objection was made at the taxation on behalf of the applicant or any creditor.  No appeal has been lodged from the taxing officer’s decision.  Any appeal would now be out of time and no basis for extending time has, in my view, been demonstrated. 

14                  Accordingly, in my opinion, the respondent is “lawfully entitled” to be reimbursed for this amount.

15                  In addition, there is evidence, consistent with the approach taken by Whitlam J in Boothe v Commonwealth of Australia [2002] FCA 1101, that the respondent is liable to the Commonwealth under the Bankruptcy (Estate Charges) Act in the sum of $20,000.  In my opinion, the respondent is also entitled to be reimbursed for this amount.

16                  These are my rulings on those points.

Associate:

Dated:              19 May 2003