FEDERAL COURT OF AUSTRALIA

 

Wenkart v Pantzer [2009] FCA 1086

PRACTICE AND PROCEDURE — order that an inquiry be conducted — objection to Certificate — nature of the hearing to be undertaken by the Court

 

Constitution Ch III

Acts Interpretation Act 1901 (Cth) s 25D

Federal Court of Australia Act 1976 (Cth) Part IIA, Div 1, 2

Federal Court Rules O 1 r 4, O 39 r 10

 

D’Antuono v Minister of Health (1997) 80 FCR 226, cited

Harrington v Lowe (1996) 190 CLR 311, cited

Harris v Caladine (1991) 172 CLR 84, cited

Gibson v Bosmac Pty Ltd (1995) 130 ALR 245, cited

Jageev Pty Limited v Deane (1997) 72 FCR 398, cited

Pantzer v Wenkart [2006] FCAFC 140, 153 FCR 466, cited

Re Peruvian Railway Construction Company Ltd [1915] 2 Ch 144, cited

Rapid Metal Developments (Australia) Pty Ltd v Rosato [1971] Qd R 82, cited

Sharpe v Goodhew (unreported, FCA, Drummond J, Q I6 of 1989, 11 December 1992), cited

Wenkart v Pantzer [2008] FCA 478, cited

Wenkart v Pantzer [2008] FCA 1387, cited

Wenkart v Pantzer (No 10) [2007] FCA 1589, cited

Murphy MD, “Judicial Registrars of Federal Courts: Widening the Supervised Exercise of Delegated Judicial Power” (1996) 6 JJA 226

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

NSD 7051 of 2002

 

FLICK J

25 September 2009

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 7051 of 2002

 

BETWEEN:	THOMAS RICHARD WENKART Applicant
AND:	WARREN PANTZER (THE FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART) Respondent

 

JUDGE:	FLICK J
DATE OF ORDER:	25 September 2009
WHERE MADE:	SYDNEY

 

THE COURT ORDERS THAT:

 

1.                  The hearing of the present proceeding be stood over to 12 October 2009 at 9:30 am for further Directions with a view to then either making orders disposing of the proceeding or fixing a further date for the hearing of submissions should that be necessary.

2.                  Liberty to apply on three days’ notice in writing.

3.                  Costs reserved. 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 7051 of 2002

BETWEEN:	THOMAS RICHARD WENKART Applicant
AND:	WARREN PANTZER (THE FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART) Respondent

 

JUDGE:	FLICK J
DATE:	25 September 2009
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1                     The present proceeding before the Court is hopefully one of the last to be resolved as between the parties.

2                     It has its origins in October 1999 when an order was made sequestrating the estate of Dr Wenkart. Mr Pantzer was appointed as the trustee of the estate. Since that time there have been a number of decisions of various judges of this Court, both at first instance and on appeal. The dispute has also occasioned an application for special leave to appeal to the High Court.  

3                     The present proceeding arises out of an order made by Branson J in September 2008 that an inquiry be held pursuant to O 39 r 2 of the Federal Court Rules: Wenkart v Pantzer [2008] FCA 1387. An inquiry was held and a Certificate subsequently issued by a Deputy District Registrar on 28 May 2009. An “objection” has been taken to this Certificate and the present proceeding before the Court is a “hearing” pursuant to O 39 r 10(3) of the Federal Court Rules. 

The Background

4                     For the purposes of undertaking that “hearing” it is fortunately unnecessary to re-state each of the previous decisions and the disputes thereby resolved. For present purposes it is sufficient to note that on 11 March 2002 Beaumont J made orders by consent, including the following two orders:

1.      Warren Pantzer as Trustee of the estate of Thomas Richard Wenkart may recover his    remuneration, costs, charges and expenses to which he is lawfully entitled or may become                lawfully entitled from Thomas Richard Wenkart and Thomas Richard Wenkart agrees to pay            the same within 28 days of determination of the quantum of the same or at such other time as       the parties may agree.

…

5.      Thomas Richard Wenkart consents to Warren Pantzer lodging a Caveat over the property in       paragraph 2 for the purpose of securing the charge in paragraph 2 and Warren Pantzer will       upon payment of the remuneration, costs, charges and expenses in paragraph 1 provide a               Withdrawal of Caveat forthwith.

The property identified in order 5 above is located in Union St, Paddington (“the Paddington property”). The correct construction of these orders has been considered by the Full Court: Pantzer v Wenkart [2006] FCAFC 140, 153 FCR 466.

5                     It is also sufficient for present purposes to further note that on 31 October 2002, Mr Pantzer filed in this Court what was later deemed to be a cross-claim whereby he sought “an order in aid of [the Court’s] order made 11 March 2002 by appointing Warren Pantzer as Trustee for Sale of [the Paddington property]”.

6                     The difficulty confronting Mr Pantzer, however, was that:

·         the total amount he had received as trustee of Dr Wenkart’s estate was $769,191.66

but that:

·         the total amount of authorised payments made by Mr Pantzer to himself by way of remuneration prior to 31 October 2002 was $325,744.60.

There had been no agreement as to the “remuneration, costs, charges and expenses to which” Mr Pantzer was entitled in excess of that which had been then authorised. No occasion had thus arisen as at 31 October 2002, the date the deemed cross-claim was filed, for him to seek to exercise his rights as against the Paddington property.

7                     As concluded by Branson J in her reasons for decision in April 2008 (Wenkart v Pantzer [2008] FCA 478):

[91] I conclude that as at the date that the cross-claim was filed, Mr Pantzer, in his capacity as trustee of Dr Wenkart’s bankrupt estate, had received a larger amount by way of receipts than the determined quantum of the remuneration, costs, charges and expenses to which he was lawfully entitled. Mr Pantzer has therefore failed to demonstrate that, as at the date of the filing of his cross-claim, he was entitled to “orders in aid” of the consent orders made on 11 March 2002.

 

[92] Nonetheless, I do not accept the submission of Dr Wenkart that it would be appropriate simply to dismiss the cross-claim with costs. Were this course adopted Mr Pantzer could simply institute a fresh application seeking to enforce the charge over the Paddington property. The regrettably long and complex history of this matter renders such an outcome even more undesirable than might ordinarily be the case. The appropriate way to deal with the premature filing of Mr Pantzer’s cross-claim is, in my view, by the making of appropriate costs orders. This will require, as a first step, the identification of the date, if any, on which 28 days had passed from the determination of the quantum of an amount by way of remuneration, costs, charges and expenses to which Mr Pantzer is lawfully entitled that resulted in the aggregate of such determinations exceeding $769,191.66 (ie the total amount received by Mr Pantzer as trustee of Dr Wenkart’s estate). If the parties are unable to reach agreement on this question, I propose to make an order for the making of an inquiry by a Registrar (O 39 r 2 and r 9 of the Federal Court Rules).

Her Honour had also earlier published in October 2007 reasons for decision relevant to the remuneration and costs of the trustee: Wenkart v Pantzer (No 10) [2007] FCA 1589.

8                     Subsequent to the publication of those reasons for decision, two Notices of Motion were filed on behalf of Dr Wenkart seeking that further consideration be given by the Court to some of the conclusions then reached. One Notice of Motion was filed on 2 June and another on 5 June 2008. Her Honour dismissed both Motions in September 2008: [2008] FCA 1387. In doing so, Her Honour expressed her conclusions and made orders as follows:

CONCLUSION

 

[30] The parties have not reached an agreement as to the date, if any, on which 28 days had passed from the determination of the quantum of an amount by way of remuneration, costs, charges and expenses to which Mr Pantzer is lawfully entitled from Dr Wenkart that resulted in the aggregate of such determinations exceeding the total amount received by Mr Pantzer as trustee of Dr Wenkart’s estate. On the approach that I have considered, and continue to consider, it appropriate to adopt, before final orders can be made on Mr Pantzer’s cross-claim it is necessary to know when, if at all, Mr Pantzer became entitled to enforce the charge over Dr Wenkart’s Paddington property reflected in order 2 of the consent orders made by Beaumont J on 11 March 2002. It will therefore be ordered that a Registrar conduct an inquiry to determine that date. When that date has been identified it will be necessary for the parties to have the opportunity of making further submissions as to orders, including orders for costs, appropriate to be made on Mr Pantzer’s cross-claim.

 

Her Honour’s orders were as follows:

1.   The applications made pursuant to the notices of motion filed on 2 June 2008 and 5 June 2008        respectively be dismissed.

2.   A Registrar conduct an inquiry to determine the date, if any, on which 28 days had passed from    the determination of the quantum of an amount by way of remuneration, costs, charges and             expenses to which Mr Pantzer is lawfully entitled from Dr Wenkart that resulted in the   aggregate of such determinations exceeding $769,191.66.

3.   The proceeding be otherwise stood over to a date to be fixed.

 

9                     Consequent upon this decision of Branson J, Deputy District Registrar Hannigan conducted the inquiry which had been ordered and issued her Certificate in May 2009. That Certificate stated as follows:

Certificate pursuant to Order 39 Rule 10 of the Federal Court Rules.

I, Paddy Hannigan, a Deputy District Registrar of the Federal Court of Australia certify that the date, if any, on which 28 days had passed from the determination of the quantum of an amount by way of remuneration, costs, charges and expenses to which Mr. Pantzer is lawfully entitled from Dr. Wenkart that resulted in the aggregate of such determinations exceeding $769,191.66 is 10 January 2005.

 

10                  Order 1 r 4 of the Federal Court Rules, it should perhaps be noted, defines “Registrar” as including “a Deputy District Registrar”. The functions and manner of appointment of Registrars are addressed in Part IIA, Div 1 and 2 of the Federal Court of Australia Act 1976 (Cth).  

Order 39 Rule 10

11                  Order 39 of the Federal Court Rules deals with “Accounts and inquiries”. Rule 1 permits an order to be made “that an account be taken” and rule 2 provides that an order may be made “at any stage of a proceeding … for the taking of any account or the making of any inquiry”. Rule 3 provides for the making of directions as to “the manner of taking or vouching the account”. Rule 5 provides for the filing of an “account and a verifying affidavit”, unless the Court otherwise orders. Rule 8 preserves unto the Court a power to “make such orders as it thinks fit” where there has been “delay in the prosecution of any account, inquiry or other matter”. Rule 9 permits an order to be made that an account or inquiry is to be held by a Registrar.

12                  Although many of these rules are more directed to the role of the Court where an “account” has been ordered (e.g. rr 3, 4 and 5), there can be little doubt that the Court would retain a general power to give directions which facilitate the manner in which an “inquiry” is to be undertaken. There can equally be little doubt that an “inquiry” should be undertaken in a manner which is procedurally fair.

13                  Order 39 does not permit, however, an order to be made referring the whole of a case to a Registrar; it only permits a “subsidiary” part of the case to be the subject of a referral: Sharpe v Goodhew (unreported, FCA, Drummond J, Q I6 of 1989, 11 December 1992). Drummond J there observed (citation omitted):

Rules such as O 39, rules 1 and 3 of the Federal Court Rules do not create a new cause of action or a new equity, nor do they confer a general right to an account in substitution for the trial of issues; these rules do not authorise the sending of the whole case to the Registrar, they only authorise the directing of such accounts as are subsidiary to determining the rights of the parties, thus emphasising that the main issue in suit cannot be disposed of by ordering the taking of an account …

One of the decisions there referred to by Drummond J was the earlier decision of the Supreme Court of Queensland in Rapid Metal Developments (Australia) Pty Ltd v Rosato [1971] Qd R 82 where Wanstall J directed attention to the “[v]arious rules of court providing for the taking of accounts” and observed that “[t]hey merely regulate procedure in aid of substantive rights arising from other sources and put in suit in a cause”.

14                  Rule 10 of the Federal Court Rules thereafter provides for the manner in which the “results of the account or inquiry” are to be conveyed back to the Court and for the manner in which any “objection” is to be resolved. Rule 10 in its entirety provides as follows:

Certificate of Registrar

(1)     The Registrar shall certify the results of the account or inquiry which he has taken or held           pursuant to rule 9, and shall deliver a copy of the certificate to each party and, unless within 7       days of the delivery thereof to him any party objects the Registrar shall deliver the certificate             to a Judge, who, without the attendance of any party, may make an order that the person                liable pay the amount so certified to be due to any party.

(2)     Upon an order being made pursuant to subrule (1), the Registrar shall deliver a copy of the          order to each party.

(3)     Where an objection is made under subrule (1), the Registrar shall give notice of the objection      to the other party and list the matter for hearing before the Court and deliver his certificate to             the Court.

(4)     Upon a hearing pursuant to subrule (3) it shall be a matter for the Court as to what weight            should, in the circumstances of the case, be given to the certificate of the Registrar.

A “hearing” is further defined by O 1 r 4 as including “any hearing before the Court, whether final or interlocutory, and whether in open court or in chambers”. 

15                  Presumably r 10 has been drafted with a view to ensuring that the procedure whereby effect can be given to a Certificate does not contravene Ch III of the Constitution. There would appear to be little scope for any challenge to the validity of O 39. But it is considered imperative that the Court retaina power to properly review the result of any such “account” or “inquiry” that may be ordered. It is that role which gives guidance to the nature of the “hearing” which it is to undertake where an “objection” is taken. And it is presumably for this reason that r 10 does not appear to have a counterpart in the rules of procedure applicable in State Supreme Courts.

16                  Some assistance as to the nature of the “hearing” to be given when an “objection” is taken may be gleaned from both the terms employed in O 39 r 10 and from authority.

17                  The use of the terms “hearing”, “weight” and “objection” support an inference that what the Court is doing upon such a “hearing” is giving consideration to something akin to a piece of evidence. It is resolving the “weight” to be given to a piece of evidence (namely the Certificate) to which an “objection” has been taken.

18                  The Rules, perhaps not surprisingly, do not purport to give a Certificate any conclusive or determinative status.

19                  Indeed, to purport to give to a Certificate such a status would be Constitutionally impermissible: cf Harris v Caladine (1991) 172 CLR 84. Section 37A(1) of the Family Law Act 1975 (Cth) allowed the judges of the Family Court to make rules delegating to Registrars all or any of the powers of the Court. An order had been made delegating to Registrars certain powers. A Registrar of the Family Court had there made consent orders for the settlement of property. By a majority it was held that the order was valid. Mason CJ and Deane J there held at 95:

It seems to us that, so long as two conditions are observed, the delegation of some part of the jurisdiction, powers and functions of the Family Court as a federal court to its officers is permissible and consistent with the control and supervision of the Family Court's jurisdiction by its judges. The first condition is that the delegation must not be to an extent where it can no longer properly be said that, as a practical as well as a theoretical matter, the judges constitute the court.  This means that the judges must continue to bear the major responsibility for the exercise of judicial power at least in relation to the more important aspects of contested matters. The second condition is that the delegation must not be inconsistent with the obligation of a court to act judicially and that the decisions of the officers of the court in the exercise of their delegated jurisdiction, powers and functions must be subject to review or appeal by a judge or judges of the court. For present purposes it is sufficient for us to say that, if the exercise of delegated jurisdiction, powers and functions by a court officer is subject to review or appeal by a judge or judges of the court on questions of both fact and law, we consider that the delegation will be valid. Certainly, if the review is by way of hearing de novo, the delegation will be valid. The importance of insisting on the existence of review by a judge or an appeal to a judge is that this procedure guarantees that a litigant may have recourse to a hearing and a determination by a judge.  In other words, a litigant can avail him or herself of the judicial independence which is the hallmark of the class of court presently under consideration.

Dawson J observed at 122:

… a federal court must retain effective supervision and control over the exercise of its functions by its officers.

The requirement that a federal court “retain effective supervision and control” has been said to be a “constitutional imperative”: Harrington v Lowe (1996) 190 CLR 311 at 321 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ.

20                  Further assistance in reaching the same conclusion may also be gleaned from the following observations of Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 130 ALR 245 at 247, when His Honour was addressing analogous provisions in the Industrial Relations Act 1988 (Cth) as follows:

It is correct, as counsel observed, that there is no reference in s 377 to the review being a hearing de novo; but the section imposes no restriction on the extent of review. The reason for this is clear; a right of full review is a constitutional precondition to the vesting of the court's powers in a non-judicial officer.

His Honour then referred to Harris v Caladine, supra, and continued:

The term “hearing de novo” is perhaps ambiguous. It may be understood to mean a hearing conducted as if there never had been a hearing before the judicial registrar, everything concerning that hearing being completely ignored. Alternatively, it may be understood to mean no more than a hearing at which the parties are not bound by the course they took before the judicial registrar, where they have the right to adduce such further evidence as they wish, perhaps to adopt positions and put contentions different from those adopted before, and put to, the judicial registrar; and, of course, where the judge is not bound by the judicial registrar's findings of fact. Like Moore J, I think a review hearing is a “hearing de novo” in the latter sense. A hearing conducted in that way answers the constitutional requirement described by Mason CJ and Deane J, “a hearing and a determination by a judge”, without forcing on the parties, as a matter of necessity in all cases, the burden of relitigating all issues.

There may be occasions when it will be appropriate to conduct the review hearing as if there had never been an earlier hearing, perhaps because the earlier hearing so miscarried that the evidence became confused and the findings irrelevant or there is so much new evidence that it swamps the earlier. But ordinarily this will not be so. Where parties make a conscientious effort to adduce the relevant evidence at a properly conducted first hearing, by the end of that hearing they will ordinarily have found considerable common ground. It will have become apparent that some issues, on which they initially had inconsistent positions, are irrelevant or peripheral. They will have dropped out of the case. Differences of evidence on other issues will have been reconciled or explained; it may have become apparent to everyone that one particular version of events is more likely to be correct than its competitor. It would be unfortunate indeed if constitutional necessity compelled the court to ignore this narrowing of the dispute. I do not think it does. The relevant constitutional principle means no more than that, on review, the parties are entitled to have the case reviewed by the judge, without any limitation imposed by the conduct of the case before the judicial registrar or the judicial registrar's findings. The parties have the right to call such additional evidence as they wish, subject to relevance and other usual canons of admissibility. The judge must decide the relevant facts for himself or herself, and not simply adopt the findings of the judicial registrar. But the principle does not require the parties to ignore the evidence tendered to the judicial registrar; on the contrary it will ordinarily be sensible for that evidence to be tendered to the judge conducting the review.

 

In most cases, by the review stage, the critical factual issues will be few and well-defined. The course most conducive to the proper conduct of the review will be for the judge, in conjunction with the parties, to identify and concentrate upon those issues. Although nobody is bound by the judicial registrar's findings of fact, and it is important that everybody concerned with the case understands that, the judicial registrar's reasons for decision will usually assist to identify the issues to be determined on the review. …

See also: D’Antuono v Minister of Health (1997) 80 FCR 226 at 228 per Burchett J and Murphy MD, “Judicial Registrars of Federal Courts: Widening the Supervised Exercise of Delegated Judicial Power” (1996) 6 JJA 226.

21                  Order 39 r 10 ensures that the Court retains “effective supervision and control” over the results of an inquiry conducted pursuant to the terms of that Order and as ultimately expressed in the Certificate as issued.

The Hearing — An Opportunity To Revisit Orders Made?

22                  In the present proceeding, however, neither party advanced any detailed submissions as to the nature of the “hearing” now required. Accordingly, this is not the occasion to attempt any more detailed analysis of what may be required. Distinctions as between a “re-hearing” or a “hearing de novo” were not the subject of submissions.

23                  There seemed, however, to be concurrence with the proposition that the “hearing” was a complete “re-hearing” in the sense that the parties were neither confined to the evidence adduced before the Deputy District Registrar nor the manner in which any factual or legal issues were there sought to be advanced for resolution. It was assumed to be what Davies J has referred to as a “rehearing on the merits”: Jageev Pty Limited v Deane (1997) 72 FCR 398 at 399.

24                  For present purposes it is sufficient to note the procedural course that was in fact pursued. Directions were made for the filing of such evidence as was considered by the parties to be appropriate and for that material to be the subject of written submissions filed in advance of a hearing in Court. The materials filed included extensive extracts of the transcript of the proceedings before Branson J and copies of the submissions previously filed. Copies of the affidavits filed in support of the 2 and 5 June 2008 Notices of Motion were also included. A two volume Judge’s Bundle of documents was also provided.

25                  It was not considered appropriate at the outset to constrain Counsel on behalf of either Dr Wenkart or Mr Pantzer to the manner in which the inquiry before the Deputy District Registrar was conducted. Rather, the more appropriate course was to allow Counsel to identify those factual or legal matters which they wished to have resolved by this Court relevant to the “inquiry” which had been ordered.

26                  A “hearing” was then held to determine the “objection” to the Certificate.

27                  Written outlines of submissions filed on behalf of Dr Wenkart and Mr Pantzer in advance of the “hearing” disclosed a fundamental divergence of approach.

28                  The course plotted by Counsel on behalf of Dr Wenkart not surprisingly took as its starting point the order made by Branson J and the Certificate of the Deputy District Registrar. The written submissions filed in respect to the “objection” to the Certificate of the Deputy District Registrar essentially fell into two categories, namely:

·         submissions seeking to contend that the order for inquiry should now be set aside. The utility in Branson J making the order for referral was disputed on behalf of Dr Wenkart at the time the order was made and the continuing utility of resolving those matters the subject of the order remained disputed by Dr Wenkart;  

and

·         submissions as to the “weight” to be given to the Certificate.

29                  With respect to those submissions as to the “weight” to be given to the Certificate, on behalf of Dr Wenkart it was contended that the Certificate should be given no “weight” essentially because (in summary form):

·         the reasoning as provided by the Deputy District Registrar was inadequate;

and because

·         such reasoning as was provided exposed a failure “to take into account the context in which the determination was to take place” including, by way of example, a failure “to take into account a distinction between pre-annulment and post-annulment entitlements” and “Dr Wenkart’s submissions concerning interest (accruing to him) were quite different in effect from the question whether Mr Pantzer was entitled to any interest”. It was further contended on behalf of Dr Wenkart that the Deputy District Registrar failed to give any reasons for her conclusion that she was “satisfied” that an amount of $105,000 had not been “double counted” and that she had included in her process of calculation “amounts which were never part of the proceedings”.

These two essential elements of the submissions were advanced in various ways on behalf of Dr Wenkart. If successful in his contention that the Certificate should be given no “weight”, the consequence according to Dr Wenkart was that the Court should itself “determine all outstanding issues in the Proceedings”.

30                  Counsel on behalf of Mr Pantzer took a more confined view as to the task presently confronting the Court. She maintained that the Certificate should be given such weight that the Court should conclude that the date calculated by the Deputy District Registrar (namely 10 January 2005) was the date on which the 28 day period referred to in the order of Beaumont J as made on 11 March 2002 expired. Counsel on behalf of Mr Pantzer further maintained that the only task confronting the Court when conducting the “hearing” provided for in O 39 r 10 was the task of determining the “weight” to be given to the Certificate. Excluded from consideration, on this approach, was any task of revisiting the orders as made by Branson J or the constraints imposed by Her Honour upon those who were to carry out the “inquiry”. Indeed, on this approach, and given the findings as made by Branson J, the task performed by the Deputy District Registrar was a simple mathematical calculation of amounts and the correlation of expenditure with dates. The confined nature of the current “hearing”, it was contended, was not only dictated by the terms of O 39 r 10 but also by the fact that Branson J had herself been previously asked to revisit the findings she had made and declined to do so in her September 2008 judgment: [2008] FCA 1387.

31                  The utility of ordering such an inquiry to be undertaken was queried. But the inquiry having been undertaken and the date identified, the outstanding task according to Counsel for Mr Pantzer was now for this Court to conduct a “hearing” confined to the resolution of such “objections” as were now properly sought to be raised for consideration. Dr Wenkart had sought such a “hearing”, as is his entitlement under O 39 r 10(3) of the Federal Court Rules. That “hearing” and that “hearing” alone, it was contended, should now proceed. Whatever subsequent appeals may be filed or other applications made all remained matters for another day.

32                  The fundamental divergence of approach exposed by the exchange of written submissions thus focussed upon those matters which could be canvassed and resolved in a “hearing” conducted for the purposes of O 39 r 10(3). It is considered that the more wide-ranging “hearing” envisaged by Counsel on behalf of Dr Wenkart is to be rejected.

33                  Rejected therefore is the submission on behalf of Dr Wenkart that “the Court should revisit the order for the inquiry and set it aside”. Whether Her Honour was right or wrong in making the orders that she did pursuant to O 39 may be ventilated in the event that there is either an appeal from such orders as may ultimately be made or in the event that there is a belated application for leave to appeal from Her Honour’s decision. To refrain from revisiting “the order for the inquiry”, it is considered, is not to deny Dr Wenkart the “hearing” to which he is presently entitled. That “hearing”, it is considered, is one confined to those matters the subject of the order for referral; it does not extend to a yet further opportunity to contend that the order itself should not have been made. Indeed, the June 2008 Motions sought to revisit the orders previously made — albeit unsuccessfully.

34                  Also rejected is any suggestion that the “weight” to be given to a Certificate may be resolved simply by reference to the adequacy of any such reasons as may be provided together with a Certificate.

35                  The “hearing” to be conducted is such that the Court retains “effective supervision and control” over the “inquiry” process. And the parties who participated in the “inquiry”are not necessarily to be confined to either the evidence relied upon during the course of that “inquiry” or the manner in which they conducted their respective cases. 

36                  The Certificate and any reasons provided together with a Certificate may, however, provide a very useful starting point. Reasons provided in support of a Certificate may prove to be of invaluable assistance both to the parties in identifying the legal and factual issues which they now wish to have resolved and to the Court itself in the resolution of those issues. The reasons in particular may provide a useful means whereby some factual matters are resolved and more confined factual disputes identified. 

37                  Such was the case in the present proceeding. The reasons provided by the Deputy District Registrar exposed a course of reasoning whereby she (inter alia) set forth in tabular form the amounts received and thereafter proceeded to identify the dates the subject of the “inquiry” ordered by Branson J. It was that table which provided a useful focus for submissions, at least for Counsel for Mr Pantzer. The submissions on behalf of Dr Wenkart ranged more widely.

38                  It is not considered that any inflexible formula can be provided as to the standard of reasons which may be desirable in support of any Certificate as to the “results of an inquiry”. A common touchstone as to that which should be provided where there is a statutory obligation to provide “reasons” is that a statement setting forth such reasons should “also set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based”: Acts Interpretation Act 1901 (Cth), s 25D. The task of the Court when conducting a “hearing” of the present nature, however, is not a task of determining whether or not such reasons as have been provided may be adequate if judicial review were being sought of the Deputy District Registrar’s decision. Such reasons as may be provided in support of a Certificate issued pursuant to O 39 simply go to assist the parties and the Court as to the “weight” to be given to a Certificate.

39                  Order 39 does not expressly require such a detailed statement to be provided. And, in the absence of any such requirement being imposed, it is considered that such reasons as are provided together with a Certificate should be such as are appropriate to the subject matter of the inquiry. Where the subject matter of an inquiry is detailed, a more detailed explanation which is provided together with a Certificate may enable the Court to give greater “weight” to the Certificate than it otherwise might. 

The Objections Now Taken

40                  Given the fact that the “hearing” to be conducted for the purposes of determining the “weight” to be given to the Certificate was not confined to the material that was before the Deputy District Registrar, it was necessary at the outset to identify both the evidence to be relied upon and the facts sought to be established.

41                  Most — if not all — of the facts to be relied upon, however, were accepted on behalf of both Dr Wenkart and Mr Pantzer to be those contained within one or other of the judgments of Branson J. And, notwithstanding the considerable volume of material which had been filed for the purposes of the present “hearing”, the only two documents sought to be relied upon were:

·         the Minutes of a Bankruptcy Creditors Meeting held on 15 March 2002; and

·         a letter from Dr Wenkart to Mr Pantzer dated 18 January 2001.

The Minutes were sought to be relied upon by Mr Pantzer; the letter was tendered by Dr Wenkart.

42                  In calculating the date of 10 January 2005 the Deputy District Registrar compiled a “table of receipts and payments”. That table was as follows:

The Deputy District Registrar, having set forth this table, went on to conclude in her reasons as follows:

[35] The relevant date on which 28 days had passed from the determination of the quantum of an amount by way of remuneration, costs, charges and expenses to which Mr Pantzer is lawfully entitled from Dr. Wenkart that resulted in the aggregate of such determinations exceeding $769,191.66, is 28 days after 13 December 2004.

[36] I find that the relevant date for the purpose of the inquiry is 10 January 2005. A certificate shall issue pursuant to Order 39 rule 10 certifying the relevant date as being 10 January 2005.

When properly understood, this table reflects nothing other than the Deputy District Registrar giving effect to the findings as made by Branson J.

43                  This table, it is considered, correctly sets forth as the starting point the sum of $769,191.66.  Reference had been made by Branson J to an alternative figure of $797,000: [2008] FCA 478 at [6]. But this alternative figure was apparently an error attributable to submissions by Senior Counsel previously appearing for Dr Wenkart. Nothing turns on this error, it being accepted by both Counsel that the correct sum is that identified in the Certificate.The sum of $769,191.66 was the sum identified by Her Honour when making the order that an “inquiry” be undertaken.

44                  And, other than a slight variation as to the dates upon which payments had been made in March 2000, there was also no disagreement on the part of Dr Wenkart as to the payments of $60,744.30, $80,000.00, $11,811.40 or $68,188.60 as identified in the table.

45                  One “objection” taken on behalf of Dr Wenkart, however, focussed upon the two sums of $105,000 paid on 15 March 2002. One sum of $105,000 was identified as “trustee remuneration” and the other sum was identified as the payment of legal fees to Cutler Hughes and Harris.

46                  It is considered that the Deputy District Registrar made no error in separately identifying and taking into account both figures.

47                  Insofar as the “trustee remuneration” was concerned, Branson J in her reasons for decision given in April 2008 directed attention to each of the four meetings held by Dr Wenkart’s creditors and relevantly concluded:

[32] I conclude that on the proper construction of the above resolution, the creditors purportedly approved Mr Pantzer’s remuneration as follows:

(a)     $60,744.70 for the period from 28 October – 10 December 1999;

(b)    $80,000 for future remuneration from 13 December 1999;

(c)     $11,811.40 for the period from 11 March – 28 March 2000;

(d)    $68,188.60 for future remuneration from 29 March 2000; and

(e)     $105,000.00 in accordance with para (a)(I) of the s 73 proposal.

…

 

In including the sum of $105,000 in her table, the sum identified in paragraph 32(e) of the reasons for decision of Branson J, the Deputy District Registrar was simply giving effect to the conclusion of Her Honour. It was to support this conclusion that Mr Pantzer sought to rely upon the Minutes of the Bankruptcy Creditors Meeting on 15 March 2002. Given the conclusion expressed by Her Honour, however, reliance upon those Minutes takes the matter no further.

48                  Insofar as the second sum of $105,000 is concerned, namely the sum paid to Cutler Hughes and Harris, the table prepared by the Deputy District Registrar and a competing table prepared on behalf of Dr Wenkart — when properly understood — disclose no relevant variance. Before the Deputy District Registrar Dr Wenkart had prepared his own table as to the expenditure incurred by Mr Pantzer. That competing table did not disclose any expenditure for legal fees on 15 March 2002. The competing table, however, accepted expenditure on 17 February 2003 in the sum of $268,477.64. Indeed that was the very sum also identified by Branson J in her April 2008 decision. Her Honour there stated:

[71] Schedule A of the Certificate of Taxation allowed $88,042.24 in respect of paid costs and Schedule B allowed $180,435.40 in respect of unpaid costs. Ms Sexton’s evidence, as given before Beaumont J and accepted before me to reflect the truth, was that she was appointed to tax the solicitor-client bills of costs of Cutler Hughes & Harris but that she did not receive bills of costs; rather she received computer print-outs of the work done on a daily basis by various members of the firm. She understood that bills of costs had not been drawn because funding was not available to pay someone to draw proper bills of costs. As I understand Ms Sexton’s evidence, she had access to Cutler Hughes & Harris’ files and she checked each item on the computer print out against the files and allowed the item only if she could find material on the files that supported the item.

The sum of $88,042.24 and $180,435.40 is the figure of $268,477.64 set forth in the competing table prepared on behalf of Dr Wenkart. The Deputy District Registrar apparently pursued an alternative course. Extracted from the table she prepared, she separately identified the following payments to Cutler Hughes and Harris in two amounts and ascribed to them the following dates:

As all of these dates precede the date identified by the Deputy District Registrar of 13 December 2004, it matters not which approach is correct. The date of 13 December 2004 is unaffected and the date of 10 January 2005 identified in the Certificate is equally unaffected.

49                  There is thus no “double counting” as suggested on behalf of Dr Wenkart.

50                  The sum of $98,095.16 in respect of “outstanding remuneration” was again a sum common to both the table of the Deputy District Registrar and the competing table of Dr Wenkart. The April 2008 reasons for decision of Branson J record that approval was sought for remuneration in the sum of $115,406.07. That approval was not forthcoming and Her Honour noted that the Minutes for that meeting record 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”.  Eighty-five percent of $115,406.07 is the sum of $98,095.16 as set forth in the Deputy District Registrar’s table.

51                  “Objection” was also taken on behalf of Dr Wenkart to the two sums of $83,219.82 and $86,736.12 paid on 13 December 2004. Again, the competing table relied upon by Dr Wenkart in his submissions before the Deputy District Registrar seemed to accept the quantum of the amount but sought to ascribe a different date to those payments. The competing table acknowledges a sum of $169,955.94 in respect to a certificate on 11 January 2005. Again, extracting the two sums identified by the Deputy District Registrar, the following emerges:

An earlier table prepared by the Deputy District Registrar identified paragraphs [75] and [76] of the reasons for decision of Branson J as published in October 2007 as the source of each of these amounts and the date. Those reasons for decision stated as follows:

[75] Following the making by Lindgren J of the orders of 21 October 2003 (see [22] above) Mr Pantzer requested that a claim for remuneration and certain bills of costs for services provided by others purportedly in relation to the administration of Dr Wenkart’s estate be taxed. By a certificate dated 13 December 2004 the taxing officer certified that she had taxed and allowed the remuneration, disbursements and expenses claimed by Mr Pantzer for the period 15 March 2002 to 21 October 2003 in the amount of $169,955.54. The amount allowed for Mr Pantzer’s remuneration was $83,219.82. Dr Wenkart’s challenge to this certificate of taxation, and to a further certificate issued by the taxing officer on 12 January 2005, was dismissed by the Full Court (see [8]–[12] above). As I have observed above (see [23]), Dr Wenkart conceded that upon completion of taxation of the claims for costs and remuneration referred to in orders 1 and 2 of the orders made on 21 October 2003 the amounts taxed would be amounts to which Mr Pantzer is lawfully entitled. I conclude that Mr Pantzer is lawfully entitled to the sum of $83,219.82 for remuneration for the period 15 March 2002 to 21 October 2003.

[76] Mr Pantzer is for the same reasons lawfully entitled to the additional amounts totalling $86,736.12 included in the certificate of taxation dated 13 December 2004 and the amount of $33,295.95 allowed by the certificate of taxation issued by the taxing officer on 12 January 2005.

 

Concurrence is thus expressed with respect to the findings of the Deputy District Registrar as to both the quantification of these two amounts and the date of 13 December 2004.

52                  As concurrence is expressed with the date as certified by the Deputy District Registrar, the expenditure after 13 December 2004 assumes no present relevance.

53                  A further “objection” was taken on behalf of Dr Wenkart to the table as prepared by the Deputy District Registrar upon the basis that interest was claimed to be payable to Dr Wenkart by Mr Pantzer but that no account had been given by the Deputy District Registrar of such interest as may be payable.

54                  There is no doubt that the Deputy District Registrar did not take into account any quantification of such interest as may be payable to Dr Wenkart. She expressly said so. Her reasons thus state:

[31] It is not within the scope of the inquiry to make a finding on either party’s entitlement to interest.

 

Although not expressly stated by her, presumably the basis upon which any consideration as to interest was excluded may be traced back to the following observations of Branson J in her October 2007 reasons for decision:

OTHER MATTERS

[90] Some additional issues were also canvassed at the hearing of this matter.

Interest

[91] One such issue was whether interest has accrued upon amounts to which Mr Pantzer has or will become “lawfully entitled” within the meaning of order 1 of the consent orders made on 11 March 2002. This is not an issue to which a simple answer can be given. In respect of any particular amount the issue of whether interest is payable, and if so, at what rate and over what period of time, will depend on considerations such as the basis of the entitlement and the period of time, if any, that Mr Pantzer has been out of pocket in respect of the amount.

 

[92] The appropriate time for the determination of questions of interest will be after the resolution of other outstanding questions.

 

Given the complexity of the factual matters being raised, such observations were perhaps not surprising.

55                  It is thus considered that the Deputy District Registrar discharged the task entrusted to her. It was no part of her function when undertaking the “inquiry” ordered by Branson J to take into account interest.

56                  It should further be noted, however, that any consideration of interest may not in any event have led to any different conclusion. The competing table prepared on behalf of Dr Wenkart and relied upon in submissions before that inquiry included a sum of $43,914.06 as at 17 February 2003. That was the figure being then advanced on behalf of Dr Wenkart. But the inclusion of that sum as at that date would have made no difference to the conclusion that payments had exceeded receipts as at 13 December 2004. Even had the sum of $43,914.06 been included, payments would still have exceeded receipts as at that date — albeit obviously by not as large a sum as otherwise was the case. Although Counsel on behalf of Mr Pantzer sought to confine Dr Wenkart to the quantification of interest and the date upon which such interest was said to be payable as set forth in his earlier prepared competing table, such a course may not have been appropriate. As the present “hearing” is not necessarily constrained by the manner in which the parties advanced their competing arguments before the Deputy District Registrar, it perhaps matters not how the case on behalf of Dr Wenkart had previously been advanced. But there was no evidence as to how any different manner of computing interest would have led to any different conclusion.

57                  A further competing submission addressed by both Counsel on behalf of Dr Wenkart and Mr Pantzer should be noted. This further submission invoked “the rule in Cherry v Boultbee”. This rule was stated by Sargant J in Re Peruvian Railway Construction Company Ltd [1915] 2 Ch 144 at 150 as follows:

… [W]here a person entitled to participate in a fund is also bound to make a contribution in aid of that fund, he cannot be allowed so to participate unless and until he has fulfilled his duty to contribute.

 

Given the constraint imposed upon the Deputy District Registrar when conducting her “inquiry”, namely that “[t]he appropriate time for the determination of questions of interest” was at a later date, this present submission need not be further considered.

Conclusions

58                  A review of all of the materials to which the Court has been referred does not lead to any different conclusion being reached to that set forth in the Certificate. Assisted by — but not dictated by — the reasons provided by the Deputy District Registrar, it is considered that the same findings should now be made as were made by the Deputy District Registrar.

59                  For the purposes of O 39 rule 10(4) of the Federal Court Rules, it is thus concluded that the “weight” to be given to the Certificate of the Deputy Registrar dated 28 May 2009 is such that a finding should be made, consistent with the terms of the order for referral, that the date on which 28 days has passed from the determination of the quantum of an amount by way of remuneration, costs and charges and expenses to which Mr Pantzer is lawfully entitled that resulted in the aggregate of such determinations exceeding $769,191.66 is 10 January 2005.

60                  That is the finding that is now made.

61                  Orders should now be made (if necessary) which give effect to the prior decisions of Her Honour Justice Branson, the Certificate as issued by the Deputy District Registrar on 28 May 2009 and the present reasons for decision. As previously contemplated by Her Honour in her reasons for decision as published in September 2008, it is appropriate that the parties have a further opportunity to make submissions as to the appropriate orders to be made — should that be necessary.

62                  It is to be hoped that no further hearing will be necessary and that the parties will be able by agreement to draft appropriate orders disposing of the proceeding. It is a hope, however, which it is expected will remain unfulfilled.

ORDERS

63                  The orders of the Court are:

1.                  The hearing of the present proceeding be stood over to 12 October 2009 at 9:30 am for further Directions with a view to then either making orders disposing of the proceeding or fixing a further date for the hearing of submissions should that be necessary.

2.                  Liberty to apply on three days’ notice in writing.

3.                  Costs reserved. 

 

I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

Associate:

 

Dated:         25 September 2009

 

Counsel for the Applicant:	Mr M Green
Solicitor for the Applicant:	Bruce Stewart Dimarco
Counsel for the Respondent:	Ms E Collins
Solicitor for the Respondent:	Bartier Perry
Date of Hearing:	11 September 2009
Date of Judgment:	25 September 2009