FEDERAL COURT OF AUSTRALIA

Shanahan, in the matter of Shanahan [2014] FCA 1080

THE COURT ORDERS THAT:

1.    In respect of each of the bankrupt estates listed in Schedules 1 to 11 in Annexure "A" to these orders (of which the parties are trustees): -

1.1    Pursuant to Rule 1.34 of the Federal Court Rules 2011 (Cth) (the Rules) and Rule 1.03(2) of the Federal Court (Bankruptcy) Rules 2005 (Cth) (the Bankruptcy Rules), compliance with the requirements of Rules 8.02(2)(b) and (c) of the Bankruptcy Rules be dispensed with.

1.2    Pursuant to section 134(4) and section 180 of the Bankruptcy Act:-

   (a)    In respect of the estates set out in Schedule 1 in Annexure "A" to these orders:-

      (1)    the resignation of John Gervase Shanahan (Mr Shanahan) as one of the two trustees of the estate be accepted; and

      (2)    from acceptance of Mr Shanahan's resignation, Joanne Emily Dunn (Ms Dunn) is the sole trustee of the estate and is entitled and obliged to act as such.

   (b)    In respect of the estates set out in Schedule 2 in Annexure "A" to these orders:-

      (1)    the resignation of Mr Shanahan as one of the two trustees of the estate be accepted; and

      (2)    from acceptance of Mr Shanahan's resignation, John Richard Park (Mr Park) is the sole trustee of the estate and is entitled and obliged to act as such.

   (c)    In respect of the estates set out in Schedule 3 in Annexure "A" to these orders:-

      (1)    the resignation of Mr Shanahan as one of the two trustees of the estate be accepted; and

      (2)    from acceptance of Mr Shanahan's resignation, Kelly-Anne Lavina Trenfield (Ms Trenfield) is the sole trustee of the estate and is entitled and obliged to act as such.

   (d)    In respect of the estates set out in Schedule 4 in Annexure "A" to these orders:-

      (1)    the resignation of Mr Shanahan as one of the two trustees of the estate be accepted; and

      (2)    from acceptance of Mr Shanahan's resignation, Lachlan Stuart McIntosh (Mr McIntosh) is the sole trustee of the estate and is entitled and obliged to act as such.

   (e)    In respect of the estates set out in Schedule 5 in Annexure "A" to these orders:-

      (1)    the resignation of Ms Dunn as one of the two trustees of the estate be accepted; and

      (2)    from acceptance of Ms Dunn's resignation, Mr Shanahan is the sole trustee of the estate and is entitled and obliged to act as such.

   (f)    In respect of the estates set out in Schedule 6 in Annexure "A" to these orders:-

      (1)    the resignation of Mr Park as one of the two trustees of the estate be accepted; and

      (2)    from acceptance of Mr Park's resignation, Mr Shanahan is the sole trustee of the estate and is entitled and obliged to act as such.

   (g)    In respect of the estates set out in Schedule 7 in Annexure "A" to these orders:-

      (1)    the resignation of Ms Trenfield as one of the two trustees of the estate be accepted; and

      (2)    from acceptance of Ms Trenfield's resignation, Mr Shanahan is the sole trustee of the estate and is entitled and obliged to act as such.

   (h)    In respect of the estates set out in Schedule 8 in Annexure "A" to these orders:-

      (1)    the resignation of Mr McIntosh as one of the two trustees of the estate be accepted; and

      (2)    from acceptance of Mr McIntosh's resignation, Mr Shanahan is the sole trustee of the estate and is entitled and obliged to act as such.

   (i)    In respect of the estates set out in Schedule 9 in Annexure "A" to these orders:-

      (1)    the resignation of Mr Nixon as one of the two trustees of the estate be accepted; and

      (2)    from acceptance of Mr Nixon's resignation, Mr Shanahan is the sole trustee of the estate and is entitled and obliged to act as such.

1.3    Pursuant to section 134(4) and section 180 of the Bankruptcy Act:-

   (a)    In respect of the estates set out at Schedule 10 in Annexure "A" to these orders:-

      (1)    the resignation of Mr Shanahan as one of the two trustees of the estate be accepted; and

      (2)    as a condition of Mr Shanahan's resignation: -

         (A)    Paul Anthony Allen (Mr Allen) must forthwith file a Consent to Act as Trustee with the Official Receiver;

         (B)    From lodgement of the said Consent to Act, Mr Allen be appointed trustee of the said bankrupt estates, jointly and severally with the remaining trustee, Ms Joanne Dunn.

   (b)    In respect of the estates set out at Schedule 11 in Annexure "A" to these orders:-

      (1)    the resignation of Mr Shanahan as one of the two trustees of the estate be accepted; and

      (2)    as a condition of acceptance of Mr Shanahan's resignation,

         (A)    Mr Allen must forthwith file a Consent to Act as Trustee with the Official Receiver;

         (B)    From lodgement of the said Consent to Act, Mr Allen be appointed trustee of the said bankrupt estates, jointly and severally with the remaining trustee, Ian Charles Francis.

   (c)    In respect of the estates set out at Schedule 12 in Annexure "A" to these orders:-

      (1)    the resignation of Mr Shanahan as one of the two trustees of the estate be accepted; and

      (2)    as a condition of acceptance of Mr Shanahan's resignation,

         (A)    Ms Dunn must forthwith file a Consent to Act as Trustee with the Official Receiver;

         (B)    From lodgement of the said Consent to Act, Ms Dunn be appointed trustee of the said bankrupt estates, jointly and severally with the remaining trustee, Brendan Nixon.

2.    In respect of each of liquidations set out in Schedules 13, 14 and 15 in Annexure "A" to these orders (of which the first, second and third-named applicants are liquidators):-

2.1    Pursuant to Rule 1.34 of the Rules and Rule 1.3(2) of the Federal Court (Corporations) Rules 2005 (Cth) (the Corporations Rules), compliance with the requirements of Rule 2.7(1) of the Corporations Rules be dispensed with;

2.2    Pursuant to Sections 473(1) and 479(3) of the Corporations Act:-

   (a)    In respect of the estates set out in Schedule 13 in Annexure "A" to these orders:-

      (1)    Mr Shanahan be removed as liquidator; and

      (2)    Ginette Dawn Muller (Ms Muller) continues to act as liquidator and is entitled and obliged to act as such.

   (b)    In respect of the estates set out in Schedule 14 in Annexure "A" to these orders:-

      (1)    Mr Shanahan be removed as liquidator; and

      (2)    Ms Dunn continues to act as liquidator and is entitled and obliged to act as such.

   (c)    In respect of the estates set out in Schedule 15 in Annexure "A" to these orders:-

      (1)    Ms Muller be removed as liquidator; and

      (2)    Mr Shanahan continues to act as liquidator and is entitled and obliged to act as such.

3.    The Applicants each pay their own costs of this application.

Annexure “A”

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

REASONS FOR JUDGMENT

1    Each of the applicants, other than John Gervase Shanahan (“Mr Shanahan”), is a director and employee of FTI Consulting (Australia) Pty Ltd (“FTI”). Each of them is a registered trustee in bankruptcy, or an official liquidator, or both.

2    Mr Shanahan was a director and employee of FTI until 15 August 2014. He has now formed his own consulting firm, Gervase Pty Ltd.

3    Following discussion between the plaintiffs, they reached agreement as to how FTI’s files should be divided between them. They decided that Mr Shanahan would voluntarily resign as trustee of 108 bankrupt estates and six liquidation estates. In respect of most of the bankrupt estates and each of the liquidation estates, there would be a remaining trustee or liquidator who will then act as the sole trustee or liquidator. With respect to some of the bankrupt estates, an additional director of FTI, either Paul Anthony Allen or Joanne Emily Dunn, will be added as a second trustee. They also agreed that Mr Shanahan would be left as the sole trustee in respect of 30 bankruptcy estates and the sole liquidator in respect of one liquidation estate by the resignation of one of the other applicants.

4    The applicants seek orders to give effect to their agreement. In particular, they seek orders pursuant to s 180 of the Bankruptcy Act 1966 (Cth), that the Court accept the resignation of the respective trustee and orders that the remaining trustee is the sole trustee, and is entitled and obliged to act as such. In some cases, they seek, as a condition of acceptance of the resignation, that Mr Allen file a consent to act as trustee, and that he be appointed trustee jointly and severally with the remaining trustee. There is a similar approach taken for Ms Dunn in relation to a number of estates.

5    The applicants seek orders that the Court remove Mr Shanahan as liquidator of six liquidation estates pursuant to s 473(1) of the Corporations Act 2001 (Cth), and that Ginette Dawn Muller (“Ms Muller”) continue to act as liquidator. In respect of one liquidation estate they seek that Ms Muller resign and that Mr Shanahan remain.

6    The applicants also seek dispensation from compliance with the notice requirements of r 8.02(2)(b) and (c) the Federal Court (Bankruptcy) Rules 2005 (Cth). They also seek dispensation from compliance with r 2.7(1) of the Federal Court (Corporations) Rules 2000 (Cth).

7    The bankrupt estates have at least 1640 creditors in total, as well as 138 bankrupts. The Official Receiver and ASIC have been served, and have indicated that they do not intend to appear at the hearing. I consider that inconvenience and expense to the estates are relevant to whether I should make each of the orders sought: see Application of Vouris and Godfrey [2004] NSWSC 384 at [11] and Condon v Watson [2009] FCA 11 at [15].

8    It is also relevant that there is no likely prejudice to the creditors, bankrupts and members. The applicants have agreed to accept a condition that they will not charge any professional fees to any of the estates for work done by them to familiarise themselves with the prior conduct of the estates. They have also agreed that they should bear their own costs of this application.

9    In these circumstances, I am satisfied that it is appropriate to make orders in terms of the orders attached to these reasons.

Associate:

Dated:    8 October 2014