= RMR M P= EW ARE TOM COR NOMEN TR POR St YN Sars amram ene me toe oe ney me me me me mw we Be ter prcatiabiseen BLE arte FRO ae SRM Le RIL teed eR IW NEE are kL wee ele ae Pentland medi en i Deere mtn Ae ime I Ne Me rn te et ee ML TDL Laren ~_— tet > 1X . od CATCHWORDS Bankruptcy - application by Registrar for the cancellation of the registration of the respondent as a person qualified to act as a trustee - at time of registration the respondent was a partner in a firm of accountants but subsequently became an employee with another firm of accountants - role of a trustee vnder the Act examined - requirement that a trustee be, and be seen to be, independent. 81, 102, 104 149(3)(c), 150(3) 54(1)(b), 155, 156A, 188, 190, B, 204, 222, and 231; Bankruptcy Act 1924-1932: ss. 105(3j), 126, and 153(2). Bankruptcy Act 1914 (Eng.): 19, and 95(2){d) Re: Kenneth Wayne Lamb Ex Parte: The Registrar in Bankruptcy Applicant ' Kenneth Wayne Lamb Respondent Sweeney, J. Melbourne 17 May 1984 ' 4 ny IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA Re: Kenneth Wayne Lamb - A registered trustee Ex parte: The Registrar in Bankruptcy for the Bankruptcy District of the State of Victoria ~- Applicant Kenneth Wayne Lamb - Respondent Coram: Sweeney, J. Place: Melbourne Date : 17 May 1984 "Reasons for Judgment Sweeney J. By application filed 27 January 1984 the Regastrar in Bankruptcy for the Bankruptcy District of the State of Victoria (the Registrar) sought the following orders and declarations: 1. An order that the registration of Kenneth Wayne Lamb (the respondent) as a person qualified to act as a trustee pursuant to Part VIII of the Bankruptcy Act 1966 (the Act) be cancelled in exercise of the power contained in s.155(5) of NAS. © (Dir abe Labtstall eX tbe WS TALE San ae an a recor AIR Aa ER la net Lh bk he dalle Mae elu neds 1c bereane eaten AA SH Ltd ree oe talent nest PD re Rite hime ne cone te ti ld LET EEE EET OT Pete tn em TN apemrmenng S R e mee e, . ' ft Pe ert ee eee ee. oe pie et ae Tn Dae Se Se nee OE VO Td arth Mine, eee remaster whe dria tna Bae Ape cate a nang teak Nae a ek rnc te the Act. 2. A declaration that the respondent is no longer qualified to be a person registered pursuant to Part VIII of the Act. 3. An order that the respondent pay the taxed costs of the Registrar of and incidental to the application. Part VIII of the Act is headed "Trustees" and s.155 provides: "(1) Each Registrar shall keep, as prescribed, a register in which shall be entered the names and such other particulars as are prescribed of persons whom the Court directs to be registered under this section as qualified to act as trustees and who have given security in the prescribed amount and manner. (2) A person may apply to the Court to be registered as qualified to act as a trustee and, subject to this section, the Court may, if it thinks fit, by order direct that he be so registered upon his entering into a bond in the prescribed amount and manner with such surety or sureties as the Registrar approves. (3) A person who is registered under this section is entitled, upon request, and upon payment of the prescribed fee, to be issued with a certificate of his registration. (4) Nothing in this section authorizes the registration as a trustee of a company, partnership, corporation or association. (5) The Court may, at any time, cancel the registration of a person under this section. (6) A person, not being the Official Trustee or a person registered under this section, who acts as a trustee of the estate or affairs of an insolvent person or a bankrupt is liable, on conviction by the Court or by a court of summary jurisdiction, to a fine not exceeding $20 for each day on which he NAR ER Ree eR Re ge ee ee a en ae oe en ee ee ee we He Taner Seat Revdeh ine anh MLOmetee Ach ba lev Le adean NE ait trl ws a al AS a tl AR tl Lanett te Nia a Lan en Alin he eee ane ie atte tnnlhe NEA ne ones eam ot erulie tity mae coe Tae > + Joa Reseeres follows: "105(3) Subject to this Act, the trustee may do all or any of the following things:- Employ a barrister, solicitor, attorney or other agent to take any proceedings or to take part in any examinations or to do any business or in respect of conveyancing matters. © pyran mete rminnaermenene seem eernaimmmyaten Senne eee ne Re ee oe has so acted, not being a day on which his acting as a trustee was confined to taking such steps as were necessary for the protection of the property of the insolvent person or bankrupt. (7) It is a defence to proceedings brought against a person under sub-section (6) in respect of his having acted as a trustee of the estate or affairs of an insolvent person if he proves that his acting as a trustee was confined to taking such steps as were necessary for the protection of the property of the insolvent person pending the taking of proceedings under this Act." In Re Dawes (Sydney, 1934) 7 ABC 190 the managing clerk to a country solicitor applied under s.126 of the Bankruptcy Act 1924-1932 (the 1924 Act) for registration as a person qualified to act as a trustee. Lukin J refused the application and said at pp.191-192: "There is, however, the further objection that he is not an independent person able to exercise his own independent and uninfluenced judgment. Als duty as trustee may, and will be likely to, come into conflict with his duty as managing clerk for his employer, e.g., when acting under s.105(j), and otherwise.- Section 153(2) of the Act indicates the legislature's opinion as to the necessity for having a trustee free from any influence that may 'make it difficult for him to act with impartiality in the interests of the creditors generally.'" S.105(j) and s.153(2) of the 1924 Act provided as x , A are nr tents a eentcty Bh atAlih DO Mae Tater) haa Cans Woe eae ih ale ae tate ra Bake Acad a ie gel da eioar ere tee! ee was ON Mate tie aletnee Oiabet eee UN he Sachem Medal LG ORE titania satel eres ed and eb meer ote et Sn er gen ae RT mene pri re ee ee ee - meee moe ee ee 153(2) If the Court is of opinion - (a) that the trustee appointed by the creditors is guilty of misconduct, or fails to perform his duties or is, by reason of lunacy, or continued sickness, or absence, incapable of performing his duties, or (b) that his trusteeship is being needlessly protracted without any probable advantage to the creditors, or (c) that his connexion with or relation to the bankrupt, or his estate, or any particular creditor, might make it difficult for him to act with impartiality in the interests of the creditors generally, or if in any other matter he has been removed from office on the ground of misconduct, the Court may remove him from his office of trustee." In Re Hickman (Melbourne, 1943) 13 ABC 138, also an application under s.126 of the 1924 Act for registration as a person qualified to act as a trustee, Clyne J said (at pp. 138-139): "In my opinion, however, a person desirous of becoming registered as a trustee should be independent in the sense that he can carry out his duties as a trustee whenever required to do so and free from any such control as may debar him from giving his time and attention to the duties and responsibilities of a trustee. If he has not that independence and as an employee is subject to the control of another, there 1s always the risk of a conflict of duties, and ain particular, the risk that his duties as an employee might be prejudicial to his duties as a trustee. Moreover, it is not satisfactory or expedient that an officer of the Court should be under the more or less continuous control of an employer. The applicant at the present time has not that independence, which is, I think, an essential qualification for any person who desires to become e - 434 ramet hee ft Can! ho pes AL ey ee a a aA CRS eA Vee Seb et aba enema Soh ere Ne te en nee eather intl "nee Neh MEG TAY Nally We HN ha nt ene Ln a Wate Sete FE ET RE EE EE A IT ee A na ee te ~— - wee ee a ee cee em registered as a trustee. He is at present employed as a managing clerk, and, although he has a right of private practice, and, although his employer is apparently willing to grant him unusual liberty, his employer nevertheless has the right, whenever ' he desires to exercise it, to direct what work should be done by him, the manner in which and when such work should be done. I consider, therefore, that the applicant ought not to be permitted to be registered as a trustee under the Act." It appears that no challenge to these cases has been made until the recent decisions in Re Robson of Wickham J, (unreported 11/11/80) and in Re Totterdell of Burt CJ, (unreported 14/6/83) exercising federal jurisdiction in bankruptcy. In Re Robson, Wickham J acceded to an application made pursuant to s.155(2) of the Act that an applicant be registered as qualified to act as a trustee. The applicant was an employee of a firm of chartered accountants. Each of the partners in the firm was registered as qualified to act as a trustee, and it was proposed that the applicant would eventually join them in partnership. The applicant had formerly been employed for 12 years with the Commonwealth Attorney-General's Department in the Bankruptcy Branch. In that employment, he had wide experience in the administration of bankrupt estates, had worked closely with the present and also a former Official Receiver in Bankruptcy for that Bankruptcy District, and had held the position of Assistant Official Receiver. The application was supported by the neh be Ne MERLE felt ale ett aS es Sth ennai PAIN, te i Mie A te ate ete oe Pm ab eM hae oe ere coer WF wee a aaa eet n oder aaneeenrenerten ones onelimedommetae" Official Receiver who said to his Honour, at p.5 of the transcript: "As far as his abilities and so-forth are congerned, I think I have expressed in my report to you that in 20 years of reporting upon applicants for admittance as registered trustees, Mr Robson, without doubt, is the most experienced person upon whom I have been called to report, and I can only say that I could not support more wholeheartedly this application which he is making today." His Honour then said: "Yes; thank you Mr Smith; well it would appear, gentlemen, I would be doing the public a dis-service if I did not accede to this application, and it 1s acceded to." Earlier in the transcript his Honour had expressed some concern with the fact that the applicant was an employee of and not a principal in the firm. However, the point was not argued at any length, the judgments in Re Dawes and Re Hickman were not referred to or read to his Honour, and there was no opposition to the application. It was submitted on the applicant's behalf and also by the Official Receiver that the character and experience of the applicant was such that he would not permit any conflict arising out of his status as an employee to divert him from his duty as a trustee. Re Totterdell was also an application to be registered as qualified to act as a trustee pursuant to s.155(2) of the wr rr re rn re rr i peer a aa ke RR ee et Nn a ee wittes One one een ee re NY ae Puen use: hen Mae Act. Again there was no opposition to the application, the applicant had previously worked in the office of the Official Receiver, and the Official Receiver strongly supported the application. His Honour was informed at the outset that the only real problem with the application was that the applicant was an employee and not a partner in a firm of chartered accountants. His Honour referred to the judgment of Clyne J in Re Hickman. His Honour heard very brief argument on the point on behalf of the applicant. In an affidavit filed in support of the application a partner in the firm which employed the applicant deposed that there would be no interference by the firm with the applicant in the performance of his duties were he to be registered as a person qualified to act as a trustee. His Honour said (at p.5 of the transcript): "Well this is an application which I intend to grant. The only point that might lead me to the contrary arises out of the decision of Mr. Justice Clyne, in re Hickman, which was decided in 1943, and in that case His Honour appears to have held that a public accountant, who 1s employed by another public accountant ~ the relationship between them being, as appears from the reasons, that of employer and managing clerk - was not thought to be a satisfactory person to be appointed to this position, or office, because it may well be that he could not, while being so employed, briny to his job, an independent judgment, and that he might be subject to the control of his employer, which would not enable him properly to carry out his duties. Well that in the end really is a question of fact, I think, that is decided in each particular case. It is not a matter which arises directly out of the Statute. I think perhaps in 1983 where firms of accountants have become far eT et PE ee rere em ee ae een ee ee ee eee ' Neer ether re nel. ete eo an ad at dat Lea BA etre atl aa Re hene ee eee larger, and it may be, in certain cases, incorporated for all I know, that the relationship between the so-called employer - I can't say he is the legal employer - and the person who may be said, and in fact is, a servant, is not one out of which there 1s any real possibility of the employer exerting any degree of control over the employee in the carrying out by that employee, of his duties. He is employed as a professional man, and he has a status which enables him, in the carrying out of his professional work, to exercise an unfettered professional judgment, in the same way, I expect, as a - I mentioned a surgeon might exercise his judgment, although technically he is employed by either a layman or a board - hospital board. This particular applicant appears to be in every respect a very competent, experienced, professional ian, well trained to carry out the duties of the appointment which he is seeking, and I think the application should be granted." In the present case the respondent was registered under s.155 of the Act as a person qualified to act as a trustee on 18 March 1983 pursuant to an order made by the court on 9 February 1983. At that time the respondent was carrying on practice as a public accountant in partnership with a Mr Scott under the style of "Scott & Lamb". It appears that this partnership was eventually dissolved, but in any event the respondent joined the firm of chartered , pubic accountants, Duesburys, as an employee on 6 June 1983. He was employed by the firm on the basis that he would be responsible for and retain clients which he introduced to the firm. The firm intended to consider the possibility of admitting the respondent into partnership once he obtained membership of the Institute of Chartered Accountants. eigen en ee ety re ee ee ere tt ee ee em te eee FL ea Hern ee ee so cpecs ef ' sm nut danthe: ahaa! umes ae a ee ee ee wee ett A te eel ee et Aen vale ek at mtn ete = wd FR NT RE oe nn Re ee Ye ere - as ' - en ee eee en ee ee ee In July 1983 a Deputy Registrar in Bankruptcy informed the respondent of the decisions in Re Dawes and Re Hickman and his consequent concern with the respondent's status as an employee. By letter dated 26 July 1983 the respondent assured the Deputy Registrar that he would not accept any appointment as a trustee under the Act nor sign any consent pursuant to s.156A of the Act until the matter was resolved. This assurance was confirmed in a letter from the respondent's solicitors to the solicitors for the Registrar dated 19 December 1983. In an affidavit sworn on behalf of the respondent in these proceedings the senior insolvency partner of Duesburys said: "3. -- - - During his employment, the Trustee - - [the' respondent] has complete independence in respect of the administrations in which he acts as trustee or as liquidator. I am able to assure the Court on behalf of my partners that they do not interfere or do they intend to anterfere or direct the Trustee in the conduct of those administrations. 4. That my partners and I, some of whome are also Trustees in Bankruptcy and Registered Or Liquidators, are very much aware of the need for independence of trustees in this regard." Many important powers and discretions are vested in a trustee by the Act. In the course of his administration of an estate, whether in bankruptcy or under Part X, a trustee must decide whether to exercise discretions which may be in , 10 the interests of creditors and the bankrupt but which may be time consuming and relatively unrewarding to the trustee and to his employers. For example, a trustee must decide whether to apply for a public examination of the bankrupt (see s.69) or for the examination of other parties under s.81 of the Act. He must also decide whether to challenge antecedent transactions of the bankrupt pursuant to Division 3 of Part VI of the Act. These decisions in some cases will involve many hours of he on i di ee ee Fe te en ee ne ee Set each ae ie preliminary investigation, preparation and detailed attention. The examinations or legal proceedings themselves may then be of considerable length, and in the end prove not to be fruitful. Similar circumstances may arise in relation to decisions whether to admit or reject a proof of debt (see s.102) when it is apparent that rejection may lead to an appeal to the court (see s.104). The trustee has the power, pursuant to s.149(3)(c), to enter an objection to the discharge of a bankrupt by force of that section, the importance of which was set out in Van Sere SF car ST ean ath ROP prelate eter an ett te aa meee nn meee Lien ent Reesema v The Official Trustee in Bankruptcy (unreported, Full Court, 26 August 1983). nett een Met Cate ne Nl hate Serre Teen em ae ae _ en man Sr a mn re moe enn ener oe pe enon mam e Ai ee a Be Oe ot CET wee Mee ee TNE DAs ed Ee ae A te ee ee Se EES tte ral Chas emt oben nL ee Na ea a eer ene te te Meee tela ne ind! caret AM The hme eee 1l On an application for discharge by a bankrupt the trustee is required to make a report concerning the bankrupt (see s.150(3)). In some cases, this report will allege matters adverse to the bankrupt (see s.150(6)) which may be challenged by the bankrupt, and the trustee may oppose the application for discharge. The preparation of such reports and participation by the trustee in an opposed application for discharge again may make considerable calls upon the time of the trustee. The trustee is required to prepare a similar report on certain applications for annulment of a bankruptcy. (see s.154(1)(b) and Rule 57(3)). A trustee plays an equally important role under Part X of the Act. When a debtor signs an authority in favour of a trustee (see s.188), the trustee shall proceed to call a meeting of the debtor's creditors. (see s.190). The trustee in practice is frequently elected as chairman to preside at the meeting (see s.I196). As chairman he becomes responsible for the conduct of the meeting and has the power to decide questions such as the entitlement of creditors to vote at the meeting. (s.198) He would also be called on to explain to the creditors the choice of special resolutions which they are able to pass at such a meeting pursuant to s.204 of the Act. As trustee of a deed of assignment, deed of arrangement or composition a trustee again exercises important powers and pave wet owne ft Mera eth ate Sine ames det beeen Wet nth ETE Lt ate eI rl Gel net need oe ae ae ae ete ht ee ele ee nat Lette Oey et discretions in the administration of the estate of the debtor. He has the power to apply to the court to have the deed or composition declared void (see s.222) and must make decisions such as whether to admit or reject a proof of debt. In the case of a deed of assignment the trustee must decide whether to attack antecedent transactions (see s.231). The examples given are not to be regarded as exhaustive. Suffice it to say that a trustee plays a central role in the administration of estates under the Act and is ,under a general duty to exercise the powers committed to him in such a fashion that the objects of the Act; including those of equality between creditors and fairness to bankrupts and debtors, are served. The objects of the Act are of public importance and it is of great importance to the community that the role given by the legislature to a trustee, 1s fulfilled only by persons who are, and who are seen to be, completely independent. In carrying out an administration whether in bankruptcy or under Part X, including the examples to which I have referred, a trustee who is a sole practitioner or a partner has unfettered power to decide for himself such questions as, whether he will pursue a particular course in relation to an administration, the allocation of his own time, including the decision whether to travel away from his office where he thinks it desirable, the allocation of particular tasks to AAT Rw RTT Ore et et ee ern me tee - - -- - = ee are eae RY ween ye wae oarent a el ee ee A ee ve oe ree ae eek A ee ee em OR a RTM VT Ne nett w eden at Le Rene en i ne members of his staff, and the priority to be given by those members to those tasks. The same cannot be said of a trustee who is an employee and subject to the control of his employer who has the right to direct what work should be done by him, the manner in which it should be done, when it should be done, the time within which it should be completed and the staff which he may use to do it. There is also the risk that an employee may be tempted, or thought to be tempted, in circumstances where an administration involves time consuminy work for little apparent reward, to allow the diligent performance of his duties as a trustee to be influenced by his desire to be more productively employed in the eyes of his employers so as to enhance his prospects of promotion or admission to the partnership. a In my opinion, the respondent does not have either the reality or the appearance of independence which is enjoyed by a trustee who is not an employee. It is of great importance to the administration of estates,- whether in bankruptcy or under Part X of the Act, that a trustee be independent and be seen to be independent. In Re Hetherington & Ors 14 December 1982, unreported, I said of a trustee (at pp. 37-38): I ee TAD ET EN A Om eee we ee eee ee ee ree ee en ee ee BAF ellen keh eile Fee awa mat ot aS nae CUR td ee ae ne kee a ttle ote why om Ne we ee Ee "He should earnestly consider whether by becoming controlling trustee he may be exposing himself to a conflict between interest and duty, or to any conflict between any existing duties flowing from any relationship with a debtor or a creditor, or any duties attaching to any office or post already held by him, and the duties involved in the proposed office of controlling trustee. He should not rely upon what he conceives to be his own ability to reconcile any such conflict but should rather ensure that the conflict does not arise. A controlling trustee should not be in a position where it may reasonably appear to those who are entitled to the benefit of his impartial discharge of the duties of his office that such a conflict exists. As the office is a statutory one, there is also a public interest that the holder of it should not be, or reasonably appear to be subject to a conflict." In Re Partridge unreported, (Sydney 22 September 1982, ) Lockhart J said of a trustee: (p.3) "He must be scrupulously careful to ensure that he never allows himself to be placed in a position of conflict between various duties or between duty and interest; nor must he ever allow the situation to arise where he may be seen to be in that position of conflict or potential conflict. A registered trustee must not only be impartial; he must be seen to be impartial." similar requirement can be found in the English equivalent to the Act, s.19 of which provides: "19. (1) Where a debtor is adjudged bankrupt, or the creditors have resolved that he be adjudged bankrupt, the creditors may be ordinary resolution appoint some fit person, whether a creditor or not, to fill the office of trustee of the property of the bankrupt; or they may resolve to leave his appointment to the committee of inspection hereinafter mentioned. SR ery a ee Ee RIED erm RT ner re ee eS rn ere ee —" Bes * re: \- a we ee edb ait aint tate ab eed La AL ee ae dit Sake Ne ne be nae ee kh a eee ee ee Re he 4 ot Oven A person shall be deemed not fit to act as trustee of the property of a bankrupt where he has been previously removed from the office of trustee of a bankrupt's property for misconduct or neglect of duty. (2) The person so appointed shall give security in manner prescribed to the satisfction of the Board of Trade and the Board, if satisfied with the security, shall certify that his appointment has been duly made, unless they object to the appointment on the ground that it has not peen made in good faith by a majority in value of the creditors voting, or that the person appointed 1s not fit to act as trustee, or that his connection with or relation to the bankrupt or his estate or any particular creditor makes 1t difficult for him to act with impartiality in the interests of tne creditors generally. (emphasis added) (3) Provided that, where the Board make any such objection they shall, if so requested by a majority in value of the creditors, notify the objection to the High Court, and thereupon the High Court may decide on its validity. $.95(2)(a) of the English Act gives the Board of Trade the power to remove the trustee from his office 1f they are of opinion "that his connection with or relation to the bankrupt, or his estate, or any particular creditor might make it difficult for him to act with impartiality in the interest of the creditors generally." These provisions emphasis the requirement that a trustee not be placed in a position where it 1s difficult for him to act with impartial°ity, regardless of whether he would in fact act with impartiality. The provisions illustrate a concern for a trustee to be seen to be independent and not in a position of potential conflict. on ern aren a men wee nee eee eee eee Ce wee ee Re ee eee er nt ee nce omen Trend Se ee Dee eee el a let A Sa Neem aed ne tee ee ee oe te or en eed ae Te ree Farwell J in In re Beale; Ex parte: The Board of Trade £1939] 1 Ch 761 said at p.764: "It may be that, if he were permitted to continue as trustee, he would in fact be quite impartial. That is not what I have to decide. I have to determine whether it would be difficult for him to act with impartiality." Lord Esher, M.R. in In re Lamb: Ex parte The Board of Trade [1894] 2 QB 805 at p.815 said: "The question is not, Would he or would he not, in fact, act with impartiality? One may have a strong belief that he would, if he is a gentleman of high character, act with impartiality, notwithstanding the difficulty in doing so. But the question is, treating him as an ordinary man, whether it would be "difficult for him to act with impartiality"?" (see also In re Mardon [1896] 1 QB 140) Some assistance may be gained by looking at the position of a liquidator in the winding up of a company. in Re Allebart Pty Ltd (in liq) and Tne Companies Act [1971] 1 NSWLR 24 at p.28, Street J (as he then was) said: "A liquidator is bound -to be on guard lest he compromise his position of independence and impartiality in all respects in the discharge of his functions as an officer of the court administering the winding up of a company. Not only is it his prerogative to decide what steps should be taken, but it is his duty to exercise himself, according to the dictates of his own opinions, what should and what should not be done in the course of any given winding up. It 1s for OR pri serge nine our stees ames Ht ee ee ee Re ee - + ees os oe ee ee es RO ee le ae te A Sete ee rte we ew en Fe en ae ae ee el ete a nae ati, ee ee a NP a wae da ue OTN ONT OT RTE EE Sree a ee ee ee me ren ee ee we » him to decide what steps are to be taken, and when, how and by what means such steps are to be taken. Where he draws upon financial assistance from a creditor, it is incumbent upon him to ensure that he does not place in jeopardy his independence in the discharge of his duties. It is indispensable that in point of substance the liquidator's independence should be preserved; and it is undesirable that a liquidator should permit a situation to develop in which it might appear that he has yielded up in any Gegree whatever his exclusive independent control in the decision-making processes and administration of a winding up." Later on his Honour said at p.30: "It ais essential that the independence and impartiality of a liquidator should at all times exist in point of substance, and be manifestly seen to exist." Bowen CJ in Equity (as he then was) in Re Stewden Nominees No. 4-Pty Ltd 1 ACLR 185 at p.187 cited Re Allebart as authority for the principle that "it is important that a liquidator should be independent, and should be seen to be independent." (see also Re Photo Holdings Pty Ltd, x parte: Ramsay and Warhurst 2 ACLR 117) In Re Intercontinental Properties Pty Ltd (an Liq) 2 ACLR 488 Needham J said at pp. 491-492: "In performing his important functions, the liquidator must both be and appear to be independent and impartial. It is wrong for him, for example, to appear to be acting as the mouthpiece of a particular creditor - Re Allebart Pty Ltd (in lig) [1971] 1 NSWLR 24 esp at 28 and ' "Tes it w oo torres cual Bake fae ee ae Sank teu ene ROT ol et uaa ean Ne neon! Patent lb Shee meet noe earmente ane Ge wee ream ie ce oe Le FEA PL reper en een ng ee eee ee Herne were -- wee ee ee eee 30-1. It is for this reason that the court will not normally appoint as a liquidator a person wno, by such appointment may be placed in a position where his interest and his duty may conflict - cf, Bray v Ford [1896] Ac 44 at 51-2. If a position of potential conflict did not appear at the time of the appointment of the liquidator but emerged subsequently, the court could in a proper case, remove him - " The status of the respondent as an employee is in my opinion fatal to his continued registration as a person qualified to act as a trustee. A diligent employee, even with understanding employers who are sensitive. to his obligations as a trustee, does not have the freedom which a self-employed trustee enjoys. A trustee should be master of his own time free to decide for himself in relation to any estate where he goes, what ne does and when he does it, free from any possible direction by employers and free from any thought that he may be prejudicing his chances of advancement or of a partnership by devoting time to carrying out his duty as a trustee. He must enjoy that. freedom and must be seen by the court, by creditors, and by debtors and bankrupts, to enjoy it. If the question were arising for the first time, I would be of opinion that the respondent should not retain his registration as a person qualified to act as a trustee. I am strengthened in that opinion by the authorities cited. To the extent that the more recent decisions in Re Robson and Re Totterdell differ from those authorities, I would By eer, nee beeen ew in ie een abe Ee een all a AU LE eA henP ti tae a etl aaa aa ae Ee RARE EDA eat RELI te Ree enero re fe Cohen ete ete Wee AL ee en Mee a | are RP nn CRE ine IE Meee ee at tere cere en oe eee ree ee ee eee ee pee ere Ey respectfully disagree with them. When this case was argued I indicated to counsel, without then pronouncing any order, that I was disposed to grant the application with costs. I further indicated that I would publish my reasons in due course but would not pronounce any order until the respondent had had an opportunity to consider those reasons and decide whether he preferred to apply himself to have his name removed from the register. It was agreed that 21 days would be an appropriate period to allow the respondent for these purposes. Accordingly I will not now pronounce an order but will reserve liberty to apply generally, so that the matter may be brought back before me within 21 days from today's date. Nothing in these reasons is intended in any way to reflect upon the character or competence of the respondent or of his employers. I certify that this and the eighteen (18) . preceding pages are a true copy of the Reasons for judgment herein of the Honourable Mr Justice "Blo. | . Associate Date: 17 May 1984 \ e