(97 | tat - (118) CATCHWORDS Bankruptcy - Costs - Petitioning Creditor - Dismissal of petition after acceptance of composition - Whether Court may order payment of petitioner's costs out of fund constituted for purposes of composition. Bankruptcy Act 1966 - ss. 109, 188(i)(e), 231(2), 237(2), 243 Re: Sneddon; ex parte: Australian Telecom Employees Credit Co-operative Ltd., unreported, Jenkinson J; judgment 15 July 1983. RE: SUSAN NIRENS, TRADING AS LORNIK EX PARTE: DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA P886 OF 1986 Jenkinson J. 31 October 1986 Melbourne IN THE FEDERAL CoURT OF AUSTRALIA } GENERAL DIVISION BANKRUPTCY DISTRICT OF THE re = c spin sTaTe i oF VICTORIA ' RE: suSAN NTRENS. TRADING AS LORNIE Debtor Ex FARTE DEPUTY COMMIS IUNER OF TASATION OF THE CUMMONWEALTH UF AUSTRALIA Creditor CORAM: Jenkinson J. EFLACE: Melbourne DATE: 31 October, 1386 REASONS FUR JUGGMENT The perition wrasented on 10 September 1356 WAS dismissed by me on 23 October Lote, after the creditors of the debtor had accepted a composition by Bankruptcy Act 136 the debtor in pursuance of 5.13d3(1liisi fat ctober 1386. The petitioner' s costs to the trustee by trustee accord to t would have costs been her pursuank to Fart K of the on £2 Uctober 13936. The authority given by or that Act was signed on L petitioning creditor sought an order that the of the petition be paid out of the fund payable the debtor under the composition and that the hat payment the priority which payment of those accorded by the trustee of the debtor s astate if a sequestration order had been made. w tf i i pal at ng fay The special resolution ov which "THAT bthe creditors accepro a Composition pursuant to the provisions of Fart K or the Bankruptcy Act 1960 in respect of the prov fable debts of the Debtor in the following terms:- l. That the Trustee of tha Composition be Everett Thomson Bent of 144 Jolimont Road, East Melbourne. ae That the debtor pay to the Trustee a lump Sum OL S15,uuu, suck sum bo é distributed as rollows:~ \ad Firstiv, in Contesilinas ramuneration. liabilities. iba Secondly, in payment Gr costs or administering the Composition including the remuneration sf the Trustee. tc) Thirdly, to priority creditors as set out in Section 109 of the Act. (dj Fourthly, to creditors proved in accordance with the provisions of the Bankruptcy Act. Such payments to be made on ce before the <oSth November, 1986. The wrovisions of 3.109 of the Bankruptcy Act 1966 are not made applicable by the Ac itself to or in relation ta a composition under Part X : See s.idc. The provisions of 3.1lu03 are mad2 applicable by 3.231(2) to and im relation toa deed of assignment, that has become binding under Fart " on the craditors of a debtor and in relation to his trade dealings, property and 3s if - w affairs, "(ary a creditor's petition had been presented against the debtor by whom deed was executed sn uilring the #x¢cucion WAS passed: ia} A sequestraiLion or against Kim sn that day on which he ¢ and ron] the trustee or the By 5.237(2) the provisions of 3.103 are made applicabie to and in relation to a deed of arrangement, that has become binding on creditors and in relation to the debtor s trade dealings, property "(ai a sequestration order had been made against the debtor on the day on which he executed the deed; and ibi the trustee of the deed were the trustee in his bankruptcy." es Credit fi In Re 2neddon; ex parte Australian Telecom Employ Co-Operative Ltd. (P22 of 19383; unreported; judgment 15 July 13383) I expressed the opinion that 3.109(lii(a) cannot be construed as comprehending, when that provision has been made applicable to and in relation to a deed of assignment, or a deed of arrangement, the fo a petitioning creditor whose petition was pending cr ia) a taxed cos when the deed was executed and was thereafter dismissed. I adhere to that opinion, for I think that 3.109(1)(a) must be understood to speak of the petitioning creditor upon whose petition the sequestration order effecting the bankruptcy was made. Ex hypothesi, there is no such a creditor when s.103 has been made applicable to and in ralation ta a deed of assignment, or a deed of arrangement. Here, where no provision of the Bankruptcy Act 1366 nas operated to make 3.109 applicable, it is a question whether clause i2(ci or the creditors special resolution is, on or its proper construction, to be taken to comprehend the petitioning creditor in this proceeding. I think not. I think that clause lic) is intended ts indicate classes of sayments which 5.109 would wv have ordained if 4 suastration order had been made against the € bi fh i ut ot ub debtor. The tax of a petitioning creditor whosa eebtition et Di) has been dismissed are not in my Gpinion the subject or s.1l039(1)(ap. ayment by the trustee The power of the curt £6 order a) of the petitioner's costs out of the fund constituted for the purposes of the composition was asserted in ke Sneddon, supra. Nothing in the conduct of the petitioner has been shown to have been unreasonable and it is, I think, tust that the petitioner's costs of bringing the petition should be shared by all who are composition. bound by th The orders with respect to the petitioner's costs will be that the costs including reserved costs or the wetitioning creditor of and incidental to the petition other than those ankruptcy notice, the affidavit or service or the o relating ta the bankruptcy notice and the preparation of the creditor s petition and the affidavit verifying paragraphs 1, 2, and 3 of the petition be taxed and that upon service forthwith of an orrice copy of this order upon the trustee of the composition accepted by the debtor's creditors on Z2 October 1986 and service upon the said trustee as s00n as possible thereafter but not in any event later than 20 Lia November 1986 of a certificate of kaxation of the said costs the amount or the said costs a cr wp T be ob a act ry a said trust@e pay to the p out of monevs which have been sr shall be paid by the debtor to the said trustee in pursuance of the said composition and which are at the time of service of the said copy order or which shall thereafter come into the hands of the trustee. It is further ordered that the said trustee pay the amount of the said costs to the petitioner before making, after the date of service on the trustee of the said office copy of this order, any payment to a creditor under the said composition. F886 of 1986 Date of Hearing 28 October, 1986 Counsel for Petitioner : Mr. P. Gigliotti Solicitor for Petitioner : Australian Government Solicitor Debtor appeared in person