Re Webb, M.A. v. Ex parte Taylor, A.R. & Ors [1987] FCA 346

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CATCHWORDS

BANKRUPTCY ~ creditor indemnifies trustee for costs of litigation - property recovered by letter threatening litigation - whether power to make order favouring indemnifying creditor.

Bankruptcy Act, 1966 s.109(10)

Re: Marion Alice Webb Ex parte: Alan Richard Taylor & Ors. Qld BN 758 of 1984

PINCUS J.

BRISBANE 7 JULY 1987

RTCSIVED -9 JUL 1987

FEDERAL COURT OF AUSTRALIA

PRINCIPAL REGISTRY

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IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) QLD BN 758 of 1984

BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF OURENSLAND )

RE: MARION ALICE WEBB

EX PARTE: ALAN RICHARD TAYLOR

Applicant MERCANTILE CREDITS LIMITED

First Respondent

AUSTRALIAN GUARANTEE CORPORATION LIMITED

Second Respondent

PINCUS J. 7 JULY 1987

REASONS FOR JUDGMENT

This is an application by the trustee of the estate of the bankrupt, Mrs. Webb, for orders under s.109(10) of the Bankruptcy Act 1966, which is set out below. The provision empowers the Court in certain circumstances to make an order giving an advantage to a creditor who has given the trustee an indemnity for costs resulting in the recovery of property. Here, the indemnifying creditor's case is that property was recovered under an indemnity and that it should have all the money, or most of the money, which has been so obtained. There is only one other

creditor and the contest is between the two.

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Section 109(10), so far as relevant, reads as follows: