Morton, R.W. v Official Receiver for the Bankruptcy District of the State of Victoria [1995] FCA 465

IN THE FEDERAL COURT OF AUSTRALIA BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA GENERAL DIVISION VT 932 of 1994

RE: ROBERT WILLIAM MORTON Applicant OFFICIAL RECEIVER FOR THE BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA Objector Coram: Olney J Place: Melbourne Judgment:28 April 1995 Reasons 14 June 1995 published: REASONS FOR JUDGMENT THE APPLICATION Robert William Morton (the applicant) became a registered trustee under the provisions of the Bankruptcy Act 1966 (the Act) on 18 February 1983. Subsequent to the commencement of the Law and Justice Legislation Amendment Act 1990 (Act No 115 of 1990) his registration was extended pursuant to the provisions of s 25(2) and (3) of that Act to 9 September 1994. On 8 September 1994 he applied for an extension of the term of his registration pursuant to s 155A. The Official Receiver in Bankruptcy for the Bankruptcy District of the State of Victoria (the Official Receiver) gave notice pursuant to s 155A(4) of the Act of his objection to the application for extension. The objection was referred to the Court pursuant to s 155A(5) for a direction to grant or refuse the application. The matter was heard on 26, 27 and 28 April 1994. At the end of those proceedings I announced my decision in the following terms: I have reached a firm view that I am satisfied that Mr Morton is capable of performing the duties of a trustee and is otherwise a fit and proper person to be registered as a trustee. I propose to give detailed reasons in writing in due course but at this stage I propose to direct the Registrar to grant his application for extension of the term of his registration as a trustee. I propose to reserve the question of costs. That can be a matter of further submission once my reasons are published.

I now publish my reasons.

THE LEGISLATIVE SCHEME The Law and Justice Legislation Amendment Act 1990 introduced a number of changes to the previously existing scheme whereby persons became registered as trustees under the Act. It is unnecessary to refer to the previous scheme other than to mention that it did not contain any requirement for a trustee's registration to be renewed or extended from time to time. A major change brought about by the amending legislation was to require trustees to apply every 3 years for an extension of the term of their registration. A trustee who immediately before the commencement of the amendments was duly registered was given the option to give notice of his or her wish to continue to be a registered trustee, and if such notice was given within the prescribed period, the trustee was deemed to be registered for a term of 3 years from the date of the notice. Trustees are required to lodge with the relevant Registrar a triennial statement setting out prescribed information (s 161A). The Act now provides that a person who is registered under s 155 may within 6 months before the end of the current term of his or her registration apply for an extension of the term (s 155A(1)). The Inspector-General or an Official Receiver may, within a limited time, object to the trustee's application (s 155A(4)). If there is no objection, the Registrar must grant the application, otherwise it must be referred to the Court for a direction to grant or refuse it (s 155A(5)). The current term of the registration continues until the application is finally determined (s 155A(8)). This appears to be the first occasion on which the Court has been required to deal with a reference by a Registrar pursuant to s 155A(5). The Act does not provide any clue as to the basis upon which an objection may be made nor does it set out the criteria to be applied by the Court in determining whether the Registrar should be directed to either grant or refuse an application. It is appropriate therefore to first refer to the criteria applicable to an original application for registration. Only a natural person may make application for registration as a trustee (s 155(2); s 155(4)).