IN THE FEDERAL COURT OF AUSTRALIA) VICTORIA DISTRICT REGISTRY ) No VX 72 of 1995 BANKRUPTCY DISTRICT ) RE: REGINALD ERNEST GILLIE, ALMA JOYCE GILLIE, GLENN ANTHONY GILLIE, DALE BRYCE GILLIE AND ROHAN CRAIG GILLIE EX PARTE:REGINALD ERNEST GILLIE, ALMA JOYCE GILLIE, GLENN ANTHONY GILLIE, DALE BRYCE GILLIE AND ROHAN CRAIG GILLIE (Applicants) AND: ANDREW MICHAEL CORNELL (Respondent) No VX 104 of 1995 RE: ALMA JOYCE GILLIE EX PARTE:ALMA JOYCE GILLIE (Applicant) AND: ANDREW MICHAEL CORNELL (Respondent) No VX 105 of 1995 RE: GLENN ANTHONY GILLIE EX PARTE:GLENN ANTHONY GILLIE (Applicant) AND: ANDREW MICHAEL CORNELL (Respondent) No VX 106 of 1995 RE: DALE BRYCE GILLIE EX PARTE:DALE BRYCE GILLIE (Applicant) AND: ANDREW MICHAEL CORNELL (Respondent) No VX 107 of 1995 RE: ROHAN CRAIG GILLIE EX PARTE:ROHAN CRAIG GILLIE (Applicant) AND: ANDREW MICHAEL CORNELL (Respondent) No VX 132 of 1995 RE: REGINALD ERNEST GILLIE EX PARTE:REGINALD ERNEST GILLIE (Applicant) AND: ANDREW MICHAEL CORNELL (Respondent) CORAM: RYAN J PLACE: MELBOURNE DATE: 19 DECEMBER 1995 REASONS FOR JUDGMENT RYAN J: An application has been made by each of the debtors, Reginald Ernest Gillie, Alma Joyce Gillie, Glenn Anthony Gillie, Dale Bryce Gillie and Rohan Craig Gillie on 18 December 1995 for an order restraining the respondent, Andrew Michael Cornell, ("the Trustee") from selling, disposing, charging or otherwise dealing with the assets or property that formed part of the estates of the applicants and are presently vested in him as Trustee pursuant to Part X of the Bankruptcy Act 1966. The applicants also seek orders for the calling of a meeting of creditors of their respective estates and the removal of the Trustee as controlling trustee of those estates. The evidence discloses that the Trustee went into possession of farming properties at Scobie Road and Matheson Road, Kyabram, on 20 November 1995. Those properties are the subject of two deeds of assignment and one deed of arrangement covering another three of the debtors. The trustee is also the agent of the National Australia Bank in possession of the freehold properties pursuant to a registered mortgage over those properties. By advertisement in the "Kyabram Free Press" on 8 December 1995, stock and station agents on behalf of the Trustee advertised for sale 360 replacement heifers. Apparently about half of those cattle had formerly been on the subject properties but were being agisted on the property of a third person when the Trustee went into possession of them. The evidence is not clear whether the present carrying capacity of the subject properties is sufficient to support all of those 360 heifers of which, I am told from the Bar table, about 180 poddy calves are presently, and always have been, on the properties. The real question to be tried, as I perceive it on the present application made on very short notice, is whether the impending sale is in the interests of the unsecured creditors who are entitled to the benefit of the deeds of assignment and the deed of arrangement. There is some evidence from one of the debtors, a farmer of more than 40 years' experience, that the price likely to be realised by tomorrow's sale is approximately $96,000, whereas if the same cattle were sold in April or May 1996 they would realise in the vicinity of $150,000. The evidence of the extent of consultation by the Trustee with creditors about the proposed sale is incomplete. The Trustee, in oral evidence, has deposed to consultation with a committee of creditors, but it is unclear whether the members of that committee have been invited to, or are capable of, expressing an opinion about the merits of the proposed sale. The Court has a wide discretion under s.178 of the Bankruptcy Act to make such orders by way of directions to a trustee as it considers just and equitable. In Re Tyndall; Ex parte Official Receiver (1977) 17 ALR 182, Deane J at 186 observed: "The trustee is made responsible for the administration of a bankrupt estate under the general provisions of the Act. He must, in the course of that administration, make a variety of decisions aimed at enabling the administration to carried out with promptness and efficiency. Some of these decisions will be business or commercial decisions in which the business or commercial experience of the trustee would itself provide a basis for arguing that, unless it were shown that the trustee's decision was perverse or clearly wrong, it would be inappropriate and unjust for the Court to interfere. Again, under the present legislation, the trustee will ordinarily be the Official Receiver and the court must be conscious of the fact that the Official Receiver will be made responsible for the administration of an extraordinarily large number of estates. In such circumstances, the administration of the Bankruptcy Act demands that the court take into account, in exercising its functions under the provisions of s 178 of the Act, the opinion of the Official Receiver, as trustee, as to what is expedient in the interests of the prompt and efficient administration of a particular bankrupt estate. That is, however, a completely different thing to saying that the court can only interfere with an act, omission or decision of the Official Receiver, as such trustee, when it is of the view that the Official Receiver has acted unreasonably, absurdly or in bad faith in so acting or failing to act in reaching that decision." I consider that those observations can be paraphrased to apply to the regard which the Court should ordinarily have to a decision taken by a trustee under a deed in the circumstances of the present case. However, I consider that it remains reasonably arguable whether the business or commercial experience of the present trustee provides a sufficient assurance in the special circumstances of this case that the impending sale is in the best interests of creditors. I have therefore decided with some diffidence to restrain, for a limited time and subject to certain undertakings by the debtors, the sale of the 360 head of cattle which would otherwise occur tomorrow. The order of the Court shall be in these terms: "Upon the debtors and each of them by their counsel undertaking to the Court that they will, while this Order remains in force, at their own expense, feed, milk and maintain the herd of cattle presently on the properties at Scobie Road and Matheson Road, Kyabram, and pay for the agistment by Tom Tehan at Benalla of the 175 yearling heifers referred to in exhibit "REG-11" to the affidavit of Reginald Ernest Gillie sworn and filed 18 December 1995 IT IS ORDERED: 1. That until 9 February 1996 or further order, the trustee be restrained from selling, offering or advertising for sale, disposing of, charging or otherwise dealing with any of the cattle referred to in the undertaking which prefaces this Order. 2. That there be liberty to any party to apply on not less than 72 hours notice in writing to the other parties. 3. That the application dated 18 December 1995, including the claim for interlocutory relief, be adjourned to 7 February 1996. 4. That the costs of all parties of this day be reserved." I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment of His Honour Justice Ryan. Associate: Date: Counsel for Applicants : Mr A K Panna Solicitors for Applicants : Messrs D E Phillips Counsel for Respondent : Mr G T Bigmore Solicitors for Respondent : J M Smith & Emmerton Date of Hearing : 19 December 1995 Date of Judgment : 19 December 1995