Pattison (Trustee), in the matter of Bellin (Bankrupt) v Bellin [2000] FCA 1167

FEDERAL COURT OF AUSTRALIA

Pattison (Trustee), In the matter of Bellin (Bankrupt) v Bellin [2000] FCA 1167 BANKRUPTCY – trustee's remuneration – resolution of creditors regarding remuneration previously passed – previous remuneration approved – approval for future fees up to certain amount – approval required for remuneration over certain amount – creditors paid in full – whether creditors can approve further remuneration when paid in full – whether creditors reserved to themselves the power to award future remuneration – Federal Court of Australia does not have power to fix remuneration of trustee. Bankruptcy Act 1966 (Cth): s 162 Re Hatcher; Ex parte Hatcher (unreported, French J, 6 November 1987) distinguished IN THE MATTER OF BERYL RITA BELLIN PAUL ANTHONY PATTISON (as Trustee of the Bankrupt Estate of BERYL RITA BELLIN) v BELLIN V 7248 of 2000 GOLDBERG J 22 AUGUST 2000 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 7248 of 2000

IN THE MATTER OF BERYL RITA BELLIN

BETWEEN: PAUL ANTHONY PATTISON (as Trustee of the Bankrupt Estate of BERYL RITA BELLIN)

Applicant

AND: BERYL RITA BELLIN

Respondent

JUDGE: GOLDBERG J

DATE: 22 AUGUST 2000

PLACE: MELBOURNE

REASONS FOR JUDGMENT

Introduction 1 The applicant is the Trustee of the bankrupt estate of the respondent. The issue before the court is whether the Trustee is entitled to be paid an amount for remuneration and costs and expenses incurred in the administration of the estate in addition to amounts already received by him as a result of an earlier resolution of the creditors of the respondent. In addition to the remuneration he has already received, the applicant claims to be entitled to be paid a further $32,927.60 in respect of remuneration and a further $1,379,67 in respect of costs and expenses incurred in administering the estate of the respondent. The Trustee seeks to have these amounts fixed, pursuant to s 162 of the Bankruptcy Act 1966 (Cth) ("the Act"), either pursuant to the Bankruptcy Regulations or by resolution of the creditors of the respondent or by the Court. 2 The reason why the Trustee has applied to the Court is that a resolution of the respondent's creditors was passed on 2 September 1997 in respect of the Trustee's remuneration costs and expenses. The resolution was in the following terms: "That the remuneration of the trustee be fixed on the hourly system at the rates laid down or recommended from time to time for bankruptcy work by the Insolvency Practitioners Association of Australia for the Melbourne District together with out of pocket expenses necessary and reasonably incurred to 31 July, 1997 in the sum of $8,916.49 and that the trustee can draw the remuneration and expenses on a monthly basis or as required and that future remuneration to finalisation of the administration be limited to $20,000 before further authorization from creditors was required." 3 The Trustee's further amended application seeks answers to the following questions: "1. Is the Applicant entitled to claim remuneration, costs and expenses in respect of administering the estate of Beryl Rita Bellin in addition to the amounts approved by a resolution of creditors on 2 September, 1997? 2. If the answer to question 1 is yes, is the Applicant entitled to seek the approval of the creditors in respect of any further claims for remuneration, costs and expenses? 3. If the answer to question 1 is yes, but the answer to question 2 is no, what is the appropriate quantum of such remuneration costs and expenses? [particulars of remuneration costs and expenses are given claiming $34,307.27] 4. Is the applicant entitled to remuneration, costs and expenses including legal costs incurred in bringing this application and administering the estate after 30 April 2000 and if so, upon what basis?" A declaration is also sought that the Trustee is authorised to recover from the respondent such remuneration and costs and expenses as may be found owing. 4 The respondent has filed a cross‑claim seeking payment of the balance of the funds held by the Trustee in respect of the estate and an order that the Trustee give the Official Receiver a certificate under s 153A(2) of the Act annulling the respondent's bankruptcy. 5 The respondent submitted that the resolution passed on 2 September 1997 foreclosed any further entitlement of the Trustee to be paid remuneration or to be reimbursed for expenses incurred in respect of his administration of the respondent's estate. The Trustee submitted that: · the resolution did not fix remuneration after 31 July 1997 so that s 162(4) of the Act applied; · if the remuneration was fixed after 31 July 1997 the creditors reserved in the resolution the opportunity for the Trustee to come back to them for authorisation of further remuneration.