FEDERAL COURT OF AUSTRALIA Pascoe, in the matter of Hudson [2007] FCA 1400 BANKRUPTCY – leave to distribute money received by the trustee of the property of the bankrupt Bankruptcy Act 1966 (Cth) Hudson v The Official Trustee & Ors [2007] FMCA 1357 cited IN THE MATTER OF PETER GEORGE HUDSON, a bankrupt SCOTT DARREN PASCOE as trustee of the property of PETER GEORGE HUDSON, a bankrupt NSD 1817 OF 2005 BENNETT J 30 AUGUST 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA SYDNEY DISTRICT REGISTRY NSD 1817 OF 2005 IN THE MATTER OF: PETER GEORGE HUDSON, a bankrupt SCOTT DARREN PASCOE as trustee of the property of PETER GEORGE HUDSON, a bankrupt Applicant JUDGE: BENNETT J DATE OF ORDER: 30 AUGUST 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant has leave to distribute the sum of $56,617.50 received by him as trustee of the property of Peter George Hudson, a bankrupt, in accordance with the Bankruptcy Act 1966 (Cth). 2. Order (1) be stayed for a period of fourteen (14) days. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SYDNEY DISTRICT REGISTRY NSD 1817 OF 2005 IN THE MATTER OF: PETER GEORGE HUDSON, a bankrupt SCOTT DARREN PASCOE as trustee of the property of PETER GEORGE HUDSON, a bankrupt Applicant JUDGE: BENNETT J DATE: 30 AUGUST 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 Mr Hudson became a bankrupt on his own petition on 21 January 2000. The Official Trustee in Bankruptcy became trustee of Mr Hudson's estate ('the Estate') pursuant to s 160 of the Bankruptcy Act 1966 (Cth) ('the Act'). In November 2001, Mr Pascoe was appointed trustee ('the Trustee') of the Estate pursuant to s 157 of the Act. The Trustee seeks leave of the Court to distribute the sum of $56,617.50, received by him as trustee of Mr Hudson's property. Those moneys are presently held by the Trustee pursuant to an order made by a Judge of this Court, after the moneys were transmitted from New Zealand under circumstances which I do not need to address, that the moneys be held by the Trustee until further order. 2 The Trustee proposes to distribute the moneys as follows: (a) Realisations Charge (3.5%) in the sum of $1,981.61; (b) Dianne Ellen Hudson, the former wife and only creditor of Mr Hudson in the sum of $5,130.00; (c) Sally Nash & Co for legal costs and expenses in the sum of $24,752.94; and (d) The Trustee for remuneration and costs in the sum of $24,752.94. 3 After the application was filed, a number of adjournments were occasioned by an application made by Mr Hudson in the Federal Magistrates Court ('the FMC application'). The FMC application, broadly, concerned the question of whether Mr Pascoe was validly appointed as Trustee of the Estate and whether the procedures subsequently adopted by him by which he objected to the discharge of Mr Hudson from bankruptcy were effective. On 10 August 2007 Wilson FM determined in Hudson v The Official Trustee & Ors [2007] FMCA 1357 that the Trustee was validly appointed and that the procedure by which he objected to the discharge of Mr Hudson from bankruptcy was effective. Subsequently Wilson FM dismissed the remaining matters in Mr Hudson's application, those orders being made on 17 August 2007. 4 The Trustee has established service of this application, effected on 10 November 2006. On none of the occasions when this matter has been before me has Mr Hudson appeared, despite service by the Trustee of letters informing him of each date on which this matter was next to be before the Court. As outlined in an affidavit of service of Melanie Cavanough sworn 2 July 2007, Mr Hudson was notified that the matter was to be heard today. The matter was called outside the Court and there was no appearance. 5 On 28 August 2007 a fax was received in my Chambers containing a notice of appeal from the decision of Wilson FM. The fax was not accompanied by any other documentation. In particular, there was no application for any stay of these proceedings pending the hearing of that appeal. Mr Pascoe presses to have the matter determined today. Apart from the number of times that the matter has already been before the Court, Ms Nash, who appears for Mr Pascoe, points to the remuneration and costs that have been incurred by the Trustee to date, which are well in excess of the amount available for distribution. Ms Nash also points to one of the proposed payments, namely, payment to the former wife and only creditor of Mr Hudson in the sum of $5,130.00. The evidence is that those moneys are due to Mrs Hudson as part of a settlement on her divorce from Mr Hudson, by reason of a miscalculation when the amount due was translated from New Zealand dollars to Australian dollars. 6 The affidavit of the Trustee sets out in some detail the matters supporting the proof of debt of Mrs Hudson and also the details of the costs and disbursements and remuneration due to the Trustee as part of the administration of the bankruptcy. There does not seem to be any dispute that the sum is owing to Mrs Hudson. From the reasons of Wilson FM, it does not seem that there was any dispute raised before him and, indeed, there is none that has been raised before me, as to the quantum of costs and disbursements due to the Trustee. 7 Bearing in mind the costs that have been incurred to date, the fact that on no occasion has Mr Hudson chosen to appear, his apparent failure to respond to any of the letters sent to him by the solicitors for the Trustee and the delay that has been occasioned in the administration of the Estate to date, it is appropriate to proceed today. 8 The Trustee has filed detailed evidence establishing the basis for the proposed payments and the quantum of those payments. I am satisfied that the Trustee has established the basis for the amounts proposed to be distributed and that it is appropriate to pay those amounts out of the Estate. The total amount proposed to be paid is less than the moneys held by the Trustee. The Act governs the way in which the moneys held by the Trustee should be applied. I order that the moneys presently held by the Trustee be released to the Trustee and that the Trustee have leave to distribute the sum of $56,617.50 received by him in accordance with the Act. 9 As the notice of appeal has been filed from the decision of Wilson FM and as it is by no means clear that Mr Hudson intends or has intended to apply for a stay, I will stay the order releasing the moneys to the Trustee for a period of 14 days. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. Associate: Dated: 10 September 2007 Solicitor for the Applicant: S Nash Date of Hearing: 30 August 2007 Date of Judgment: 30 August 2007