Re Michael Warshall, A Bankrupt Ex Parte: the Official Trustee In Bankruptcy (As Trustee of the Property of Michael Warshall, A Bankrupt) [1987] FCA 119 (6 April 1987)

FEDERAL COURT OF AUSTRALIA

Re: MICHAEL WARSHALL, a bankrupt
Ex Parte: THE OFFICIAL TRUSTEE IN BANKRUPTCY (as trustee of the property of
Michael Warshall, a bankrupt)
No. 1176 of 1981
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA
Jenkinson J.

CATCHWORDS

Bankruptcy - Discharge - Trustee's application for extension of time at which objection to discharge will lapse dismissed - Bankrupt's costs - Whether to order payment by trustee.

Bankruptcy Act, 1966 - s.149(8)

HEARING

MELBOURNE
6:4:1987

Counsel for the Applicant: Mr. G.T. Bigmore, Solicitor

Counsel for the Debtor: Mr. G. Davies

Solicitor for the Applicant: Mr. G.T. Bigmore

Solicitor for the Debtor: Madgwicks

DECISION

On 26 November 1986 I dismissed an application, by the trustee of the bankrupt, for an order pursuant to s.149(8) of the Bankruptcy Act 1966 that the period, at the expiration of which an objection which the trustee had entered under s.149(3)(c) of that Act will lapse, be extended. Mr. Davies of counsel for the bankrupt, by whom the application had been successfully resisted, sought an order that the bankrupt's costs of the application be paid by the trustee. The ground of the application had been that time was required for further investigation of the bankrupt's conduct, both to determine whether that conduct had been seriously blameworthy in certain respects and to discover any further assets by the recovery of which the bankrupt's estate might be augmented.

2. The submissions in support of the bankrupt's claim for costs against the trustee were similar to those advanced in support of such a claim in Re N.R. Campbell; Ex parte Official Trustee in Bankruptcy (No. 234 of 1977). In the latter case I have today refused to make any order for costs and have published my reasons for that refusal. That case concerned an application by a trustee under s.149(12) which was dismissed, but in my opinion the reasons stated are applicable, mutatis mutandis, to an application under s.149(8). For the reasons stated in Re N.R. Campbell, a copy of which is annexed to these reasons, I consider that no order for costs should be made against a trustee whose application for an order under s.149(8) is dismissed, unless the making or the prosecution of the application has been in some way unreasonable.

3. It was pointed out that in this case of Mr. Warshall there had been very great delay in administration of the bankrupt's estate, for which delay the evidence provided no explanation. That circumstance should in my opinion be considered as tending to attract an order that the trustee pay the bankrupt's costs of an unsuccessful application under s.149(8). As in the course of time the Court's attitude to circumstances of that kind, in relation to applications under sub-sections (8) and (12) of s.149, is disclosed by reasons given for the decisions of such applications, the likelihood will increase that the bringing of an application in the face of circumstances previously held by the Court to preclude the making of the order sought will be considered to be unreasonable, and will attract an order that the applicant pay the bankrupt's costs. But I do not think that in the circumstances of this case such an order is justified. There will be no order as to costs.