Re Alan Roy Palmer Ex Parte: Alan Richard Taylor As Controlling Trustee Under Part X of the Bankruptcy Act 1966 (Commonwealth) As Amended [1988] FCA 46 (4 March 1988)

FEDERAL COURT OF AUSTRALIA

Re: ALAN ROY PALMER
Ex parte: ALAN RICHARD TAYLOR as Controlling Trustee under Part X of the
Bankruptcy Act 1966 (Commonwealth) as amended
No. QLD X63 of 1986
Bankruptcy - Constitutional Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Spender J.(1)

CATCHWORDS

Bankruptcy - alleged wrongful conduct by Trustee of creditors' meeting - penalty - Deputy Registrar purporting to reduce Trustee's remuneration to nil - function of Deputy Registrar - function of Court in disciplinary action concerning trustees.

Constitutional Law - fixing of Trustee's remuneration by Registrar - whether power under s.162(4) and 162(5) amounts to exercise of judicial power contra ss.71 and 72 of The Constitution - not a grant of judicial power of The Commonwealth.

Bankruptcy - Part X deed of assignment - application to have it declared void - whether insufficiency of divisible property relevant - primacy of creditors' decision.

Bankruptcy Act 1966 ss.14(5), 162(4), 162(5), 212.

The Constitution 1901 ss.71, 72.

HEARING

BRISBANE
4:3:1988

Counsel for applicant: Mr. W.J. Roberts instructed by: Mr. D. Spence of Thynne and Macartney

Solicitor for Deputy Registrar:Mr. S. Johnson of Australian in Bankruptcy: Government Solicitor's

Counsel for Commonwealth: Mr. R.I. Hanger Q.C. and Mr. J.A. Logan Attorney-General: instructed by: Australian GovernmentSolicitor

ORDER

The remuneration of the Controlling Trustee, Mr. Alan Richard Taylor, be fixed in the sum of $2,085.70.

No order as to costs.

NOTE: Settlement and entry of orders is dealt with by Rule 124 of the Bankruptcy Rules.

DECISION

This is an application by Alan Richard Taylor, the Controlling Trustee under Part X of the Bankruptcy Act of the estate of Alan Roy Palmer, made pursuant to s.14(5) of the Bankruptcy Act 1966, seeking to review a decision of a Deputy Registrar in Bankruptcy whereby the remuneration sought by him, to be approved in the sum of $2,085.70, was 'reduced to nil', and that an order be made that the controlling trustee's remuneration be approved at that sum, and that the costs of the application be the costs in the administration of the estate of Alan Roy Palmer under the deed of assignment pursuant to Part X of the Bankruptcy Act 1966.

2. Mr. Taylor of Messrs. Horwath & Horwath, chartered accountants, has been registered as trustee in bankruptcy since 1974.

3. Alan Roy Palmer executed a document in the form of an authority pursuant to s.188 of the Bankruptcy Act on 7 March 1986. The name of the person so authorised was left blank, but the consent to exercise the powers included in the form referred to the "said" Alan Richard Taylor, and was signed by him, this signature being witnessed by Mr. Bruce Milner, who is a qualified solicitor of the Supreme Court of Queensland employed by Messrs. Horwath & Horwath. Mr. Milner also witnessed Mr. Palmer's signature on that form.

4. It may be noted that s.306(2) provides:-

"A defect or irregularity in the appointment of any
person exercising, or purporting to exercise, a
power or function under this Act or under a deed
entered into under this Act does not invalidate an
act done by him in good faith."

5. Mr. Palmer, who is a bookmaker, on 7 March 1986, handed to Mr. Taylor his available cash in the sum of $1,580.00, which was deposited to Mr. Taylor's trust account and a receipt issued. On 12 March 1986, the Deputy Registrar wrote to Mr. Taylor and acknowledged receipt of a s.188 authority and, by letter of 20 March, drew attention to the absence of the nomination of a registered trustee authorised to call a meeting of creditors. On 25 March, Mr. Taylor replied to that letter, indicating that Mr. Palmer had on that same day signed an authority and the letter ended with the statement, "I apologise for the oversight."

6. Section 194 deals with the calling of meetings, and pursuant to this section, a meeting of creditors was convened on Thursday, 27 March 1986, at the office of Messrs. Horwath & Horwath. According to the amended minutes of this meeting, four creditors with debts totalling $911,076.00 in value attended for voting purposes. The statement of affairs of the debtor was tabled and the debtor was questioned by the meeting. A special resolution was put before that meeting in these terms:-

"That the debtor, Alan Roy Palmer, enter into a
Deed of Assignment with his creditors under Part X
of the Bankruptcy Act."

In respect of that resolution, Baymer Pty. Ltd., a creditor in the sum of $5,106.00, by its proxy Mr. Milner, voted in favour of the resolution, as did a Mr. Malcolm Craig, who had a proxy on behalf of the Palmer Family Trust, which was a creditor in the sum of $1,200.00. The proxy for the Deputy Commissioner of Taxation, whose proof was for $669,532.33, voted against the debtor entering into a deed of assignment and the major creditor, Citicorp Australia Limited, who was a creditor in an amount of $734,596.92, abstained from voting on the resolution. The minutes record that the chairman advised that the proposal had not been passed by the necessary majority in number or value.

7. A resolution, moved by the proxy for the Deputy Commissioner of Taxation and seconded by the major creditor, Citicorp Australia Limited, was then put:-

"That this meeting of creditors be adjourned to
2.30 p.m. on Thursday 10th April, 1986 at 2.30
p.m."

This resolution was carried unanimously.

8. On 1 April 1986, Mr. Taylor caused to be posted to the creditors of Mr. Palmer notice of the adjournment of the meeting of creditors, requesting that creditors lodge fresh proxies with Mr. Taylor prior to the adjourned meeting.

9. Mr. Taylor says that on 10 April 1986, he received a proxy form from Citicorp Australia Limited, under a covering letter by a Mr. Jones, Manager of the Corporate Finance Division, and the proxy gave a direction to vote in respect of a motion to agree to a Part X arrangement. Mr. Taylor then spoke by telephone with Mr. Jones and, as a consequence, a telex was received at midday, the effect of which was to confirm that the reference to a Part X arrangement in the proxy was to reflect the intention of Citicorp Australia Limited to direct the debtor to enter into a deed of assignment.

10. The minutes of that adjourned meeting indicate that Mr. Taylor was present, as were Mr. Palmer and Mr. Milner, who held a proxy for Baymer Pty. Ltd.. Mr. Taylor held proxies for Citicorp and for the Palmer Family Trust. The Deputy Commissioner of Taxation did not submit a further proxy, and the original proxy was not permitted to vote.

11. At this adjourned meeting, a special resolution was moved and seconded:-

"That the Debtor, Alan Roy Palmer, execute a Deed
of Assignment under Part X of the Bankruptcy Act
1966."

The minutes record that that was carried unanimously.

12. A deed of assignment was signed by Mr. Palmer and Mr. Taylor on 10 April 1986.

13. Mr. Taylor says that to give effect to the deed of assignment it was necessary that the creditors by ordinary resolution appoint a trustee to administer the debtor's estate. None of the proxies contained directions as to the appointment of a trustee, and he says that as a consequence, he caused a telephone call to be made to Citicorp Australia Limited during the course of the meeting in the presence of all creditors and observers, and a telex was received shortly thereafter from Citicorp Australia Limited, the text of which read:-

"We agree and vote in favour of Alan Richard R.
Taylor to be the trustee of the deed of
assignment."

14. The minutes record that the motion calling for the appointment of Mr. Taylor as trustee of the deed was carried as an ordinary resolution. It further records in respect of remuneration:-

"The Chairman advised the Meeting that as there
were no independent Creditors present and voting
at the Meeting, he was not willing to put to this
meeting of creditors a resolution for approval of
the Controlling Trustee's remuneration.

The Controlling Trustee would apply to the
Registrar in Bankruptcy for approval of his
remuneration."

15. On 23 April, 1986, Mr. Taylor wrote to the Registrar in Bankruptcy enclosing a copy of his memorandum of fees for professional services provided as controlling trustee in the administration of the estate of Mr. Palmer, for the purpose of having him approve those fees. Section 193 applies the provisions of ss.162-167 (inclusive) in relation to the controlling trustee, as if the debtor who gave the authority under s.188 were a bankrupt and the controlling trustee were his trustee in bankruptcy.

16. Section 162(4) provides:-

"Where the remuneration of the trustee is not fixed
by the creditors or the committee of inspection,
the Registrar may fix the remuneration."

And sub-section 162(5) provides:-

"The Registrar may, on the application of a
creditor or the trustee or of his own motion,
review the amount of the trustee's remuneration
and may confirm, reduce or increase the
remuneration."

17. The letter accompanying the memorandum of fees included the following:-

"My staff and I held proxies from several creditors
with specific directions to vote in favour of a
Deed of Assignment but the proxies did not
specifically authorise me to draw my fees.

In these circumstances, my policy is to have my
fees assessed by an independent Arbitor (sic)."

The memorandum of fees listed fourteen items of work attended to by Mr. Taylor or his staff and gave a breakdown of the time expended and the rate claimed as follows:-

" HOURS RATE TOTAL
Controlling Trustee 6.5 98.00 637.00
Insolvency Manager 10.3 65.00 669.50
Senior Typist .8 38.00 30.40
Intermediate Typist 1.6 31.00 49.60
Senior Computer Operator 6.4 39.00 50.70
Intermediate Insolvency Clerk 1.3 39.00 50.70
Insolvency Clerk 11.7 33.00 386.10
---------
$2,085.70
---------

18. On 23 May 1986, Mr. R.A. Allen, a Deputy Registrar, wrote to Mr. Taylor and listed a number of points of criticism. The first concerned the defect in the s.188 authority. The second related to the exclusion of the representative of the Australian Taxation Office from voting at the adjourned meeting of 10 April 1986 because she was without a fresh proxy. Mr. Allen further stated that the proxy executed by the Deputy Commissioner of Taxation on 16 March 1986 authorised the person to be a proxy at the meeting of creditors on "27 March 1986 or at any meeting of the creditors of the abovementioned debtors (sic)." Mr. Allen said that the representative should not have been prohibited from participating in the adjourned meeting. The third matter of criticism was that Mr. Taylor resumed the chair at the adjourned meeting "as it was an adjournment of the original meeting", and said "I fail to perceive what authority there was for that." The next matter concerned the approach by Mr. Milner to Citicorp Australia Limited seeking authorisation of a vote in favour of Mr. Taylor becoming trustee. Referring to the fiduciary obligation owed by a trustee to act in accordance with what is morally right and honest, Mr. Allen stated:-

"My present view is that the sequence of events
outlined above are solicitous and should not have
been engaged in."

The letter continued:-

"Of more moment than all the above irregularities
is the fact that once a motion for a deed of
assignment is put and lost, it cannot validly be
put at an adjourned meeting. Re Appleton ex parte
A.R.C. Engineering Pty Ltd (26.4.85) per Pincus J.
The aim of this rule is to prevent the wearing
down of creditors by behaviour which would be
regarded by the Court as oppressive."

Later he said:-

"For immediate purposes, you have applied for
approval of controlling trustee's remuneration in
the sum of $2085.70.

In Re RM (1931) 3 ABC 114, the remuneration of a
trustee suffered substantial reduction through
demonstrable defaults.

Subject to whatever written submission you may
wish to put to the contrary I regretably presently
propose reducing the controlling trustee's
remuneration herein to nil."

19. On 4 June 1986, Mr. Taylor gave a very detailed, six page reply. In respect of the absence of the nomination of a trustee in that authority, he drew attention to the requisition by the Registry of 20 March and his reply of 25 March and said:-

"I regard this matter as a clerical oversight on my
part and adequately explained by correspondence
from and to your Registry."

He acknowledged:-

"The representative from the Australian Taxation
Office was excluded by me from voting at the
Adjourned Meeting of Creditors on 10th April 1986.
In hindsight that was a mistake on my part."

20. He said that, when that matter was discussed at the meeting, he told her that, unless she wished to object to his decision, he intended to exclude her from voting and no objection was raised by her or any other person present at the meeting. He noted that the Director of Public Prosecutions was represented at the adjourned meeting of creditors, and said:-

"Had an objection been raised, even by an observer,
I would have given due and detailed consideration
to it. That is my practice as Chairman."

I note the possible application of s.201 to this aspect of complaint.

21. As to his resuming the chair at the adjourned meeting, he referred to Horsley's Meetings Procedure Law and Practice a passage at p 91 reading:-

"An Adjourned Meeting when it is resumed, is a
continuation of the original Meeting. For
practical purposes, it is generally beneficial and
preferable for the same chairman to preside at an
Adjourned Meeting."

In this respect, Mr. Taylor said:-

". . . no objection was raised by any person present
to my resuming the Chair. If you know of
authorities to demonstrate that my actions were in
any way defective or questionable I would be
pleased to receive your advices."

22. As to the resolution that Mr. Taylor be appointed trustee, he referred in some detail to the circumstances and to the fact that the meeting was still under way while that procedure was followed in the presence of all persons present at the meeting, and after the special resolution concerning the deed had been properly passed. Mr. Taylor said:-

"Neither Mr. Milner nor myself solicited the vote
of Citicorp Australia Limited. That Creditor was
left entirely to exercise its own discretion. I
respectfully suggest you obtain the advices of
Citicorp Australia Limited in this matter."

It is not irrelevant to note the provisions of ss.204(4) and 214(1)(b) in this respect.

23. As to putting the resolution forward on two occasions, strenuous objection was taken to any suggestion that the creditors were "worn down" as a result of the adjournment of the meeting. Attention was drawn to the fact that the largest creditor was a party to the adjournment of the first meeting. Mr. Taylor said that, in respect of the suggestion of a failure to exercise the necessary degree of neutrality in the administration:-

"I was appointed a Registered Trustee in Bankruptcy
in 1974. Mr. Milner is a Solicitor of the Supreme
Court of Queensland. We both resent the implied
criticism that we failed to exercise the necessary
degree of neutrality in this administration."

Any complaints by any creditor of failure of professionalism or neutrality were sought and Mr. Taylor stated:-

"Mr. Palmer was not known to me nor to Mr. Milner
prior to his approaching me and requesting that I
convene a Meeting of his Creditors. My firm has
had no professional relationship with Mr. Palmer
in the past."

Other detailed matters were referred to, including:-

"All persons present at both meetings, including
observers from the offices of the Australian
Government Solicitor, the Director of Public
Prosecutions and the Commissioner of Taxation,
were given an opportunity by me to question the
Debtor about his financial affairs. The debtor
was closely questioned, particularly by the
representatives from Government instrumentalities.

I suggest you seek independent verification of
this by speaking with the people at the meetings."

And later:-

"It is not my role to preempt a decision of a
Meeting of Creditors as to how those Creditors
wish a Debtor's financial affairs to be
administered. Mr. Palmer approached me in my
capacity as an experienced impartial Insolvency
Practitioner for advice on his financial position
as at March 1986. On the basis of those
discussions I accepted Mr. Palmer's instructions
to convene a Meeting of his Creditors. I object
to the implied accusations that my intention was
to mislead or jeopardize the position of unsecured
Creditors."

The letter contained the statement:-

"Your decision to reduce my remuneration to nil is
arbitrary, and unjustifiable. I will instruct my
Solicitors to have your decision overturned."

24. On 12 June 1986, Mr. Allen, Deputy District Registrar, wrote simply:-

". . . the decision upon remuneration stand(s)."

25. The present application was filed on 25 June 1986. On 14 July 1986, a notice of intention to oppose the motion of Mr. Taylor was filed on behalf of the Deputy Registrar in Bankruptcy of the Southern District of Queensland indicating that the Deputy Registrar intended to oppose the making of the orders sought by Mr. Taylor, on the grounds:-

"(1) that the conduct of the Controlling Trustee at
a meeting of creditors held on 10th April,
1986 and earlier was such that he should be
denied his remuneration either in whole or
alternatively in such part as this Honourable
Court thinks fit

Particulars of conduct

a.wrongfully rejecting a proxy signed by the
Deputy Commissioner of Taxation

b.wrongfully permitting the meeting to entertain
a motion that the debtor enter into a Deed of
Assisgnment (sic) when such a motion had, by
special resolution, been defeated at a meeting
of creditors held on 27th March 1986.

c.appending to a Notice of Adjourned Meeting
dated 1st April, 1986 an Instrument of
Appointment of Proxy bearing the words

"If you are unable to attend this
Meeting and if you are desirous of
being represented at the Meeting by the
Trustee or a member of his staff it is
suggested that you appoint the
"CHAIRMAN" to be your proxy"

d.contacting a creditor namely CITICORP
Australia Limited, during the creditors
meeting in relation to your being appointed
trustee under the proposed Deed of
Assignment."

26. I have referred to this so as to indicate that there is no dispute as to the nature of the tasks performed or as to the hours taken or rates of remuneration claimed, and further, so as to indicate the basis of the Deputy Registrar's action, namely that it was thought right to reduce the trustee's remuneration for misconduct.

27. When this matter was first before me, a number of matters were raised. The first was the standing or desirability of the Registrar in respect of the s. 14(5) review. It was also suggested on behalf of Mr. Taylor that the constitutional validity of s. 162(4) and (5) would be put at issue in these proceedings, yet notices pursuant to s. 78B of the Judiciary Act had not at that time been sent.

28. The matter was adjourned, and on the hearing of the application by Mr. Taylor, the Registrar in Bankruptcy appeared by counsel to indicate that the Registrar was no longer opposing the application but would abide by the order of the Court. The Attorney-General for the Commonwealth of Australia appeared by senior and junior counsel to make submissions on the constitutional point that had been raised on behalf of Mr. Taylor and counsel appearing for the applicant trustee.

29. Because of his particularised criticism of the trustee's conduct, it is important, in my opinion, to note the Deputy Registrar's reference to Re R.M. (1931) 3 ABC 114, saying:-

"the remuneration of the trustee suffered
substantial reduction through demonstrable
defaults."

I will later indicate that this suggests to me a misconception of that case on the Deputy Registrar's part, and of in what circumstances and under what powers it was decided, and shows the misplaced confidence in it by him as demonstrating an available power to reduce the trustee's remuneration to nil.

30. As to the claimed constitutional point, it was submitted that s. 162(4), which was set out earlier, does not empower the Registrar or Deputy Registrar to penalise the applicant for any default on his part. It was said that the function of a Registrar in this situation has been likened to that of a Taxation Officer on taxation of a bill of costs and his function, (which was referred to in In re Shirley, Ex parte The Board of Trade (1892) 9 Morrell's Bankruptcy Reports 147), was that in determining remuneration the Registrar "should do that which is just and right". It was submitted that the conduct of the applicant and the imposition of any penalty in respect therefore was a judicial matter for consideration by the Court only under the provisions of the Bankruptcy Act 1966 and in particular ss. 155(5B), 155(5C), 179, 212, 212A and 212B. It was submitted that the entitlement of the Registrar in respect of any misconduct which in his view may have arisen is to apply to the Court so that it may take such action as those sections entitle it to take against the trustee.

31. I think it relevant, at this stage, to set out s. 212 in full:-

"212(1) Where the Registrar is of the opinion,
whether as a result of an account furnished to him
in pursuance of section 211 or of an audit under
that section or for any other reason, that a
trustee who is or has been a controlling trustee
may have been guilty of malfeasance, misfeasance,
negligence, wilful default or breach of trust in
relation to the property or affairs of the debtor,
the Registrar may apply to the Court for an order
under sub-section (2).

212(2) The Court may order that the trustee make
good any loss that has been sustained by reason of
the malfeasance, misfeasance, negligence or wilful
default of, or a breach of trust by, the trustee
or may make such other order as the Court thinks
just and equitable in the circumstances."

32. Implicit in the claim of constitutional invalidity is that the Deputy Registrar is not entitled, pursuant to either s.162(4) or 162(5) to penalise the applicant for misconduct by reducing his remuneration to nil, and that any such imposition of a penalty is within the judicial power of the Commonwealth and it is competent for Parliament to repose such judicial power only on Courts under ss.71 and 72 of The Constitution.

33. In the letter of 23 May 1986, the Deputy Registrar indicated that he proposed, subject to whatever written submission he received, "reducing the Controlling Trustee's remuneration herein to nil." It was submitted, and in my opinion correctly, that the function of the Deputy Registrar in the circumstances here was to "fix the remuneration" of the trustee. The reference to reducing the trustee's remuneration to nil seems to be a reference to the powers contained in s.162(5). I respectfully agree with the observation of Sheppard J. in Re Smith, Ex Parte Hamilton, (unreported judgment of the Federal Court of Australia sitting in Sydney on 24.4.1986), where His Honour said:-

"I think the matter is not free from doubt but that
the better view is that sub-sec.162(5) was
intended to provide for the review of fixations by
resolutions of creditors or committees of
inspection but not of fixations by the Registrar
himself."

34. It was submitted that, pursuant to s.162(4), the Deputy Registrar was only empowered to carry out the administrative task of assessing a reasonable commercial fee payable to the applicant for the actual services carried out by him, in that he could only have regard to the amount of the work done by the applicant, and determine that the work carried out was not excessive and therefore reasonable in the circumstances. That sub-section did not entitle him to penalise the applicant for any default on his part. If the Deputy Registrar was of the view that the applicant was guilty of some misconduct, he was entitled only to apply to the Court for redress against the applicant.

35. It seems to me that the constitutional point sought to be argued on behalf of the trustee is misconceived and confuses the question of the constitutional validity of a statutory power with the validity of the exercise of that power.

36. A well known definition of "judicial power" is that given by Griffith C.J. in Huddart, Parker & Co. Pty. Ltd. v. Moorehead [1909] HCA 36; (1908) 8 CLR 330 at p 357, where he said:-

"Apart from these considerations, I am of opinion
that the words 'judicial power' as used in sec. 71
of the Constitution mean the power which every
sovereign authority must of necessity have to
decide controversies between its subjects, or
between itself and its subjects, whether the
rights relate to life, liberty or property. The
exercise of this power does not begin until some
tribunal which has power to give a binding and
authoritative decision (whether subject to appeal
or not) is called upon to take action."

This passage was referred to with approval by the Privy Council in The Shell Company of Australia Ltd. v. The Federal Commissioner of Taxation [1930] UKPCHCA 1; (1930) 44 CLR 530 at pp 542-3. The High Court also considered the question of what constituted judicial power of the Commonwealth in The Queen v. Davison [1954] HCA 46; (1954) 90 CLR 353. In the joint judgment of Dixon C.J. and McTiernan J., (with whom Fullagar J. at p 375 generally concurred) their Honours said at p 366:-

"Many attempts have been made to define judicial
power, but it has never been found possible to
frame a definition that is at once exclusive and
exhaustive."

Reference was then made, in the following page, to the well known definition given by Palles CB in The Queen v. Local Government Board (1902) 2 IR 349 at p 373.

37. I am of the clear view that the power conferred on the Registrar to fix the remuneration of a trustee under s.162(4), on consideration of the various criteria referred to in the cases above, does not constitute the grant of judicial power to a body other than as provided by Chapter III of The Constitution. The nature of the power conferred on the Registrar under s.162(4) is akin to that of a taxing officer on a taxation of costs.

38. In my view the function of the Registrar in undertaking this type of task is not such as may properly be called 'judicial'. In Silk Bros.Pty.Ltd. v.State Electricity Commission of Victoria [1943] HCA 2; (1943) 67 CLR 1, the High Court considered that certain regulations in the National Security (Landlord and Tenant) Regulations purporting to vest in Fair Rents Boards power to determine applications by landlords for the recovery of premises and providing for the enforcement of the Boards' orders, were invalid, inasmuch as their effect would be to confer judicial power contrary to ss.71 and 72 of The Constitution. However, the power to fix a fair rent was held not to be judicial: Latham C.J. at p 13, with whom Rich and McTiernan JJ. agreed, concluded that provisions relating to the fixing of fair rents were quite independent of the provisions relating to the recovery of possession and ejectment, and he expressed the view that if the regulations conferring powers of possession and ejectment on the Boards were found to be invalid, this did not affect the validity of the rest of the Landlord and Tenant Regulations.

39. In Re Moss; Ex parte Tour Finance Ltd. (1969) 13 FLR 101, Gibbs J., as he was then, considered that in fixing the time for compliance with a bankruptcy notice under s.40(1)(g)(i) of the Act, the Registrar was not acting judicially. At p 106, he said:-

"In issuing a bankruptcy notice, and in fixing the
time for compliance with its requirements, the
Registrar does not decide any controversy between
parties; he does not determine any issue of fact
or law or ascertain any existing rights or
liabilities; and his decision (if it can be called
that) cannot itself be enforced by execution or in
any other way. The function which he exercises
seems to me to exhibit none of those features
which, generally speaking, belong to judicial
power (see R. v. Davison (1954) 90 CLR at
pp 367-8)."

He later said (at p.107):-

"A function which in itself does not possess any of
the elements normally characteristic of judicial
power may, however, involve the exercise of
judicial power, either because the legislature has
committed its exercise to a court, or because the
function has invariably or consistently been
regarded as one that is appropriate for discharge
by the courts (see R. v. Davison (1954) 90 CLR,
at pp 369, 382, 388). In the present case, the
legislature has committed to the Registrar, and
not to the Court, the exercise of the power to fix
the time for compliance with a bankruptcy notice
served in Australia. There is nothing in the
Bankruptcy Act 1966 to suggest that the act of the
Registrar in fixing the time is intended to be
regarded as the act of the Court."

Gibbs J. noted that the power was conferred directly on the Registrar and that:-

". . . there is nothing in the manner in which it is
conferred to suggest that the legislature has
treated it as a judicial power."

He also considered the question ". . . whether the prescription of the time for compliance with a bankruptcy notice has traditionally been regarded as the function of a court, so that it must be regarded as within the concept of judicial power."

40. It seems to me that the fixing of remuneration is not a matter which traditionally or historically bears the hallmark of the exercise of judicial power. The position seems to be quite the reverse. It is to be noted that in The Queen v. Quinn; Ex Parte Consolidated Foods Corporation [1977] HCA 62; (1977) 138 CLR 1, Barwick C.J. said, at p 5, of the power to remove trade marks from the Register:-

"Such powers of entering and removing are not of
their nature essentially judicial. Indeed, in my
opinion, they are essentially administrative. The
intention of the Parliament in giving the power to
the Registrar is not, in my opinion, a determinant
in deciding the nature of the power, though the
nature of the body or person to whom it is
entrusted is an element in making such a decision.
It does not follow that if a like power exercised
by a court or by the Appeal Tribunal would be part
of the judicial power of the Commonwealth the same
power exercisable by the Registrar would be of a
like nature."

41. Jacobs J., with whom Mason, Steven, and Murphy JJ. agreed, at p 10 said:-

"There is no doubt that the determination of these
matters can be the subject matter of judicial
power if Parliament chooses to make them so
(Farbenfabriken Bayer A.G. v. Bayer Pharma Pty.
Ltd. [1959] HCA 32; (1959) 101 CLR 652, as it has done in the
nomination of the Appeal Tribunal. But are they
necessarily the subject of judicial power, so that
they fall within the first class of case in the
classification made by Isaacs J.? I do not think
so. The rights involved spring from the statute
which governs their creation and continuance. The
Registrar is given the administration of the
statute. It is his administrative duty to keep
the register in the state which the legislature
has prescribed. In so doing he must make
decisions not only upon what should or should not
be placed but also upon what should remain on the
register in accordance with the statutory
prescriptions."

And later:-

". . . the answer is that none of the features is
exclusively related to judicial power and they are
therefore not inconsistent with administrative
power."

42. Mayne v. Jaques [1960] HCA 23; (1959) 101 CLR 169, concerned s.133(7) of the Bankruptcy Act 1924-58, which provided "If the creditors fail to fix the remuneration, the Court may on the application of the trustee fix the remuneration". The High Court (Fullagar, Kitto, Taylor, and Windeyer JJ., with Menzies J. dissenting) concluded that a trustee in bankruptcy other than a salaried Official Receiver or trustee undertaking the administration of a bankrupt estate gratuitously, has a right to remuneration out of the assets of such estate for work done by him in the course of its administration. The High Court concluded that where a trustee died without his remuneration having been fixed either by the creditors or the Court, his right to remuneration devolves as a right of property upon his legal personal representative for the benefit of his estate.

43. The fixing of the remuneration was by s.133(7) of that Act expressly and directly conferred on the Court, and there is no doubt that, when the Court exercised that power, it was exercising the judicial power of the Commonwealth. That consideration does not, for the reasons already referred to, determine, or even indicate, that where Parliament has conferred a power of fixing remuneration on a Registrar, he, in the exercise of that task, is exercising the judicial power of the Commonwealth.

44. In my opinion, for the above reasons, neither ss.162(4) or 162(5) is ultra vires the constitutional power of the Commonwealth.

45. Turning then to the review of the decision of the Deputy Registrar to "reduce the remuneration to nil", I have already indicated that it seems implicit in this expression that he held the view that the power he was exercising was that conferred by s.162(5). In my opinion, in the circumstances of this case, the only power exercisable by the Registrar is that under s.162(4).

46. As is indicated by the correspondence and other material, there seems to be no dispute that the work done and the hours claimed were in fact expended, nor is there anything to suggest that the rates of remuneration used as the basis of the quantification of the claim were excessive. It seems to me that there was a view involved, truly held by the Deputy Registrar, that it was within his power to punish by way of reduction in remuneration for the various errors that were perceived to be associated with the administration of this particular estate.

47. Mayne v. Jaques (supra) was decided under the Bankruptcy Act 1924. Recognising that, in my opinion the words of Fullagar J. at p 171 have to be borne in mind in approaching s.162(4) of the 1966 Act. He said that s.133(7) of the former Act:-

". . . presupposes and contemplates throughout that
the trustee is entitled to remuneration for work
and labour done by him - unless, no doubt, there
is some specific reason why he should not receive
remuneration, such as that he has had no work to
do, or that he has misconducted himself in some
way. The words 'if any' in sub-s. (1) do not mean
that the creditors may give or withhold
remuneration at their absolute discretion. Nor is
the court in any different position if an
application is made to it under sub-s. (7). The
court could, no doubt, as could the creditors,
refuse to fix any remuneration for such good
reason as is suggested above. But, if work has
been done and remuneration earned, the court is
bound to fix 'the remuneration' at such sum as it
considers reasonable."

48. A Divisional Court was concerned with the quantum of a trustee's remuneration in In Re Shirley; Ex parte The Board of Trade (supra). Here, the Committee of Inspection of a bankrupt had fixed the remuneration of the trustee at certain percentages. Some creditors objected to the Board of Trade so it fixed lower rates of remuneration pursuant to powers given to it under the Bankruptcy Act 1883. The trustee appealed to a County Court judge, who declared that the Board of Trade's fixing was inoperative, and that the remuneration as fixed by the Committee of Inspection was binding and ought to be allowed.

49. The Divisional Court held that the order of the County Court was wrong. Pollock B. in the course of his judgment said at p 154:-

"I only wish to say that I am clear that the Board
of Trade in doing this are not exercising the
judicial function, but merely one which is
committed to them, in which their officers must
exercise their best judgment, obtaining their
information fairly from all sources."

Vaughan Williams, J. seems to reflect a different view. He said at p 155:-

"I am very far from suggesting - and do not wish to
suggest - that the Board of Trade in the present
instance have really done anything but what was
just and right and proper. But the Board of Trade
ought to be very careful to recognise in each case
the gravity of the duty they have to perform,
which, although not in form, is, in substance,
really a judicial duty. They ought not I think,
for example, to refer a matter of the amount of
remuneration to a committee of creditors, but to
make up their own minds as to whether or not the
remuneration is so unnecessarily large as to
justify the interference of a public department.
In this case it is said personal attention was
given to the matter, and I am glad to hear that.
But I may perhaps add that if the Board of Trade
wish to carry out their very important functions
in such a manner as to command the respect of the
professional men who have to be engaged in these
matters, it does seem to me of the highest
importance that they should not only be careful in
each case to do what is right, but careful also to
seem to do what is right."

50. Reference has been made earlier to Re R.M. (1931) 3 ABC 114. This case has significant relevance to the present case. A registered trustee had failed to make returns in connection with a number of estates, and the Registrar had so reported this fact to the Court. The trustee was called upon to show cause why his registration should not be cancelled. Lukin J. at p. 116 said:-

"I reprimand him for his neglect. I direct that he
forthwith comply with the requirements of the
Statute in all the estates in which the failure to
perform any statutory duty continues. I further
direct that his remuneration as such trustee,
throughout his administration of each of the
estates in which there has been default, be
reduced to one half thereof, and that if any
amount in excess of half the authorised fees has
been already paid to him he shall forthwith repay
that excess to the account of the estate; and that
half of future fees that become payable remain in
the estate."

51. It is to be recognised that these orders were imposed by way of penalty by the Court, and as a consequence of the urging by the trustee's counsel that his registration should not be cancelled but rather that some other penalty be imposed, the suggested penalty being a deprivation of part of the remuneration payable to him for his services. That was the course that Lukin J. adopted. He had earlier noted:-

"The trustees are a privileged class under the
Statute - No one but a person registered as such
can act as a trustee in a bankruptcy proceeding
under the Act. For their services they get a
prescribed remuneration. Before registration each
applicant must satisfy the Court of his competency
and integrity. He must be a person in whom the
Court, creditors, debtors and the community can
have complete confidence that his duties will be
honestly, properly and promptly carried out."

52. It seems to me that in the discharge of the Deputy Registrar's functions, he has proceeded upon an erroneous basis. It is not part of his function to discipline trustees by the imposition of any penalty, but it is to fix the remuneration to which a trustee is entitled by the Act at a figure that is reasonable in all the circumstances. It is of course not correct that a person is entitled to be paid only if his work manifests no error or is without fault. Such a standard of perfection would be unworkable.

53. It remains then to consider what I ought properly to do in the circumstances of this case. One option, of course, is to remit the matter to the Deputy Registrar for further consideration.

54. It is accepted that criticism can properly be levelled at aspects of the trustee's conduct of this estate. So much has been frankly admitted by him in some respects. What has been strenuously challenged is the suggestion of lack of independence or integrity or of professional competence in the discharge of those tasks.

55. When one considers the various aspects which were the subject of the correspondence between the Deputy Registrar and the trustee and, in particular, the estimate by the Deputy Registrar that in the ordinary uncomplicated administration the trustee's remuneration would be expected to be of the order of $3,000.00 to $4,000.00, it seems to me that in all the circumstances of this case thus far, it would be not unreasonable to fix the remuneration of the trustee in the amount claimed by him, namely $2,085.70.

56. There is no suggestion that the work was not done or that the rates were not appropriate, and I do not think it right to discount that figure by way of a disguised penalty for the manner in which the duties of the trustee have been performed. I do not accept that the adjourned meeting was unnecessary. The meeting was adjourned unanimously and it was competent for the adjourned meeting to consider the alternative options available to the creditors under s.204 of the Act. It must be recognised that the decisions under Part X are not conferred on the putative trustee or on the chairman of a creditors' meeting but on the creditors themselves, subject to the intervention of the Court in appropriate circumstances.

57. I fix the remuneration of the trustee of the estate of Mr. Palmer in the sum of $2,085.70.