Maxwell-Smith v Donnelly (No 2) [2011] FCA 259 (25 March 2011)

Last Updated: 25 March 2011

FEDERAL COURT OF AUSTRALIA

Maxwell-Smith v Donnelly (No 2) [2011] FCA 259

Citation:		Maxwell-Smith v Donnelly (No 2) [2011] FCA 259
Parties:		EUGENE MAXWELL-SMITH and INGE MAXWELL-SMITH v MAX CHRISTOPHER DONNELLY and S & E HALL PTY LTD
File number:		NSD 198 of 2004
Judge:		NICHOLAS J
Date of judgment:		25 March 2011
Catchwords:		BANKRUPTCY – trustee’s costs, charges and expenses of administration of former bankrupts’ estates – taxation of trustee’s costs, charges and expenses – whether judgment should be entered in favour of trustee against former bankrupts for sum of such costs, charges and expenses – trustee not entitled to judgment but declaration made specifying sum of trustee’s entitlements BANKRUPTCY – application by former bankrupts under s 179(1) of the Bankruptcy Act 1966 (Cth) claiming orders for inquiry and for payment of compensation by trustee – application unjustifiably vexatious and oppressive to trustee – application an abuse of process – application dismissed save as to one particular issue
Legislation:		Bankruptcy Act 1966 (Cth) s 179 Federal Court Rules O 20 r 5, O 46 r 7A, O 62 r 45 Bankruptcy Regulations 1966 (Cth) Pt 8, Div 4
Cases cited:		Maxwell-Smith v Donnelly [2010] FCA 474 Donnelly v Maxwell-Smith [2010] FCAFC 154 Hardoon v Belilios [1901] AC 118 Pantzer v Wenkart [2006] FCAFC 140; (2006) 153 FCR 466 Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378
Date of hearing:	2 February 2011
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	40

	The second applicant appeared in person and on behalf of the first applicant
Counsel for the First Respondent:	BJ Skinner
Solicitor for the First Respondent:	Church & Grace
Solicitor for the Second Respondent:	The Second Respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 198 of 2004

BETWEEN:	EUGENE MAXWELL-SMITH First Applicant INGE MAXWELL-SMITH Second Applicant
AND:	MAX CHRISTOPHER DONNELLY First Respondent S & E HALL PTY LTD Second Respondent

JUDGE:	NICHOLAS J
DATE OF ORDER:	25 MARCH 2011
WHERE MADE:	SYDNEY

THE COURT DECLARES THAT:

1. The sum of the entitlements of Maxwell Christopher Donnelly (the Trustee) to remuneration, costs and expenses of his administration of the former bankrupt estates of Eugene Maxwell-Smith and Inge Maxwell-Smith (the Applicants) for the period 16 September 2003 to 21 May 2008 is $273,717.41.

THE COURT ORDERS THAT:

2. The Applicants give vacant possession of the property known as 8B Surf Circle, Tura Beach, New South Wales (the Tura Beach Property) to the Trustee, or his duly authorised servants or agents, within 60 days of the date of this order.
3. The trustee file and serve an affidavit within 21 days of today specifying his estimate of such other amount as the Applicants might reasonably be required to pay on account of any additional remuneration, costs and expenses incurred in the administration of the Applicants’ former bankrupt estates to which the Trustee may be found to be entitled including any additional remuneration, costs and expenses referable to the proposed sale of the Tura Beach Property.
4. The Trustee file and serve an affidavit within 28 days of today:

(a) exhibiting a copy of any valuation obtained by him of the Tura Beach Property;

(b) outlining the steps which he proposes to take in relation to the marketing and promotion of the Tura Beach Property.

5. There be no order as to costs of the taxation before the Registrar.
6. The Trustee’s costs in the administration of the former bankrupts’ estates include eighty-five percent (85%) of the Trustee’s costs, charges and expenses of and incidental to the notices of motion filed 5 May 2009 (including as amended on 16 October 2009) and 20 August 2009.
7. Each party have liberty to apply on 5 days notice for the purposes referred to in paras 13, 15 and 16 of the reasons for judgment delivered today.
8. The application filed in Court on 2 February 2011 (the 2 February 2011 application) be dismissed in so far as it claims relief under s 179 of the Bankruptcy Act 1966 (Cth) in relation to the matters raised in paragraphs 1 – 5 (inclusive) and paragraphs 7 and 8 on pages 2 and 3.
9. The 2 February 2011 application, in so far as it claims relief under s 179 of the Act in relation to the matter raised in paragraph 6 on page 2, be stood over for directions to a date to be fixed.
10. The Applicants file and serve within 14 days a statement of particulars that specifies:

(a) the details of the requests referred to in para 6 of the 2 February 2011 application (including whether those requests were written or oral or partly written and partly oral);

(b) the details of the refusals referred to in para 6 of the 2 February 2011 application (including whether those refusals were written or oral or partly written and partly oral); and

(c) the reasons why such refusals are alleged to have been unreasonable.

THE COURT DIRECTS THAT:

11. A Registrar of the Court tax any further costs, charges and expenses of the Trustee incurred in administering the former bankrupt estates of the Applicants, including the costs specified in Order 6 above, as if it were a taxation in accordance with Part 8, Division 4 of the Bankruptcy Regulations 1966 (Cth).
    

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 198 of 2004

BETWEEN:	EUGENE MAXWELL-SMITH First Applicant INGE MAXWELL-SMITH Second Applicant
AND:	MAX CHRISTOPHER DONNELLY First Respondent S & E HALL PTY LTD Second Respondent

JUDGE:	NICHOLAS J
DATE:	25 MARCH 2011
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. The procedural history in this matter is set out in my reasons for decision of 14 May 2010 (Maxwell-Smith v Donnelly [2010] FCA 474). That decision was the subject of an appeal by Mr Donnelly (the trustee). On 16 December 2010 the Full Court which heard the appeal dismissed it as incompetent (Donnelly v Maxwell-Smith [2010] FCAFC 154). An application for leave to appeal against the same orders was filed during the course of the hearing of the appeal. The Full Court further ordered that “[l]eave to appeal be refused because any appeal would have no prospects of success”. The Full Court also made a declaration that the trustee is not entitled to any indemnity from the former bankrupt estates of Mr and Mrs Maxwell-Smith in respect of the appeal and application for leave to appeal.
2. There are two matters that I need to deal with. The first concerns the making of orders in relation to the trustee’s costs and expenses. The second concerns another application that has been filed by Mr and Mrs Maxwell-Smith seeking orders pursuant to s 179(1) of the Bankruptcy Act 1966 (Cth) (the Act). I will deal with these matters in that order.

The trustee’s costs and expenses

3. For the reasons stated in my earlier judgment, I made an order remitting the proceeding to the Registrar to allow her to review the bills of costs the subject of the taxation and prepare a short report indicating what further amounts should be disallowed in accordance with my reasons. The Registrar’s report is dated 5 November 2010. In it the Registrar revises the total for all bills that were the subject of the previously issued certificates of taxation down from $392,482.72 to $273,717.41.
4. The parties were given the opportunity to raise any issue they had with the Registrar’s report. Neither the trustee nor Mrs Maxwell-Smith raised any such issue.
5. Now that the Registrar’s report is at hand and the trustee’s appeal has been determined, it is necessary for me to make the appropriate orders. In my earlier judgment I said (at [99]) that it was my intention to make an order for the payment of the trustee’s entitlement after it was finally ascertained. I also said:

And unless there is some co-operation between the trustee and Mr and Mrs Maxwell-Smith which renders it unnecessary for me to do so, it is also my intention to make an order for possession of the Tura Beach property so that it may be sold by Mr Donnelly, thereby allowing him to be paid what he is owed from the proceeds of the sale.

6. The title to the Tura Beach property is registered in the name of the trustee though it is still occupied by Mrs Maxwell-Smith. The relief now sought by the trustee is as follows:
   • A judgment in favour of the trustee in the sum of $273,717.41 against Mr & Mrs Maxwell-Smith.
   • An order that Mr and Mrs Maxwell-Smith give vacant possession of the property known as 8B Surf Circle, Tura Beach, New South Wales to the trustee within 42 days.
   • Leave to issue a writ for possession in the event that Mr and Mrs Maxwell-Smith fail to give such possession.
   • A direction that a Registrar of the Court tax any further costs, charges and expenses of the applicant trustee including his legal expenses of the notices of motion filed 5 May 2009 (which was amended and filed 16 October 2009) and 20 August 2010 (together, the Notices of Motion) in accordance with Part 8, Division 4 of the Bankruptcy Regulations.
7. Counsel for the trustee argued that there should be a judgment in the amount of $273,717.41 in the trustee’s favour against Mr and Mrs Maxwell-Smith. He said that this was the result provided for by the rules in accordance with which the taxation occurred. While counsel did not refer me to any specific rules, I understood him to be referring to O 62 of the Federal Court Rules and, in particular, O 62, r 45(3) which provides:

If, after 14 days from the date of service of the certificate of taxation, the costs remain unpaid then the Registrar shall, at the request of the party in whose favour the costs are awarded draw up sign and seal an order in favour of that party for the sum shown in the certificate of taxation and enter the same.

8. The first difficulty with the trustee’s argument is that the taxation that occurred did not occur in accordance with O 62. The taxation went beyond a taxation of “costs” and extended to the trustee’s remuneration and expenses for work undertaken by him in connection with the trustee’s administration of the former bankrupt estates. Nor was the taxation one that occurred under Pt 8, Div 4 of the Bankruptcy Regulations 1966 (Cth) (Bankruptcy Regulations). The reason for that is that the Registrar who conducted the taxation in the present case was not appointed by the Inspector General of Bankruptcy. As I previously explained, the taxation occurred pursuant to an order authorised by s 30(1) and (2) of the Act: see paras [21]-[32] of my previous reasons. In substance, the order made by Moore J provided that the trustee’s costs, charges and expenses of the administration of the estates, including the remuneration and expenses of the trustee, would be taxed by a registrar of the Court as if it were a taxation in accordance with Pt 8, Div 4 of the Bankruptcy Regulations. That is precisely what occurred.
9. The second difficulty with the trustee’s argument is that it would, if accepted, have the result that Mr and Mrs Maxwell-Smith would be personally liable for the trustee’s remuneration, costs and expenses incurred by him in the course of the administration of the bankrupt estates. Yet as counsel for the trustee has emphasised, his client’s entitlement to be paid his reasonable costs, expenses and remuneration arises out of his right to be indemnified out of the trust assets. That entitlement has been confirmed by orders made from time to time, including, for example, the order made by Allsop J which provided that “the costs, remuneration and expenses of the respondent trustee ... as taxed ... form part of the respondent trustee’s costs, charges and expenses of the administration ...”. That order, and others like it made in favour of the trustee, is not one that renders Mr and Mrs Maxwell-Smith personally liable.
10. There are circumstances in which a beneficiary may be personally bound to indemnify a trustee for liabilities properly incurred: see Hardoon v Belilios [1901] AC 118 and other authorities referred to in J.D. Heydon, M.J. Leeming, Jacobs Law of Trusts, 7th ed at [2015]. But the trustee has never argued that Mr and Mrs Maxwell-Smith could be made personally liable by reference to the principles discussed in those cases. Indeed, in his submissions to me, counsel for the trustee made it clear that his client wished to do no more than enforce his right to be indemnified out of the trust assets.
11. It is therefore not appropriate to enter judgment against Mr and Mrs Maxwell-Smith. What I propose to do, however, is make a declaration that the sum of the trustee’s entitlements to remuneration, costs and expenses of his administration of the former bankrupt estates of Mr and Mrs Maxwell-Smith for the period 16 September 2003 to 21 May 2008 is $273,717.41.
12. There is an additional complication in that the trustee’s entitlements are most likely not confined to the sum of $273,717.41 because, since the close of the period to which the certificates of taxation issued by the Registrar relate (ie. 16 September 2003 to 21 May 2008) further costs and expenses have been incurred by the trustee which are covered by the indemnity. Hence, the declaration I propose to make is not intended to impose any limit upon the total amount that might ultimately be payable to the trustee in respect of his remuneration, costs and expenses. What further amount is payable will depend upon the outcome of a further taxation which will occur in accordance with another direction that I propose to make similar to the direction proposed by the trustee.
13. I will also order that Mr and Mrs Maxwell-Smith deliver up possession of the Tura Beach property to the trustee to enable the property to be sold by him. My order will allow them 60 days in which to provide the trustee with vacant possession of the Tura Beach property. I propose to give the trustee liberty to apply for leave to issue a writ of possession should that prove necessary.
14. The trustee, through his counsel, stated that he is willing to co-operate with Mr and Mrs Maxwell-Smith with a view to allowing them, if possible, to obtain finance on the security of the property and thereby avoid the proposed sale. I received into evidence a letter written by the trustee on 4 July 2007. In numbered paragraph 10 of that letter the trustee states:

In regard to the finalisation of my administration, I have sought to reach agreement with you about my entitlements on a number of previous occasions. I have offered to assist by speaking to financiers who you may wish to approach. I have volunteered to participate in orderly arrangements for the transfer of title to your properties in conjunction with payment of my entitlements (for example a transfer to you in conjunction with you granting a mortgage to a mortgagee who advances funds from which my entitlements are paid, which is standard conveyancing practice). This is a matter of record.

The significance of this for present purposes is that counsel for the trustee informed me that the trustee’s position remains as stated in that paragraph.

15. I propose to grant Mr and Mrs Maxwell-Smith liberty to apply for the purpose of applying for a stay of the order for possession in the event that they are able to arrange a payment to the trustee in the amount of $273,717.41 together with such other amount as they might reasonably be required to pay on account of the trustee’s additional remuneration, costs and expenses which are yet to be taxed. But there are two things I should say to Mr and Mrs Maxwell-Smith about this. First, I would need to be satisfied by evidence that they were willing and able to make such a payment before granting a stay of the order for possession. Secondly, they need to understand that if they want to avail themselves of the opportunity to reach an agreement with the trustee, they will need to move quickly.
16. I think the trustee should provide an estimate of the additional costs and expenses which he has incurred in the period since that covered by the taxation before the Registrar. This would seem to be a necessary step in allowing Mr and Mrs Maxwell-Smith the opportunity to arrange finance to pay out the trustee. Should there be any dispute about the reasonableness of any further amount which the trustee seeks to have set aside out of the proceeds of sale on account of his additional costs and expenses, then it will be open to any party to apply for further orders in relation to that matter. I will allow the trustee 21 days in which to comply with this order.
17. I was informed by counsel for the trustee that the trustee does not have an up-to-date valuation of the Tura Beach property but that he intends to obtain one for the purpose of setting a reserve and selling the property by auction. Counsel for the trustee said that the trustee did not object to filing and serving an affidavit that exhibits the valuation. I think that should be done. I also think the affidavit should outline the steps the trustee proposes to take in terms of advertising and promoting the sale of the property. I will allow the trustee 28 days in which to comply with this order.

Costs

18. Counsel for the trustee made it clear during the course of the hearing that the trustee does not make any claim for the costs and expenses that were incurred by him in connection with the taxation before the Registrar. Accordingly, I propose to make an order that there be no order as to the costs of the taxation before the Registrar. However, the trustee maintains that he is entitled to his costs of the Notices of Motion. To this end he does not ask me to make any order for costs on the basis, I infer, that in the absence of any such order his right to recover his costs and expenses will be preserved.
19. I think the trustee is entitled to recover his costs of the Notices of Motion. The question is whether there should be some adjustment in favour of Mr and Mrs Maxwell-Smith to reflect the trustee’s lack of success on several issues and, if so, by what mechanism any such adjustment should be given effect. Counsel for the trustee submitted there should be no adjustment because it had not been shown that the trustee was guilty of misconduct or that the costs and expenses incurred by him in maintaining his claim to items which were ultimately disallowed were themselves unreasonable.
20. I did not make any finding that the trustee was guilty of misconduct. Nor do I do so now. However, I did find that certain amounts that he had claimed were unreasonable. As to the costs and expenses associated with the examination summons, I made an explicit finding to that effect. As to the matter of the solicitors’ uplift, I found that the trustee’s solicitors were not entitled to charge any uplift under two of their three costs agreements with the trustee and, as a result, the trustee was not entitled to be reimbursed for any such uplift out of the former bankrupts’ estates.
21. The trustee relied on the Full Court decision in Pantzer v Wenkart [2006] FCAFC 140; (2006) 153 FCR 466 in support of his submissions. However, there is nothing in the decision of the Full Court in that case which suggests that a trustee is entitled to charge against a former bankrupt’s estate costs and expenses incurred by the trustee in maintaining a claim for antecedent costs and expenses which were themselves disallowed as unreasonable. I do not accept that the trustee’s right of indemnity extends to such costs and expenses.
22. The matter of the Full Court’s “no costs” order may be in a slightly different category. While the trustee’s interpretation of the Full Court’s order has been shown to be erroneous, I do not regard the interpretation of that order for which the trustee argued as one that was not reasonably open. Nevertheless, it seems to me that when a trustee in bankruptcy is involved in litigation against the former bankrupt and there is a dispute as to the meaning or effect of an order previously made in relation to the bankruptcy, then it is not necessary for the former bankrupt to show that the trustee’s view of the order was unreasonable before the former bankrupt can obtain an order depriving the trustee of his costs in so far as they relate to that dispute. Again, I do not think this is contrary to anything the Full Court said in Pantzer v Wenkart [2006] FCAFC 140; (2006) 153 FCR 466.
23. In the present case I am satisfied that it would be unjust to allow the trustee to charge all his costs and expenses of the Notices of Motion against the former bankrupt estates. I propose to make a costs order which makes clear that the trustee is not entitled to all such costs and expenses.
24. I do not think it is satisfactory to attempt to divide out on an item by item basis following yet another taxation the costs and expenses which ought to be disallowed on the basis that they related to matters upon which the trustee was unsuccessful. I think the better approach is for me to make an adjustment which reflects my broad assessment of the time spent considering those aspects of the Notices of Motion upon which the trustee was unsuccessful.
25. I am satisfied that it is appropriate to make an adjustment in Mr and Mrs Maxwell-Smith’s favour of 15%. This figure reflects the trustee’s lack of success on the three issues which I have identified and my assessment of the amount of time which was devoted to them during the hearing. Accordingly, the costs order I propose to make is that 85% of the trustee’s costs of the Notices of Motion form part of the trustee’s costs, charges and expenses of the administration of the former bankrupts’ estates.
26. I will direct that the further costs, charges and expenses incurred by the trustee in his administration of the bankrupt estates of Mr & Mrs Maxwell-Smith, including the costs specified in para [25] above, be taxed by a Registrar of this Court as if it were a taxation in accordance with Pt 8, Div 4 of the Bankruptcy Regulations.

Application under s 179(1) of the Act

27. On 16 December 2010, Mrs Maxwell-Smith attempted to file an application and supporting affidavit in the registry. These documents were referred to me pursuant to O 46, r 7A(2) and I made a direction that the application and affidavit not be accepted for filing without the leave of a judge. I also directed that any application for such leave be listed before me at 9.30am on 2 February 2011. On that date I granted leave to Mrs Maxwell-Smith to file the application and her supporting affidavit in Court.
28. The application is expressed to be made by Mr and Mrs Maxwell-Smith for orders under s 179(1) of the Act. The substantive relief that Mr and Mrs Maxwell-Smith seek in the application includes $750,000 in compensation and, by way of interlocutory relief, that any “final order ...to pay the trustee’s costs be put on hold”. The relief that is now sought and the basis upon which that relief is sought raise some important issues.
29. First, in my earlier judgment I considered arguments raised by Mrs Maxwell-Smith at the hearing of the Notices of Motion involving similar allegations to those raised in this application which she argued at that time should result in the trustee being denied the whole of his claim. Some of those arguments are summarised by me in paras [44] to [48] of my previous reasons. Those arguments were implicitly rejected by me when I held, subject to the findings I made in relation to certain costs that were disallowed, that I was not satisfied that the Registrar’s decision was wrong: see para [55] of my previous reasons. It was submitted by Mr and Mrs Maxwell-Smith to the Registrar that the trustee was not entitled to any of his remuneration, costs and expenses and that he and his staff had acted in bad faith, irresponsibly, and not in the interests of the creditors and the bankrupts. None of those submissions was accepted by the Registrar.
30. The relief that is now sought by Mr and Mrs Maxwell-Smith presupposes that the trustee is not entitled to receive any of his costs, charges and expenses which I have determined are properly allowable to him. The position Mr and Mrs Maxwell-Smith now seek to take up by this application is fundamentally at odds with the conclusion I reached in my earlier judgment where I accepted that the bulk of those costs were reasonable. It is impossible to see how my decision to allow the trustee his costs (now quantified at $273,717.41) could be permitted to stand if I was to also hold that Mr and Mrs Maxwell-Smith were entitled to recover compensation from the trustee on the basis that none of those costs were properly payable to him.
31. Secondly, leaving aside my previous decision, the application seeks to re-agitate a number of issues that have already been considered by Wilcox J and Allsop J. Wilcox J has already heard an application made by Mr and Mrs Maxwell-Smith for orders under s 179(1) of the Act. That application related to six separate matters that were considered by his Honour and which I summarised at para [14] of my previous reasons. His Honour refused to make any such orders. That decision was confirmed on appeal subject to one important exception relating to the matter of permission to travel: see para [17] of my previous reasons. This matter was later the subject of an inquiry pursuant to s 179(1) of the Act conducted by Allsop J. His Honour found that there was no basis for criticism of the trustee in relation to this matter: see para [19] of my previous reasons. Mr and Mrs Maxwell-Smith unsuccessfully sought to challenge Allsop J’s decision before the Full Court and then by way of application for special leave to appeal to the High Court.
32. It is well established that proceedings may constitute an abuse of process if the point sought to be raised in them is the same as was determined in earlier proceedings albeit in circumstances that do not give rise to any issue estoppel: Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378. In that case, Mason CJ, Deanne and Dawson JJ said (at 393):

...proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings.

(citations omitted)

Their Honours also said (again at 393):

The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1982] A.C. 529, at p. 536 as “the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people”.

33. It is clear that most of the matters identified in the application, including the matter of “permission to travel”, have been considered by Wilcox J and Allsop J. While some of the grievances that Mr and Mrs Maxwell-Smith now raise do not precisely mirror those dealt with in their Honours’ judgments, they are so intrinsically bound up in what has already been considered that it would be manifestly unfair for the trustee to have to respond to these matters in yet another round of litigation with Mr and Mrs Maxwell-Smith. Another inquiry is likely to increase the trustee’s costs and expenses substantially.
34. Even if those additional matters were not so intrinsically bound up in the matters that were previously dealt with, it was open to Mrs Maxwell-Smith to seek to raise them years ago. In fact, Mrs Maxwell-Smith spent a considerable amount of time putting the same or very similar arguments to me in support of her position that the trustee was not entitled to anything in respect of his remuneration, costs and expenses during the hearing of the Notices of Motion in November 2009. Save to the extent reflected in my previous judgment, I was not persuaded by any of them.
35. The Court is empowered by O 20, r 5 to dismiss a proceeding, or a claim for relief in such a proceeding, where it is satisfied that the proceeding or claim is frivolous or vexatious or an abuse of the process of the Court. The power conferred by O 20, r 5 is one that is exercised sparingly and only in clear cases. In the present case, I am satisfied that the power should be exercised in relation to all of the matters which Mr and Mrs Maxwell-Smith seek to agitate in this latest proceeding save for that referred to in para 6 of their application.
36. In my opinion, to allow Mr and Mrs Maxwell-Smith to maintain the claims made in their latest application would be manifestly unfair to the trustee. I am satisfied that the proceeding brought by them is unjustifiably vexatious and oppressive to the trustee and constitutes an abuse of process. That conclusion is subject to a qualification relating to para 6 of their application.
37. In para 6 of the application, Mr and Mrs Maxwell-Smith complain of the trustee’s refusal to return to them the title deeds to the Jindabyne property (folio 29/SP30123). Their complaint seems to be that this alleged refusal was unreasonable. It does not appear to me that any such complaint was considered by Wilcox J or Allsop J. Nor has it been previously considered by me.
38. I am not disposed to dismiss Mr and Mrs Maxwell-Smith’s application for an inquiry under s 179(1) of the Act in relation to the matter raised in para 6. In saying this, I am not intending to reflect on the merits of this particular complaint one way or the other save for saying that, on the material presently before me, I am not satisfied at this point in time that the proceeding would be vexatious or oppressive to the trustee or that it would amount to an abuse of process if it was confined to that particular matter.
39. What I propose to do is order that the application, in so far as it claims relief in respect of the matters raised in paras 1-5 (inclusive) and paras 7 and 8 of the document, be dismissed pursuant to O 20, r 5. So far as the claim for relief based on para 6 of the application is concerned, I will fix the matter for hearing on a date convenient to the parties. The question for decision in relation to para 6 will then be whether an order for any inquiry should be made in relation to that matter pursuant to s 179(1) of the Act. I propose to make an order requiring Mrs Maxwell-Smith to provide particulars of the requests and refusals referred to in para 6 and specifying the reasons why the alleged refusals are said by her to have been unreasonable.
40. I will make orders accordingly.
    

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas.

Associate:

Dated: 25 March 2011