Ferella v Official Trustee in Bankruptcy

INTRODUCTION 1 By an application filed on 3 July 2017, the applicant, Gustavo Ferella, seeks leave to file an amended statement of claim (ASOC) pursuant to rule 16.53 of the Federal Court Rules 2011 (FCR). The application for leave to amend is opposed by the respondent, the Official Trustee in Bankruptcy (the Official Trustee). 2 Further, by an application made on 31 July 2017 and amended on 28 August 2017, the Official Trustee seeks orders striking out the statement of claim pursuant to FCR rule 16.21 and/or summarily dismissing the proceeding under s 31A of the Federal Court of Australia Act 1976 (Cth) (FCA Act). 3 These applications are made in the context where an application for an interlocutory injunction against the Official Trustee was earlier refused on the ground that the originating application did not disclose a serious question to be tried: Ferella v Official Trustee in Bankruptcy [2016] FCA 1270 (Ferella (No. 1)). The issues raised by the originating application were summarised in Ferella (No. 1) as follows: 1. By an originating application filed on 16 October 2015, the applicant, Mr Gustavo Ferella, seeks orders pursuant to ss 153A, 154, 178 and 179 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) for the annulment of his bankruptcy. The barrier to annulment is the existence of a dispute as to the liability of the bankrupt estate to reimburse the respondent, the Official Trustee in Bankruptcy (the Official Trustee), for costs and expenses expended in the administration of the bankruptcy. All other creditors have been paid. 2. The bulk of the expenses claimed by the Official Trustee are legal expenses incurred by it in the complex and costly network of litigation that this bankruptcy has unfortunately spawned. The legal costs estimated by the Official Trustee in relation to each set of proceedings, together with a description of those proceedings, are set out in the table annexed to these reasons. The applicant maintains that it is likely, on a proper investigation, that the Official Trustee would be bound to make a determination under s 153A of the Bankruptcy Act which would have the result that the applicant would be entitled to an annulment and a re-vesting of the residue of his assets. He contends that no monies are payable to the Official Trustee or alternatively that a significantly reduced amount is payable. 4 In addition, the originating application sought an order that the Official Trustee compensate or pay damages to the applicant in respect of (unidentified) assets in the bankrupt estate said to have been "improperly appropriated or applied" and a declaration that the Official Trustee was not justified in commencing proceedings against Nida Ferella and the applicant in the s 66G Supreme Court Proceedings (which are explained below). 5 Despite affording the applicant leave to do so, no application has been made to amend the originating application. Nonetheless, the statement of claim and the proposed amended statement of claim apparently abandon any claim for damages and for a declaration with respect to the s 66G proceeding. They also reformulate the relief sought. Those matters notwithstanding, it remains the case that pursuant to ss 153A, 178 and 179 of the Bankruptcy Act, the applicant seeks an annulment of his bankruptcy and consequential orders for the re-vesting of property in him on the basis that certain charges were not properly chargeable against his bankrupt estate and that the Official Trustee should have been satisfied that his debts have been paid in full. 6 In line with the manner in which the argument ultimately proceeded, the issues on the interlocutory applications by the parties ultimately reduce to the question of whether, even if the applicant were granted leave to re-plead in terms of the draft ASOC, the pleadings would have any reasonable prospects of success or would otherwise be liable to be struck out. 7 For the reasons set out below, leave to amend should be refused and the application should be dismissed under s 31A of the FCA Act.

EVIDENCE 8 The application to amend was supported by the affidavit of Zali Burrows, solicitor for the applicant, affirmed on 30 June 2017. In addition, the applicant tendered paragraphs 6-12 of the affidavit of Joyce Fu, a public servant employed with the Australian Financial Security Authority as a Team Leader, Estate Administration, and the table annexed at Annexure B to that affidavit (exhibit A-1) (quoted at [45] below). Exhibit A-1 sets out the Official Trustee's estimate as at 12 February 2016 of the amount outstanding to meet the costs, charges and expenses of the administration of the applicant's bankrupt estate. 9 No evidence was led by the Official Trustee.

BACKGROUND 10 The background to these proceedings is dealt with in detail in Ferella (No. 1) at [15]-[40]. While I do not repeat that detail here, it is helpful to summarise certain pertinent aspects. I also note that the summary of the litigation history set out below describes some of the litigation pursued with respect to this bankruptcy but by no means the totality of the litigation which is summarised in the table attached to the judgment in Ferella (No. 1).

3.1 The applicant 11 The applicant and his son, Angelo Ferella, were made bankrupt on 14 October 2005: Ferella (No. 1) at [15]. They were discharged from bankruptcy on 3 December 2008 by operation of law. 12 Before his bankruptcy, the applicant and his wife were the registered proprietors of four properties: 3 Chester Street, Blacktown and 15 Chester Street, Blacktown (the Blacktown Properties); 2/20-32 Hutton Road, North Entrance (the North Entrance Property); and 6 Alan Street, Box Hill (the Box Hill Property) (collectively, the Properties). Upon the applicant being made bankrupt, his half interest in the Properties vested in the Official Trustee by virtue of the combined operation of s 58(1)(a) of the Bankruptcy Act and s 90 of the Real Property Act 1900 (NSW): Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 (Ferella (s 66G) (NSWCA)) at [3].

3.2 Other litigation relating to the applicant's bankruptcy

3.2.1 The s 66G proceedings in the NSW Supreme Court 13 In proceedings instituted by the Official Trustee in the Supreme Court of NSW, Nicholas AJ made orders on 18 December 2014 under s 66G of the Conveyancing Act 1919 (NSW) (Conveyancing Act) appointing Trustees for Sale for the sale of the Properties (the s 66G orders). His Honour, however, stayed the effect of the s 66G orders on the Box Hill Property. In dismissing their appeal against the s 66G orders, the Court of Appeal held that Gustavo and Nida Ferella had consented to those orders or at least not opposed them: Ferella (s 66G) (NSWCA). In this regard, Tobias AJA held at [44] that "…what I would regard as the hopelessness of the appellants' case is that they, in effect, consented to the making of the orders by the primary judge or at least did not oppose their making in accordance with Short Minutes of Order in the preparation of which they appeared to co-operate.": see also Ferella (s 66G) (NSWCA) at [1] (Bergin CJ (In Eq)) and at [63] (Emmett AJA). 14 Further, Gustavo and Nida Ferella relied before the Court of Appeal upon material obtained under freedom of information legislation which, so it was asserted, indicated that "costs and expenses incurred by the Official Trustee in the administration of the bankrupt estate of Angelo Ferella had been wrongly attributed to the second appellant [Gustavo Ferella]": Ferella (s 66G) (NSWCA) at [51]. Those submissions were emphatically rejected by the Court of Appeal: Ferella (s 66G) (NSWCA) at [51]-[53] (Tobias AJA) and [66] (Emmett AJA).

3.2.2 The Agusta and Inquiry Proceedings 15 In the Inquiry Proceeding instituted in the Federal Court, Angelo Ferella and Gustavo Ferella sought an inquiry under s 179 of the Bankruptcy Act of their respective estates (the Inquiry proceedings) including with respect to the Official Trustee's defence of proceedings in the Supreme Court of New South Wales with respect to the realisation of a property at Point Piper (the Agusta proceedings): see Agusta Pty Ltd v The Official Trustee in Bankruptcy [2008] NSWSC 685 and Agusta Pty Ltd v The Official Trustee in Bankruptcy [2009] NSWCA 129. In essence the applicants alleged that: (1) the administration of their respective bankrupt estates was a relatively simple matter that should have been undertaken expeditiously; (2) the Official Trustee participated unnecessarily in the Agusta proceedings in relation to the Point Piper land; (3) other assets were available to the Official Trustee to meet the claims of all creditors, as well as its remuneration and costs; and, as a consequence, (4) the administration of the bankrupt estates had been unnecessarily delayed and the estates exposed to the burden of additional costs which they should not bear. See Ferella v Official Trustee in Bankruptcy (No 2) [2011] FCA 619 (Ferella (Inquiry) (No 2)) at [4]-[7]). 16 The Agusta and Inquiry proceedings were summarised in Ferella (No. 1) at [31]-[36] and [37]-[40] respectively. Suffice it to say for present purposes that in the Inquiry Proceeding, Yates J rejected the applicants' submission that the Official Trustee had defended the Agusta proceeding on a substantially misconceived basis or in a manner which was unnecessary or extravagant: Ferella (Inquiry) (No 2) at [185]. To the contrary, Yates J held that the Official Trustee "…was justified in defending the [Agusta] proceedings in the way that it did and in prosecuting its claim to be entitled to be indemnified from the Point Piper funds." Yates J also otherwise rejected the application for a s 179 inquiry save with respect to a discreet issue concerning the Official Trustee's failure to disclose a letter from the Australian Taxation Office (ATO): Ferella (Inquiry) (No 2). An appeal against that decision by Angelo and Gustavo Ferella was dismissed with costs: Ferella v Official Trustee in Bankruptcy [2013] FCAFC 43 (Ferella (Inquiry) (FCAFC)). 17 Yates J subsequently found that, while not justified, the non-disclosure of the ATO's letter had no material consequences for the administration of the bankrupt estates: Ferella v Official Trustee in Bankruptcy (No 4) [2015] FCA 712 (Ferella (Inquiry) (No 4) at [92]. His Honour also held at [95] that the applicants' submissions ignored his earlier finding in Ferella (Inquiry) (No 2) at [185] with respect to the Official Trustee's conduct in the Agusta proceedings. Yates J therefore held that the applicants had not made a proper case for the relief which they sought (at [95]). Costs were ultimately apportioned between the applicants and the Official Trustee by orders made on 8 September 2015: Ferella v Official Trustee in Bankruptcy (No. 5) [2015] FCA 983. An application by Angelo and Gustavo Ferella for leave to appeal against the costs orders was dismissed, with an order made for the applicants to pay the Official Trustee's costs of the application: Ferella v Official Trustee in Bankruptcy [2016] FCA 1297.

3.2.3 The Riva proceeding 18 Gustavo and Angelo Ferella, together with Riva NSW Pty Limited, also instituted proceedings in mid-2015 claiming damages for alleged breaches of duty by the Official Trustee occasioned by the Official Trustee's conduct in relation to the Point Piper land (the Riva Proceeding). Riva NSW Pty Limited was the trustee of the Cavallino Unit Trust for which the Point Piper land was purchased. The Riva Proceeding was summarily dismissed under s 31A of the FCA Act with costs on the ground that the causes of action were barred by statute or by analogy and in any event, the claims for relief were misconceived: Riva NSW Pty Limited v Official Trustee in Bankruptcy [2017] FCA 188 (Riva). 19 The applicants applied for leave to appeal against the decision in Riva. However, that application was withdrawn by consent on 18 September 2016 and therefore shortly after judgment was reserved on the interlocutory applications in the present proceedings.

3.3 The present proceedings 20 Finally, as earlier mentioned, in Ferella (No. 1) I refused the application for a mandatory interlocutory injunction against the Official Trustee on the ground that the applicant had failed to establish that there was a serious question to be tried and, in any event, in the exercise of discretion. 21 Following that decision, orders were made on 7 December 2016 for the applicant to file and serve any interlocutory application to amend the originating application together with a proposed statement of claim, or alternatively a statement of claim identifying the basis on which relief is sought in the originating application. 22 The applicant did not take up the opportunity to amend his originating application but sought only purportedly to elucidate upon his original claims by the statement of claim filed on 16 January 2017. By orders made at the directions hearing on 20 January 2017, the matter was referred to mediation, noting that there was a degree of urgency in the matter. While the orders also required the applicant to attend the mediation in person, he did not attend apparently due to ill health and the District Registrar made orders on 2 March 2017 adjourning the mediation to a date to be advised. 23 Orders were made on 15 May 2017 by Jagot J for the applicant to serve (but not file) any proposed amended statement of claim by 31 May 2017, with the matter to be listed for further directions on 9 June 2017. As the Official Trustee did not consent to the proposed ASOC, a timetable was set by Jagot J on 9 June 2017 for the applicant to file and serve any application to amend the statement of claim and for the Official Trustee to file and serve any application to strike out the statement of claim, together with submissions and any evidence. 24 On 30 June 2017, the applicant applied for leave to amend the statement of claim, and on 25 July 2017 the Official Trustee applied to strike out the statement of claim. The latter application was amended on 28 August 2017 so as also to seek summary dismissal of the proceeding under s 31A of the FCA Act, pursuant to leave granted at the hearing of the interlocutory applications on that day. 25 Leave was also granted to file and serve submissions after the hearing to address certain limited issues arising from the hearing as follows: (1) by 1 September 2017 the respondent was to file and serve submissions addressing the coming into effect of the Insolvency Law Reform Act 2016 (Cth) (the Reform Act) and to respond to the applicant's outline entitled "re provisions authorising fees", being a note dated 19 May 2016; (2) by 8 September 2017 the applicant was to file and serve any submissions in response to the submissions referred to in paragraph (1) and in response to the respondent's supplementary submissions filed on 28 August 2017; and (3) by 15 September 2017, the respondent was to file any submissions in reply. 26 With respect to the first of these orders, I note that at the hearing on 28 August 2017, the applicant handed up for the first time a "Note by applicant re provisions authorising fees" dated 19 May 2016 (the Applicant's Note) on which he sought to rely in support of his argument challenging the realisation charges set out in exhibit A-1. Counsel for the applicant explained that he had thought that the Note had been filed following the hearing on the application for an interim injunction pursuant to leave granted at that hearing. However, it is apparent from the Court file that no such note was filed: see also Ferella (No. 1) at [60]. 27 Furthermore, the Applicant's Note was not only convoluted and difficult at points to understand, but appeared to go beyond the applicant's case as pleaded in his statement of claim and draft ASOC: see in particular the Applicant's Note at [12] to [16]. In this regard, as Jagot J held in Pivotel Satellite Pty Limited v Optus Mobile Pty Limited [2010] FCA 516 at [23], a vague and ambiguous pleading "cannot be cured by oral submissions instructing the reader about how the paragraph should be read. It needs to be clear from the face of the pleading." Equally, other deficiencies in pleadings cannot ordinarily be cured by written submissions. Furthermore, the Note having been prepared before the statement of claim and the draft ASOC were filed and served, I must take the applicant's case to be that reflected in the statement of claim and draft ASOC. If the applicant truly wished to pursue any of the apparently additional points reflected in his Note, he has had ample opportunity to plead them. As I explain below, pleadings are intended to give the other party fair notice of the case against them. That object is not achieved by the 'shifting sands' of multiple sets of written submissions on interlocutory applications which do not accurately reflect what is pleaded. 28 The applicant also sought for the first time in his submissions filed on 8 September 2017 after the hearing to seek leave to further amend the proposed ASOC in order to plead an alternative entitlement to relief under the Insolvency Practice Schedule (Bankruptcy) (the IP Schedule) contained in Part 1 of Schedule 1 to the Reform Act. While I consider that the applicant went beyond the leave granted on 28 August 2017 in seeking to raise these new proposed amendments, no objection to this course was raised by the Official Trustee in his written submissions in reply. Rather the Official Trustee repeated his earlier submissions as to the failure by the applicant to plead the material facts relied upon and submitted that "[t]he fundamental difficulty in the substantive application and the proposed ASOC is that the essential requirement for prospective success are not pleaded or otherwise identified. No route to the conclusion said to entitle the Applicants [sic] to relief is laid out." For the reasons later explained, I agree. 29 In addition, as earlier noted, the application for leave to appeal against the decision in Riva was withdrawn after judgment on the present applications had been reserved. In argument on these applications, the Official Trustee had relied in part upon the fact that further costs and expenses in the bankruptcy were accruing in the Riva application as a reason why the application for annulment in this proceeding had no reasonable prospects of success. Upon discovering the withdrawal of the application in Riva, my associate therefore wrote to the parties on 8 January 2018. The parties subsequently confirmed that there are no outstanding proceedings with respect to the proceeding in Riva, and orders were then made permitting the parties to file brief submissions on the impact of that change in circumstances on their submissions and respective positions. Pursuant to these orders, the applicant submitted that, given that there were no outstanding proceedings between the parties other than the current proceedings, it was therefore no longer viable for the Official Trustee "to posit the impossibility of making a final determination for the purposes of s 153A Bankruptcy during the pendency of the now withdrawn proceedings and whatever may have arisen from them." However, as the applicant's submission acknowledged, the issues raised by the applicant's challenge to the amounts of remuneration, fees and expenses claimed by the Official Trustee remain to be addressed. The Official Trustee was of the same view and relied otherwise on his submissions already filed. The Official Trustee also advised the Court that it did not seek leave to re-open to rely upon evidence annexed to its written submissions dated 16 January 2018 and I have disregarded that material and the Official Trustee's submissions relying upon it. 30 Finally, I note the undesirability of parties filing written submissions and evidence without leave of the Court. Of particular concern is the applicant's conduct in handing up detailed new submissions at the hearing on 28 August 2017 and in exceeding the limited leave granted to file written submissions after the hearing, as well as the Official Trustee's conduct in annexing without leave further evidence to his submissions dated 16 January 2018. As the Full Court (Allsop CJ, Robertson and Mortimer JJ) observed in SZSJA v Minister for Immigration and Border Protection [2013] FCAFC 158 with respect to written submissions filed after a hearing beyond leave granted to do so: 66 Towards the end of the hearing of the appeal, the Court granted leave to each party to exchange and file short submissions directed to the significance, if any, of the Code of Conduct for Registered Migration Agents referred to in s 314 of the Migration Act and the regulations, together with any provision of any statute, such as, but not limited to, the Crimes Act 1914 (Cth) and the Criminal Code Act 1995 (Cth). In the event, the appellant filed supplementary written submissions which were longer than the Court had contemplated but which did deal with that topic. The respondent also filed further written submissions pursuant to that leave but, in our view, went beyond that leave in paragraphs 7-10. As the majority said in NT Power Generation Pty Ltd v Power and Water Authority [2004] HCA 48; (2004) 219 CLR 90 at [192]: "This is unsatisfactory. It is impermissible to file further submissions without leave, and this cannot be evaded by adding on to submissions filed with leave other material for which leave should have been obtained." (Footnote omitted) See also the comments of, and cases referred to by, the New South Wales Court of Appeal in Bale v Mills [2011] NSWCA 226; (2011) 81 NSWLR 498; (2011) 282 ALR 336 at [57]-[61], and Seafish Tasmania Pelagic Pty Ltd v Burke, Minister for Sustainability, Environment, Water, Population and Communities [2013] FCA 782 per Logan J. 67 The filing of such submissions is to be deprecated because it runs counter to the principle that the hearing, in open court, is the time and place to present argument; it is at the hearing that a party has the opportunity to put his or her case; and a fair and effective process requires that written submissions beyond the scope of any leave granted should not be filed lest there be a fresh round of answering submissions. 31 Those comments apply with even greater force in the case of further evidence filed after a hearing without leave.

RELEVANT PRINCIPLES: APPLICATIONS TO STRIKE OUT AND FOR SUMMARY DISMISSAL 32 First, rule 16.21(1) of the FCR provides that: A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading: (a) contains scandalous material; or (b) contains frivolous or vexatious material; or (c) is evasive or ambiguous; or (d) is likely to cause prejudice, embarrassment or delay in the proceeding; or (e) fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or (f) is otherwise an abuse of the process of the Court. 33 The principles by which it is determined whether a pleading should be struck out were recently summarised in Australian Parking and Revenue Control Pty Ltd v Reino International Pty Ltd [2016] FCA 744 (Australian Parking (No. 1)) at [19]. Of particular relevance here, I note the following. (1) In determining whether to strike out a pleading, the central function of pleadings must be borne squarely in mind, namely, to state with sufficient clarity the case to be met so as to ensure as a matter of procedural fairness that a party has the opportunity of meeting the case against it: see also Australian Parking (No. 1) at 19. (2) While a respondent has no absolute right to insist on the applicant pleading every material fact necessary to demonstrate a complete cause of action, all of the material facts necessary to formulate a complete cause of action should in general be pleaded: FCR r 16.02(2); Young Investment Group Pty Ltd v Mann [2012] FCAFC 107; (2012) 293 ALR 537 (Young Investment Group) at 540 [7]. (3) A pleading which simply pleads a conclusion from unstated facts is embarrassing and is liable to be struck out: Trade Practices Commission v David Jones (Australia) Pty Ltd (1985) 7 FCR 109 at 114-5; Young Investment Group at 540 [7]. A pleading is also embarrassing where it is unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against her or him: Priest v New South Wales [2006] NSWSC 12 at [34] (Johnson J). 34 Secondly, leave to re-plead will generally be refused where the amendment would be futile, such as where it fails to disclose a reasonable cause of action or seeks to raise a case that is misconceived in point of law, where the amendment is embarrassing, or where the amendment is otherwise liable to be struck out: Research in Motion Ltd v Samsung Electronics Australia Pty Ltd [2009] FCA 320; (2009) 176 FCR 66 at [23]; Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26 at 36 (Lindgren J (with whose reasons Lockhart and Tamberlin JJ agreed)); SZSRR v Minister for Immigration and Border Protection [2017] FCA 328 at [48] (Gleeson J). 35 Thirdly, with respect to the question of futility and the interlocutory application by the Official Trustee, s 31A of the FCA Act relevantly provides that: (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. 36 The principles governing the application of s 31A are well established and were summarised in Riva as follows. 45 First, the respondent as the moving party bears the onus of persuading the Court that the application has no reasonable prospects of succeeding: Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 (Cassimatis) at 271 [45] (Reeves J). 46 Secondly, the intention behind the enactment of s 31A is "to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by such authorities as Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91-92, and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130…": White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511; (2007) 160 FCR 298 (White Industries) at 310 [54] (Lindgren J); see also Cassimatis at 271 [46] (Reeves J). In the cases to which Lindgren J referred in White Industries, the requirement had been expressed in such terms as "manifestly groundless" or "hopeless". As Hayne, Crennan, Kiefel and Bell JJ held in Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 (Spencer) at 139 [52]-[53]: 52. …effect must be given to the negative admonition in sub-s (3) that a defence, a proceeding, or a part of a proceeding may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is "hopeless" or "bound to fail". …[I]t is important to begin by recognising that the combined effect of sub-ss (2) and (3) is that the inquiry required in this case is whether there is a "reasonable" prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail. 53. In this respect, s 31A departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered. 47 Thirdly, the assessment required by s 31A of whether a proceeding has no reasonable prospects of success necessitates the making of value judgments in the absence of a full and complete factual matrix and argument, with the result that the provision vests a discretion in the Court: Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401 (Kowalski) at 408-409 [28] (the Court). … 48 In the fourth place, despite the threshold for summary dismissal having been lowered, the discretion must still be exercised with caution (Spencer at 131 [24] (French CJ and Gummow J) and 141 [60] (Hayne, Crennan, Kiefel and Bell JJ)). Consistently with this, the discretion is concerned "with the bringing and defending of proceedings, not just with pleadings; with substance, not just with form": White Industries at [50] (Lindgren J) (approved in Kowalski at 409 [30] (the Court); see also Spencer at [23] (French CJ and Gummow J)). 49 Finally, in his Honour's helpful explanation of how these principles are to be applied, Reeves J in Cassimatis further explains at 271-272 [46] that: …the determination of a summary dismissal application therefore does not require a mini-trial based upon incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial. Each application for summary judgment or summary dismissal has to be determined according to its particular circumstances. What is required is a practical judgment of the case at hand. The relevant circumstances will partly depend upon the stage which the proceedings have reached. Among other things, this will affect the materials available to the Court considering the application, for example, whether pleadings have been exchanged, or discovery of documents has occurred. 50 To illustrate the application of these principles, Reeves J explained at [47] that the moving party is more likely to succeed if she or he demonstrates that the applicant's success relies on a question of fact that is fanciful, trifling, implausible, improbable, tenuous or contradicted by all the available documents or evidence. Conversely, his Honour explained that, as a general principle, such an application is unlikely to succeed where, on a critical examination of all the available materials, the Court is satisfied that there appears to be a real question of fact to be determined. The latter, in his Honour's view, is more likely to be the case where the available materials include pleadings that raise factual disputes that can truly be described as significant, substantial, plausible or weighty.

WOULD THE PROPOSED AMENDED STATEMENT OF CLAIM HAVE REASONABLE PROSPECTS OF SUCCESS?

5.1 The draft amended statement of claim 37 Two preliminary matters should be noted. First, in her supporting affidavit affirmed on 30 July 2017, the solicitor for the applicant, deposes that "[t]he purpose of the amendments is to plead the case of the Applicant with greater particularity and clarity and not to add any additional cause of action." This was confirmed by the applicant's counsel in oral submissions. It logically follows that if the proposed amended statement of claim fails to disclose any reasonable cause of action, neither does the statement of claim. The applicant did not contend otherwise. 38 Secondly, in his written submissions and in particular those filed after the hearing, the applicant seeks to explain the case which he intends to put and to assert that there are "live dispute[s]" about various matters. However, as I have earlier explained, where an extrinsic 'explanation' departs from the pleadings, it cannot be treated as curing deficiencies in the pleading itself. That is not to suggest, however, that such "explanations" may not be relevant to the question of whether leave to re-plead should be allowed in the exercise of discretion. 39 The primary relief sought by the applicant under both s 178 and s 179 is an annulment of his bankruptcy. Specifically, the applicant contends that the Official Trustee was in breach of his duty to determine pursuant to s 153A(1) of the Bankruptcy Act that he was satisfied that the applicant's debts have been paid in full or by failing to make that determination within a reasonable period after having realised sufficient of the vested assets to pay the applicant's debts in full (draft ASOC at [5A]). As a consequence of the alleged breach of s 153A, the applicant contends that the Official Trustee is in breach of his duty to hold the residual funds and assets under his control solely for the benefit of the applicant, and to return the residual funds without delay, relying upon Adsett v Berlouis (1992) 37 FCR 201 (Adsett) at 208. Specifically paragraph [7] of the statement of claim and draft ASOC alleges that the Official Trustee's estimate of the amount outstanding in the applicant's bankrupt estate in the sum of $672,596.29: …is erroneous and overstated in that: (a) it includes what amounts to an annulment charge of $173,124.26 over and above asset realisation charges permitted by s 163(1) of the Bankruptcy Act and/or s 7(1) of the Bankruptcy (Estate) Charges Act 1997 (Cth) ("BECA"); (b) further and in the alternative to (a), the respondent would only be entitled in the event of an annulment of the applicant's bankruptcy in lieu of any other remuneration that remuneration provided for under the Bankruptcy (Estate Charges) (Amount of Charge Payable) Determination 2015 ("BFR 2015"); (c) no adjustment has been made to the figure of $672,596.29 for the legal costs recoverable by the applicant from the respondent in NSD 1284 of 2009 [the Inquiry Proceedings] and other costs in those proceedings not properly chargeable by the respondent against the bankrupt's estate; (d) the figure of $672,596.29 does not take account of the receipt by the respondent of the proceeds of realisation on 14 November 2016 of the properties known as 3 and 15 Chester Street, Blacktown referred to at paragraph 9 below; and (e) the figure of $672,596.29 should be reduced to the extent to which, if any, which [sic] the separate assets of the applicant have been applied to meet the separate liabilities of Angelo Ferella. 40 The applicant also contends that the Official Trustee has failed to determine properly and have taxed the correct amount of costs in the Inquiry proceedings (NSD 1284 of 2009) which the applicant contends should be excluded from his debts (ASOC at [7B]). 41 The applicant also challenges the sale of the alleged moiety in the Blacktown properties, alleging that: 8. On 11 December 2014 in the Supreme Court of New South Wales, Equity Division, in proceedings number 2014/00204343, orders were made ("the Supreme Court orders") pursuant to s.66G of the Conveyancing Act 1919 (NSW) for the appointment of Stephen Nichols and Richard Brien as trustees for sale by the respondent of the moiety forming part of the vested assets in respect of property: owned by Nida Ferella and the respondent including properties at 3 and 15 Chester Street, Blacktown. 9. On 14 November 2016 the said Nida Ferella purchased from the trustees for sale the said moiety in respect of the said Blacktown properties for a consideration of $760,000.00. 10. In the premises, the sale of the said moiety in the said Blacktown properties was not reasonably required to affect payment of the applicant's debts and constituted a breach of the duty referred to in paragraph 4F above [being a duty not to realise vested assets not required to affect payment of all the applicant's debts]. 42 The relief sought is set out at paragraphs [11] and [12] of the draft ASOC which reads: 11. In the premises it is just and equitable within the meaning of s.178(1) and/or s179 of the Bankruptcy Act that: (a) the respondent be ordered to forthwith make a proper assessment of the applicant's debts of the bankrupt within the meaning of s. 153A(6) of the Bankruptcy Act having regard to the proper principles and any reduction to be made in relation to the funds referred to in paragraph 7(c), (d) and (e); (b) the said assessment should be made on the footing that the respondent not make any claims for realisation charges against the bankrupt estate of the applicant other than as permitted by- (i) s.163(1) of the Bankruptcy Act and/or BECA; and/or (ii) BFR 2015 in lieu of the charges referred to in (i); (c) the respondent should be ordered to make a determination pursuant to s.153A(1) of the Bankruptcy Act that is satisfied that the applicant's debts bankrupt's debts in relation to the applicant's bankrupt estate have been paid in full; (d) the respondent should be ordered to take such steps as are necessary to quantify by taxation or assessment the amount of costs in NSD 1284 of 2009 [being the Inquiry Proceeding] and other proceedings which are properly chargeable against the bankrupt estate of the applicant; (e) the respondent should be ordered to take such steps as may be necessary for a revesting in or transfer to the applicant of the remaining assets in the bankrupt estate of the applicant; (f) the respondent should be ordered to consent to orders permanently staying the Supreme Court orders to the extent to which they have not already been acted on; (g) consequent upon a determination being made in or to the effect of (c), a declaration should be made that the bankruptcy of the applicant has been annulled. (h) the respondent be ordered to pay the applicant's costs of these proceedings; (i) the respondent pay interest on funds to have been retained by the respondent at a time when the applicant's bankrupt's debts had been paid in full in relation to the applicant's bankrupt estate. 12. Further and in the alternative the respondent should be ordered to perform its duties as trustee in bankruptcy of the applicant's bankrupt estate by making orders to or to the effect of those stated in paragraph 1211(a) to (i). 43 The amendments proposed to the relief sought in the draft ASOC are identified by underlining and strikethrough above. Those amendments are not substantive but rather 'cosmetic' in nature. 44 It is apparent that the central relief sought remains an annulment of the applicant's bankruptcy on the ground that the Official Trustee should have been satisfied that all of the applicant's debts have been paid in full and, indeed, should have been so satisfied before the Blacktown properties were realised as pleaded at ASOC [8]-[10]. The other relief relates to the basis on which the applicant says that the Trustee should have been so satisfied (see 11, (b), (c), and (d)), or is reliant upon the applicant succeeding on that ground (see 11-(i)). The latter include the orders sought to transfer the remaining assets to the applicant, and for a stay of the Supreme Court orders referring, presumably, to the s 66G orders made by the Supreme Court by consent as explained at [13]-[14] above.

5.2 The Official Trustee's estimate of the amount required to annul the bankruptcy 45 In support of his central contention that the bankruptcy should be annulled, the applicant contends that the Official Trustee's identification of the amount of $672,596.29 as outstanding as at 12 February 2016, and relied on in Ferella (No. 1) by the Official Trustee in written submissions filed on 12 May 2016, is erroneous. That amount is the amount estimated by the Official Trustee of debts and expenses in the applicant's bankrupt estate as at 12 February 2016 as set out in the table annexed to Ms Fu's affidavit and tendered by the applicant (Exhibit A-1) as follows: Estimate of Debts and expenses in the bankrupt of Gustavo Ferella Description Amount Total Debts $0.00 Costs of Administration $845,621.32 Insurance premium $0.00 Total debts plus costs $845,621.32 OT's Fees $4,000 + 20% x $845,621.32 (Reg. 16) $173,124.26 OT's Fees $173,124.26 Debts plus costs plus OT's fees $1,018,745.58 Less Funds received from Petitioning Creditors 8 March 2006 ($74,656.00) Less Funds received from bankrupt 13 March 2006 ($249,321.54) Less Realisation of interest in North Entrance property 23 March 2015 ($210,000.00) Plus 8% Realisation Charge (for funds received from 1/11/1996 - 30/6/06) $25,918.20 Plus 6% Realisation Charge (for funds received from 1/7/14-30/6/15) $12,600.00 $523,286.24 Plus 7% Realisation Charge (for $562,673.39 required from 1/7/15) $39,387.14 Total amount required to annul bankruptcy $562,673.38 Plus interest claims on Cavalino Unit Trust Debts pursuant to order 5K of the Supreme Court Orders dated 24 July 2008 $70,596.21 Plus OT's remuneration outstanding pursuant to the Supreme Court Orders dated 15/10/2013 $39,326.70 $672,596.29

46 The realisation charges which are the subject of specific challenge by the applicant are shaded in the table above: see further below at [65]-[77]. 47 By way of explaining the table, Ms Fu deposed at [6]-[11] of her affidavit that: (1) where an estate is in funds, such as where there has been a sale of a vested property, costs and expenses incurred in its administration may be paid directly from those funds although that is not always done; (2) the Official Trustee ordinarily allocates joint expenses between the relevant estates in such a way as to have them paid from estate funds rather than as expenses to be funded by it (from public funds); thus the whole, or an unequal part, of a joint expense may be allocated to one estate rather than another because the former is in funds and the other is not, or is not sufficiently in funds; (3) regardless of how joint expenses are funded (i.e., from money from one estate rather than another, or by the Official Trustee), and regardless of how they are allocated in the Account Transaction and Expenses Reports of any estate, the Official Trustee for the purposes of calculating the total expenses incurred in the administration of an estate, has regard to the total of any joint expenses; and (4) where an estate is not in funds, the Official Trustee funds the payment of expenses. 48 Ms Fu also explained in her affidavit at [12] that: As the estates of Gustavo and Angelo have not been in funds since 13 October 2015, no further transactions have been recorded on the Account Transaction Reports since that date. The Official Trustee continues to fund payment of expenses relating to the estates, which payments have been recorded to the Expense accounts of each estate as appropriate. 49 As I later explain, the Blacktown properties were realised subsequently: see below at [60].

5.3 The claim for relief under s 178(1), Bankruptcy Act 50 For the reasons set out below, in so far as the applicant relies upon s 178(1) of the Bankruptcy Act, the statement of claim and the draft ASOC have no reasonable prospects of success. They also fail to plead the material facts, are embarrassing in that they plead conclusions from unstated facts, are so vague as to fail to disclose the case alleged against the Official Trustee, and are misconceived in point of law.

5.3.1 Relevant principles: s 178(1), Bankruptcy Act 51 At the time that this litigation was commenced, s 178(1) provided that the Court may make such order as it thinks just and equitable where a creditor or the bankrupt is affected by an act, omission or decision of the trustee under s 178(1). As such, s 178(1) conferred standing upon creditors and the bankrupt to apply to the Court in respect of acts, omissions or decisions of the trustee affecting the creditor or bankrupt, given that the trust executed by a trustee in bankruptcy under the Act "is not a trust for persons but a trust for statutory purposes… because the creditors and the bankrupt are not beneficiaries in the proper sense…": Young v Thomson (formerly trustee of the property of Young) [2017] FCAFC 140 (Young) at [117]. 52 The purpose in vesting jurisdiction in the Court under s 178(1) was identified by the Full Court in Young (referring to Adsett) as follows: 112 Where a statutory trust exists, such as that created by the Bankruptcy Act, the trustee's powers and duties fall to be exercised in accordance with, or having regard to, the requirements of the legislation. And, that is a reason why the Court has the supervisory jurisdiction under s 178 over a trustee's acts, omissions or decisions. That jurisdiction exists so as to enable the Court to evaluate what order is just or equitable in the particular circumstances. 53 As such, s 178 confers a very wide discretion on the Court to make such order as seems appropriate in the circumstances of the case and it is not necessary for an applicant for relief under the section to show that the trustee's decision was absurd, unreasonable or taken in bad faith: Frost v Sheahan (Trustee) [2009] FCAFC 20 (Frost) at [8]. Nonetheless, as the Full Court also cautioned in Frost at [8] (quoting from the reasons of the primary judge): 2. …At the same time, the Court will be slow to make orders which will have the effect of interfering in the day-to-day administration of a bankrupt's estate and, in cases involving an exercise of business or commercial judgment, will place considerable weight on the trustee's decision. Furthermore, a Court will not intervene under s 178 simply because the Judge forms a different view from that of the trustee.

5.3.2 Relief sought at ASOC [11(c)] 54 First, as earlier explained, the applicant seeks an order that "the respondent should be ordered to make a determination pursuant to s.153A(1) of the Bankruptcy Act that it is satisfied that the applicant's debts have been paid in full" (draft ASOC, [11(c)]). 55 Section 153A relevantly provides that: (1) If the trustee is satisfied that all the bankrupt's debts have been paid in full, the bankruptcy is annulled, by force of this subsection, on the date on which the last such payment was made. (1A) In determining whether there has been full payment of a debt that bears interest, the interest must be reckoned up to and including the date on which the debt (including interest) is paid. … (6) In this section: bankrupt's debts means all debts that have been proved in the bankruptcy and includes interest payable on such of those debts as bear interest, and the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee. 56 As is apparent from s 153A(1), the condition precedent to an annulment under that provision is the formation by the trustee of a state of satisfaction that all of the bankrupt's debts have been paid in full. Manifestly, this Court cannot order a trustee to reach a state of mind. As such the specific relief sought at ASOC [11(c)] has no prospects of success. However, the Official Trustee accepted that it would be open to the Court to make a declaration, for example, that certain charges were not bankrupt's debts even though that is not presently pleaded or proposed to be pleaded, or that all of the bankruptcy debts had been paid.

5.3.3 Failure to plead material facts and disclose a reasonable cause of action 57 Secondly, as the applicant accepted in his supplementary submissions dated 8 September 2017, an annulment requires a point in time anterior to the bringing of the application at which all of his bankruptcy debts, as defined in s 153(6), have been paid in full. Furthermore, s 178(2) provides that an application under s 178(1) "must be made not later than 60 days after the day on which the person became aware of the trustee's act, omission or decision": see further at [62]-[64] below. As such and as the Official Trustee submits, the applicant must plead the material facts relied upon to establish his entitlement to the relief sought, including: (1) the particular legal costs or other expenses wrongly charged to his estate; (2) the basis or bases on which it is contended that such expenses were not the "bankrupt's debts" as defined in s 153A(2); (3) the date on which the applicant contends that his bankruptcy debts were paid in full; (4) the date on which the applicant became aware of the Official Trustee having proceeded wrongly; and (5) that the date on which the applicant became so aware was one within 60 days before the commencement of these proceedings on 15 October 2015. 58 However, the pleadings manifestly fail to plead the material facts identified at 57 and (2) above. Specifically: (1) At draft ASOC [7(c)], the applicant asserts as a bare conclusion that the trustee's estimate in Exhibit A-1 has made no adjustment for the legal costs recoverable by the applicant from the Official Trustee in the Inquiry proceeding; (2) At draft ASOC [7(c)] the applicant also fails to identify the other costs in the Inquiry proceeding alleged to be "not properly chargeable by the respondent against the bankrupt's estate" and the basis on which those costs are said to be "not properly chargeable"; (3) At draft ASOC [7B], the applicant again fails to identify the costs in the Inquiry Proceeding which it is said "should be excluded from the applicant's debts" and the basis on which it is said that those costs are "not properly chargeable". (4) Furthermore, at draft ASOC [7(e)], the pleading that the Official Trustee's estimate in Exhibit A-1 should be reduced to the extent "if any" to which the applicant's assets have been applied to meet the separate liabilities of Angelo Ferella fails even to allege that there has been any such conduct by the Official Trustee and is by its very terms speculative. In this regard, a submission to the same effect was emphatically rejected by the Court of Appeal in Ferella (S 66G) (NSWCA), as I earlier observed at [14] above. I also note that no attempt was made by the applicant either in the pleadings or in submissions to grapple with the way in which the Official Trustee ordinarily allocates joint expenses between the relevant estates as explained by Ms Fu: see above at 47. 59 As such, the draft ASOC does not plead any of the material facts necessary to establish a cause of action and are embarrassing. The same deficiency is evident in the original statement of claim. The pleadings also therefore do not disclose any arguable case for excluding those costs from the applicant's bankruptcy debts for the purposes of s 153A, or which could support the allegation at ASOC [7A] that the Official Trustee appropriated or retained amounts in excess of his proper entitlements. The proposed pleading at ASOC [7A] is also objectionable on the ground that it is vague and embarrassing in that it pleads breaches of duty "including" by the appropriation or retention of the amounts alleged at ASOC [7], but fails to identify the other amounts not pleaded that were allegedly wrongly retained or appropriated. 60 With respect to the proposed pleading at ASOC [7(d)], it is plainly correct that the figure of $672,596.29 estimated by the Official Trustee in exhibit A-1 as at 2 February 2016 does not take account of the alleged receipt by the Official Trustee of the proceeds of realisation of the Blacktown properties on 14 November 2016. However, the basis on which that allegation could give rise to a breach of duty in appropriating or retaining amounts in excess of the Official Trustee's entitlements as alleged at ASOC [7A], is not disclosed by the draft ASOC. Indeed, any such contention could have no reasonable prospects of success where, on the face of the pleading, the Blacktown properties were realised only after the Official Trustee prepared the estimate of the shortfall in the bankrupt's estate in Exhibit A-1. Those properties having now been realised, there is no reason to suppose (and none pleaded) that the Official Trustee would not properly apply the monies received from the realisation of those properties in accordance with his duties in the administration of the bankruptcy. 61 Moreover, the draft ASOC at [10] asserts as a bare conclusion that the sale of the moiety in the Blacktown properties "was not reasonably required to effect payment of the applicant's debts". As a result, the applicant pleads that the sale constituted a breach of the duty not to realise vested assets in circumstances where their realisation is unnecessary to effect payment of all the applicant's debts. Again, however, no material facts are pleaded in support of the asserted conclusions which assume that the Official Trustee had sufficient funds to meet all of the applicant's debts prior to the date of sale. As such no arguable or other basis for the alleged breach of duty is disclosed.

5.3.4 Failure to plead compliance with the time-limit in s 178(2), Bankruptcy Act 62 Thirdly, neither the statement of claim nor the draft ASOC contain any pleadings addressing the matters identified at 57 to (5) above inclusive. Yet, as the Official Trustee submits, by virtue of s 178(2), it is necessary for the applicant to establish that the application under s 178(1) is brought within the time limit in order to establish that the application is competent. The applicant's submission that the failure to plead that the relief was sought within the 60 day period set by s 178(2) is not fatal because the allegation is that the Official Trustee had "a continuing duty to bring about an annulment of the bankruptcy" (ASOC at [5]) is unsupported by any authority and misses the point. The question for the purposes of s 178 must turn on when the duty to annul is alleged to have come into existence and when the applicant became aware of the failure by the Official Trustee to act in accordance with that duty. It makes no sense, with respect, to suggest that the 60 day period commences to run each day that a trustee continues to be in breach of her or his duty, once the applicant is aware of the initial breach. That construction would undermine the purpose of the limitation period, namely, to ensure that any such application is brought in a timely fashion once an applicant is aware of the issue and does not unduly delay or interfere with the efficient administration of the bankruptcy. It follows that the applicant has failed to plead matters essential to his cause of action under s 178 of the Bankruptcy Act and also in this respect to establish the competency of his application. 63 Furthermore, the Official Trustee submits that there is no power to extend the requirement that an application be made within the 60 day period. Nonetheless, the Official Trustee properly pointed out that there is a conflict in the authorities as to whether the general power in s 33(1)(c) of the Bankruptcy Act is available to extend the period prescribed by s 178(2). (1) Thus, on the one hand, Katzmann J in Samootin v Official Trustee [2012] FCA 64 (Samootin) considered at [18] that the Court lacked power to extend the period prescribed in s 178(2) because s 178(2) expressly makes provision to the contrary. In so holding, Katzmann J followed the High Court's decision in David Grant & Co Pty Ltd (Receiver Appointed) v Westpac Banking Corporation (1995) 184 CLR 265 (David Grant) dealing with an analogous provision of the Corporations Law also enacted after a general provision allowing for the grant of an extension of time. In addition, her Honour considered that this interpretation accorded with the evident purpose of s 178(2), being "the avoidance of inconvenience and cost to trustees", and noted that this construction was consistent with the Explanatory Memorandum to the Bankruptcy Legislation Amendment Bill 2002 which introduced s 178(2) (Samootin at [18]). Katzmann J's construction of s 178(2) in Samootin was applied subsequently in the carefully-reasoned decision of Driver FM (as his Honour then was) in Heshmati v Paul Burness and Morgan Lane [2012] FMCA 884 with which Raphael J agreed in Tomasetti v Andrew John Scott as Trustee of the Property of Peter Charles Tomasetti [2013] FCCA 1693 at [13]. (2) On the other hand, Jagot J subsequently held in Kerr v Bechara [2015] FCA 284 (Bechara) at [42]-[46] that s 178(2) does not provide to the contrary of s 33(1) but merely provides a time-limit amenable to extension under s 33(1). However, her Honour states that she was not referred to any authority; nor does it appear that the question of construction was argued in any detail in Bechara as her Honour deals only briefly with the issue without addressing the issues which persuaded Katzmann J to express a contrary view. 64 In any event, the short point is that, even if an application for an extension of the time period set by s 178(2) is required and might be permitted, and even if there were otherwise merit in the proposition that all of the applicant's debts have been fully paid, no application for an extension has been made. Nor have any circumstances been pleaded or even alluded in the evidence or submissions which might justify the grant of an extension of time, assuming again that an extension of time is required and that there is power to grant it.

5.3.5 Failure to demonstrate that the pleadings at [7(a) and (b)] (realisation charges) have any reasonable prospects of success 65 The applicant also contends that the Official Trustee's estimate in Exhibit A-1 is in error in that the "realisation charges" recorded in the table ought properly to be characterised as remuneration for the Official Trustee provided for in s 163 of the Bankruptcy Act. As such, the applicant contends that the trustee cannot charge the estate "what amounts to an annulment charge of $173,124.26 over and above asset realisation charges permitted by s.163(1) of the Bankruptcy Act and/or s.7(1) of the Bankruptcy (Estate Charges) Act 1997 (Cth) (BEC Act)" : see draft ASOC at [7(a)]. To do so would constitute, in the applicant's submission, 'double-dipping'. Further or in the alternative, the applicant contends that the Official Trustee would be entitled on annulment in lieu of any other remuneration, only to remuneration under the Bankruptcy (Estate Charges) (Amount of Charges Payable) Determination 2015 (BEC Determination 2015) made under the BEC Act: see draft ASOC at [7(b)]. 66 These grounds have no reasonable prospects of success for the following reasons. 67 Section 163 provides specifically for the Official Trustee to be remunerated as follows: (1) The Official Trustee is to be remunerated as determined by the Minister by legislative instrument. (2) An amount equal to each amount of remuneration received by the Official Trustee shall be paid to the Commonwealth. Note: The remuneration may be in respect of work the Official Trustee does as trustee of the estate of a bankrupt or in respect of work done in any other situation under this Act (such as where the Official Trustee acts as a trustee as a result of a personal insolvency agreement). 68 As the note to s 163 makes clear, the words "remunerated" and "remuneration" are used in the provision in their ordinary meaning, namely, as payment for services rendered by the Official Trustee in the administration of the bankruptcy: see the Macquarie Online Dictionary and Oxford Online Dictionary definitions. 69 Remuneration is payable to a trustee only upon completion of a bankruptcy administration, including by annulment: Re Athanassopoulos (1982) 41 ALR 603; followed in Re Wilson; Wilson v Official Trustee in Bankruptcy [2000] FCA 1251 at [80]-[81] (Emmett J). 70 The current determination for the purposes of s 163 of the Bankruptcy Act is the Bankruptcy (Fees and Remuneration) Determination 2015 (the Remuneration Determination 2015) which came into force on 1 July 2015. Relevantly the rate of remuneration to the Official Trustee in respect of an administration of an estate in bankruptcy or upon annulment of the bankruptcy is the same: see clauses 3.05 and 3.09(1), Remuneration Determination 2015. Specifically, the remuneration payable to the Official Trustee is calculated by reference to "the realised balance", which is the lesser of: (1) the total "amount realised - (business costs + securities)"; and (2) the total "costs of administration + debts"; over the course of the administration. 71 It is apparent from the definition of "business costs", "securities" and "debts" in cl 3.01(1) of the Remuneration Determination 2015 that none of these concepts is apt in its terms to include realisation charges paid or payable by the Official Trustee. Further, while the "costs of administration" in cl 3.01(1) is defined as "the proper costs, charges and expenses of administration of the estate", that sub-clause expressly excludes "any realisation charge paid or payable by the Official Trustee under an Act" (as well, of course, as any remuneration paid or payable to the Official Trustee under the Determination itself). It follows, as the Official Trustee submits, that neither of the means by which the remuneration accruing to the Official Trustee is calculated under the Remuneration Determination 2015 can include any realisation charge. 72 On the other hand, by virtue of s 6(1) of the BEC Act, a realisation charge calculated in accordance with ss 7 and 8 of that Act: (1) is imposed in respect of amounts received (relevantly) by a trustee of a bankrupt's estate, including but not limited to the Official Trustee; (2) is payable by the trustee to the Commonwealth; and (3) is payable within 35 days after the end of the "charge period", being a financial year as opposed to the completion of the administration of the bankruptcy. 73 It follows that it cannot reasonably be argued that the Official Trustee's liability to collect a realisation charge for the Commonwealth under s 6 is properly characterised as remuneration of the trustee. As the Official Trustee submitted, his remuneration is provided for by s 163 of the Bankruptcy Act, whereas realisation charges are provided for separately in the BEC Act, that is, they derive from separate statutory regimes. The provisions also serve different purposes. While s 163 is concerned, as I have said, with remunerating the Official Trustee for work undertaken by it in the administration of the bankrupt estate, a realisation charge is effectively a tax collected by a trustee in bankruptcy, whether the Official Trustee or not, for the Commonwealth. 74 Furthermore, the rate of the realisation charge must be determined in accordance with s 7 of the BEC Act. In this regard, as I held in Ferella (No. 1) at [59] with respect to the realisation charges set out in the Official Trustee's estimate in Exhibit A1: (2) The 8% realisation charge for funds received between 1 November 1996 and 30 June 2006 is authorised by ss 6 and 7 of the Bankruptcy (Estate Charges) Act 1997 (Cth) (Bankruptcy (Estate Charges) Act) as in force prior to 1 July 2006. … Section 7 in turn [then] provided that the amount of the charge payable for a charge period is an amount equal to 8% of the amount on which the charge is payable for the period or if a different percentage is prescribed by the regulations, the prescribed percentage. (3) The 6% realisation charge for funds received between 1 July 2014 and 30 June 2015 was authorised by ss 6 and 7 of the Bankruptcy (Estate Charges) Act as in force from 1 July 2007. Specifically, the percentage of 6% was prescribed for the purposes s 7(2), by the Bankruptcy (Estate Charges) (Amount of Charge Payable) Determination 2014 (Cth) made on 27 March 2014. (4) Finally, the 7% realisation charge levied for the $562,673.39 required from 1 July 2015 accords with the percentage prescribed for the purposes of s 7(2) of the Bankruptcy (Estate Charges) Act by the Bankruptcy (Estate Charges) (Amount of Charge Payable) Determination 2015 (Cth) dated 30 April 2015. 75 It follows as the Official Trustee submits that, before any administration is completed (by due administration or by annulment), a liability for a realisation charge would have been accrued and likely been paid irrespective of whether or not the Official Trustee's entitlement to remuneration has crystallised. 76 Finally, it is plain from the definition of "bankrupt's debts" in s 153A(6) as including "costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee" that there is no dichotomy between charges such as the realisation charge and the trustee's remuneration in the sense that only one or the other may accrue as a debt against the bankrupt estate where the Official Trustee is the trustee. There is, in other words, nothing in the language of s 153A(6) which suggests that realisation charges under the BEC Act are not "bankrupt's debts" where the trustee is the Official Trustee entitled therefore to remuneration under s 163, but not otherwise. In this regard, "[t]he language which has actually been employed in the text of legislation is the surest guide to legislative intention": Allcan (NT) Alumina Pty Ltd v Commission of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27 at [47] (Hayne, Heydon, Crennan and Kiefel JJ), 77 For these reasons, the applicant's pleadings at draft ASOC [7a) and (b)] are misconceived in point of law and have no reasonable prospects of success. The realisation charges on the one hand, and the trustee's remuneration, on the other hand, are separate amounts provided for by separate statutory schemes, with neither scheme making provision for the abatement of one charge against the other. That being so, no reasonably arguable case is raised challenging the treatment by the Official Trustee of the realisation charges and, on completion of the bankruptcy, to the Official Trustee's remuneration under s 163 of the Bankruptcy Act, as "bankrupt's debts" for the purposes of s 153A.

5.4 The claim for an inquiry under s 179, Bankruptcy Act

5.4.1 Relevant principles 78 Relief is sought in the statement of claim and the draft ASOC under s 179 of the Bankruptcy Act which deals with control of trustees by the Court. Section 179 relevantly provides that: (1) The Court may, on the application of the Inspector-General, a creditor or the bankrupt, inquire into the conduct of a trustee in relation to a bankruptcy and may do one or both of the following: (a) remove the trustee from office; and (b) make such order as it thinks proper. 79 French J (as his Honour then was) summarised the relevant principles with respect to s 179 in Macchia v Nilant [2001] FCA 7; (2001) 110 FCR 101 (Macchia) at [49] (in a passage cited with approval in Ferella (Inquiry) (FCAFC) at [39]) as follows: 49. As appears from the language of s 179 [of the Bankruptcy Act] it invites first a consideration, albeit upon application by a person with standing, of whether the Court should inquire into the conduct of the trustee. If inquiry is undertaken, the next question is whether the trustee should be removed from office and/or any other order made. The first question requires the Court to consider whether, on the grounds and facts before it, a case has been made for an inquiry - Re Alafaci [Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262] at 268. The application of s 179 to that first step involves a broad discretion as to whether or not there are sufficient grounds to make an inquiry appropriate - Turner v Official Trustee in Bankruptcy (Full Court, 27 November 1998, unreported). The Full Court there quoted with approval the observation of Ellicott J in Re Gault [Gault v Law (1981) 57 FLR 165] that: "…the court should be loath to order an inquiry unless it considers that on the evidence before it there are substantial grounds for believing that the trustee erred in his administration. If the court considers that an inquiry is unlikely to reveal misconduct it should not make an order and put the respondent and possibly the creditors to the expense and trouble involved." (173) The policy consideration referred to by Deane J in Re: Tyndall [(1977) 30 FLR 6] that "the court should not unduly interfere with the day-to-day administration of a bankrupt's estate by a trustee" applies also to the operation of s 179 - Turner [v Ofifcial Trustee in Bankruptcy (unreported, Federal Court, Gull Court, No 8 of 1998, 27 November 1998] at pp 2-3. 50. Section 179 operates in aid of the Court's supervision of trustees who are its officers. That operation, however, is subject to restraint against undue interference and to discretionary considerations including the practical benefit likely to be derived from the conduct of any inquiry… the court will also have in such cases the discretion to determine the utility of an inquiry and its likely outcomes. For "although the court is given a broad discretion under s 179 of the Act, that discretion must be exercised in the interests of the orderly administration of the bankrupt's estate" - Re Challen (A Bankrupt); Ex parte Brown (Beaumont J, 23 April 1996, unreported) cited with approval by Merkel J in Cheesman at first instance, p 114. (emphasis added) 80 Consistency with the reticence exercised by the Court in ordering an enquiry under s 179 for the reasons explained by French J, the Court is entitled to take into account whether any enquiry would be fruitful, or more likely than not lead only to the incurring of further substantial costs without any benefit to the applicant, and delay with consequential detrimental impacts upon the quality of evidence: Re Gault; Gault v Law (1981) 57 FLR 165.

5.4.2 No reasonable prospect of ordering an inquiry 81 As the Official Trustee submits, it is apparent first that the ASOC does not allege misconduct against the trustee. Rather, at its highest, the applicant seeks to challenge the correctness of the Official Trustee's treatment of certain costs, charges and expenses as the "bankrupt's debts" as defined in s 153A(6). Applying the principles set out about, that is not properly a matter for inquiry under s 179 of the Bankruptcy Act. 82 Secondly and in any event, for the reasons set out above, neither the Statement of Claim nor the draft ASOC raise a reasonably arguable case that there are substantial grounds for believing that the trustee has erred in his administration. As such, I do not consider that any basis has been established on the basis of which it might reasonably be concluded that an inquiry would be fruitful, or do anything other than further obstruct and delay completion of the administration of the estate.

5.5 Should the applicant be afforded a further opportunity to replead? 83 The question then arises as to whether the applicant should be afforded a further opportunity to attempt to re-plead his case. 84 First, it will be recalled that in submissions filed after the hearing, the applicant sought leave to amend the draft ASOC to plead that he is a regulated debtor having a financial interest in the ongoing administration of his bankrupt estate and an entitlement to relief under ss 90-15 and 90-20 of the IP Schedule (Bankruptcy) in Part 1 of Schedule 1 to the Bankruptcy Act. The applicant appears to do so in order to avoid the time-limit which applies to applications made under s 178(1) of the Bankruptcy Act: see the applicant's supplementary submissions dated 8 September 2017 at paragraph [12]. 85 In this regard, s 178 and s 179 were repealed with effect from 1 September 2017 in connection with the enactment by the Reform Act of the IP Schedule to the Bankruptcy Act: see reg 5(2)(p), Insolvency Law Reform (Transitional Provisions) Regulation 2016. However, by virtue of item 164, Div 3, Part 3 of Schedule 1 to the Reform Act, proceedings brought under the Bankruptcy Act as immediately in force before the commencement day (i.e. the "old Act" as defined in item 102, Part 3, Schedule 1) are to continue under the Old Act. Specifically, item 164 provides that: (1) This item applies if proceedings are brought under the old Act in a court (on application or on the initiative of the court) in relation to the administration of a regulated debtor's estate either: (a) before the commencement day; or (b) on or after the commencement day (in accordance with a provision of this Division). (2) Subject to this Part, nothing in this Act affects: (a) the proceedings; or (b) the power of the court to make orders in relation to the proceedings; or (c) any orders made by the court in relation to the proceedings; or (d) any enforcement in relation to, or as a result of, the proceedings (including giving effect to any court orders); or (e) any appeal or review in relation to the proceedings. (3) Subject to this Part, the old Act continues to apply on and after the commencement day in relation to the proceedings despite the amendments and repeals made by this Act. (4) In this item: proceedings include civil and criminal proceedings, inquiries by the court, enforcement processes and any other processes. 86 These proceedings are civil proceedings and were plainly instituted under the Old Act as defined. As such, the applicant rightly contends that he is entitled to continue the proceedings insofar as they were instituted pursuant to ss 178 and 179 of the Bankruptcy Act by virtue of item 164, subject to the present interlocutory applications. However, the proposition that the applicant also has an entitlement to relief under ss 90-15 and 90-20 of the IP Schedule and is a regulated debtor under that Schedule has no reasonable prospects of success. Item 164 providing that the proceedings are governed by the old Act is directly inconsistent with that proposition. 87 In this regard, I note that item 165(3) of Part 3 of Schedule 1 to the Reform Act provides that the court's power to make an order in relation to the trustee's remuneration under s 90-15(3)(f) of the IP Schedule applies whether or not the remuneration is paid or payable before, on or after the commencement date. However that transitional item is expressed to be "for the avoidance of doubt" only (item 165(1), Schedule 1, Part 3, Insolvency Law Reform Act). It is plain both from the language and purpose therefore of item 165(3), that it is not intended to provide an exception to the transitional rule contained in item 164. This construction is confirmed by the fact that no exception from the operation of item 164 is made with respect to s 90-20 of the IP Schedule, as opposed to s 90-15. Yet s 90-20 is the operative provision conferring standing on certain persons to apply for an order under s 90-15. 88 It follows that any amendment to plead the allegedly alternative grounds for relief under the IP Schedule would be futile and bound to fail. Equally, the lack of any reasonable prospects of success with respect to the statement of claim and draft ASOC would not be met by the applicant clarifying the different grounds on which he relies under s 179 as opposed to s 178(1) of the Bankruptcy Act or clarifying the introduction to the ASOC at [11] (as suggested by the applicant in his supplementary submissions at [27]). Leave to amend to so plead should therefore be refused and the proposed amendments do not provide a basis on which the Court might decline to dismiss the application summarily under s 31A of the FCA Act. 89 Nor otherwise in the exercise of discretion ought the applicant to be granted leave to re-plead. The applicant has already had ample opportunity to articulate his claim. His originating application was supported by the affidavit of Angelo Ferella sworn on 15 October 2015 which purported to set out grounds on which relief was sought (albeit that that evidence suffered from the deficiencies referred to in Ferella (No. 1) at [8]-[10]). Serious deficiencies in the applicant's case were the subject of detailed consideration in Ferella (No. 1). Following that decision and in light of it, the applicant was required to file a statement of claim in order to clarify his claims and was afforded an opportunity to amend his originating application. The applicant has also applied for leave to amend the statement of claim. The applicant also relied upon three sets of written submissions on the current interlocutory applications affording him an ample opportunity to expose an arguable case, if indeed there was one. Despite these opportunities and the fact that the applicant has had legal representation throughout the proceeding, he has not articulated a claim with any reasonable prospects of success. Furthermore, the bulk of the remaining expenses are legal expenses incurred, as I explained in Ferella (No. 1), by the Trustee in responding to the complex and costly network of litigation that this bankruptcy has spawned and in which the applicant has been unsuccessful save for limited success on a narrow point in the Inquiry Proceeding. 90 It would not be in the interests of justice to further delay the administration of the bankrupt estate and to require the expenditure of further money and resources in apparently fruitless litigation. It is to be hoped that the administration of the estate may soon be able to be completed with the withdrawal by consent of the application for leave to appeal in the Riva litigation and the realisation of the Blacktown Properties.

CONCLUSION 91 The application to amend the statement of claim is dismissed with costs. The application for summary dismissal under s 31A of the FCA Act should be upheld and the proceeding dismissed with costs. I certify that the preceding ninety-one (91) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry.