65 By a memorandum dated 8 January 2002 Hunt & Hunt repeated their request to Cutler Hughes & Harris for an itemised account of their costs.
66 By a letter dated 16 January 2002 Mr Pantzer advised Hunt & Hunt:
My solicitors did not state in their facsimile to you of 11 December 2001 that an itemised Bill of Costs had been provided by it to the creditors. My solicitor's statement was that the Trustee:
'…will provide an itemised Bill of Costs (as provided by Cutler Hughes & Harris) to the Creditors;…'
I have been issued with legal Bills of Costs in relation to the estate for work up to November 2001. My solicitors are currently preparing Memoranda of Fees in relation to the work done since that date. The Bill of Costs which I have received, are of course, available for inspection by the creditors at any time.
Please find enclosed copies of the bills with which [I] have already been issued. Upon receipt of the Bills of Costs from Cutler Hughes and Harris relating to work done from November 2001 I will provide you with those copies.
…
Would you please confirm that your clients still require a taxation of those bills.
In the event that your clients require taxation of the bills, would you please indicate:
(a) Which creditor will provide me with the costs of making an application for taxation of the bills; and
(b) Which creditor will undertake to provide payment of those costs or provide me with security for the payment of those costs
by return letter.
The evidence does not identify the copy bills apparently enclosed with the above letter.
67 As noted in [23] above, on 1 March 2002 Beaumont J made consent orders for the convening of a meeting of the creditors of Dr Wenkart's bankrupt estate for the purpose of considering Dr Wenkart's s 73 proposal. Order 2 of those orders required Dr Wenkart to deliver to Mr Pantzer immediately before the meeting certain bank cheques including a bank cheque in favour of Cutler Hughes and Harris in the amount of $105,000. I infer that at this time Dr Wenkart accepted that Mr Pantzer did not then have cash in hand of approximately $24,000 that could be used to meet part of his liability to Cutler Hughes & Harris (see [60] above).
68 A memorandum dated 24 April 2002 from Hunt & Hunt to Sally Nash & Co, who by then were acting for Mr Pantzer, stated:
Although your client has indicated that he had asked Cutler Hughes & Harris to tax their costs, for abundant caution we request that those costs be taxed in accordance with section 167 of the Bankruptcy Act.
69 Apparently as a consequence of the above request, Ms Sexton was appointed on 6 August 2002:
[t]o be the taxing officer and tax the bill of cost of Cutler Hughes & Harris on a solicitor/client retainer for services provided to the Trustee, Mr Warren Pantzer, Trustee of the bankrupt estate of Thomas Richard Wenkart, bankruptcy number NSW 5988/99/0.
70 On 17 February 2003 Ms Sexton issued a Certificate of Taxation in the form of two schedules, "Schedule A - Paid Costs" and "Schedule B - Unpaid Costs". Her certification was expressed as follows:
I do hereby certify that I have taxed the solicitor-client bills of costs of Cutler Hughes & Harris, Solicitors relating to work undertaken by that firm on behalf of Warren Pantzer the trustee of the estate of Dr Thomas Richard Wenkart, and have allowed the following amounts.
71 Schedule A of the Certificate of Taxation allowed $88,042.24 in respect of paid costs and Schedule B allowed $180,435.40 in respect of unpaid costs. Ms Sexton's evidence, as given before Beaumont J and accepted before me to reflect the truth, was that she was appointed to tax the solicitor-client bills of costs of Cutler Hughes & Harris but that she did not receive bills of costs; rather she received computer print-outs of the work done on a daily basis by various members of the firm. She understood that bills of costs had not been drawn because funding was not available to pay someone to draw proper bills of costs. As I understand Ms Sexton's evidence, she had access to Cutler Hughes & Harris' files and she checked each item on the computer print out against the files and allowed the item only if she could find material on the files that supported the item.
72 Schedule A of the Certificate of Taxation is constituted by 12 separate items or amounts allowed for legal work done between nominated dates in respect of matters only generally described. By way of example, item 2 reads "$408.30 in PAN 992/3 for the period 20‑7‑00 to 26-11-01 (Deed)" and item 9 reads "$18,169.59 in PAN 992/14 for the period 24‑10‑00 to 30-11-01 (Application by R Walter Pty Ltd)". The earliest nominated date in Schedule A is 24-1-00 and the latest 20-3-02. The supporting documentation, apparently created by Ms Sexton and forming part of the Certificate of Taxation, shows each of the 12 items or amounts to have been paid on 22 March 2002. I conclude that it is more likely than not that it was on 22 March 2002 that the payment of $105,000 made by Mr Pantzer to Cutler Hughes & Harris by bank cheque on 15 March 2002 was received into Cutler Hughes & Harris' bank account.
73 Schedule B of the Certificate of Taxation is constituted by four separate items or amounts described in a similar way to the items in Schedule A. By way of illustration, item 1 reads "$5,338.82 in PAN 991/5 for the period 27.7.00 to 22.8.00 (Advice on rejection/admission of proofs of debt)". Item 2 reads "$111,214.98 in PAN 992/7 for the period 30.1.01 to 26.3.02 (General advice - Wenkart)". The remaining two items concern periods of time ending in November 2001. The earliest nominated date on Schedule B is 16-5-00 and the latest 26-3-02 (ie shortly after the annulment of Dr Wenkart's bankruptcy).
74 I do not pretend to understand precisely the process that led to the issuing by Ms Sexton of her Certificate of Taxation dated 17 February 2003. Nonetheless, it seems clear from her evidence that, if Cutler Hughes & Harris had issued bills of costs to Mr Pantzer, such bills were not provided to her. I am satisfied that Cutler Hughes & Harris did issue bills of costs to Mr Pantzer (see [68] above). Indeed, the Cash Payments List gives details of invoice numbers for some, but not all, of the payments made to Cutler Hughes & Harris.
75 Having regard to the facts that Dr Wenkart became bankrupt on 28 October 1999 and the earliest date nominated in the Certificate of Taxation is 24 January 2000, I conclude that Ms Sexton did not conduct a taxation in respect of all of the work undertaken by Cutler Hughes & Harris for Mr Pantzer in his capacity as trustee of Dr Wenkart's bankrupt estate. It is not in dispute that Cutler Hughes & Harris were retained by Mr Pantzer throughout Dr Wenkart's bankruptcy.
76 I reject Mr Pantzer's contention that there was no request for any of the amounts paid to Cutler Hughes & Harris to be taxed under s 167 of the Act other than in respect of the amount of $105,000 paid on the day that Dr Wenkart's bankruptcy was annulled. In my view the correspondence exchanged between the date of Dr Wenkart's s 73 proposal and the date that his bankruptcy was annulled makes plain that Dr Wenkart, by his solicitor, requested a taxation of all of Cutler Hughes & Harris' costs for services provided to Mr Pantzer as trustee of Dr Wenkart's bankrupt estate. The terms of Ms Sexton's appointment tend to confirm this understanding of the taxation request made by Dr Wenkart.
77 Moreover, for the reasons set out below, I accept that this proceeding has been conducted on the basis that Mr Pantzer agreed to have the bills of costs of Cutler Hughes & Harris taxed. In particular, I accept that the orders made by Lindgren J on 21 October 2003 were formulated as they were because it was understood by those who respectively acted for Mr Pantzer and Dr Wenkart that Mr Pantzer so agreed.
78 The context in which Lindgren J came to make orders in this matter on 21 October 2003 was that the docket judge, who was then Beaumont J, was unwell. Lindgren J was thus more than usually dependent on information provided to him by the parties' respective legal representatives. On 11 March 2002 Beaumont J had made the consent orders that are set out in [2007] FCA 1589 at [15]. Those orders provided, in effect, that Dr Wenkart charged the Paddington property to secure the remuneration, costs, charges and expenses to which Mr Pantzer was, or might become, lawfully entitled as trustee of his bankrupt estate and recorded that Dr Wenkart "agreed to pay the same within 28 days of determination of the quantum of the same or at such other time as the parties may agree". I observe, incidentally, that there is no suggestion that the parties have agreed another time.
79 The orders made by Lindgren J on 21 October 2003 (see [2007] FCA 1589 at [22]), although made after the filing of the cross-claim, were intended to enable the amount to which Mr Pantzer was "lawfully entitled" as trustee of Dr Wenkart's estate to be quantified. Those orders in effect, obliged Mr Pantzer to require the persons who had provided services to him with respect to Dr Wenkart's bankrupt estate (other than Cutler Hughes & Harris) to supply bills of costs pursuant to s 167 of the Bankruptcy Act and additionally obliged Mr Pantzer to notify Dr Wenkart of his claim for remuneration in respect of services provided after the annulment of Dr Wenkart's bankruptcy. I observe incidentally that the absence of any reference in the order to Mr Pantzer's entitlement to remuneration for services provided before the annulment of Dr Wenkart's bankruptcy supports my above conclusion that Mr Pantzer's entitlement in that regard had by that time been quantified. His Honour noted that Dr Wenkart conceded that upon completion of taxation of the claims for costs and remuneration referred to in the orders, the amount taxed would be amounts to which Mr Pantzer was lawfully entitled within the meaning of the orders made on 11 March 2002.
80 The explanation for Mr Pantzer not being obliged by the orders made on 21 October 2003 to require Cutler Hughes & Harris to supply bills of costs can be found in the transcript of the hearing on that day before Lindgren J. On that day Mr Johnson of counsel appeared for Mr Pantzer. One of the matters debated before his Honour was a procedure for quantifying the amounts to which Mr Pantzer was "lawfully entitled" within the meaning of order 1 of the consent orders made on 11 March 2002. Mr Johnson told his Honour:
The position that we would seek is orders that we are lawfully entitled to a quantified amount of remuneration and costs and, your Honour, either to give directions as to who that procedure [sic] is to be quantified and then that attached to the charge.
Mr Johnson later observed:
Well, if your Honour was then minded to consider a position of a regime for quantification, we would say there should be some conditions, because we're concerned about this matter dragging on.
81 Mr Johnson went on to advise his Honour that the judgment of Beaumont J of 6 May 2003 (ie Wenkart v Pantzer [2003] FCA 471) dealt with the amounts due to Cutler Hughes & Harris. That judgment concerned Mr Pantzer's entitlement to the amount of Ms Sexton's certificate of taxation of 17 February 2003. Mr Johnson agreed with Lindgren J that, because Beaumont J had already determined the amount to which Mr Pantzer was entitled in respect of the costs of Cutler Hughes & Harris, those costs should be an exception to the order obliging Mr Pantzer to require service providers to supply bills of costs. Shortly thereafter the transcript records the following exchange concerning the way in which the orders to be made by Lindgren J should be drafted:
His Honour: ….We have excluded from that order legal services provided to Mr Pantzer by Cutler Hughes & Harris. Now is that correct? That covers all legal services irrespective of when provided by Cutler Hughes & Harris?
Mr Johnson: I believe it does, your Honour. And I also believe it extends to their out of pocket expenses, including counsel fees …
His Honour: In other words, that is already subject to the existing taxation?
Mr Johnson: Yes. Again, I will check Ms Sexton's taxation records on that, your Honour.
It does not appear that Mr Johnson later qualified or withdrew his affirmative answer to the last of Lindgren J's above questions and his Honour thereafter made the orders dated 21 October 2003.
82 For the reasons given above, it appears that Mr Johnson's understanding on 21 October 2003 of the ambit of Ms Sexton's taxation was erroneous. However, I see no reason to conclude that Dr Wenkart's legal representatives were aware of Mr Johnson's error; Dr Wenkart's solicitors had requested a comprehensive taxation of the costs of Cutler Hughes & Harris. I conclude that it is not now open to Mr Pantzer in this proceeding to adopt an approach that is inconsistent with the basis upon which Lindgren J was invited to make the orders dated 21 October 2003.