Nixon, in the matter of Nixon (No 2) [2015] FCA 1047

Federal Court of Australia|2015-09-23|Before: Edelman J

ON THE CONDITION THAT NONE OF THE APPLICANTS CHARGE ANY PROFESSIONAL FEES TO ANY OF THE ESTATES IDENTIFIED IN SCHEDULES 1 TO 9 IN ANNEXURE A TO THESE ORDERS FOR WORK DONE TO FAMILIARISE THEMSELVES WITH THE PRIOR CONDUCT OF THE SAID ESTATES, THE COURT ORDERS THAT:

In respect of each of the bankrupt estates listed in Schedules 1 to 6 in Annexure "A" to these orders (of which the parties are trustees): 1.1 Pursuant to Rule 1.34 of the Federal Court Rules 2011 (Cth) (the Rules) and Rule 1.03(2) of the Federal Court (Bankruptcy) Rules 2005 (Cth) (the Bankruptcy Rules), compliance with the requirements of Rules 8.02(2)(b) and (c) of the Bankruptcy Rules be dispensed with. 1.2 Pursuant to section 134(4) and section 180 of the Bankruptcy Act 1966 (Cth):- (a) In respect of the estates set out in Schedule 1 in Annexure "A" to these orders:- (1) the resignation of Brendan Joseph Nixon (Mr Nixon) as one of the two trustees of the estate be accepted; and (2) as a condition of Mr Nixon's resignation:- (A) Joanne Emily Dunn (Ms Dunn) must forthwith file a Consent to Act as Trustee with the Official Receiver; (B) From lodgement of the said Consent to Act, Ms Dunn be appointed trustee of the said bankrupt estates, jointly and severally with the remaining trustee, Ian Charles Francis (Mr Francis). (b) In respect of the estates set out in Schedule 2 in Annexure "A" to these orders:- (1) the resignation of Mr Nixon as one of the two trustees of the estate be accepted; and (2) as a condition of Mr Nixon's resignation:- (A) Kelly-Anne Lavina Trenfield (Ms Trenfield) must forthwith file a Consent to Act as Trustee with the Official Receiver; (B) From lodgement of the said Consent to Act, Ms Trenfield be appointed trustee of the said bankrupt estates, jointly and severally with the remaining trustee, Ms Dunn. (c) In respect of the estates set out in Schedule 3 in Annexure "A" to these orders:- (1) the resignation of Mr Nixon as one of the two trustees of the estate be accepted; and (2) as a condition of Mr Nixon's resignation:- (A) Ms Dunn must forthwith file a Consent to Act as Trustee with the Official Receiver; (B) From lodgement of the said Consent to Act, Ms Dunn be appointed trustee of the said bankrupt estates, jointly and severally with the remaining trustee, John Richard Park (Mr Park). (d) In respect of the estates set out in Schedule 4 in Annexure "A" to these orders:- (1) the resignation of Mr Nixon as one of the two trustees of the estate be accepted; and (2) as a condition of Mr Nixon's resignation:- (A) Ms Dunn must forthwith file a Consent to Act as Trustee with the Official Receiver; (B) From lodgement of the said Consent to Act, Ms Dunn be appointed trustee of the said bankrupt estates, jointly and severally with the remaining trustee, Ms Trenfield. (e) In respect of the estates set out in Schedule 5 in Annexure "A" to these orders:- (1) the resignation of Mr Nixon as one of the two trustees of the estate be accepted; and (2) as a condition of Mr Nixon's resignation:- (A) Ms Dunn must forthwith file a Consent to Act as Trustee with the Official Receiver; (B) From lodgement of the said Consent to Act, Ms Dunn be appointed trustee of the said bankrupt estates, jointly and severally with the remaining trustee, Paul Anthony Allen (Mr Allen). (f) In respect of the estates set out in Schedule 6 in Annexure "A" to these orders:- (1) the resignation of Mr Nixon as the sole trustee be accepted; (2) as a condition of Mr Nixon's resignation:- (A) Ms Dunn must forthwith file a Consent to Act as Trustee with the Official Receiver; (B) Ms Trenfield must forthwith file a Consent to Act as Trustee with the Official Receiver; (C) From lodgement of the said Consents to Act, Ms Dunn and Ms Trenfield be appointed joint and several trustees of the said bankrupt estates.

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 699 of 2015

BETWEEN: BRENDAN JOSEPH NIXON, JOANNE EMILY DUNN, LACHLAN STUART MCINTOSH, JOHN RICHARD PARK, KELLY-ANNE LAVINA TRENFIELD, PAUL ANTHONY ALLEN AND IAN CHARLES FRANCIS

JUDGE: EDELMAN J DATE: 23 SEPTEMBER 2015 PLACE: BRISBANE

Introduction 1 This is the resumption of proceedings which were adjourned on 3 September 2015. On that date, after hearing from Mr Jiear on behalf of the applicants, I adjourned this application setting out several concerns with the orders sought: Nixon, in the matter of Nixon [2015] FCA 976. The applicants say that they have addressed those concerns. After reading the material provided yesterday by the applicants, including their revised proposed orders, I indicated to the parties that I would deal with this matter on the papers without the need or expense of an oral hearing. These are my reasons why the concerns I identified on 3 September 2015 have been addressed.

Background to this application and my 3 September 2015 reasons 2 This application concerns 85 different estates. The applicants described them as 71 bankrupt estates (identified in Schedules 1 - 6) (the Bankrupt Estates), four estates where the court has appointed a liquidator (the Liquidation Estates), and 10 estates where creditors have appointed a voluntary liquidator (the CVL estates). 3 Each of the applicants in this matter is an Official Liquidator or Registered Trustee. This application arises because one of the applicants, Mr Nixon, has left his employment at FTI Consulting (previously Kordamentha Qld). He had been appointed to his roles while serving in that employment. He and the Senior Managing Directors of FTI have now agreed that he will resign from his appointments as trustee and liquidator. 4 As I explained in my reasons on 3 September 2015, the applicants seek orders to replace Mr Nixon as a trustee and liquidator of various estates. Broadly, the applicants seek three types of orders: (1) orders dispensing with any requirement to provide notice of Mr Nixon's retirement; (2) orders that Mr Nixon be removed from his appointments as trustee and liquidator (in effect by acceptance of his resignation); and (3) orders that Ms Dunn (in relation to the estates in Schedules 1, 3, 4, 5, 6, and 8 to the originating process) and Ms Trenfield (in relation to the estates in Schedules 2, 6, and 9) replace Mr Nixon in those appointments. 5 In my 3 September 2015 reasons I explained three concerns that I had with these orders. Apart from those concerns, for the reasons I have explained the orders were otherwise appropriate. 6 My first concern was in relation to dispensing with notice of this application. It was unclear why no notice had been given to the petitioning creditors of the five bankrupt estates who had insisted that only Mr Nixon be appointed as the trustee in bankruptcy. 7 My second concern was whether the applicants would charge professional fees to familiarise themselves with the prior conduct of the estates. 8 My third concern was in relation to the four Liquidation Estates. Mr Nixon and Ms Dunn are joint and several trustees of these four estates. Mr Nixon seeks to resign from these estates and to have Ms Trenfield replace him. But I doubted whether there was power under s 473(7) of the Corporations Act 2001 (Cth) (which was the only provision relied upon by the applicants) to replace one of two co-liquidators.

The applicants have addressed the three concerns satisfactorily 9 As to my first concern, the applicants have now given notice of this application to the petitioning creditor of the five bankrupt estates. Subsequent evidence now filed by the applicants shows that this petitioning creditor is the Deputy Commissioner of Taxation. The Deputy Commissioner of Taxation has confirmed that he does not oppose the application. 10 As to my second concern, the applicants have now provided evidence that they will not pass on to the estates (i) the costs of this application, (ii) the costs of new appointees familiarising themselves with the estates, (iii) the costs of obtaining information from Mr Nixon relevant to the files, or (iv) the costs of notifying the Bankrupts, directors, and shareholders of the companies of the change in appointees. 11 As to my third concern relating to the four Liquidation Estates, the applicants are content for Ms Dunn to remain the sole liquidator. 12 Since all of my concerns have now been addressed, the orders proposed should be made. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edelman.

Federal Court (Corporations) Rules 2005(Cth)rr 1.34, 1.3(2), 2.7(1)

Bankruptcy Act 1966(Cth)ss 134(4), 180

Corporations Act 2001(Cth)ss 473(1), 473(7), 479(3), 502, 503, 511(2)

Federal Court (Bankruptcy) Rules 2005(Cth)rr 1.03(2), 8.02(2)(b), 8.02(2)(c)

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