Pattison (Trustee), In the matter of Bellin (Bankrupt) v Bellin

Background 1 On 22 August 2000 I published Reasons for Judgment answering certain questions which had been raised by the applicant in relation to his claim for remuneration, costs and expenses in relation to the administration of the bankrupt estate of the respondent. I gave the parties the opportunity to make written submissions as to the costs of the applicant's claim and the respondent's cross‑claim. 2 The applicant submitted that as he had succeeded on the issues raised in the claim and the cross‑claim he was entitled to an order for his costs on an indemnity basis as he was acting in the exercise of his duties as trustee. The applicant also drew my attention to a letter which his solicitors had written to the respondent's solicitors on 7 April 2000 which was expressed to be "Without prejudice except as to costs". In that letter the applicant's solicitors' stated that the applicant was prepared to reduce his remuneration by 25% if the matter was settled within seven days. That offer was rejected by the respondent's solicitors on 18 April 2000. The applicant submitted that I could take his offer into account as a "Calderbank" offer: Calderbank v Calderbank [1976] Fam 93; John S Hayes & Associates Pty Limited v Kimberly‑Clark Australia Pty Limited (1994) 52 FCR 201. I do not consider the applicant's offer as one appropriate to be considered by reference to Calderbank principles. The questions which I answered did not determine the amount of remuneration, costs and expenses to which the applicant was entitled but only determined the means by which the remuneration might be determined. 3 The respondent submitted that the applicant should not be allowed his costs of the application or, alternatively, that they should be disallowed or reduced by setting off the costs which should be ordered to be paid by the applicant to the respondent. The respondent submitted that the application brought by the applicant sought an indulgence and was not brought for the benefit of the creditors, the estate or for the respondent, but rather only for the applicant. It is true that creditors have been paid in full but the issue which arose between the applicant and the respondent, which was contested by the respondent, was the entitlement of the applicant to be paid further remuneration, costs and expenses. It is not correct to characterise the application as one seeking an indulgence; rather it sought the determination of a claimed entitlement. 4 The respondent submitted, in my view correctly, that the applicant's initial application, dated 16 May 2000 filed on 17 May 2000, was misconceived. That application claimed an order that the respondent pay the applicant $42,430.49 in respect of his remuneration, costs and expenses of administering the estate of the respondent. On the same day a notice of motion was filed seeking an order that the respondent pay the applicant $31,510.17 in respect of outstanding remuneration, fees and expenses associated with the estate of the respondent. When the matter came on for hearing before me on 5 June 2000 the applicant filed an amended application deleting the claim for an order for payment of $31,510.17 and seeking a declaration that the applicant was entitled to claim remuneration, costs and expenses in respect of administering the estate of the respondent in addition to the amounts approved by the resolution of creditors on 2 September 1997, in the total sum of $42,455.79 together with the costs of bringing the application on an indemnity basis. The additional remuneration was sought in accordance with Reg 8.08 of the Bankruptcy Regulations. 5 Subsequently on 20 July 2000 the applicant filed a further amended application and an amended notice of motion seeking answers to certain questions and deleting any claim for the payment of money sums. I gave the applicant leave to file these documents at the hearing on 24 July 2000. 6 At the hearing the applicant's principal submission appeared to be that the applicant's remuneration should be determined either by the Court or pursuant to Reg 8.08 of the Bankruptcy Regulations. It was an alternative submission of the applicant that the creditors had reserved to themselves the power to allow further remuneration to the applicant and that they had the right to exercise that power. 7 The respondent submitted that the applicant should not be entitled to any of his costs incurred prior to 19 July 2000 (the date upon which proposed amended notice of motion asking the questions was served) and that the applicant should pay the respondent's costs thrown away by the amendments to the application and the notice of motion.