Trkulja v Morton

Federal Court of Australia|2005-05-30|Before: Spender J, Gray J

The nature of the proceeding 1 These reasons for judgment concern an application by a bankrupt to remove his trustee in bankruptcy from office on the ground of alleged misconduct. The applicant alleged that, at two separate meetings, one on 18 November 2003 and the other on 25 February 2004, the trustee made to the applicant improper threats, amounting to blackmail. 2 The applicant is Michael Trkulja, who was made bankrupt on 4 September 2000, in consequence of his presentation of a debtor's petition. The respondent, Robert William Morton, was appointed trustee of the applicant's bankrupt estate. As a result of two objections made by the respondent to the applicant's discharge from bankruptcy, the bankruptcy has been extended until 5 September 2008. 3 I have approached the application on the basis that the power invoked by the applicant is that conferred on the Court by s 179(1) of the Bankruptcy Act 1966 (Cth) ('the Bankruptcy Act'). Section 179(1) provides as follows: '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.' 4 In its terms, this power is plainly concerned with 'the conduct' of the trustee 'in relation to a bankruptcy'. As Macchia v Nilant [2001] FCA 7 (2001) 110 FCR 101 at [49] - [50] demonstrates, the Court must first consider whether it should inquire into the conduct of the trustee. If an inquiry is undertaken, the next question is whether the trustee should be removed from office and/or whether any other order should be made. The Court should be reluctant to undertake an inquiry, unless there are substantial grounds for believing that the trustee erred in the administration. If an inquiry is unlikely to reveal misconduct, it should not be undertaken. The Court should not unduly interfere with the day-to-day administration of a bankrupt's estate by the trustee. In order to remove a trustee in bankruptcy, it is necessary to find misconduct on the part of the trustee. Removal is possible if the relationship between the trustee and the bankrupt has broken down totally: Doolan v Dare [2004] FCA 682 at [49]. In that case, Spender J found that there was a clear conflict of interest between the trustee's interests in having her remuneration paid and how she thought that might be achieved, and her obligations as a fiduciary to the creditors and the bankrupt. 5 With these principles in mind, I took the view that I should conduct an inquiry. If true, the allegations of threats amounting to blackmail would be sufficiently serious conduct in relation to the bankruptcy to warrant the removal of the respondent as the applicant's trustee in bankruptcy. The principal question is therefore whether the allegations of threats amounting to blackmail are true. If they are, it would be necessary to consider whether, in the circumstances, removal was appropriate. If the allegations are untrue, and there is nothing else about the conduct of the respondent on the two occasions in question to amount to misconduct in relation to the bankruptcy, then it would be appropriate to dismiss the application. 6 The respondent filed an affidavit in answer to the applicant's initial affidavit, giving an account of the respondent's administration of the applicant's bankrupt estate. The exhibits to this affidavit were voluminous. I took the view that it was unnecessary, at least at the initial stage of the inquiry, for me to have regard to the manner in which the entire administration of the bankrupt estate had been conducted. Section 179(1) does not give the Court a general jurisdiction to oversee the trustee's management of the administration. Even s 178, which confers jurisdiction on the Court to make orders about the administration of the estate, requires that there be an act, omission or decision of the trustee in relation to which application can be made to the Court. For present purposes, it is sufficient to say that the evidence to which I have had regard discloses that the administration of the applicant's bankrupt estate has been complex and difficult, that the respondent has pursued and continues to pursue what he believes to be undisclosed assets and sources of income of the applicant, and that a certain amount of animosity has developed between the applicant and the respondent. With this background in mind, I turn to the evidence of what occurred at the two meetings.

The meeting of 18 November 2003 7 In an affidavit sworn on 8 May 2004, which was intended to contain the grounds of the application, the applicant said: 'a) Mr. Morton has BLACKMAILED ME and I believe he may have engaged in dodgy tactics. I attended with my Solicitor Mr. Allan McMONNIES his solicitor's office on 19/11/2003 at his request made to my solicitor Mr.Allan McMONNIES to discuss a possible way of resolving the matter. b) Mr. Morton simply tried to blackmail me by stating that if I did not offer a substantial amount of money to him then he would put the heat up and refer me to the Police. After we left his office Mr. McMONNIES advised me this is Blackmail. c) Then although I cannot prove it I believe the Mr. Morton was involved in me being bashed and threatened in my office a few days later. This was reported to the police. Then I went to Mr. Morton office [sic] with my solicitor Allan McMonnies and he said he wanted $350,000.00 which considering the amount he has already collected for my estate is three times the amount owed to creditors. d) I just walked out with my lawyer. Two weeks later 18/3/04 his solicitor wrote to say that Mr Morton would now accept $150,000.00. Copy of Letter from his solicitor enclosed e) I believe he is harassing me and my family and engaging in unethical practices far beyond what is reasonable or in accordance with the law.

f) I request the Honourable Court to dismiss Mr. Morton as my trustee and appoint new Trustee who will have an independently fresh look on all Issues and who will not Blackmail me like Mr. MORTON and his solicitor.' 8 It will be noted that the applicant says in this affidavit that the first meeting occurred on 19 November 2003. It is now clear from other evidence that the meeting occurred on 18 November 2003. 9 Mr Allan McMonnies, the solicitor then acting for the applicant, swore an affidavit on 31 May 2004. His account of the first meeting, given in that affidavit, is as follows: 'I attended with the applicant at the office of John Curtain & Associates on 18th November, 2003 in the morning for a meeting to discuss possible settlement. This was in the presence of Mr. Nikolaidou. At this meeting the respondent stated that if the applicant did not agree to make a substantial payment to the trustee he would put the heat up and refer the matter to the police. I took exception to the fact of the threat made to refer the matter to the police if money was not paid. I spoke with the applicant after the meeting and stated words to the effect that this was in effect blackmail and is not allowed by law.' 10 In a further affidavit, to which I will refer, Mr McMonnies referred to his affidavit of 31 May 2004 and confirmed that the contents of it were true and correct. 11 The applicant gave oral evidence. His evidence-in-chief was not easy to follow. This was largely because of his tendency to be discursive, and his evident desire to communicate to the Court the details of every complaint that he makes, or would like to make, about the respondent's conduct of the administration. According to the applicant, there were four persons at the meeting: the applicant; Mr McMonnies; the respondent; and the respondent's solicitor, Mr Nikolaidou. The meeting opened with a conversation about a computer, of which the respondent had taken possession, and about whether the applicant could have it returned. The respondent then said that the applicant had been a very difficult customer. According to the applicant, he asked, 'In which way am I a difficult customer?' The respondent then said, 'Look, let's resolve it as civilised people', and began to talk about a previous case in which he said that he had put a Mr Christodoulou in gaol for four years. The respondent then said, 'Look, if you don't pay substantial money, I will put the full force of the law and I will...'. The applicant said, 'Are you threatening me here?' and told the respondent, 'If you're threatening, you can get stuffed.' The applicant then left. At a later stage, the applicant said that he added, 'I walk now. I'm not come here to be threatened.' 12 On the applicant's account, Mr McMonnies then said that he wanted to see what the respondent wanted, and talking began. Mr Nikolaidou laughingly said, 'Mr Trkulja is beyond any threats.' Mr Nikolaidou then repeated the suggestion that, if a substantial amount of money were not put up, the respondent 'can put the heat up.' Mr Nikolaidou said that this was a 'cut-throat situation'. According to the applicant, there was no figure discussed, beyond the requirement for a substantial sum of money. The respondent then made it clear that the payment of such a sum would enable him to bring the bankruptcy to an end, and the applicant would be free. Mr Nikolaidou made reference to the applicant's potential to make money. According to the applicant, there was then discussion about whether Mr Morton had delivered to another person, the defendant in a defamation case in which the applicant is a plaintiff, the applicant's documents relating to the claim. The applicant requested the respondent to, 'Please stop rubbishing my name. I don't have no criminal record.' The respondent alleged that the applicant did have a criminal record. 13 Mr McMonnies also gave oral evidence. He said that he had difficulty remembering the meeting of 18 November 2003, without looking at notes that he had made at the time, or at his affidavit, which he said was made from the notes. He had not brought the notes to the Court with him. In the course of giving evidence about the second meeting, he said that his recollection was prompted by looking at an affidavit that he had made about that meeting. He said he was reminded that the reference to putting the heat up took place at the meeting of 18 November 2003, rather than the second meeting. He thought there was a reference to the police in both meetings. He did not recall a discussion about the return of the computer, or about Mr Christodoulou. He knew that there was a discussion about trying to settle the matter. He did not recall the exact words people said and had not taken careful notes. Nor did he recall a discussion about the respondent rubbishing the applicant's name, or about any criminal record. In cross-examination, Mr McMonnies revealed that he had told the applicant that he thought that what had occurred at one or both of the meetings 'was in the nature of blackmail.' He also thought that the applicant was unhappy with what was happening at the first meeting and did not want to stay there. 14 The respondent also gave oral evidence about both meetings. He made no notes of either, because the discussions were without prejudice. His recollection of both meetings was limited. He did recall discussing with the applicant the terms of a composition. He believed that, at the meeting of 18 November 2003, he said that, if the applicant wanted to be discharged from bankruptcy, he would need to put a composition to his creditors. He believed that he explained to the applicant the mechanics of a composition pursuant to s 73 of the Bankruptcy Act. He believed that he also gave the applicant the alternative of a discharge at any time, on the basis that the respondent could withdraw his objection to a discharge. A reasonable proposal to the creditors would result in a withdrawal of the objection. This would require a meeting, and it would be necessary for the applicant to pay the respondent $5000 to call and conduct that meeting, especially as there would probably be some adjournments. 15 The respondent said that he had been the trustee of the estate of a Mr Christodoulou, who had gone to gaol as a result of the respondent referring a matter directly to the police. Mr Christodoulou had stolen the Titles Office copy of a certificate of title and used it, with a forged signature, to create a mortgage, in order to obtain money. The respondent could not recall mentioning this to the applicant in the context of the meeting on 18 November 2003, although acknowledged that he may have. He also said he may have told the applicant that he would turn the heat up on him, but could not recall this. He did not believe that he threatened to refer anything to the police if money was not paid. 16 In cross-examination by the applicant, the respondent could not recall a discussion about the computer, but conceded that there might have been one. He did not believe that he said that the applicant had a criminal record. He believed that no amount of money was mentioned at the first meeting. He did not believe he said that, if no substantial amount of money was paid, he would turn the heat up and the applicant would finish in gaol like Mr Christodoulou. The respondent had no recollection about any discussion about him visiting the defendant in the defamation case. He did not believe that he said that the applicant had a criminal record. In fact, his evidence was that he did not know whether the applicant has a criminal record, apart from having seen a document suggesting that the applicant had been refused a licence as a private inquiry agent on the basis that he had a criminal record. The respondent could not recall the applicant saying at the meeting, 'Don't rubbish my name.' He did not believe that he had threatened the applicant. 17 Mr Nikolaidou also gave evidence, by means of an affidavit, sworn on 21 June 2004. He was cross-examined by the applicant. The relevant portions of his affidavit are as follows: '3. On 18 November 2003, I convened a meeting at my office. In attendance were my client, Robert William Morton, Mr Allen McMonnies, Mr. Michael Trkulja and me. 4. The purpose of the meeting was to have a without prejudice discussion about Mr Trkulja making an offer to his creditors which, if accepted by them, would bring his extended bankruptcy to an end. As soon as we were all in the same office, I confirmed with Mr McMonnies that the meeting was to be without prejudice, and that nothing that was said in the meeting would be used in any subsequent litigation. Before I was able to say anything further, Mr Trkulja demanded to know from Mr Morton the whereabouts of his computer. This was a reference by Mr Trkulja to a computer that was seized by Mr Morton during the execution of one of the Search Warrants on one of Mr Trakulja's [sic] premises at 138 A'Beckett Street, Melbourne. Mr Trkulja had been pursuing this computer for some time. Mr Trkulja was extremely hostile in his voice, tone and demeanor [sic]. 5. I recall Mr Morton saying to Mr Trkulja that the computer was a separate issue that could be addressed after the meeting. With some difficulty I was able to calm Mr Trkulja down sufficiently to start the meeting. I then said to Mr McMonnies and Mr Trkulja that my client wanted to see if we could sit down and have a discussion to ascertain whether Mr Trkulja was able to put a proposal to pay money to his creditors for the purpose of bringing his bankruptcy to an end. I then said to Mr Trkulja that there are a number of issues still outstanding in this matter and as I recall I went through all the outstanding issues as I saw them, in order to indicate that it would be sensible for this matter to settle if possible. 6. I then said that Mr Morton would explain to him (Mr Trkulja) the ways in which all these matters could be resolved and he could achieve a discharge from his bankruptcy. I allowed Mr Morton to explain the procedure available under the Bankruptcy Act. Mr Morton explained the ways in which under the Bankruptcy Act a bankrupt could seek a composition with his creditors, and it usually meant the payment of a sum of money. It would be then up to Mr Morton to decide whether to recommend the composition to the creditors having regard to all the circumstances. 7. I recall Mr Trkulja asking Mr Morton what kind of money he had in mind. I further recall Mr Morton saying that he did not think it was appropriate for him to identify the amount of money and it would be for Mr Trkulja to make any offer assuming he was inclined to do so. It became clear to me however that Mr Trkulja was not in a position to put any offer of settlement at that point in time, having regard to his hostile manner. It was agreed by Mr McMonnies and me that Mr Trkulja and he would go away and Mr Trkulja would consider his position and make any offers that he was minded to make at a later time. The entire meeting was a very tense and hostile affair. I made a note of the meeting immediately after it concluded.' 18 Mr Nikolaidou's notes of the meeting of 18 November 2003 were exhibited to the affidavit. Although his affidavit account is more full than the notes, the two are consistent. 19 In cross-examination by the applicant, Mr Nikolaidou was asked to recall what happened at the meeting. His evidence was: 'Well, we sat down and we agreed that it was a without prejudice discussion and I remember you were quite hostile to Mr Morton. You were complaining about the fact that he hadn't returned your computer that he had taken from a raid - not a raid, an execution of a warrant, and I think we tried to sort of say that that should be pushed aside and dealt with later because we were there to discuss the possible settlement of the matter. I remember we sort of raised - I said, "Well, these are the outstanding issues." I think I tried to say what the outstanding litigation matters were and other such things and that it would be best to try and see if we could resolve the matter. I said, "Well, Mr Morton can explain how it is you can come to some arrangement with your creditors so that everything is resolved and you can go your way with your life and everybody is free to do other things." As I recall, Mr Morton explained how under the Bankruptcy Act you can reach a composition with your creditors by offering a sum of money in settlement, and if he believes it appropriate he can recommend it to the creditors and they can accept it, or reject it of course, and if they do reject it, that's the end of the bankruptcy; you are - you would be... If it's accepted, then the bankruptcy comes to an end and that's the end of the matter, and you I think said, "What kind of money do you" - either you or Mr McMonnies, "What kind of money you had in mind?" Mr Morton said, well, he thought it would be more appropriate for you to suggest a sum of money rather than for him to put to you, and it was then generally agreed that you need to think about it or discuss it with your lawyer or whatever, and you would go away and contact, or your lawyer would contact, me at a future date if an offer was to be put. I think that was the discussion generally.' 20 Mr Nikolaidou did not recall the respondent making any threats, or talking about the police. He did not believe that the respondent threatened the applicant. He did not recall the respondent saying that he would put the heat up, or that if the applicant did not pay a substantial sum of money, the respondent would put him in gaol. He did not recall a mention of the case of Mr Christodoulou. He conceded that Mr Christodoulou might have been mentioned. He denied that he himself threatened the applicant. He conceded that the applicant might have said 'get stuffed' in one of the meetings, but could not recall which. Mr Nikolaidou conceded that the respondent might have said that if the applicant did not pay a substantial sum of money, he would put the heat up and would apply the full force of the law, although Mr Nikolaidou did not recall this and there was nothing in his notes suggesting it. Mr Nikolaidou conceded that he might have said 'Mr Trkulja is beyond any threats', by way of a jocular aside. He could not recall the applicant asking the respondent to stop rubbishing him and his family. 21 It is obvious from this summary of the evidence so far that there was no consensus about the details of the meeting of 18 November 2003. The applicant himself put forward different versions. To some extent, the version given by Mr McMonnies in his oral evidence differed from that in his affidavit. The respondent and Mr Nikolaidou said they could not recall a number of the details suggested by the applicant, but in most cases were prepared to concede that the things the applicant suggested had been said might have been said. The one clear difference between the two sides is that the respondent and Mr Nikolaidou denied that the respondent ever threatened that if the applicant did not pay a substantial sum of money, the respondent would report him to the police. 22 In fact, as the applicant revealed in the course of being cross-examined, he had made a recording of the meeting of 18 November 2003, without the knowledge of any of the other participants in that meeting. He tendered in evidence a tape-recording of the meeting. In the absence of any objection to the tender, I admitted the tape-recording into evidence. I requested that the Court's transcript provider provide a transcript of that recording. In a number of instances, the recording is too indistinct, either for a listener to hear exactly what was said, or for the transcriber to transcribe exactly what was said. Many of these indistinct passages are the result of more than one person talking at the same time. Some are no doubt the result of the inadequacy of the recording device for the task, and the fact that it was concealed, rather than being placed in an optimum position. The transcript of the recording therefore bears the inscription '(indistinct)' in a number of places. In addition, when I listened to the tape, it appeared to me that, in a few instances, what appears to have been said by Mr McMonnies has been attributed to the respondent. Those instances are not crucial to the issues in dispute. Despite the imperfections of the recording, it is possible to obtain a fairly clear picture of what was said at the meeting. 23 At an early stage, the applicant did say, 'Before we say anything, can I ask one question? Why I can't get my computer back?' there was brief discussion about this, and then the following exchange occurred: 'The respondent: There is no doubt that this has been a difficult administration for me to conduct, all right. You are a very difficult man. The applicant: It will be more difficult, Mr Morton, from now on. I will give you a run for your money. You can be sure that you and Mr Harvey, I will give you a run for the rest of your life. The respondent: Yes, well (indistinct) you know (indistinct) you may well wish to get on with your life.' 24 It is probable that the reference to 'Mr Harvey' in the transcribed version was in fact a reference to a Mr Hardy, a barrister who is the applicant's principal creditor. This exchange was followed by some discussion about whether the applicant was likely to succeed in appealing against the respondent's objections to his discharge from bankruptcy. The respondent then said: 'See, I've reached a turning point in this administration and the turning point is going to mean that either I'm going to turn up the heat and when I turn up the heat - when I say I turn up the heat, I really mean turn up the heat. I have, in previous administrations, difficult administrations, dealt with this - brought the full force of the law to bear and just - one example, Mr Christodoulou, I mean, he spent four and half... He spent four and a half years in jail which was, you know, basically my doing and...'. 25 The following exchange occurred immediately: 'The applicant: Are you bring us here to threaten me something? The respondent: No, no, no, I don't. The applicant: You going do it. If you threaten me it just gets tough really to really to walk in my (indistinct) you don't threaten me. Just cut (indistinct) talk. Tell me what - why we were. The respondent: No, no, I'm just laying the cards on the table (indistinct) conversation. I mean, I've got…. Mr Nikolaidou: Mr Trkulja is impervious to all this. I think we can take it all as read. So maybe let's just... The applicant: Just straight to the point... Mr Nikolaidou: Yeah. The applicant: what you after, mate. Mr Nikolaidou: I think Mr Trkulja is beyond the threats. The respondent: Well, any rate, we'll see. Mr Nikolaidou: But anyway - no, what my client said is this: life can be made difficult for both, you know. I mean, you've made difficult for him, he can make it difficult for you and it's a cut-throat situation. Now, what he's saying is that he's extended your bankruptcy by five years. The applicant: That's okay. Mr Nikolaidou: Now, you said you would appeal, but your appeal record is not enviable, let's be frank about this, and therefore it's highly unlikely you will succeed. You have five more years of bankruptcy. What Mr Morton has said, if you're prepared to come to a deal which you are prepared to pay, then he can rescind your bankruptcy, you will be out there doing whatever you like and that will be the end of the matter.' 26 The respondent then explained the machinery of a composition pursuant to s 73 of the Bankruptcy Act, including saying that the applicant would have to put $5000 on the table for a start and then put a proposal to creditors, which they may or may not accept. The alternative was that, pursuant to s 149J of the Bankruptcy Act, the trustee has power to withdraw an objection to discharge. If he were to withdraw the objection then the applicant would be discharged and would be free. The applicant said that he was free. He indicated that he could go on the dole and leave the respondent to take his chances and then asked, 'But anyway, what's next?' The respondent said: 'Well, I mean, the proposal would have to be reasonably substantial. You do earn and have the capability of earning a substantial level of income. I'm aware of that. You are aware of that.' 27 The applicant said that the respondent was only guessing. The respondent said that he was more than guessing. The following exchange then occurred:

'Mr Nikolaidou: What Mr Morton is suggesting is that if you are interested in making a lump sum offer, the - for his consideration, he's prepared to withdraw his objection to your extension to your bankruptcy and the banks will - I mean, you say that you're a free man; I'm sure you are. But I'm sure you will agree it's much better not to be bankrupt than to be bankrupt. The applicant: Sure. Mr Nikolaidou: Because you won't have anyone looking over your shoulder. That's the end of the matter. The applicant: Sure. Mr Nikolaidou: That must be worth something to you. The applicant: Yeah. Mr Nikolaidou: So anyway, I think - I don't know whether you have some specific figure in mind. The respondent: I think that, you know, it's - the first thing that these gentlemen need to do is to go away and consider whether they're interested in that or not.' 28 There was then some discussion about how much was owing to the creditors. The respondent said it was something over half a million dollars. The applicant described this as 'bullshit'. Mr Nikolaidou said that no-one is suggesting that the applicant would need to pay half a million dollars. The respondent said he was suggesting a compromise. Mr Nikolaidou then said: '(indistinct) to pay that in full and final settlement and Mr Morton has to make up his mind that that is reasonable in all the circumstances, having regard perhaps to your past and what a difficult customer you have been and all that sort of thing and take it from there.' 29 There was then discussion about a proceeding in the County Court, and the applicant's chances in it, and some further discussion about the amounts owing to creditors. The respondent said that he was not going to talk numbers at that stage and that he was not prepared to discuss numbers that morning. Mr Nikolaidou pointed out the advantage of ending the bankruptcy, to save wasting time lodging appeals, and complaints about lawyers. There was discussion about service of a subpoena and whether the respondent had attempted to throw the applicant out of a particular property. There was a discussion about whether the respondent would ever do violence to the applicant. This led the applicant to say, 'Now stop rubbishing' and to say, 'You do not have anywhere criminal record of me. No way.' The respondent said that he did, 'in the papers'. The applicant denied that he did, saying that he had been wrongly accused and had no criminal record 'in this country.' There was talk of a defamation case, which the applicant apparently won. Mr Nikolaidou mentioned perjury by the applicant at his oral examination. Mr Trkulja challenged him to proceed in relation to that. He said he would go on the dole and fight, with legal aid. Mr Nikolaidou asked, 'Are you interested in coming to some agreement or - in theory?' The applicant said, 'Probably yes.' There was discussion about what had happened at a mediation. The following exchange then occurred: 'The applicant: Well, unless you - unless you tell us what you want, we have nothing to discuss. The respondent: Okay (indistinct) The applicant: You tell us what you want and if is a - if is something what I can afford it… The respondent: I've made you aware this morning of what the options are from a legal point of view. The applicant: That's okay. The respondent: And now you know what the options - you can go away and consider them and if you think it's appropriate… Mr Nikolaidou: Normally - yeah, sure. The respondent: …you can make a proposal and that's when negotiations start. Mr Nikolaidou: Yeah, the normal procedure in these matters is for the, you know, the person to make a proposal to the trustees and say, "Look…" The respondent: It's not for the trustee to make a proposal. Mr Nikolaidou: "…do you - I have this amount of money I can lay my hand on. Is this enough in your judgement to, you know, get rid of the whole thing?", and he will say, "Well, yes, I think that (indistinct) or…"' 30 The applicant referred to a sum of $18 000, which apparently had already been paid, and there was discussion as to how that had been applied. Someone, probably Mr McMonnies, who appears to have been silent up to this point, suggested that the discussion would probably not get much further. He indicated that he and the applicant would go off and consider what had been said. Mr Nikolaidou suggested that Mr McMonnies come back to him, referring to there being too much conflict. The applicant said: 'No, I don't have a problem. I have - I am only upset with Mr Morton when he come to (indistinct) my mum and that was - that was the cruellest thing he ever did and he also be coming (indistinct) start again. But, you know, to go to my - to old woman to, you know - would be…' 31 Mr Nikolaidou then, in effect closed the meeting and said, 'We'll no doubt speak later on.' The respondent said, 'I'm sure we will.' Mr Nikolaidou said, 'You know the way out.' The respondent said, 'Don't go too far or we'll all wind up out there.' Mr Nikolaidou said, 'Yes, yes (indistinct) you'll never return, you'll lose yourself there.' The respondent said, 'Thank you.' Mr McMonnies said, 'Thank you.' The meeting then appears to have ended. 32 The tape-recording of the meeting makes it absolutely clear that the applicant's complaint, that the respondent threatened him that if he did not pay a substantial amount of money, the respondent would go to the police, is not made out. It is clear that the respondent was doing no more than attempting to secure a compromise, which would enable him to withdraw his objection to the discharge of the applicant from bankruptcy, and thereby release the applicant from bankruptcy and relieve the respondent of the burden of numerous investigations and legal proceedings. This was a proper thing for the respondent as trustee in bankruptcy to do. The word 'police' was not mentioned in the course of the meeting, so far as the tape reveals. To the extent that indistinct passages occur on the tape, there is none in which the context makes it likely that there was a reference to the police. The respondent did refer to the case of Mr Christodoulou, no doubt intending the applicant to get the message that his persistence in resisting attempts to uncover all his assets could result in prosecution for criminal offences, and in imprisonment. 33 It was by no means improper for the respondent to communicate these matters to the applicant, in an attempt to induce him to settle. There was no element of blackmail about them. In the context of a discussion in which the applicant was forthright, and even aggressive, the respondent said nothing untoward. When the applicant asked him, after he had referred to the Christodoulou case, whether he was intending to threaten the applicant, the respondent denied it. It was in this context that Mr Nikolaidou expressed the view that the applicant would not respond to threats. Plainly, the applicant was, at that early stage of the meeting, far from overawed by any threat. As I have said, he continued to put his position in a forthright, and at times aggressive, manner. The reference to turning up the heat was intended to communicate to the applicant that, if no compromise were achieved, there would be more legal proceedings. Far from proposing to walk out, the applicant remained in the meeting, and participated in the discussion in a manner wholly inconsistent with any belief that he had been threatened. He did not hesitate to put his point of view. Although the meaning of the comments of the respondent and Mr Nikolaidou at the conclusion of the meeting is unclear, neither was cross-examined about them and I do not take them to involve any kind of threat. 34 In short, what took place at the meeting of 18 November 2003 was not out of the ordinary in a meeting between a trustee in bankruptcy and the bankrupt, in which the trustee in bankruptcy wished to explain to the bankrupt that the bankrupt could be discharged if a compromise were achieved, and how that might be effected. No threat was made, other than in general terms in relation to further legal proceedings and the possibility of criminal prosecutions, leading to imprisonment. No reference was made to the police. If Mr McMonnies did indeed form the view that some unlawful threat had been made at the meeting, then I am unable to see why he should have done so. I can understand why the applicant, with his high level of hostility towards the respondent, might have magnified what had occurred, in his mind, after the event. On the evidence, I am certainly unable to make any finding of misconduct against the respondent on the basis of what occurred at the meeting on 18 November 2003.

The meeting of 25 February 2004 35 There is also inconsistency between the various accounts given of the second meeting. It will be recalled that, in his initial affidavit, sworn on 8 May 2004, the applicant described that meeting in just one sentence: 'Then I went to Mr. Morton [sic] office with my solicitor Allan McMonnies and he said he wanted $350,000.00 which considering the amount he has already collected for my estate is three times the amount owed to creditors.' 36 The applicant then said that he walked out with Mr McMonnies. He complained that he received a letter from the respondent's solicitors, dated 18 March 2004, demanding a substantially lower sum. That letter referred to a prior offer which was rejected, and requested payment of $150 000, by way of an initial payment of $30 000 and the balance to be secured by a second registered mortgage over a designated property. The respondent offered to withdraw his objection to discharge on the signing of all documents and the payment of the initial sum. It is significant that there was no reference in the applicant's original affidavit to any threat at the second meeting. The affidavit of Mr McMonnies, sworn on 31 May 2004, describes the meeting as follows: '3. I attended for a second meeting at Mr. Morton's office where we spoke with the respondent and Mr. Nikolaidou at approximately 2:00 pm on 25th February 2004. The purpose of the meeting was to see if it was possible to compromise the issues in dispute between the respondent and the applicant. 4. The meeting was of short duration as the respondent simply stated words to the effect that he wanted the applicant to pay $350,000.00 to enable a release of the applicant from the bankruptcy. 5. He stated that if the applicant was not prepared to pay the amount requested that the respondent would put up the heat and instigate police action. The applicant then terminated the meeting. 6. On the way out with him I said to the applicant that it was inappropriate for respondent [sic] to have threatened police action in the event that a payment was not made.' 37 On 15 June 2004, both the applicant and Mr McMonnies swore affidavits about the second meeting, prepared by another firm of solicitors. The applicant's account of the meeting in his affidavit of 15 June 2004 is as follows: '5. Prior to the 25 February meeting I was informed by my solicitor at the time, Allan McMonnies, and believe that the purpose of the meeting was to discuss the possibility of enabling me to be released from bankruptcy. There had been a number of meetings prior to the 25 February meeting to endeavour to try to arrange this outcome. 6. I attended the meeting at Mr Morton's offices with my solicitor at the time Mr. McMonnies. Mr McMonnies and I initially met with Mr Morton's solicitor Nick Nikolaidou. The three of us waited for Mr Morton to join the meeting. Whilst we were waiting for Mr Morton to join the meeting Mr McMonnies, on my instructions, put an offer to settle my bankruptcy which involved seeking to arrange a transfer of property to the trustee. Mr Nikolaidou said that he would need to obtain instructions. 7. Mr Morton then joined the 25 February meeting. Mr Nikolaidou relayed the offer that had been put to him on my behalf by Mr McMonnies. Mr Morton rejected my offer. It is the following conduct of Mr Morton that I rely upon in support of my application. 8. Mr Morton then stated words to the following effect: "You have been a difficult customer." 9. I said to Mr Morton: "Cut the bullshit and tell us what you want." 10. Mr Morton said: "$350,000.00 - this can be paid over several years." 11. I said to Mr Morton: "Get stuffed."

And I said to Mr McMonnies: "Come on Allan we're going."
Mr. McMonnies said: "Wait I want to hear what they want."
Mr Morton said: "I will put the heat up and I mean real heat up and I will use the full force of the law. I want $350,000 or I will report you to the Police."
I said to Mr Morton: "You can get stuffed. You are not going to blackmail me and threaten me with the Police."
Mr McMonnies and I then left the room and departed Mr Morton's offices without saying anything further.' 38 The account given by Mr McMonnies in his affidavit of 15 June 2004 is as follows: '6. The purpose of the 25 February meeting was to discuss the possibility of settling the issues in dispute between Mr Morton and Mr Trkulja. There had been a number of meetings prior to the 25 February meeting to endeavour to settle these issues.
Upon attending Mr Morton's offices for the 25 February 2004 meeting Mr Morton was not available. Mr Trkulja and I waited for Mr Morton. Mr Morton's solicitor Nick Nikolaidou arrived shortly thereafter and waited with us until Mr Morton arrived. Mr Nikolaidou was present when Mr Morton attended the meeting.
Upon Mr Morton attending the 25 February meeting he stated words to the following effect: "The situation is this. If you pay me $350,000.00 I will release you from bankruptcy and all proceedings."
Mr Trkulja said: "We're wasting our time." At the same time Mr Trkulja was readying to leave the meeting.
Mr Morton said: "If you don't pay I will put the heat up and I will report you to the Police."
The meeting ended abruptly and Mr Trkulja and I left.
My recollection of Mr Morton threatening Mr Trkulja "to turn the heat up" and of reporting Mr Trkulja "to the Police" is very clear.' 39 In his evidence-in-chief, the applicant described the respondent as wanting '350,000 or else he will refer the matter to police and, you know, he will turn the heat up, really up. I tell him to get stuffed.' He then said that Mr McMonnies wanted to stay a few minutes extra to hear what else they were saying. And said, 'But that's when Mr Morton want 350,000 or he'll refer the matter to the police and he will put heat up and presumably I will be in jail.' In cross-examination, the applicant also said that the respondent said, 'I can't be bothered any more.' He said that he walked out and Mr McMonnies stayed inside. 40 In cross-examination, the applicant also conceded that, prior to the respondent's arrival at the meeting, there was discussion between Mr Nikolaidou and Mr McMonnies about the possibility that the applicant might arrange for a transfer to the respondent of a house and land, purchased in the name of his nephew Branislav Todoran, in exchange for a discharge from his bankruptcy. The respondent did not accept this proposal. The applicant said that he did not recall the respondent suggesting that he could have time to pay. In one of his answers in cross-examination, the applicant gave this account of the meeting: 'Look, when he said 350,000, I say - you know, how is it separate and say, "You can get stuffed." I just walk out. He say, "We'll report you to police," and I will go to jail. I said, "Do whatever you wish." I say, Mr McMonnies, come out with me, and we went out (indistinct) stayed a few minutes or so, and then went out. He say he will report to police and put me in jail.' 41 When pressed about whether the respondent had said he would put the applicant in jail, the applicant said, 'Yes, that's what he says.' 42 The account given by Mr McMonnies, in answer to questions in evidence-in-chief, was as follows: 'Well, what's your recollection of the second one?…The second meeting - I remember more clearly what it was about. It was a relatively short meeting. We waited for Mr Morton to come back from wherever he was. It was in the afternoon. He arrived - we actually arrived before he arrived in his office. We went into the room. As I recollect, Mr Morton almost at the start of the meeting indicated that - it was like this: if Mr Trkulja paid a sum of money, the matter would be finished, all matters against the two of them would have been finished. Against the two of them?…So all matters would have been finished, but it was between the two - Mr Trkulja and Mr Morton. There was a number of related proceedings. That's probably a better way of putting it. Yes, okay?…Mr Morton indicated if he paid this sum of money to him, as being the trustee, that the matter would have been - he would discontinue all other - all proceedings against Mr Trkulja. Yes?…The sum of money was - I think it was 315,000, without me looking up the notes. It was something, it was a fairly large sum of money. 315?…I think it was 315,000. Mr Trkulja got fairly - basically said, "We're wasting our time," or something like that, was about to walk out. Mr Morton then said words to the effect of I think the words were something like, "I'm going to put the heat up or something," and I don't remember the exact words now, but basically he was saying that if Mr Trkulja didn't pay the money that he was going to take all the steps he could take to - and also the more important thing was, he said he would refer him for criminal proceedings. As I walked out with Mr Trkulja I said to him, because the matter - we didn't resolve it. I said to Mr Trkulja that, "He's not able to do that to you, threaten criminal proceedings to resolve not paying money," but that's as far as I can remember the gist of the conversation and I probably - I'm certain I used the words to Mr Trkulja that it's in the nature of blackmail.' 43 Mr McMonnies said that the respondent 'certainly said he would refer the matter to the police or words to that effect.' Mr McMonnies said that he prepared his affidavit of 15 June in draft form, relying on his notes of the meeting (which he did not bring with him to court) and the solicitors who prepared the affidavit turned his draft into final form, without altering the substance. 44 On being shown his affidavit of 31 May 2004 (the contents of which he confirmed in his affidavit of 15 June 2004), Mr McMonnies was asked whether the earlier affidavit prompted any recollection on his part. His answer was: 'What it does remind me of is the putting the heat up was the first meeting rather than the second meeting, so I had that confused. The reference to the police, this is was I remember it. "At this meeting the respondent stated the respondent did not agree to make a substantial payment to the trustee but would put the heat up and refer the matter to the police. I took exception" - this is how I remember the first meeting.' 45 The evidence proceeded as follows: 'So "put the heat up" was the first meeting but not the second?…Not the second meeting, that's correct. And "police" was both or…?…Police was both.' 46 In cross-examination, Mr McMonnies confirmed his recollection that the words 'putting the heat up' were used only at one meeting, that he had thought it was the second meeting, but he now thought it was the first. He did not recall any discussion about the property purchased in the name of the applicant's nephew. He thought that the figure mentioned at the meeting was $315 000, but said, 'I've got 350 in my affidavit, so it must be 350.' According to Mr McMonnies, the applicant got very upset about the amount of money that was being asked, said words to the effect of, 'Let's go' and then, Mr McMonnies said, 'We didn't last very much longer.' It was when the applicant wanted to leave that the respondent came up with the suggestion that he would take further action and refer the matter to the police if the applicant did not pay. When asked, 'Mr Morton didn't say, did he, that he was going to refer the matters to the police?', Mr McMonnies responded 'Yes, he did, or words to that effect.' In his next answer, he confirmed that there was definitely mention of referral to the police. He was certain that the word 'police' was used. He thought it was only used once. When asked whether the proposition was, 'I won't go to the police if you pay $300,000', Mr McMonnies said. 'It was the other way round…, "If you pay $350,000, I won't go to the police."' In the next answer, however, he rendered it as, '"If you don't pay the money, we'll go to the police," or something like that.' 47 In his evidence-in-chief, the respondent said that he thought the applicant had come to the meeting with a proposal that the property in the applicant's nephew's name be assigned to the respondent. The respondent said, 'I didn't accept that. I suggested to him that I wanted $300,000 but that I would give him time to pay.' He said that the applicant responded to this suggestion by telling him to get stuffed and getting up to walk out. The respondent said that he may have said that, if the matter could not be resolved, 'I'm going to have to turn the heat up in relation to the conduct of this administration.' He did not believe that he would have said that he would refer the matter to the police because, in relation to bankruptcy offences, it would have been necessary for him to refer a complaint to the Insolvency Trustee Service Australia ('ITSA'). 48 Apart from a side issue about who was responsible for initiating the meeting of 25 February 2004, there was not a great deal of cross-examination of the respondent about what occurred at that meeting. In such cross-examination as there was, he did not depart from what he had said in chief. 49 Mr Nikolaidou's evidence-in-chief about the second meeting was again given by means of his affidavit of 21 June 2004, on which he was cross-examined. The account in his affidavit is as follows: '12. When I attended Mr Morton's office I recall I was the first to arrive. Mr McMonnies and Mr Trkulja arrived shortly thereafter and came into the same room with me. Before Mr Morton arrived, Mr McMonnies said to me that the Todoran property had an equity of approximately $50,000.00 or so and that his client was prepared to transfer the property to Mr Morton in exchange for a discharge of bankruptcy and the resolution of all outstanding disputes. He raised a number of matters about the loan to the bank, saying that it was up to date, and that if necessary we could arrange a power of attorney to be signed to facilitate the orderly transfer of the property and so on. I was surprised by this proposal as I thought the meeting was not intended to try and resolve all outstanding matters but simply to find a way to transfer the Branislav Todoran property to my client in a manner that would satisfy all parties. I told Mr McMonnies words to the effect that I did not think that the proposal would be acceptable to Mr Morton, however we should wait and see what my client had to say.
I then recall Mr Morton arriving in the office and as I recall this proposal was put to him. I recall Mr Morton rejecting the proposal and instead indicating that he would need an amount of $300,000.00 to finalize all the outstanding matters. The meeting was again very tense and I recall Mr Morton trying to explain that he would give Mr Trkulja terms to pay this amount and it would not have to be paid immediately. However, I recall Mr Trkulja being very unhappy about what he had heard and jumping up and saying to Mr McMonnies words to the effect, "Let's go". I took that to mean that he thought it was pointless to continue the meeting.
It appeared to me that the meeting had degenerated yet again into one of hostile exchanges between parties. However, I have no recollection of any specific words being used by either party.
I have no recollection of Mr. Morton threatening to report Mr. Trkulja to the police unless Mr. Trkulja paid him a sum of money, let alone $350,000. I am confident that had Mr. Morton made such a threat that I would have recalled it. I made some notes during the meeting but as the meeting had effectively ended almost as soon as it started, my notes were not comprehensive or detailed. As I recall the meeting with Mr Morton being present was 5 minutes or less in duration.' 50 Again, Mr Nikolaidou's notes of the meeting were exhibited to the affidavit. They are cryptic, but are more detailed in some respects than any of the other evidence. They refer to the figure of $50 000 or thereabouts, apparently as the amount of the equity in the house in the name of the applicant's nephew. They put the figure of $300 000 as the substantial payment requested by the respondent. They record that the nephew's property was a separate issue, and that the respondent apparently said that he would win in relation to a dispute over another property. They record a reference to $70 000 to $80 000 in income contributions, and the respondent as saying that he would allow the applicant to pay over four years, with $100 000 down and the balance then. At the end of the notes, Mr Nikolaidou recorded, 'They offered to transfer property-$50k equity in exchange, discharge of bankruptcy.'

51 In cross-examination, Mr Nikolaidou referred to a time when he, Mr McMonnies and the applicant were together, prior to the arrival of the respondent. Mr McMonnies made an offer to transfer the property that was in the nephew's name. Mr Nikolaidou's evidence continued: 'And he said that there's about 50,000 or so in equity in the property and that it could be easily arranged for it to be transferred to Mr Morton and in exchange for that he wanted the bankruptucy to come to an end and all other outstanding legal proceedings to be terminated, to be settled. I said I was surprised by that because I thought the whole purpose of the meeting was to pursue the transfer of that property as you had indicated you would do so at the previous examination on 20 February whenever it was. I thought the whole purpose of the meeting was for a mechanism to be discussed to transfer the property. So I said I didn't think that would be acceptable to Mr Morton that we should ask him. Then, as I recall, Mr Morton did arrive and the proposal was put to him. He rejected it and, as I recall, he said he wanted 300,000, I think it was. Are you certain about that, you're very certain?…Well, I made a note of that but I may be wrong. Not 350? 300?…It might have been but… Are you certain - 300 or 350?…I'm not certain either way. I made a note of 300 but I may have mis-written it. It's not unheard of. So my belief was that it was 300 but it might be 350, I'm not sure. In any event, whatever it was, it was certainly rejected by you. You got up, you were clearly angry about it. You wanted to go. You were stopped by Mr McMonnies who said, you know, "Hang on, maybe we just listen to see what is being suggested," and there was some further discussion. I don't remember what exactly was said. It was clearly an angry exchange. … Anyway, you certainly got up, you were clearly angry and you said, "Let's go," or words of that kind, something like that. Mr McMonnies I think got up as well and said - I think tried to stop you and said, "No, hang on, let's wait and see what he has to say," and Mr Morton explained why he wanted the sum that he said he wanted, or something like that. I can't recall. I know there was a heated exchange. When you say "heated", you know, shouting at each other or…?…Not necessarily shouting but there was clearly anger. There was certainly anger from your end. There may have been some from Mr Morton. It was certainly not a casual discussion, the intensity of it had gone up. I think after two or three minutes, I think it was, or maybe even less, you left - both of you left - and that was it.' 52 Mr Nikolaidou was not sure how long the meeting took after the respondent arrived. He thought it was around five minutes, but it might have been two or three. He said that the applicant did not leave straight away, when he heard the figure, but paused while there was a little further discussion. Mr Nikolaidou did not recall any negotiations, or reference to negotiations, other than in relation to the property in the nephew's name, prior to the arrival of the respondent. He did not recall any reference at the meeting to the total amount owed to creditors being in the region of half a million dollars. He did not recall the respondent saying that if the applicant did not pay $350 000, the respondent would report him to the police and apply the full force of the law. He had some recollection of the applicant using the words 'get stuffed'. 53 One description of the meeting that Mr Nikolaidou gave was: 'Everybody was up and it was sort of like a - I mean, I was trying to put a bit of order there I think, just to - the whole thing was degenerating into a farce, but I wasn't concentrating on what was being said. I was worried that the meeting had, you know, got out of hand. That was my main worry and I basically just stopped participating, I think.' 54 Again, a good deal of the cross-examination was related to the fruitless question of who had initiated the meeting. 55 In the absence of a tape-recording of the meeting, it is obviously more difficult to determine exactly what took place at the meeting of 25 February 2004 than was the case with the meeting of 18 November 2003. It was plain that the later meeting was very much shorter than the earlier one, because the applicant took exception to being invited to pay whatever sum was mentioned, whether it be $300 000, $315 000 or $350 000. He became abusive and was prepared to leave, until he was restrained somewhat by Mr McMonnies. What took place then is not absolutely clear. For a number of reasons, I do not accept, on the balance of probabilities, that what took place included any threat by the respondent to report the applicant to the police. 56 More than 10 weeks elapsed between the meeting of 25 February 2004 and 8 May 2004, when the applicant swore his affidavit in support of his application to remove the respondent as his trustee in bankruptcy. The applicant never offered any explanation as to why, if he were so concerned about the making of an unlawful threat, which caused him to believe that the respondent should no longer act as his trustee in bankruptcy, he took such a length of time to act on his concern. When he did swear his affidavit of 8 May 2004, as I have said, he made no specific allegation that, at the second meeting, the respondent had threatened to refer him to the police if he did not pay the sum demanded. In the context of an affidavit in which the applicant did make such an allegation in relation to the meeting of 18 November 2003, this omission is significant. It was not until he swore his affidavit of 15 June 2004 that the applicant made an allegation about such a threat having been made at the meeting of 25 February 2004. 57 In his affidavit of 15 June 2004, the applicant purported to use precise words. So also did Mr McMonnies. The difficulty is that the precise words quoted by each differ in a number of respects. The common elements are the mention of the sum of $350 000 (as to which Mr McMonnies had expressed some doubts in his oral evidence, thinking that it was $315 000) the reference to putting the heat up, and the threat to report the applicant to the police. In his oral evidence, Mr McMonnies retreated from the allegation that 'put the heat up' was used at the meeting of 25 February 2004, saying that it was used only at the first meeting. He was of the view that the word 'police' was used at both. He subsequently expressed certainty that the word 'police' was used at the second meeting. Ordinarily, the certainty of a solicitor that specific words were used would be entitled to great weight. In the light of Mr McMonnie's obviously incorrect recollection of the word 'police' being used at the first meeting, as well as his change of heart as to whether there was a reference to putting the heat up at the second meeting, the weight to be given to his evidence is much reduced.

58 The applicant tended to conflate the two meetings, and to suggest in cross-examination that what was said at one was said at the other. His antagonism towards the respondent and Mr Nikolaidou was apparent at a number of points. He was very ready to make allegations of improper behaviour against each of them. Indeed, it was with some difficulty that I persuaded him from time to time to concentrate on the issues in the case, rather than to pursue all of his theories and grievances. In the result, I can have no confidence that anything that the applicant said in evidence was truthful. I suspect that, whether inadvertently or otherwise, he has reconstructed each meeting in his own mind in a way that would cast the respondent, and to some extent Mr Nikolaidou, in the worst possible light. It is apparent that his reconstruction of the first meeting contained elements that the tape-recording of that meeting proved to have been false. If the applicant could reconstruct the first meeting so inaccurately, despite having the tape-recording of it available for reference at any time, no reliance can be placed on his reconstruction of the second meeting except where it has been confirmed by other evidence. As I have said, I cannot be confident that Mr McMonnie's recollection of the use of the word 'police' provides sufficient corroboration of the applicant's evidence in that respect. 59 It is plain that, at the time when the meeting of 25 February 2004 took place, the possibility of the applicant being involved in criminal proceedings had become a real one. A short time before that date, he had been examined before a registrar, by counsel instructed by the respondent. Allegations had been made against the applicant that he had procured a bank loan for the purchase of the property in his nephew's name by supplying false information to the bank. Allegations had also been made that, in relation to the purchase of another property in the name of another person, the applicant had made a false statutory declaration to evade stamp duty. It must have been apparent, both to the applicant and to Mr McMonnies, on the occasion of the meeting of 25 February 2004 that there was some attraction in settling with the respondent, so as to procure a discharge from bankruptcy and to reduce, if not eliminate, the possibility of criminal charges. No doubt this was what motivated the applicant to put through Mr McMonnies the offer to procure a transfer of the house in the nephew's name to the respondent by way of settlement. In this context, it is easier to see how the applicant might have supposed that the consequence of not settling might involve him in criminal

prosecutions. It is an easy step from that situation to believing that the respondent had made an actual threat. 60 I accept the respondent's evidence that it is unlikely that, if he had been making a threat about criminal prosecutions, he would have referred to the police. He gave evidence of a circular from the Official Receiver, instructing trustees not to institute prosecutions on their own account, but to report any suspected offences to ITSA, which was equipped to investigate alleged criminal offences and to ensure that prosecutions were commenced in appropriate cases. When the respondent and Mr Nikolaidou said that they could not recall any threat involving the police, I do not think that they were being deliberately untruthful. 61 For these reasons, therefore, I am unable to accept that the respondent made any unlawful threat to the applicant at the meeting of 25 February 2004. I am also of the view that the evidence does not disclose any conduct of the respondent at that meeting that would cause me to consider that he should no longer be the applicant's trustee in bankruptcy.

Conclusion 62 The applicant has failed to establish the grounds on which he sought an order that the respondent be removed as his trustee in bankruptcy. It is plain that there is considerable antagonism on the part of the applicant towards the respondent. I do not think that that is any ground for removing the respondent as trustee. I have little doubt that the applicant would be antagonistic towards anyone who pursued him vigorously in respect of possible undisclosed assets. On the evidence I have heard, the respondent has done nothing that a competent and willing trustee would not have done.

63 It is therefore necessary to dismiss the application. The appropriate order as to costs would be to have them paid out of the bankrupt's estate. The respondent should certainly not be out of pocket as to costs, at least so far as he can be indemnified on a party-party basis.

I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

Counsel for the applicant: The applicant appeared in person

Counsel for the respondent: R Garratt QC with TJ McLean

Solicitor for the respondent: Mulcahy Mendelson & Round

Bankruptcy Act 1966(Cth)ss 179(1), 178, 73, 149J

At a glance

Court

Decision date

Before

Source

Judgment (15 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (3)