Wenkart v Pantzer - [2010] FCA 866 - FCA 2010 case summary — Zoe

CTHFCA

Wenkart v Pantzer

[2010] FCA 866

Federal Court of Australia|2010-08-13|Before: Flick J

View original source

At a glance

Source facts

Court

Federal Court of Australia

Decision date

2010-08-13

Before

Flick J

Source

Original judgment source is linked above.

Judgment (46 paragraphs)

[1]

Gray v Guardian Trust Australia Ltd [2002] NSWSC 1218, cited Hanave Pty Ltd v LFOT Pty Ltd [2004] FCAFC 180, 136 FCR 566, followed HK Frost Holdings Pty Ltd (in liq) v Darvall McCutcheon (a firm) [1999] FCA 795, applied In Shoppe Pty Ltd v Smith (1976) 33 FLR 107, 6 ATR 242, cited McKinnon v Pattison [2009] FCA 1421, cited O'Keeffe v Hayes Knight GTO Pty Ltd [2005] FCA 389, 218 ALR 604, cited Pantzer v Wenkart [2006] FCAFC 140, 153 FCR 466, discussed Perpetual Trustees (WA) Ltd v Equus Corp Pty Ltd (Unreported, Supreme Court of New South Wales Equity Division, Young J, 5 March 1998), cited Pollack v Retravision (NSW) Ltd (Unreported, Federal Court of Australia, Moore J, 23 December 1996), cited Pyrenees Vineyard Management Ltd v Frajman [2008] VSC 552, cited Ruddock v Vadarlis (No 2) [2001] FCA 1865, 115 FCR 229, cited Seven Network Limited v News Limited [2007] FCA 1062, cited Sony Entertainment (Australia) Ltd v Smith [2005] FCA 228, 215 ALR 788, cited SSSL Realisations (2002) Ltd v AIG Europe (UK) Ltd [2006] Ch 610, considered Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213, 28 ALR 201, cited Vamuta Pty Ltd v Sogo Co Ltd (1996) 68 FCR 151, cited Wenkart v Pantzer [2003] FCA 471, cited Wenkart v Pantzer (No 8) [2004] FCA 280, 135 FCR 422, cited Wenkart v Pantzer [2007] FCA 1589, 5 ABC(NS) 642, cited Wenkart v Pantzer [2007] HCA Trans 99, cited Wenkart v Pantzer [2008] FCA 1387, cited Wenkart v Pantzer [2008] FCA 478, 6 ABC(NS) 37, cited Wenkart v Pantzer [2009] FCA 1086, cited Whitaker v Commissioner of Taxation (1998) 82 FCR 261, applied Attorney-General's Department, A Strategic Framework for Access to Justice in the Federal Civil Justice System, September 2009 Aitken, L 'Recent applications of the rule in Cherry v Boultbee (or Jeffs v Wood)' (2010) 84 Australian Law Journal 191 Meagher R, Heydon D and Leeming M, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (4th ed, 2002) Young P W, Croft C and Smith M L, On Equity (2009)

[2]

[22]

REASONS FOR JUDGMENT 1 On 25 September 2009 reasons for yet a further decision in this long-running dispute were published: Wenkart v Pantzer [2009] FCA 1086. It was then stated that that decision and reasons would "hopefully [be] one of the last to be resolved between the parties". 2 There is now but little hope that this present decision will be the last. The issues dividing the parties may now be relatively clear - but the ability to resolve the issues, at least before a single Judge of this Court, remains questionable. One or other of the parties contends that some issues have been conclusively resolved by one or other of the many judgments that have to date been delivered, whilst at the same time seeking to unilaterally reserve unto themselves the ability to re-open so much of a judgment with which there is continuing disagreement. 3 Whether a course can be trodden between now resolving the issues outstanding - or whether some issues will necessarily have to be resolved by a Full Court - remains to be seen. Given the difficulties, however, the most prudent course is to attempt to resolve such issues as can be resolved by a single Judge whilst at the same time making such findings as may be of assistance to a Full Court. The time has well come when this litigation should be brought to a close - either in this judgment or on appeal. 4 As explained in the September 2009 reasons for decision, the dispute has its origins almost a decade earlier in October 1999. An order had been made sequestrating the estate of Dr Wenkart. Mr Pantzer was appointed the trustee in bankruptcy by an order of this Court on 28 October 1999. The bankruptcy was annulled on 15 March 2002. An overview of the history of the litigation may be found in a number of judgments: e.g., Wenkart v Pantzer (No 8) [2004] FCA 280 at [2] to [37], 135 FCR 422 per Lindgren J; Wenkart v Pantzer [2007] FCA 1589 at [1] to [35], 5 ABC(NS) 642 at 644 to 652 per Branson J. 5 The degree of exasperation that is now expressed is sufficiently explained by stating that as at March 2002 the outstanding claims then being advanced by Mr Pantzer fell far short of the amount now claimed. Written submissions filed on behalf of Mr Pantzer on 14 May 2010 in advance of a hearing in June 2010, for instance, contended that a claim once made for payment of $193,531.18 had, as at the date of the submissions, attracted interest in the sum of $476,938.01. 6 In the absence of explanation, the fact that the disputed sum has not been either paid or compromised is scandalous. The absence of agreement has necessarily occasioned numerous applications to this Court, both at first instance and on appeal. The costs to the parties - and the costs to the community in the continued and repeated provision of judicial services to resolve their dispute - is reminiscent of the infamous litigation in Jarndyce v Jarndyce immortalised in Charles Dickens' Bleak House. Regrettably, whilst the Dickens tale may have been partly fiction; the present tale is all fact. 7 The present chapter in this sorry tale opens with a hearing on 23 March 2010. No certainty then prevailed that the issues to be resolved were the entirety of all outstanding issues. In order to ensure as far as possible that this would be the last forensic stoush between the parties, as opposed to yet further forensic foreplay preceding yet further issues to be later identified, directions were then made that the parties were to exchange a draft statement of what they each perceived to be the outstanding issues to be determined by the Court. The draft was intended to be of assistance to the later provision of an identified set of issues for final resolution. The task of preparing a draft, and then a final version, was intended to minimise the prospect of further "wriggle room" during the course of oral submissions. Such delay as was necessarily occasioned by such an exercise was considered preferable to a course which had the potential to only resolve some - but not all - of the issues dividing the parties. Such a course is also now expressly sanctioned by s 37M of the Federal Court of Australia Act 1976 (Cth) and the stated purpose of resolving disputes "as quickly, inexpensively and efficiently as possible". 8 Short Minutes of Orders giving effect to these directions were made on 24 March 2010. 9 To unravel the outstanding dispute it is perhaps not surprising that it is, regrettably, necessary to revisit many of the earlier decisions given by other Judges of this Court. Indeed, the occasion to revisit those decisions is becoming an exercise in legal history. Reproduction of extracts from those earlier judgments may, however, make the task of those who will inevitably be invited to review the present reasons for decision less cumbersome than may otherwise be the case. All three of the former Judges to whom this proceeding has been docketed - namely, Justices Beaumont, Lindgren and Branson - are no longer Judges of this Court.

[23]

The Issues To Be Resolved 10 Given the protracted history of this proceeding to date, it is prudent to record the statement of those issues which Dr Wenkart and Mr Pantzer now want resolved. 11 These issues, it is now agreed between the two of them, exhaustively state all of the outstanding issues which they each wish to have resolved before the proceeding can finally be concluded. 12 On the part of Dr Wenkart, his written statement of issues dated 6 May 2010 provides as follows: Dr Wenkart contends that the following issues remain for the Court's determination at the hearing listed for 7 and 8 June 2010. 1. Whether, Mr Pantzer having had no claim to relief when these proceedings commenced on 31 October 2002 (as held by Branson J on 11 April 2008), is nevertheless entitled to relief in respect of matters occurring after 31 October 2002. 2. Whether the commencement and conduct by Mr Pantzer of the proceedings has not been reasonable in the circumstances upon the principles stated in Adsett v Berlouis (1992) 37 FCR 201. 3. Whether Mr Pantzer may receive moneys from Dr Wenkart without first paying to Dr Wenkart moneys owing to Dr. Wenkart as at 15 March 2002 (annulment of the bankruptcy) together with interest. 4. Whether Dr Wenkart is entitled to interest on the moneys payable by Mr Pantzer to him as the annulment of the bankruptcy. 5. Costs. Dr Wenkart seeks an order that Mr Pantzer pay him the sum of $240,352.20. 13 On the part of Mr Pantzer, the written Outline of Submissions as filed on his behalf on 14 May 2010 provide as follows (without alteration): Those issues are as follows: (a) the proper construction of the orders by Beaumont J on 11 March 2002; (b) whether Mr Pantzer was liable as at the date of annulment of Dr Wenkart's bankruptcy to pay monies to Dr Wenkart; (c) whether Mr Pantzer was lawfully entitled or may become lawfully entitled as at 31 October 2002 to recover from Dr Wenkart any remuneration, costs, charges and expenses; (d) whether Mr Pantzer is presently lawfully entitled to recover from Dr Wenkart any remuneration, costs, charge and expenses; (e) whether Mr Pantzer is entitled to declaratory relief in respect of remuneration, costs, charges and expenses which he may become lawfully entitled to recover from Dr Wenkart; (f) what is the proper exercise of the Court's discretion in relation to the costs of these proceedings; (g) whether any party to the proceedings has an entitlement to interest. In contrast to the orders sought by Dr Wenkart, and perhaps not surprisingly, Mr Pantzer, in his written submissions dated 14 May 2010, seeks (inter alia) an order that Dr Wenkart is to pay him the sum of $193,531.18 plus interest in the amount of $476,938.01. 14 As the statements of issues make readily apparent, the essence of the dispute may be simply stated as being whether Mr Pantzer owes Dr Wenkart moneys or whether it is Dr Wenkart who owes Mr Pantzer moneys. 15 Following the hearing held on 7 and 8 June 2010, the final written submissions filed on behalf of Dr Wenkart were filed with the Court on 6 July 2010. 16 A convenient starting point for the resolution of the competing positions is: · the events of March 2002. Thereafter, it is convenient to then consider: · the effect of the agreement recorded in the March 2002 orders; · the filing of the "cross-claim" by Mr Pantzer in October 2002 and the identification of the relief then claimed; · the ambit of the disputes to be resolved; · the table which was prepared by a Deputy District Registrar of this Court in May 2009 recording the receipts and payments made by Mr Pantzer; · whether there was a "surplus" of moneys in the hands of Mr Pantzer as at 15 March 2002 such as to preclude Mr Pantzer making any claim without first accounting for that "surplus"; · whether the "inchoate" nature of the "cross-claim" as at October 2002 precludes the granting of relief; · the reasonableness of the course pursued by Mr Pantzer; · the manner in which Mr Pantzer claims an entitlement to $193,531.18; and · the entitlement of Mr Pantzer to further declaratory relief. There then remains the necessity to consider: · whether any order should be made as to the payment of interest pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth); and · the appropriate order to be made as to costs, including submissions in respect to the award of indemnity costs.

[24]

The Events in March 2002 17 The events in March 2002 assume importance for either of two reasons, namely: · it was on 11 March 2002 that Beaumont J made consent orders recording an agreement between Dr Wenkart and Mr Pantzer. The terms of that agreement and the orders then made were to prove to have continuing significance until the present day; and · it was on 15 March 2002 that there was a meeting of creditors and a composition accepted pursuant to s 73 of the Bankruptcy Act 1966 (Cth). 18 Section 73 of the Bankruptcy Act 1966 (Cth) contemplates that a bankrupt may put a proposal to his creditors for a composition or a scheme of arrangement. Upon the acceptance of the proposal by a special resolution of the creditors, the bankruptcy is annulled: Bankruptcy Act 1966 (Cth), s 74. 19 In the present proceeding, Dr Wenkart sought on a number of occasions to put to his creditors a proposal to secure the annulment of his bankruptcy. 20 The proposal that ultimately was put to the creditors followed orders made by Beaumont J on 1 and 11 March 2002. On 1 March 2002 consent orders were made requiring the convening of a meeting pursuant to s 73 within 14 days. On the latter occasion His Honour made further consent orders. Those orders were as follows: BY CONSENT THE COURT ORDERS AND NOTES THE AGREEMENT OF THE PARTIES AS FOLLOWS:- 1. Warren Pantzer as Trustee of the estate of Thomas Richard Wenkart may recover his remuneration, costs, charges and expenses to which he is lawfully entitled or may become lawfully entitled from Thomas Richard Wenkart and Thomas Richard Wenkart agrees 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. 2. Thomas Richard Wenkart forthwith charges the land and improvements in folio identifier [XX] and known as [XX] Street, Paddington in favour of Warren Pantzer to secure the amount in paragraph 1. 3. Hapday Holdings Pty Ltd ACN 001 185 253 hereby postpones mortgage [XX] over the land in paragraph 2 in favour of the interest of Warren Pantzer pursuant to the charge in paragraph 2. 4. The orders and agreement in paragraphs 1, 2 and 3 are only to have effect if the bankruptcy of Thomas Richard Wenkart is annulled pursuant to s74 of the Bankruptcy Act on 15 March 2002. 5. Thomas Richard Wenkart consents to Warren Pantzer lodging a Caveat over the property in paragraph 2 for the purpose of securing the charge in paragraph 2 and Warren Pantzer will upon payment of the remuneration, costs, charges and expenses in paragraph 1 provide a Withdrawal of Caveat forthwith. The first of the issues raised on behalf of Mr Pantzer - namely the correct construction of these orders - was ultimately not contentious. What was contentious was the effect of or the consequences of the agreement recorded in those orders. 21 If any question as to the date upon which Mr Pantzer may have become "lawfully entitled" is presently left to one side, it is clear that the orders made by Beaumont J embraced: · not only the amounts to which Mr Pantzer was lawfully entitled as at 11 March 2002 but also · those amounts to which he "may become lawfully entitled" thereafter. That construction of the orders, it is considered: · flows naturally from the terms of Order 1 itself; · is not contrary to any conclusion previously expressed by any other Judge of this Court; and · is supported by the construction given to the orders when the matter came before the Full Court in Pantzer v Wenkart [2006] FCAFC 140 at [44], 153 FCR 466 at 477. So much was accepted by Senior Counsel on behalf of Dr Wenkart during the course of oral submissions. That concession was properly made. The question as to when Mr Pantzer became "lawfully entitled" was resolved by Branson J as being "an agreement to pay within 28 days of the determination of the quantum of 'the same'": Wenkart v Pantzer [2008] FCA 478 at [85], 6 ABC(NS) 37 at 58 to 59. 22 An event that also took place on 11 March 2002 was the sending to creditors of a Notice of Meeting. The Report to Creditors dated the same date referred to orders made by consent on 1 March 2002 by Beaumont J that two bank cheques each in the sum of $105,000 be delivered to Mr Pantzer prior to the meeting and further stated in part as follows: The following remuneration, costs and expenses remain outstanding and unpaid as at the date of this report (figures include GST): Warren Pantzer, Trustee (as at 4 March 2002) $70,830.76 Lawler Partners (as at 4 March 2002) $136,506.27 Cutler Hughes & Harris (approx amount as at 27 February 2002) $260,000.00

[27]

October 2002 29 The attempts by Mr Pantzer to recover moneys claimed after the meeting of creditors commenced in April 2002. 30 On 22 April 2002 Mr Pantzer requested payment of the 85% within 28 days. It was not paid. Dr Wenkart complained to the Insolvency and Trustee Service Australia claiming that the amount was excessive. That body responded on 28 June 2002 stating that it had "recently inspected Mr Pantzer's file in relation to your bankruptcy, from cover to cover as part of the routine inspection program carried out by this office. It appeared that remuneration was properly approved and I do not consider that work has been carried out unnecessarily …". 31 The moneys remained unpaid. 32 It was on 31 October 2002 that Mr Pantzer filed a Notice of Motion seeking orders permitting him to sell the Paddington property. The Motion sought "an order in aid of [the] order made 11 March 2002". This Motion was subsequently characterised as a "cross-claim". 33 The Motion sought an order (inter alia) that Mr Pantzer "be given power of sale of the property" at Paddington and power to deduct from the proceeds of sale various amounts. 34 But the difficulty then confronting Mr Pantzer in recovering the amount claimed of $193,531.18 is the fact that as at 31 October 2002 he was not then entitled to "orders in aid" of the order made on 11 March 2002. So much was the conclusion of Branson J in her April 2008 judgment: Wenkart v Pantzer[2008] FCA 478, 6 ABC(NS) 37. Her Honour there relevantly concluded: Position as at 31 October 2002 [84] … the significance of the date 31 October 2002 is that it is the date of the filing of Mr Pantzer's deemed cross-claim seeking "an order in aid of [the Court's] order made on 11 March 2002 by appointing Warren Pantzer as Trustee for Sale of the [Paddington property]" (see [2007] FCA 1589 at [17]). [85] …[I]t is, I think, uncontroversial that Dr Wenkart's agreements to pay the remuneration, costs, charges and expenses to which Mr Pantzer is "lawfully entitled" from him is an agreement to pay within 28 days of the determination of the quantum of "the same". The charge over the Paddington property secures the payments by him of the relevant amount within that period of time. That is, Mr Pantzer is not entitled to exercise rights under the charge created by order 2 of the consent orders until Dr Wenkart defaults on his agreement to pay. By filing his cross-claim Mr Pantzer sought to exercise rights in reliance on that charge. Her Honour then went on to conclude: Conclusion on cross-claim [90] As already mentioned, order 1 of the consent orders of 11 March 2002 recorded that Dr Wenkart relevantly agreed to pay the remuneration, costs, charges and expenses to which Mr Pantzer was lawfully entitled or may become lawfully entitled "within 28 days of determination of the quantum of the same". Having regard to the approach of the Full Court in Pantzer v Wenkart (2006) 153 FCR 466 … , it seems that order 1 must be understood distributively; that is, as recording an agreement that upon the quantum of any claim by Mr Pantzer for remuneration, costs, charges and expenses being determined, Dr Wenkart agreed to pay the same within 28 days. [91] I conclude that as at the date that the cross-claim was filed, Mr Pantzer, in his capacity as trustee of Dr Wenkart's bankrupt estate, had received a larger amount by way of receipts than the determined quantum of the remuneration, costs, charges and expenses to which he was lawfully entitled. Mr Pantzer has therefore failed to demonstrate that, as at the date of the filing of his cross-claim, he was entitled to "orders in aid" of the consent orders made on 11 March 2002. Her Honour, however, also went on to further address how the outstanding claims of Mr Pantzer were to be resolved as follows: [92] Nonetheless, I do not accept the submission of Dr Wenkart that it would be appropriate simply to dismiss the cross-claim with costs. Were this course adopted Mr Pantzer could simply institute a fresh application seeking to enforce the charge over the Paddington property. The regrettably long and complex history of this matter renders such an outcome even more undesirable than might ordinarily be the case. The appropriate way to deal with the premature filing of Mr Pantzer's cross-claim is, in my view, by the making of appropriate costs orders. This will require, as a first step, the identification of the date, if any, on which 28 days had passed from the determination of the quantum of an amount by way of remuneration, costs, charges and expenses to which Mr Pantzer is lawfully entitled that resulted in the aggregate of such determinations exceeding $769,191.66 (ie the total amount received by Mr Pantzer as trustee of Dr Wenkart's estate). If the parties are unable to reach agreement on this question, I propose to make an order for the making of an inquiry by a Registrar (O 39, rr 2 and 9 of the Federal Court Rules 1979 Cth). It was this proposed order, later made on 16 September 2008, that led to the Deputy District Registrar holding an inquiry and certifying that "the date, if any, on which 28 days had passed from the determination of the quantum of an amount by way of remuneration, costs, charges and expenses to which Mr. Pantzer is lawfully entitled from Dr. Wenkart … is 10 January 2005". A hearing to resolve an "objection" to that certificate was heard and resolved in September 2009: Wenkart v Pantzer [2009] FCA 1086. 35 It should be noted that, after the April 2008 judgment, both Dr Wenkart and Mr Pantzer applied unsuccessfully to have various paragraphs of the judgment "reconsidered" or "withdrawn". Her Honour published further reasons for so deciding in a decision published on 16 September 2008: Wenkart v Pantzer [2008] FCA 1387. In doing so, Her Honour referred to an exchange between then Senior Counsel for Dr Wenkart and the Court and continued: [18] The above exchange caused me to believe that Dr Wenkart accepted that, in determining Mr Pantzer's cross-claim, the Court could take into account amounts to which Mr Pantzer became "legally entitled" from Dr Wenkart within the meaning of the consent orders made by Beaumont J on 11 March 2002 after the date on which the cross-claim was filed - albeit that he contended that the preferable course would be not to do so. I indicated in my reasons for judgment of 11 April 2008 at [92] why I regarded the option of simply dismissing Mr Pantzer's cross-claim on the basis that it had been instituted prematurely to be undesirable. It seemed to me to be a course likely to result in the institution of yet further litigation between the parties. This did not seem to me to be in the public interest or in the interests of the parties, particularly having regard to the Court's wide powers to formulate orders for costs. It may be that I would have taken a different view had Dr Wenkart, at an early stage in this regrettable litigious saga, identified, perhaps as a preliminary point for the Court's determination, his claim that Mr Pantzer's cross-claim was bound to fail as it had been filed prematurely. He did not do so. Rather, as it seems to me, he utilised the proceeding as a vehicle to obtain judicial review of virtually every aspect of Mr Pantzer's claim for remuneration as trustee of his estate. 36 But whatever the date may have been as to when "28 days had passed", there is no doubt that the remuneration, costs, charges and expenses being claimed by Mr Pantzer otherwise fell within Order 1 of the 11 March 2002 orders. That was the conclusion of the Full Court in Pantzer v Wenkart [2006] FCAFC 140, 153 FCR 466. Black CJ, Ryan and Moore JJ there concluded: [40] In our opinion, the remuneration, costs, charges and expenses claimed by Mr Pantzer after 11 March 2002 and, in particular, those associated with the litigation that flowed from Mr Pantzer's application of 31 October 2002 and for which each taxation certificate issued, were comprehended by order 1 of the consent orders of 11 March 2002. The application on 31 October 2002 was for an order appointing Mr Pantzer as trustee for sale of the property secured by the charge that had been agreed to and embodied in the orders of 11 March 2002. The 31 October 2002 application was instituted to give practical effect to a benefit that flowed naturally and directly to Mr Pantzer from the orders of 11 March 2002.

[28]

The Confined Ambit of the Disputes To Be Resolved? 37 Senior Counsel on behalf of Dr Wenkart placed at the forefront of his submissions the proposition that the only matter presently before the Court involved the claims for relief as set forth in the Notice of Motion filed on 31 October 2002. 38 Given the reliance placed by Senior Counsel on that Notice of Motion, its terms should be set forth. It is as follows: The Respondent will at 9:45am on 5 day of November 2002, move the Court for the following orders:- 1. That the Court make an order in aid of its order made 11 March 2002 by appointing Warren Pantzer as Trustee for Sale of folio identifier [XX] known as [XX] Street, Paddington ('the property') pursuant to security granted on 11 March 2002 for the purpose of realising that property to enable payment to the Respondent of items in paragraph 2 together with payment of any charge payable by the Respondent pursuant to the Bankruptcy Estate Realisation Charges Act, 1997. 2. That the Respondent be given power of sale of the property at auction or by private treaty and the said Trustee be empowered to deduct from the proceeds of sale: (a) The Trustee's remuneration of $98,095.16; (b) Charges payable by the Respondent under the Bankruptcy Estate Realisation Charges Act, 1997 (c) legal fees due to Cutler Hughes & Harris with respect to a Federal Court taxation of costs relevant to the bankrupt estate of Richard Thomas Wenkart and secured by order of the Federal Court made in these proceedings on 11 March 2002 which are being taxed; (d) The Trustee's remuneration costs, fees and expenses of finalising the bankrupt estate of the Applicant and of determining these proceedings; (e) the commission and other expenses of any real estate agent employed by the Trustees; (f) the legal expenses of the Trustee in respect of the sale; (g) the legal expenses of transferring the land to the purchaser; (h) the legal expenses of this motion; (i) the Trustee's remuneration of acting on the sale; (j) the balance to Thomas Richard Wenkart. 3. That the Applicant give the Respondent as Trustee for Sale vacant possession of the property. 4. That a Writ of Possession of [XX] Street, Paddington being folio identifier [XX] issue 28 days after the date of this order. 5. The Applicant pay the Respondent's costs of this Motion on an indemnity basis. 6. Such further or other order as the Court deems fit. The Notice of Motion as filed on 31 October 2002, it should be noted, was later amended by the filing of a Further Amended Notice of Motion on 8 February 2005 and the filing of a Cross-Claim on 23 February 2005. Both of those amendments confined relief to "an order in aid" of the March 2002 orders. 39 The focus of that Notice of Motion, so it was contended by counsel for Dr Wenkart, was confined to seeking an order "in aid of [the] order made on 11 March 2002 by appointing Warren Pantzer as Trustee for Sale …". And the orders made in March 2002 themselves embraced an agreement to pay the amount to which Mr Pantzer was "lawfully entitled - or may become lawfully entitled … within 28 days of determination of the quantum of the same …". 40 Given the conclusion of Branson J in Wenkart v Pantzer [2008] FCA 478, and the subsequent comments made in Wenkart v Pantzer [2009] FCA 1086, it is simply said that no further claim for relief may now be advanced. 41 Construed according to its terms, it is submitted that Branson J made orders to facilitate the identification of that date and the Certificate of the Deputy District Registrar issued in May 2009 identifies the date "on which 28 days had passed" as being 10 January 2005. 42 Orders should now be made, so it is contended on behalf of Dr Wenkart, that give effect to this decision and no further claim to relief should be entertained. 43 Such a confined ambit of the issues to be resolved is rejected for a number of reasons. 44 First, the Notice of Motion as filed on 31 October 2002 was not confined in its terms to merely seeking an order "in aid" of those previously made by Beaumont J. It expressly sought "[s]uch further or other order as the Court deems fit". Although Motions frequently claim such relief, and although in the vast majority of applications made it may never be necessary to rely upon such a claim to relief, Motions are so drafted not as a mere matter of form. 45 Second, both the agreement embraced within Order 1 as made by Beaumont J in March 2002 and the Notice of Motion as filed in October 2002 (and in particular paragraph 2) contemplated the payment of moneys which were not then capable of quantification or determination. Order 1 thus referred to amounts to which Mr Pantzer "may become lawfully entitled". And paragraph 2 of the Motion, for example, sought an order that authorised Mr Pantzer to deduct from the proceeds of sale of the property an amount for the "Trustee's remuneration costs, fees and expenses of finalising the bankrupt estate …". Importantly, however, it is not considered that the October 2002 Motion can be construed as any attempt to confine or vary the agreement which had previously been reached and recorded by Beaumont J. That Motion may well have been intended as a means whereby the entirety of then outstanding claims could be brought to finality; but it cannot be construed as a constraint or limitation upon the agreement. 46 Thirdly, irrespective of whether the 31 October 2002 Notice of Motion had been prematurely filed, there remained to be resolved the quantification of the outstanding claims being advanced by Mr Pantzer. 47 Finally, if at all possible, a Court should grant such relief as best resolves "as far as possible, all matters in controversy between the parties": Federal Court of Australia Act 1976 (Cth), s 22. And s 23 confers power upon the Court to "make orders of such kinds … as the Court thinks appropriate." Given the constant claims being advanced by Mr Pantzer, and the identification of those claims at various stages during the course of this proceeding before various Judges, it is not considered that either party can claim at this stage of their protracted litigation that they have been denied an adequate opportunity to address the merits of those claims. 48 Nor is it considered that the decision of Branson J in April 2008 confines the relief which can now be claimed.

[29]

The Table of Receipts and Payments 49 The dispute which has engulfed the parties inevitably made it necessary at some point of time to try and unravel the amount of money that had come into the control of Mr Pantzer and the amounts that had been paid by Mr Pantzer and the amounts to which he was entitled to receive as remuneration. 50 In September 2008 Branson J thus made orders, including an order that a Registrar "conduct an inquiry to determine the date, if any, on which 28 days had passed from the determination of the quantum of an amount by way of remuneration, costs, charges and expenses to which Mr Pantzer is lawfully entitled from Dr Wenkart that resulted in the aggregate of such determinations exceeding $769,191.66": Wenkart v Pantzer [2008] FCA 1387. 51 A Deputy District Registrar conducted the inquiry as ordered. In May 2009 a certificate was issued which stated as follows: Certificate pursuant to Order 39 Rule 10 of the Federal Court Rules. I, Paddy Hannigan, a Deputy District Registrar of the Federal Court of Australia certify that the date, if any, on which 28 days had passed from the determination of the quantum of an amount by way of remuneration, costs, charges and expenses to which Mr Pantzer is lawfully entitled from Dr Wenkart that resulted in the aggregate of such determinations exceeding $769,191.66 is 10 January 2005. 52 The judgment previously delivered on 25 September 2009 was a "hearing" pursuant to O 39 r 10(3) of the Federal Court Rules to resolve an "objection" to that Certificate. 53 For the purposes of preparing her Certificate, the Deputy District Registrar compiled the following "table of receipts and payments": Date Description Amount Balance Payments received by the Trustee (Receipts) $769,191.66 $769,191.66 Less Payments made 10.12.1999 Trustees remuneration $60,744.30 $708,447.36 10.12.1999 Future trustee remuneration $80,000.00 $628,447.36 28.3.2000 Trustee remuneration $11,811.40 $616,635.96 28.3.2000 Future Trustee remuneration $68,188.60 $548,447.36 15.3.2002 Trustee remuneration at annulment meeting $105,000.00 $443,447.36 15.3.2002 Cutler Hughes and Harris at annulment meeting $105,000.00 $338,447.36 Amounts to which the trustee is lawfully entitled 15.3.2002 Outstanding remuneration $98,095.16 $240,352.20 17.2.2003 Cutler Hughes and Harris unpaid legal fees $163,477.54 $76,874.66 13.12.2004 Taxing Officer Certificate for trustee remuneration $83,219.82 ($6,345.16) 13.12.2004 Certificate of Taxation $86,736.12 ($93,081.28) 12.01.2005 Certificate of Taxation $33,295.95 ($126,377.23) 10.06.2005 Bankruptcy Estate Charge $20,000.00 ($146,377.23) 17.01.2007 Letter notifying remuneration and costs to 31 December 2006 $159,192.82 ($305,570.05) 19.01.2007 Letter notifying unpaid legal fees $302,682.97 ($608,253.02)

[31]

Cherry v Boultbee 55 The reliance placed by Dr Wenkart upon "the rule in Cherry v Boultbee" starts from an assumption that as at 15 March 2002 funds totalling $769,191.66 had been received by Mr Pantzer as trustee and the further assumption that as at that date there remained a balance of $240,352.20 payable by Mr Pantzer to Dr Wenkart. 56 Both of those factual assumptions, contends Dr Wenkart, follow from the acceptance of the "table of receipts and payments" prepared by the Deputy District Registrar in her inquiry of May 2009. The sum of $240,352.20 is characterised on behalf of Dr Wenkart as a "surplus". 57 The submission on behalf of Dr Wenkart thereafter asserts that as at 15 March 2002, the date of annulment, Mr Pantzer was thereafter not entitled to receive further payment from Dr Wenkart without first paying to him the sum of $240,352.20. 58 The rule in Cherry v Boultbee (1839) 4 My & Cr 442, 41 ER 171 has been described as a "commonsense rule of fairness": Aitken, 'Recent applications of the rule in Cherry v Boultbee (or Jeffs v Wood)' (2010) 84 Australian Law Journal 191 at 191. 59 The manner in which the rule operates has recently been summarised as follows by Chadwick LJ in SSSL Realisations (2002) Ltd v AIG Europe (UK) Ltd [2006] Ch 610: [12] The rule in Cherry v Boultbee is applied in equity to the distribution of a fund. Put very shortly (at this stage) equity requires that a person cannot share in a fund in relation to which he is also a debtor without first contributing to the whole by paying his debt. The operation of the rule may be illustrated by an example. Suppose A is indebted to B in the sum of Ł1,000. B dies leaving his residuary estate to be shared equally amongst four beneficiaries, of which A is one. After the payment of B's debts, administration expenses and specific legacies (but before A has paid the Ł1,000) the amount of the residuary estate in the hands of B's executors is Ł10,000. A must bring his debt into account before he can receive his share. So the amount which he will receive will be Ł1,750 (1/4 of {Ł10,000 + Ł1,000} - Ł1,000). The other three beneficiaries will each receive Ł2,750. It can be seen that, if A's debt were greater than his aliquot share of the whole, he would receive nothing in the distribution. ({1/n (x+y) - y} < 0, if x/(n-1) < y). 60 In Pyrenees Vineyard Management Ltd v Frajman [2008] VSC 552, Judd J described the operation of the rule as follows: [39] The principle underlying the rule in Cherry v Boultbee is that the person controlling a fund, whether as trustee, liquidator or in some other capacity, may deduct from the entitlement of a beneficiary any amount the beneficiary is obliged to contribute to the fund. The person administering the fund may invoke the rule to protect the fund from claims to a distribution by beneficiaries with an unsatisfied obligation to the fund. … 61 The rule is not confined to situations where "debts at law are owing by 'A' to 'B' and 'B' to 'A'".The "equity illustrated by Cherry v Boultbee is applicable in situations where one of the parties is only entitled in equity or beneficially to money and there is a common law debt owing on the other side": Perpetual Trustees (WA) Ltd v Equus Corp Pty Ltd (Unreported, Supreme Court of New South Wales Equity Division, Young J, 5 March 1998). Young J there went on to conclude: … There is no reason why a Court of Equity should not apply the equity illustrated in Cherry v Boultbee where one person merely has an equitable title … The rationale of the equity is that if a person has to contribute to a fund he or she should not be able to have the fund dissipated by collecting from it before he or she has made contribution; that equity will not apply where it is contrary to statute or where it is contrary to the agreement of the parties, or otherwise the circumstances show that it would not be in accordance with conscience that it should apply. In Gray v Guardian Trust Australia Ltd [2002] NSWSC 1218, Austin J summarised the principles as follows: The rule in Cherry v Boultbee [108] There was no real dispute as to the applicable legal principles concerning the rule in Cherry v Boultbee. The following propositions appear to me to be pertinent: (1) where a person is entitled to participate in a fund, but is also bound to make a contribution into that fund, he cannot be allowed so to participate unless he has fulfilled his duty to contribute: …; (2) this principle applies in respect of a beneficiary of the estate of a deceased person who has an obligation to contribute to the estate (for example, where the beneficiary is indebted to the estate); (3) the principle applies to a beneficiary who is indebted to an estate even where the debt is statute barred: …; (4) the same principle applies whether the obligation be to pay the principal alone, or to pay principal and interest: … [citations omitted] There was an appeal from this decision but the appellant only achieved "small success": Gray v Gray [2004] NSWCA 408 at [103], 12 BPR 22,755. There was no disagreement with Austin J's summary of the principles. And, where the rule applies, "not only the debt but also interest due on the debt is able to be set against the legacy due to the debtor": [2004] NSWCA 408 at [94] per Young CJ in Eq. Sheller and Bryson JJA agreed. The Chief Judge there further observed that "the general equitable principle is not confined to the Cherry v Boultbee situation, but applied whenever a person seeks equity but owes money in a case where the creditor is able to claim repayment of the debt without having to bring an action to recover it, at least where the relevant limitation acts bars only the remedy": at [97]. See also: Meagher, Gummow and Lehane's Equity: Doctrines and Remedies at [37-125] to [37-190] (4th ed., 2002). 62 The application of the rule in Cherry v Boultbee in the present proceeding, it is respectfully considered, has to accept the conclusiveness of the "table of receipts and payments". 63 The order was made by Branson J in September 2008 for an inquiry to be held by a Registrar. That inquiry was held and, in Wenkart v Pantzer [2009] FCA 1086, it was concluded that: [59] For the purposes of O 39 r 10(4) of the Federal Court Rules, it is thus concluded that the "weight" to be given to the Certificate of the Deputy Registrar dated 28 May 2009 is such that a finding should be made, consistent with the terms of the order for referral, that the date on which 28 days has passed from the determination of the quantum of an amount by way of remuneration, costs and charges and expenses to which Mr Pantzer is lawfully entitled that resulted in the aggregate of such determinations exceeding $769,191.66 is 10 January 2005. That decision regrettably - with the benefit of hindsight - did not resolve the submission previously advanced as to the application of the rule in Cherry v Boultbee: [2009] FCA 1086 at [57]. The decision, however, clearly contemplated as follows the ambit of the orders to be made: [61] Orders should now be made (if necessary) which give effect to the prior decisions of Her Honour Justice Branson, the Certificate as issued by the Deputy District Registrar on 28 May 2009 and the present reasons for decision. As previously contemplated by Her Honour in her reasons for decision as published in September 2008, it is appropriate that the parties have a further opportunity to make submissions as to the appropriate orders to be made - should that be necessary. The course of the hearing then conducted to determine the weight to be given to the Certificate is set forth in those reasons for decision - including the reliance placed upon earlier decisions supporting each of the amounts set forth in the table and the limited additional factual material sought to be relied upon. The table, upon analysis, was really no more than an arithmetical presentation chronologically setting forth findings which had previously been made by Branson J. Whatever the table did and however it may have been prepared and presented, the "weight" to be given to the Certificate has now been resolved by the September 2009 judgment. 64 Notwithstanding the order made by Branson J in September 2008 for such an inquiry to be conducted, and the conclusion expressed in the decision giving effect to the inquiry thereafter conducted, it must further be recalled that the September 2008 orders were preceded by Her Honour's decision in April 2008 wherein Her Honour: · concluded that as at 31 October 2002 Mr Pantzer was not entitled to "orders in aid" of the 11 March 2002 consent orders made by Beaumont J; · declined to dismiss the cross-claim, as Her Honour was then invited to do by Dr Wenkart as "Mr Pantzer could simply institute a fresh application seeking to enforce the charge over the Paddington property" ([2008] FCA 478 at [92]); and · proposed the ordering of the inquiry "as a first step" in the "making of appropriate costs orders" to deal with the premature filing of the cross-claim. That was the purpose to be served by later ordering the inquiry to be held. It is also to be recalled that in her subsequent decision in September 2008, Branson J: · expressed a belief that Dr Wenkart accepted that in determining the cross-claim filed by Mr Pantzer "the Court could take into account amounts … after the date on which the cross-claim was filed" ([2008] FCA 1387 at [18]); and · again adverted to her earlier disinclination to simply dismiss the cross-claim because such a course would be "likely to result in the institution of yet further litigation between the parties" and because this "did not seem … to be in the public interest or in the interests of the parties, particularly having regard to the Court's wide powers to formulate orders for costs". 65 Rejected is a submission advanced by Counsel on behalf of Mr Pantzer that as at 15 March 2002 there was in fact no "surplus". The "table of receipts and payments",it was submitted, did not conclusively resolve whether or not there was in fact a "surplus" as at 15 March 2002. The table, it was understood from the submission, may have been conclusive as to the date at which the 28 day period had expired - so as to inform Branson J as to a fact relevant to a future exercise of a discretion as to costs - but it was not conclusive as to the state of receipts over payments as at 15 March 2002. 66 But it is now considered to be far too late for Counsel on behalf of Mr Pantzer to seek to advance any factual material or submission seeking to challenge any of the factual findings set forth in the "table of receipts and payments". 67 Although the focus of earlier decisions may have been, for whatever reason, upon when a period of 28 days had expired when amounts exceeded $769,191.66, the fact is that the dates upon which payments were made by Mr Pantzer have received repeated attention in: · the decision of Branson J in April 2008; · the decision of Branson J in September 2008 when Her Honour declined to "reconsider" or "withdraw" paragraphs of her earlier decision; and in: · the inquiry conducted by the Deputy District Registrar.

[32]

Moreover, little constraint was imposed upon the litigants when: · the hearing was held to resolve objections which were taken to the Certificate of the Deputy District Registrar - that hearing being a "rehearing" ([2009] FCA 1086 at [23]). It is thus concluded that it is not now open for Mr Pantzer to seek to place reliance upon factual material seeking to question the factual account now set forth in the table. 68 But the significance that is to be given to the "table of receipts and payments", and what the table identifies as a "balance" of $240,352.20 as at 15 March 2002, does not have the consequence that Mr Pantzer must first account to Dr Wenkart for this amount before being entitled to claim any further moneys that may be payable to him. 69 Prior to 15 March 2002 Mr Pantzer had been the trustee of Dr Wenkart's bankrupt estate. As at that date it was expressly contemplated that Mr Pantzer was both obliged to pay expenses which had not as at that date been paid and recognised that he was also entitled to claim further expenses. The entitlement to "recover his remuneration, costs, charges and expenses to which he … may become lawfully entitled" was expressly embraced within the consent orders made by Beaumont J in March 2002. 70 There are at least three reasons for reaching this conclusion. 71 First, the orders as made by Beaumont J in March 2002 provided that Dr Wenkart was to pay Mr Pantzer's "remuneration, costs, charges and expenses to which he is entitled or may become lawfully entitled" and further recorded an agreement on the part of Dr Wenkart "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". 72 As at that point of time, and even prior to the "table of receipts and payments" being prepared, the amounts which were then within the contemplation of the parties as remaining to be paid were set forth in the Report to Creditors dated 11 March 2002. That Report disclosed outstanding claims for remuneration, costs and expenses being: Warren Pantzer, Trustee (as at 4 March 2002) $70,830.76 Lawler Partners (as at 4 March 2002) $136,506.27 Cutler Hughes & Harris (approx amount as at 27 February 2002) $260,000.00

[33]

Senior Counsel for Dr Wenkart was not able to point to any authority in which Cherry v Boultbee had been applied in such circumstances. 73 The agreement which was in place left no room for any suggestion that Mr Pantzer would first have to account for any "surplus" that he may receive before being able to recoup from any such "surplus" the amounts to which he was entitled or may become entitled. 74 Second, the "table of receipts and payments" merely confirmed the liability on the part of Dr Wenkart to pay the amounts set forth in that table. Even if it be accepted that as at 15 March 2002 there was an outstanding"balance" of $240,352.20, it is not considered that Mr Pantzer had to "contribute" that amount into the fund or that he was "bound to make a contribution into that fund" as expressed in Perpetual Trustees and Gray. 75 It is, with respect, a mistake to characterise the "balance" recorded in the table as a "surplus". It remained moneys that were available to meet the claims being made by Mr Pantzer. 76 The third and final reason for rejecting the present submission being advanced on behalf of Dr Wenkart is that the rule in Cherry v Boultbee is not a rule without exceptions. In Young, Croft and Smith On Equity (2009) the authors there state: Exceptions to the rule [15.600] The rule will not apply where it is contrary to statute or the agreement of the parties or the terms of the relevant will, or in circumstances where it would not be in accordance with conscience that it should apply Perpetual Trustees (WA) Ltd v Equus Corp Pty Ltd. The rule does not apply where the legatee becomes bankrupt in the testator's lifetime and the debt is released on his or her discharge: R v Akerman. If the creditor decides not to deduct the debt from the legacy but elects to pursue some other remedy (for example, by proving the insolvent estate of the debtor), the equity will not apply: see Re Hurburgh; Stammers v Elliott; White v Sewell; and compare Otis Elevator Co Pty Ltd v Guide Rails Pty Ltd (election not established). [footnotes omitted] 77 Whatever may be the reasons in fairness for requiring (for example) a beneficiary to first contribute to a fund before he may participate in its distribution, such reasons seem to have little application to a trustee in bankruptcy recuperating his remuneration. The functions of a trustee are those prescribed by law and a trustee is bound to administer an estate in accordance with the Bankruptcy Act 1966 (Cth) and the Bankruptcy Regulations 1996, including the duty to make payments in accordance with s 109 of that Act.In Freeman v Joiner [2005] FCAFC 149, 3 ABC(NS) 332 Spender, Kiefel and Dowsett JJ at [16] referred to the dual functions of a trustee as being "to administer the estate in the interests of the creditors and the bankrupt; and to exercise the powers given and duties imposed by the Act as a public duty and for the public welfare". He is properly to be regarded as an officer of the Court: Adsett v Berlouis (1992) 37 FCR 201 at 208; Frost v Sheahan [2005] FCA 1014 at [106], 3 ABC(NS) 288 at 300 per Lander J. 78 It would seem an odd conclusion to impose upon a trustee - or, now, the former trustee - the same obligation as is imposed upon a beneficiary by the rule in Cherry v Boultbee. 79 In the absence of explanation advanced on behalf of Dr Wenkart, it is difficult to conclude that there was any "fund" to which Mr Pantzer had to contribute before he could equitably claim the remuneration to which he was otherwise entitled: cf. Ansett Australia Ltd v Travel Software Solutions Pty Ltd [2007] VSC 326 at [101] to [108], 214 FLR 203 at 225 to 226 per Hargrave J. 80 To invoke the words of Young J in Perpetual Trustees (WA) Ltd v Equus Corp Pty Ltd, supra, it is considered that "it would not be in accordance with conscience that [the rule] should apply".

[34]

Baldry v Jackson: The Cross-Claim 81 It was on 31 October 2002 that Mr Pantzer filed his Notice of Motion seeking orders permitting him to sell the Paddington property. The Motion sought "an order in aid of [the] order made 11 March 2002". This Motion was subsequently characterised as a "cross-claim". 82 And, as at 31 October 2002, Branson J has concluded that Mr Pantzer was not then entitled to "orders in aid" of the order made on 11 March 2002: Wenkart v Pantzer [2008] FCA 478 at [91]. 83 The argument now sought to be advanced on behalf of Dr Wenkart is that Her Honour Justice Branson has "held that Mr Pantzer had no entitlement to relief when he first brought his Cross-Claim on 31 October 2002" and that "the Court has definitively determined that Mr Pantzer had no entitlement to relief (and thus, in essence no 'cause of action') when his proceeding commenced". Relying upon the decision in Baldry v Jackson [1976] 2 NSWLR 415, the submission is that "where there was no extant cause of action at the date of commencement of the proceedings, it is not open to a claimant to support those proceedings by recourse to after-occurring events or entitlements". 84 The decision in Baldry v Jackson had its origins in a motor vehicle collision in Queensland. The issue which was resolved by the New South Wales Court of Appeal centred upon the correct application of Part 15 r 16 of the Supreme Court Rules which provided as follows: A party may plead any matter notwithstanding that the matter has arisen after the commencement of the proceedings. In concluding that the rule did not permit an amendment to be made to rely upon a cause of action that had not arisen as at the date of commencement of the proceeding, Samuels JA held at 419: In my view, therefore, "matter" in Pt. 15, r. 16 does not include "cause of action". There is, however, perhaps a simpler way of meeting the appellant's argument. The rule looks to events which have occurred after the commencement of the proceedings and thus, where the proceedings have been commenced by statement of claim, after the statement of claim has been filed. It primarily contemplates a party pleading matter which has arisen after the statement of claim has been filed, but before the time comes to file the pleading in which the matter is to be included. No doubt all this can be done by amendment after the relevant pleading has been filed. But an amendment, duly made, takes effect, not from the date when the amendment is made, but from the date of the original document which it amends; …. There is nothing in the rules to displace this principle … It seems to me, therefore, impossible to permit an amendment to this statement of claim which would have the effect of introducing into it a cause of action based upon facts which had not arisen when the statement of claim was filed. The situation becomes even more curious when one considers that these new facts would be wholly in substitution for the facts already pleaded which do not, of course, disclose any cause of action. I cannot see how a plaintiff can commence proceedings by a statement of claim dated 5th November, 1975 (and that date would remain after amendment) which pleads facts which did not occur until the 1st December, 1975: there is nothing in r. 16 to authorize such a course. [citations omitted] Moffitt P and Glass JA agreed. 85 The decision in Baldry v Jackson has since been applied by this Court: Pollack v Retravision (NSW) Ltd (Unreported, Federal Court of Australia, Moore J, 23 December 1996); Airservices Australia v Jeppesen Sanderson Inc [2006] FCA 906 at [39] per Graham J. As explained by Burchett J in Vamuta Pty Ltd v Sogo Co Ltd (1996) 68 FCR 151 at 155: "As was held by the Court of Appeal of New South Wales in Baldry v Jackson … a merely 'inchoate' claim cannot support an initiating process until it is 'consummate'". 86 In the present proceeding, Her Honour Justice Branson clearly regarded the Notice of Motion as filed by Mr Pantzer on 31 October 2002 as "premature". Given the construction of Orders 1 and 2 as made on 11 March 2002, and the subsequent certification of the date after which "28 days had passed", that conclusion of Her Honour was clearly correct. Her Honour was also very conscious of the "regrettably long and complex history of this matter": [2008] FCA 478 at 92, 6 ABC(NS) 37 at 60. 87 But the conclusion of Her Honour, with respect, says nothing as to either: · the entitlement of Mr Pantzer to claim at some time in the future amounts for costs, expenses and remuneration; or · the reasonableness of either filing the Notice of Motion on 31 October 2002 or his subsequent efforts to recover the amounts to which he claimed he has a lawful entitlement. Indeed, it was presumably the very ability of Mr Pantzer to make such claims that may have led Her Honour not to simply dismiss the "Cross-Claim" - as was the order previously sought by Dr Wenkart: [2008] FCA 478 at [92]. 88 Notwithstanding the "premature" filing of the Notice of Motion on the part of Mr Pantzer, it is not considered that the filing of that Motion on 31 October 2002 precludes Mr Pantzer from now obtaining the relief he seeks. 89 The Notice of Motion as filed on 31 October 2002 was a Motion seeking an "order in aid" of the order previously made on 11 March 2002. To conclude, as did Branson J, that as at 31 October 2002 Mr Panzter was not then entitled to an "order in aid" of the March 2002 orders for the reason that as at October 2002 Mr Pantzer had received "a larger amount by way of receipts than the determined amount of the remuneration, costs, charges and expenses to which he was lawfully entitled", says nothing as to whether as at some date other than October 2002 Mr Pantzer "may become lawfully entitled to" future payment in accordance with the March 2002 agreement. 90 As at 31 October 2002 there were unpaid - and untaxed - legal costs incurred by Cutler Hughes and Harris in the sum of $163,477.54. There was also the outstanding claim for remuneration of $98,095.16. The order made by the Full Court in Wenkart v Pantzer [2003] FCAFC 210, 132 FCR 204 was that Mr Pantzer became entitled to payment of $98,095.16 pursuant to Regulation 8.08of the Bankruptcy Regulations 1996 (Cth) in April 2002. 91 As at October 2002, it is not possible to characterise the amount of $163,477.54 as anything other than an amount to which Mr Pantzer "may become lawfully entitled". The same conclusion may be reached in respect to those other amounts found payable by the Deputy District Registrar. And it is not possible to conclude that the cause of action for the payment of $98,095.16 was not complete as at October 2002. 92 The conclusiveness or finality of the finding made by Branson J that the Notice of Motion as filed on 31 October 2002 was "premature", with respect, says nothing as to the future ability of Mr Pantzer to recover his entitlements or the reasonableness of his seeking to recover those entitlements. Mr Pantzer's entitlement to seek these moneys, albeit at a future date, arose by reference to the agreement reached in March 2002. 93 The rule in Baldry v Jackson, it is concluded, does not preclude the relief which is now sought by Mr Pantzer. The premature filing of the "cross-claim" in October 2002 does not preclude Mr Pantzer later enforcing his entitlements to which there was prior agreement.

[35]

The Commencement and Conduct of the Proceeding 94 A further submission advanced on behalf of Dr Wenkart is that the "commencement" of the proceeding initiated by the Notice of Motion as filed on 31 October 2002, and Mr Pantzer's subsequent "conduct" in pursuing the relief then sought has not been "reasonable" in the circumstances. A potential distinction arises as between the initial filing of the Notice of Motion and the subsequent conduct. As at 31 October 2002 the filing of the Notice of Motion was "premature". 95 In advancing that submission, reliance is placed by Dr Wenkart upon the following observations of Northrop, Wilcox and Cooper JJ in Adsett v Berlouis (1992) 37 FCR 201 at 212: … the trustee's right to remuneration is limited to work properly undertaken. In this context, "properly" means work reasonably and bona fide undertaken for the purpose of administering the estate or performing any public duty imposed by the Act, conformably with the trustee's duty to perform the work with reasonable care and skill and in an efficient and economical way. "There exists", it has been said, "a public interest in ensuring that trustee's remuneration is open to objective scrutiny": McKinnon v Pattison [2009] FCA 1421 at [40] per Marshall J. See also: O'Keeffe v Hayes Knight GTO Pty Ltd [2005] FCA 389 at [14], 218 ALR 604 per Nicholson J; Boensch v Pascoe [2007] FCA 1977 at [10] to [15], 5 ABC(NS) 480 at 483 to 484 per Buchanan J. 96 The principle set forth in Adsett v Berlouis may be accepted; but Dr Wenkart's reliance upon the principle is, with respect, misplaced. 97 The submission is largely answered by the decision of the Full Court in Pantzer v Wenkart [2006] FCAFC 140, 153 FCR 466. The issues canvassed in that decision also focussed on the Notice of Motion as filed on 31 October 2002 and the conduct pursued by Mr Pantzer subsequent to the annulment of Dr Wenkart's bankruptcy on 15 March 2002. Of particular concern was a finding of the primary Judge that Mr Pantzer had undertaken litigation for his own benefit rather than for the purpose of administering the estate of Dr Wenkart. That conclusion was reversed on appeal. In doing so, Black CJ, Ryan and Moore JJ concluded: [43] It may be accepted that a trustee's right to remuneration is restricted to work reasonably and bona fide undertaken for the purpose of administering the estate or performing a statutory public duty with reasonable care and skill and in an efficient and economical way: see Adsett v Berlouis (1992) 37 FCR 201. In the present matter however, the litigation in which Mr Pantzer became involved after Dr Wenkart's bankruptcy had been annulled was to defend, successfully, in the face of sustained opposition from Dr Wenkart, the remuneration, costs, charges and expenses he had claimed at the time of the annulment. From Mr Pantzer's viewpoint, such a course was unavoidable, in a practical sense, if he was to maintain and realise his entitlements. [44] It was in his capacity as a former trustee that Mr Pantzer was drawn into the litigation to assert a right to be paid a claimed amount which Dr Wenkart had not challenged by seeking taxation in the way provided for by the Regulations, and to exercise an implied right of sale arising from the consent orders and the failure of Dr Wenkart to comply with them. It is true, in a sense, that the litigation was undertaken by Mr Pantzer for his benefit, as the primary judge observed. In the same sense, any litigation into which a trustee might be drawn concerning remuneration, disbursements and expenses is litigation for the trustee's benefit. But to characterise it this way does not necessarily answer the question whether the trustee (or former trustee) has been properly involved in the litigation as an incident of having acted as a trustee charged with the responsibility of administering the bankrupt's estate. In our view, the facts in the present case compel the conclusion that the remuneration, costs, charges and expenses incurred after the annulment of the bankruptcy were so incurred for the purpose of giving practical effect to the 11 March 2002 consent orders and, more generally, administering the estate. Consequently, Mr Pantzer was "lawfully entitled" to them within the terms of the consent orders. Special leave to appeal from this decision was sought but refused on 2 March 2007: Wenkart v Pantzer [2007] HCA Trans 99. 98 Notwithstanding these conclusions of the Full Court, it is nevertheless now said on behalf of Dr Wenkart that: · the decision of the Full Court preceded the judgment of Branson J on 11 April 2008 (Wenkart v Pantzer [2008] FCA 478); · there is now "an extant finding that Mr Pantzer had no claim against Dr. Wenkart when he commenced these proceedings, which were always doomed to ultimate failure"; · Mr Pantzer has acknowledged in a letter dated 13 March 2003 to the Insolvency and Trustee Service Australia that "I was also initially advised by my solicitors that I ought to wait until taxation was completed before making application to the court to enforce the security pursuant to the consent orders"; and · "these proceedings were premature, at all times at least until 10 January 2005 (when Mr Pantzer's 'lawful entitlements' - consisting of remuneration and costs incurred in the conduct of these proceedings - first exceeded funds received by him at which point only did he (arguably) have a claim capable of enforcement)". The date of 10 January 2005, it is recalled, was that fixed by the Deputy District Registrar. 99 One further comment should be made in respect to the decision of the Full Court. Immediately preceding their conclusion that Mr Pantzer had undertaken the work for the purpose of administering the estate, their Honours had concluded: REASONING [40] In our opinion, the remuneration, costs, charges and expenses claimed by Mr Pantzer after 11 March 2002 and, in particular, those associated with the litigation that flowed from Mr Pantzer's application of 31 October 2002 and for which each taxation certificate issued, were comprehended by order 1 of the consent orders of 11 March 2002. The application on 31 October 2002 was for an order appointing Mr Pantzer as trustee for sale of the property secured by the charge that had been agreed to and embodied in the orders of 11 March 2002. The 31 October 2002 application was instituted to give practical effect to a benefit that flowed naturally and directly to Mr Pantzer from the orders of 11 March 2002. These conclusions of the Full Court give effect to their construction of Order 1 as made on 11 March 2002. 100 But none of the factors now relied upon by Dr Wenkart lead to any different conclusion being reached. The simple fact is that Mr Pantzer is entitled to payment of an outstanding claim for remuneration, costs charges and expenses. Dr Wenkart has wrongly refused to pay. Although the claim as made on 31 October 2002 was "premature", there were at that date moneys to which he "may become lawfully entitled". Given the refusal to pay, and even though the claim as at 31 October 2002 was "premature", it is not considered that Mr Pantzer at any point of time acted unreasonably in seeking to recover the moneys he claimed. Even the letter dated 13 March 2003 does not lead to any different conclusion. And, even if it were open for a single Judge to reach any contrary conclusion than that previously reached by the Full Court, there is considered to be no reason to do so.

[37]

It may presently be noted that there is a small 40 cent discrepancy between the amounts paid during the bankruptcy as claimed by Mr Pantzer (and as derived from the Certificate of the Deputy District Registrar) and those calculated by Branson J. 105 Leaving aside interest, it is concluded, that the amount to which Mr Pantzer has a lawful entitlement, is $193,531.18 less $20,451.47. An entitlement to this smaller sum, it is concluded, has not been made out. 106 The amounts paid during bankruptcy, namely this amount of $430,744.30, may be traced in part to the judgment of Her Honour Justice Branson delivered on 11 April 2008: Wenkart v Pantzer [2008] FCA 478, 6 ABC(NS) 37. Her Honour there reviewed the resolutions which had been passed and a schedule prepared by Mr Pantzer and concluded: [32] I conclude that on the proper construction of the above resolution, the creditors purportedly approved Mr Pantzer's remuneration as follows: (a) $ 60,744.70 for the period from 28 October - 10 December 1999; (b) $ 80,000 for future remuneration from 13 December 1999; (c) $ 11,811.40 for the period from 11 March - 28 March 2000; (d) $ 68,188.60 for future remuneration from 29 March 2000; and (e) $ 105,000.00 in accordance with para (a)(I) of the s 73 proposal. These amounts are reflected in the first eleven payment items shown on Mr Pantzer's schedule … These sums total $325,744.70. Together with the sum of $105,000 paid to Cutler Hughes and Harris on 15 March 2002, the total is $430,744.70. Notwithstanding this discrepancy, reliance is placed upon the sum as claimed as set forth in the Certificate. 107 The quantification of the sum of $484,824.59 paid post annulment may also be traced back to conclusions previously reached by Branson J. The sum of $484,824.59 is itself the aggregate of the following amounts: Outstanding remuneration $98,095.16 Unpaid legal fees $163,477.54 Taxed remuneration $83,219.82 Certificate of Taxation $86,736.12 Certificate of Taxation $33,295.95 Bankruptcy estate charge $20,000.00 $484,824.59

[39]

[33] Additionally, as I noted in [2007] FCA 1589 at [64], Mr Pantzer's claim for 85% of the sum of $115,406.07 (ie $98,095.16) has been the subject of litigation in other proceedings. In Wenkart v Pantzer (No 6) [2003] FCA 1210 published on 29 October 2003, Lindgren J dismissed a motion by Dr Wenkart for an extension of time within which to request that this claim be taxed. On that day Mr Pantzer's claim to be lawfully entitled to that sum was rendered effectively beyond challenge. The date upon which he is to be regarded as becoming lawfully entitled to the sum is, in my view, 14 days after Dr Wenkart became aware of the amount of the claim, namely 29 March 2002 (reg 8.09(1) of the Bankruptcy Regulations 1996 as then in force). This amount is reflected in the second unpaid amount listed in Mr Pantzer's schedule. 109 The sum of $163,477.54 may also be traced back to the decision of Branson J delivered on 16 October 2007: Wenkart v Pantzer [2007] FCA 1589. In respect to this amount Her Honour referred to yet another earlier decision and then concluded: [69] In Wenkart v Pantzer [2003] FCA 471 Beaumont J ruled that Mr Pantzer is lawfully entitled to disbursements claimed by Cutler, Hughes and Harris. His Honour also noted that no appeal had been lodged from the decision of the taxing officer to issue a certificate of taxation on 17 February 2003 in respect of costs, including unpaid costs, in the total sum of $180,435.30. Mr Pantzer gave evidence that the amount of $163,477.54 remains owing by him to Cutler, Hughes and Harris in respect of these costs. I conclude that Mr Pantzer is lawfully entitled to this amount. 110 The remuneration of $83,219.82 may also be traced back to conclusions reached by Branson J in her October 2007 judgment. Her Honour there recounted earlier challenges to the amount quantified and expressed her conclusions as follows: [75] Following the making by Lindgren J of the orders of 21 October 2003 (see [22] above) Mr Pantzer requested that a claim for remuneration and certain bills of costs for services provided by others purportedly in relation to the administration of Dr Wenkart's estate be taxed. By a certificate dated 13 December 2004 the taxing officer certified that she had taxed and allowed the remuneration, disbursements and expenses claimed by Mr Pantzer for the period 15 March 2002 to 21 October 2003 in the amount of $169,955.54. The amount allowed for Mr Pantzer's remuneration was $83,219.82. Dr Wenkart's challenge to this certificate of taxation, and to a further certificate issued by the taxing officer on 12 January 2005, was dismissed by the Full Court (see [8]-[12] above). As I have observed above (see [23]), Dr Wenkart conceded that upon completion of taxation of the claims for costs and remuneration referred to in orders 1 and 2 of the orders made on 21 October 2003 the amounts taxed would be amounts to which Mr Pantzer is lawfully entitled. I conclude that Mr Pantzer is lawfully entitled to the sum of $83,219.82 for remuneration for the period 15 March 2002 to 21 October 2003. 111 The sum of $86,736.12 and the sum of $33,295.95 may also be traced to the same judgment where Her Honour went on in the following paragraph to conclude: [76] Mr Pantzer is for the same reasons lawfully entitled to the additional amounts totalling $86,736.12 included in the certificate of taxation dated 13 December 2004 and the amount of $33,295.95 allowed by the certificate of taxation issued by the taxing officer on 12 January 2005. 112 The sum payable under the Bankruptcy (Estate Charges) Act 1997 (Cth) was first addressed in a judgment of Beaumont J in Wenkart v Pantzer [2003] FCA 471. Apparently payment of the charge in issue was resisted by Dr Wenkart on the basis that that sum was to be paid by a firm called Lawler Partners rather than Mr Pantzer. In her October 2007 judgment, Branson J addressed this question as follows: [54] Mr Pantzer works in the Sydney office of Lawler Partners which is predominantly a Newcastle based firm. He is not a partner or an employee of Lawler Partners but rather an "independent consultant". As the above written submissions reflect, Mr Pantzer gave evidence that Lawler Partners, rather than he personally, would make payment of the charge (and possibly interest thereon) in respect of Dr Wenkart's bankrupt estate payable under the Bankruptcy (Estate Charges) Act 1997 (Cth) by 10 June 2005. He acknowledged that there was no contract, arrangement or understanding between him and Lawler Partners in relation to that proposed payment. [55] In my view, the payment (or perhaps more accurately, the agreement to pay) by the firm within which Mr Pantzer works of the statutory charge payable by Mr Pantzer in respect of Dr Wenkart's bankrupt estate does not render the statutory charge (and the interest payable thereon) something other than "expenses occurred under the Bankruptcy (Estate Charges) Act 1997" within the meaning of the ruling made by Beaumont J. [56] Lawler Partners may be assumed to have a proper interest in maintaining a good relationship with Insolvency and Trustee Services Australia (ITSA). It is immaterial for present purposes that, presumably to protect that relationship, the firm agreed to pay the statutory charge itself rather than wait for Dr Wenkart to pay the due amount to Mr Pantzer or require Mr Pantzer to pay it personally. As between Dr Wenkart and Mr Pantzer it is an amount payable by Dr Wenkart to Mr Pantzer. Nothing in the evidence suggests an arrangement between Mr Pantzer and Lawler Partners that would entitle Mr Pantzer to keep the amount for his personal benefit should it be paid to him by Dr Wenkart. When he receives from Dr Wenkart the amount due under the statute, Mr Pantzer, as he acknowledged, will be under an obligation to pay that amount to Lawler Partners - assuming the firm earlier to have paid the statutory charge. Her Honour concluded: [68] I have already concluded above that Mr Pantzer is lawfully entitled to the amount of the charge payable under the Bankruptcy (Estate Charges) Act 1977 (Cth) (see [56] above). 113 It was not disputed on behalf of Dr Wenkart that the entitlement to receive the amount of $26,702.48 has been admitted on the pleadings. 114 The "miscellaneous expenses" of $20,451.47 is, perhaps, less certain. That sum is comprised of the following amounts: Out of pocket expenses $10,157.58 A sum for "rent contra" $2,714.00 GST $319.89 Trustee's lien $7,260.00 $20,451.47

[41]

Declaratory Relief? 117 A further question said on behalf of Mr Pantzer to be outstanding is whether or not he is entitled to declaratory relief in respect of remuneration, costs, charges and expenses which he may become lawfully entitled to recover from Dr Wenkart. 118 Dr Wenkart denies the entitlement of Mr Pantzer to now seek such declaratory relief. 119 Two amounts have been the subject of a claim already made by Mr Pantzer upon Dr Wenkart and the subject of attention in this Court. Thus, on 17 and 19 January 2007 Mr Pantzer wrote to Dr Wenkart making the following two claims for payment, namely: · a claim in respect of remuneration and disbursements for the period 22 October 2003 to 31 December 2006 totalling $159,192.82; · a claim in respect of legal costs incurred since 21 October 2003 totalling $302,682.97. The response of Dr Wenkart was to file on 14 February 2007 a Notice of Motion seeking orders (inter alia) that these claims be withdrawn. 120 That Motion was considered by Her Honour Justice Branson in Wenkart v Pantzer [2007] FCA 1589. In the course of her reasons, Her Honour noted that Dr Wenkart maintained that the claims were without foundation because: "(a) The bankruptcy ended in March 2002; (b) Lindgren J made orders in [this proceeding] on 21 October 2003 requiring [Mr Pantzer] to make a final claim for remuneration by 23 October 2003 and a final claim for expenses by 22 October 2003; (c) [Mr Pantzer] is not entitled to claim remuneration and expenses as a trustee in bankruptcy for post annulment work as if he was a trustee in bankruptcy; (d) There is no agreement with [Dr Wenkart] to reimburse [Mr Pantzer] for his post annulment remuneration (if any) or his post annulment expenses (if any); and (e) [Mr Pantzer's] claims are personal costs which have nothing to do with the administration of the former bankrupt estate of [Dr Wenkart] (which ended in March 2002)." See: [2007] FCA 1589 at [34]. 121 Her Honour's reasons separately address "Post-Annulment Remuneration, Costs, Charges and Expenses" (at paragraphs [36] to [44]) and "Mr Pantzer's Legal Costs after 21 October 2003" (at paragraphs [45] to [51]). 122 Whilst addressing the post-annulment remuneration, Her Honour expressed conclusions as to Mr Pantzer's entitlement to those amounts and dealt with the proper construction of the orders made by Lindgren J. She relevantly concluded that Mr Pantzer was entitled to remuneration for giving practical effect to the 11 March 2002 consent orders and further concluded that the orders made by Lindgren J were not intended to "deprive Mr Pantzer of any amounts to which he might thereafter become lawfully entitled". Her Honour expressed her conclusions as follows: [43] I therefore proceed on the basis that amounts claimed by Mr Pantzer as remuneration, costs, charges and expenses incurred by him for the purpose of giving practical effect to the 11 March 2002 consent orders and, more generally, administering Dr Wenkart's bankrupt estate are amounts to which Mr Pantzer is prima facie "lawfully entitled" within the meaning of order 1 of the consent orders made on 11 March 2002. I also proceed on the basis that, subject to any relevant impact of the orders made by Lindgren J on 21 October 2003, the agreement to pay reflected in order 1 of the 11 March 2002 consent orders, and therefore the agreement to charge reflected in order 2 of those orders, extends to those amounts. [44] I next turn to the issue of the proper construction of the orders made by Lindgren J on 21 October 2003. The reasons for judgment of the Full Court make plain that, as at 21 October 2003, the possibility existed of Mr Pantzer becoming "lawfully entitled" to amounts by way of remuneration, costs, charges an expenses in respect of services not yet provided - notwithstanding that Dr Wenkart's bankruptcy had been annulled nineteen months earlier. Although Lindgren J may not have turned his mind to this possibility when he made the orders (see [79] below), nothing in the language of the orders suggests that they were intended to deprive Mr Pantzer of any amounts to which he might thereafter become lawfully entitled. Nonetheless, the orders were plainly intended to have some effect; they required Mr Pantzer to take certain steps and some significance must have been intended to attend any failure by him to take those steps. Having regard to the reasons for judgment of the Full Court, I conclude that the orders required Mr Pantzer to take those steps in relation to services that had, as at that date, been provided by any person in respect of the bankrupt estate of Dr Wenkart and in relation to his claim for remuneration as at that date (ie in respect of his present, but unclaimed, entitlements). Were it established that Mr Pantzer failed to comply with the orders in respect of any services that had been provided as at 21 October 2003, or in respect of a claim for remuneration for work undertaken as at that date, Mr Pantzer would not, I conclude, be entitled to recover any amount in respect of those services or that claim for remuneration in reliance on orders 1 and 2 of the consent orders made on 11 March 2002. This, I conclude, is the full extent of the ongoing significance of the orders made by Lindgren J on 21 October 2003 so far as Mr Pantzer's entitlements to remuneration, costs, charges and expenses are concerned. 123 And when addressing the legal costs incurred after 21 October 2003, Her Honour referred to her comments at paragraph [44] and then concluded: [50] I therefore conclude that bills of costs for legal services provided to Mr Pantzer in respect of Dr Wenkart's bankrupt estate which: (a) were supplied before 21 October 2003, or pursuant to the orders made on that day in respect of services provided by no later than that day; or (b) relate to services provided after 21 October 2003; are to be taxed under the Act on a solicitor/client basis. 124 Her Honour also concluded that Dr Wenkart was not entitled to the orders he sought in his Notice of Motion as filed on 14 February 2007: [2007] FCA 1589 at [51], 5 ABC(NS) 642 at 656. 125 Given the conclusions of Her Honour Justice Branson, it is considered that Mr Pantzer is entitled to declaratory relief that he has a lawful entitlement upon taxation to the amount as taxed in respect to both: · the claim for remuneration totalling $159,192.82; and · the claim for legal expenses totalling $302,682.97. 126 These two claims were for the confined two periods of time identified in the claims themselves. Thereafter, further legal costs have unquestionably been incurred. And Mr Pantzer would be entitled to claim a further amount in respect to his remuneration. An appropriately drafted declaration should give effect to his entitlement to make these further claims.

[42]

Interest 127 In a proceeding for the recovery of money, power is conferred upon the Court to order interest up to judgment: Federal Court of Australia Act 1976 (Cth), s 51A. Section 51A(1) and (2) provide as follows: Interest up to judgment (1) In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either: (a) order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or (b) without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest. (2) Subsection (1) does not: (a) authorize the giving of interest upon interest or of a sum in lieu of such interest; (b) apply in relation to any debt upon which interest is payable as of right whether by virtue of an agreement or otherwise; (c) affect the damages recoverable for the dishonour of a bill of exchange; (d) limit the operation of any enactment or rule of law which, apart from this section, provides for the award of interest; or (e) authorize the giving of interest, or a sum in lieu of interest, otherwise than by consent, upon any sum for which judgment is given by consent. 128 The principles applicable to the exercise of the discretion conferred by s 51A are well-settled. In HK Frost Holdings Pty Ltd (in liq) v Darvall McCutcheon (a firm) [1999] FCA 795 at [6] to [11], Finn J summarised these principles as follows: (1) It is well settled that the objective of provisions of this type is to compensate an applicant for the loss it suffers in being kept out of its money or damages: … (2) The award of interest under s51A(1) is mandatory "unless good cause is shown to the contrary" … Ordinarily it will be for the respondent to establish such "good cause"… Furthermore, it is open to the court, for example, to take into account such considerations of public policy as may be relevant in the circumstances: … (3) Though the matter is and remains one of judicial discretion, it is the usual practice of this Court in applying s 51A(1) to adopt the rates of interest applied by the Supreme Court of the State or Territory in which this Court is dealing with the matter: … though, no less so than a State court, the Court may then depart from those rates as a matter of discretion given the circumstances of the case: … A justification for this practice is that it helps to ensure that damages are awarded on the same basis at least as to rates of interest whether a proceeding is instituted in this Court or in a Supreme Court. Parity in the making of interest awards will, though, often be unattainable because the legislation of a particular State may prescribe varying periods for which pre-judgment interest may be awarded (depending upon the nature of the cause of action in question) that differ from what is allowable under s 51A(1): … (4) Given the variations in the language and structure of the pre-judgment interest provisions of the various Australian States, care must be taken in using the decisions of State courts on their own statutes to elucidate the meaning of s51A(1). For example, for the purposes of s51A(1) the formula "good cause to the contrary" would appear on its proper construction to mean only good cause for not allowing interest at all: ... The subsection itself otherwise provides discretions as to the rate and the period of an interest award. In contrast, the same formula as used in s58 of the Supreme Court Act 1986 (Vic) has been interpreted to mean good cause for allowing interest otherwise than in accordance with the terms of that section: … But s58, notably, does not provide the same discretions as does s51A(1). (5) It is neither possible nor desirable to define what will constitute "good cause" disentitling a party to interest under s51A(1); each case must be considered by reference to its own circumstances: … (6) There is considerable diversity in judicial opinion as to the extent to which, if at all, the rate or (more usually) the period selected for an interest award should as a discretionary matter be moulded adversely to a party that delays in the prosecution or defence of a claim where no resultant detriment to the other party is shown: … Nonetheless, insofar as concerns a successful applicant who has been guilty of unreasonable delay, the view I am prepared to follow in the absence of binding authority is that the period for which the interest award is made can properly be adjusted if to allow interest for the whole period for which it could otherwise be ordered would work an injustice to the respondent in the circumstances: … Such would seem to be consistent with the policy of the s51A(1) in that an applicant that has been held out of the benefit of its money because of its own unreasonable actions should not be allowed as of course to cast the effects of a 'self-inflicted burden' onto the respondent: … [citations omitted] Section 51A "does not require that prejudgment interest be claimed at a point prior to judgment": Hanave Pty Ltd v LFOT Pty Ltd [2004] FCAFC 180 at [36], 136 FCR 566 at 575 per Keifel J (Wilcox and Allsop JJ agreeing at [6]). See also: In Shoppe Pty Ltd v Smith (1976) 33 FLR 107, 6 ATR 242 at 248 per Hutley JA. 129 The primary purpose of an award of pre-judgment interest is to "compensate a successful plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period": Whitaker v Commissioner of Taxation (1998) 82 FCR 261 at 269 per Lockhart J. Appl'd: Donald Financial Enterprises Pty Ltd v APIR Systems Ltd (No 2) [2008] FCA 1269 at [10] per Edmonds J.A secondary purpose is to provide a discouragement to respondents from delaying the conclusion or settlement of the proceedings. However, "[i]nterest should be compensatory and not punitive":Genocanna Nominees Pty Ltd v Thirsty Point Pty Ltd[2006] FCA 1268 at [408]. See also:Byrnes v Jokona Pty Ltd [2002] FCA 41 at [161] per Allsop J (citing: Haines v Bendall (1991) 172 CLR 60). 130 In the present proceeding it is considered that interest should be ordered pursuant to s 51A. No "good cause" has been established which would not warrant such an order being made and if Mr Pantzer is to be compensated an order for interest is warranted. 131 There remains outstanding the date or dates from which interest should run. By reason of the time taken to resolve the claims now advanced, the reality is that both: · the time from which interest is to run; and · the quantum of the calculation as to interest are not matters free of difficulty. 132 In a rare but welcome step, Counsel for both Dr Wenkart and Mr Pantzer have indicated that both of these matters are expected to be the subject of agreement. 133 In the absence of agreement, brief submissions will be further entertained when final orders are made giving effect to these reasons.

[43]

Costs 134 The remaining issue to be addressed is that of costs. 135 Section 43 of the Federal Court of Australia Act 1976 (Cth) confers a discretion which has been said to be absolute and unfettered, albeit a discretion which must be exercised judicially and not arbitrarily or capriciously: Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213 at 219, 28 ALR 201 at 207 per Fisher J (citing: Cretazzo v Lombardi (1975) 13 SASR 4 per Bray CJ). Attempts to specify narrow criteria for the exercise of the discretion have not been successful: Gladstone Park Shopping Centre Pty Ltd v Ross Wills (1984) 6 FCR 496 at 505 per Davies J. Ordinarily, costs should follow the event: Ruddock v Vadarlis (No 2) [2001] FCA 1865 at [11], 115 FCR 229 at 234. 136 There are two discrete matters presently relevant to the exercise of the discretion as to costs in the present proceeding. 137 First, Mr Pantzer has been substantially successful in obtaining the relief he claimed. The lack of success in respect to the "miscellaneous expenses" of $20,451.47 can be put to one side. Little (if any) extra costs would have been incurred in respect to submissions directed to this claim. 138 Of greater concern is the fact that the October 2002 "cross-claim" was in fact filed prematurely and at a point of time when Mr Pantzer was not entitled to "orders in aid" of the previous consent orders made by Beaumont J. It was presumably to assist in the formulation of an appropriate order as to costs that Branson J made her orders directing the inquiry held before the Deputy District Registrar. Dr Wenkart is entitled to some costs incurred in respect to the premature filing of this "cross-claim". 139 Any separate order that Dr Wenkart should be entitled to such costs as have been incurred "of and incidental" to the premature filing, or any order that Dr Wenkart should be entitled to costs during a particular period of time or in respect to particular parts to this prolonged proceeding, it is strongly suspected would only be productive of further disputes. 140 The preferred course, it is concluded, is to order that Mr Pantzer should be entitled to an order for costs - but only a percentage of his overall costs. Any assessment of that percentage is necessarily lacking in any mathematical precision: cf. Dias Aluminium Products Pty Ltd v Ullrich Aluminium Pty Ltd [2005] FCA 1400 at [7], 225 ALR 569 at 570 per Crennan J; Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd (No 2) [2010] FCA 277 at [4] per Jacobson J. To "a considerable extent matters of impression and judgment" are involved: Barrett Property Group Ltd v Metricon Homes Pty Ltd (No 2) [2007] FCA 1823 at [19] per Gilmour J. 141 And, in the present proceeding, it is an assessment made even more complicated by reason of the fact a decision now has to be made by reference to earlier decisions of other Judges of this Court. 142 Accepting that making an assessment does involve matters of impression and judgment, it is considered that Mr Pantzer should have 90% of his costs. It is unlikely that many of the legal costs that have been incurred would have been avoided even if the "cross-claim" had not been filed prematurely. 143 The second aspect of any order as to costs which was raised with the parties was whether any entitlement to costs should be denied by reason of the history of the litigation. An initial claim for moneys was subsequently to be dwarfed by the incurring of yet further legal costs and interest. 144 Potentially relevant are the terms of s 43(1) which provides as follows: … the Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which this or any other Act provides that costs shall not be awarded. Of present concern is whether the term "costs" can or should be construed as extending beyond the legal costs incurred by one or other of the parties to also embrace a consideration of the "costs" incurred by the community in providing the forum in which the parties have ventilated their ongoing dispute. 145 The object and purpose of a power to order costs, however, must necessarily be recognised as being "principally by way of perceived restorative justice" between the parties: Ruddock v Vadarlis (No 2), supra, at [12] per Black CJ and French J. 146 Concern as to the disproportionate legal costs that may be incurred in the resolution of a proceeding, and concern as to the costs also incurred by the community in providing access to the judicial process, has nevertheless been expressed in other proceedings: e.g., Seven Network Limited v News Limited [2007] FCA 1062 at [17] to [18] per Sackville J. And concern is not confined to a mere consideration of legal costs incurred by the parties. Protracted litigation - and, on one view of it, unnecessary litigation - may have the consequence that other litigants are delayed access to the Courts. Increasing reference is thus being given to the fact that Courts are a "publicly funded resource" and the need to "maintain public confidence in the judicial system": Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27 at [5], 258 ALR 14 at 17 per French CJ. 147 In the absence of authority, it is nevertheless not considered that the term "costs" should be extended beyond its presently accepted meaning. To do so could well have the consequence of placing yet a further obstacle in the path of litigants seeking access to justice and an impermissible incentive upon litigants to accept perhaps less than their legal entitlements. The policy considerations involved in the conferral of such a power, and the manner in which such a power should be exercised, would truly attract complex and conflicting considerations. Access to justice remains, however, a matter of continuing concern and is of course addressed in the Attorney-General's Report provided in September 2009: A Strategic Framework for Access to Justice in the Federal Civil Justice System. 148 Litigants are obviously entitled to access the Courts for the purposes of resolving their disputes. 149 But, once having gained access, legitimate questions arise as to whether they should be permitted to thereafter use the publicly funded resources of the Courts as some private colosseum in which to wage a totally uncommercial piece of litigation fought by their gladiatorial Counsel. 150 But such matters may presently be left to one side. 151 One final matter which should be addressed is whether or not an order should be made pursuant to O 62 r 4(2)(c) of the Federal Court Rules. The power conferred is particularly suited to complex litigation - although the power is not confined to cases of that type: Sony Entertainment (Australia) Ltd v Smith [2005] FCA 228 at [189], 215 ALR 788 at 812 per Jacobson J. The making of such an order in the present case may avoid the potential for further dispute. Submissions as to whether such an order should be made and the quantum of any such order may be made at that point of time when final orders are sought to give effect to these reasons. 152 In assessing that percentage, consideration has been given to whether any separate order should be made for costs on an indemnity basis for any part or parts of the proceeding. Ultimately it is not considered that any such order should be made. The 90% assessment is a fair and proper accommodation of all of the competing considerations relevant to the exercise of the discretion.

[44]

Conclusions 153 The present proceeding, it is recognised, exposes a potential tension that may emerge in litigation that proceeds before a number of different Judges and over the space of nearly a decade between: · the need for finality in litigation, such that litigants are not afforded an endless opportunity to re-canvass arguments that should have been advanced on the one occasion rather than sequentially; · the need for a single Judge to accept the conclusiveness of a decision that has previously been made by another Judge of the Court and to leave it for a dissatisfied litigant to seek redress on appeal before a Full Court; and · the need to resolve in as expeditious a manner as possible, and in a manner which exposes no litigant to prejudice or unfairness, all issues that divide the litigants. Indeed, some may say that each of these matters is separate and discrete from the others and that there is in practice no tension at all. Whatever may be the reach or impact of s 37M of the Federal Court of Australia Act 1976 (Cth), neither that provision nor s 22 can be construed as simply a licence to resolve all issues free of long-established constraints upon the powers and discretions of a Judge at first instance. 154 However the dividing line may be drawn between these issues, it is hoped that there has been no impermissible transgression. It is no answer to such tension as may exist to recognise the possibility - if not the certainty - that the present decision will be appealed to a Full Court. 155 For the reasons expressed, it is thus considered that the issues as formulated by Dr Wenkart may in summary form be answered as follows: 1. Yes; 2. The commencement and conduct of the proceeding by Mr Pantzer has been reasonable in all the circumstances; 3. Yes; 4. The question does not arise; and 5. Dr Wenkart should pay 90% of the costs of Mr Pantzer. 156 The issues as formulated on behalf of Mr Pantzer are not as readily susceptible of answers being provided in the same format, but for the reasons expressed above, it is considered that: (a) The consent orders as made by Beaumont J on 11 March 2002 are to be construed in the manner indicated by the Full Court in Pantzer v Wenkart [2006] FCAFC 140 at [40], 153 FCR 466 at 476; (b) No; (c) Yes; (d) Yes; (e) Yes; (f) Mr Pantzer is entitled to an order that Dr Wenkart pay 90% of his costs; (g) Mr Pantzer is entitled to an order for interest pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth). 157 The parties are to prepare Short Minutes of Orders which give effect to these reasons and conclusions. Should it be necessary to address any further outstanding issue still dividing the parties, a short note identifying any such issue should be exchanged between the parties and forwarded to Chambers. 158 When preparing those Short Minutes the parties should also extract from those documents which have presently been simply "Marked for Identification" the documents to which reference was made during the course of the hearing. The extracted documents will then be marked as an exhibit.