Ferella v Official Trustee in Bankruptcy [2013] FCAFC 43: Inquiry into Trustee

In Ferella v Official Trustee in Bankruptcy [2013] FCAFC 43 (delivered 7 May 2013) the full court considered an application under the Bankruptcy Act 1966 (Cth) (the Act) s 179 relating to the court's power to inquire into the conduct of a trustee in relation to a bankruptcy.

Background

The proceedings arose from a Federal Magistrate's decision making sequestration orders on 14 October 2005 pursuant to the Act against the estates of the appellants. The respondent became the trustee of each bankrupt estate and on 3 December 2008 the appellants were discharged from bankruptcy by operation of law. On 11 November 2009 the appellants applied pursuant to the Act s 179 for orders that there be inquiries into the respondent’s conduct in relation to both bankrupt estates.The primary Judge on 6 June 2011 ordered that there be a limited inquiry into such conduct. The appellants now appeal against those orders, effectively asking that the full court of the Federal Court to extend the ambit of the proposed inquiry.

Before the primary Judge the appellants had sought a s 179 inquiry into 11 questions (see par [5] of the judgment] concerning the conduct of trustees’ appointed in relation to bankrupt estates. The primary Judge had declined ordering a broader inquiry and the appellants sought to appeal the decision but had failed to deliver the notice of appeal in time.

Issues

The full court considered whether on the material available to trial judge he should have ordered a  broader inquiry and whether error of law in the sense of House v The King (1936) 55 CLR 499 was shown to exist by the appellants.

The full court also considered the appellants attempt to amend the notice of appeal where the notice of appeal was delivered after conclusion of the hearing and whether the grounds of appeal reflected in the appellants’ oral and written submissions were valid.

Result

Dismissing the appeal to extend the inquiry, the full court extended the time in which the applicants could apply for leave to appeal against the orders made on 6 June 2011; the appellants were granted leave to appeal and required to file within seven days of the delivery of the reasons a notice of appeal in the form  prescribed by the full court (see the form annexed to the judgment).

Source: Judgment of the Full Court in Ferella v Official Trustee in Bankruptcy [2013] FCAFC 43.

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