Nirens, Susan, trading as Lornik v Deputy Commissioner of Taxation [1986] FCA 677

Nirens, Susan, trading as Lornik v Deputy Commissioner of Taxation [1986] FCA 677

Section 109 of the Bankruptcy Act does not directly apply to compositions; the Court, however, may order petitioner's costs to be paid out of the composition fund, and in justice such costs should be shared by all bound by the composition.

Parties
Debtor: Susan Nirens, trading as Lornik; Creditor / Petitioner: Deputy Commissioner of Taxation of the Commonwealth of Australia
Jurisdiction
Australia
Judgment Date
31 October 1986
Procedural Posture
Bankruptcy / Post Dismissal of Creditor's Petition Following Acceptance of Composition
Outcome
Petitioner's costs ordered to be paid out of the composition fund; trustee to pay petitioner before any payments to creditors under composition.
Legal Topics
Costs in Bankruptcy Proceedings, Priority of Payments Under Composition, Application of Bankruptcy Act to Compositions
Bankruptcy Costs in Bankruptcy Proceedings Priority of Payments Under Composition Application of Bankruptcy Act to Compositions

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Parties

Susan Nirens, trading as Lornik

Debtor

Deputy Commissioner of Taxation of the Commonwealth of Australia

Creditor / Petitioner

Procedural Posture

Bankruptcy / Post Dismissal of Creditor's Petition Following Acceptance of Composition

Legal Issues

  1. 1 Whether the Court may order payment of petitioner's costs out of fund constituted for purposes of composition
  2. 2 Whether s.109 of Bankruptcy Act applies to composition under Part X
  3. 3 Priority of petitioner's costs vis-à-vis other payments under composition

Ratio Decidendi

Section 109 of the Bankruptcy Act does not directly apply to compositions; the Court, however, may order petitioner's costs to be paid out of the composition fund, and in justice such costs should be shared by all bound by the composition.

Court Disposition

Petitioner's costs ordered to be paid out of the composition fund; trustee to pay petitioner before any payments to creditors under composition.

Orders

  • The petitioner's costs (including reserved costs) of and incidental to the petition (other than those relating to the bankruptcy notice, service, preparation of petition, and supporting affidavit) to be taxed.
  • Upon service of office copy of this order and certificate of taxation on the trustee, trustee to pay the amount of taxed costs to petitioner out of funds paid by debtor in pursuance of composition.