Official Trustee in Bankruptcy, in the matter of Matson v Deputy Commissioner of Taxation [1999] FCA 914

Official Trustee in Bankruptcy, in the matter of Matson v Deputy Commissioner of Taxation [1999] FCA 914

The recovered property would not have been obtained but for the indemnities, and the risk undertaken by the indemnifying creditors was significant, so the indemnifying creditors should receive the whole available amount as a real benefit for assuming that risk. American Express International Inc.'s written offer to assist financially was a sufficient indemnity within s 109(10), even though it did not sign the proffered indemnity form, because no prescribed form was required by the Act.

Jurisdiction
Australia
Judgment Date
28 June 1999
Procedural Posture
Application Under S 109(10) of the Bankruptcy Act 1966 (cth) for an Order Determining Priority to Be Given to Indemnifying Creditors / Final Orders
Outcome
Application granted; the net amount recovered from BMM Investments Proprietary Limited was ordered to be distributed to the indemnifying respondents in specified proportions.
Legal Topics
['distribution of Bankrupt Assets' 'indemnifying Creditors' 'indemnity for Costs of Litigation' 'priority in Distribution']
['bankruptcy'] ['distribution of Bankrupt Assets' 'indemnifying Creditors' 'indemnity for Costs of Litigation' 'priority in Distribution']

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Procedural Posture

Application Under S 109(10) of the Bankruptcy Act 1966 (cth) for an Order Determining Priority to Be Given to Indemnifying Creditors / Final Orders

Legal Issues

  1. 1 ['Whether the whole of the available amount recovered through litigation should be distributed to indemnifying creditors under s 109(10) of the Bankruptcy Act 1966 (Cth).' "Whether American Express International Inc.'s letter dated 24 April 1998 was a sufficient indemnity for costs of litigation to bring it within s 109(10)." 'What proportions of the recovered net amount should be distributed to the indemnifying creditors.']

Ratio Decidendi

The recovered property would not have been obtained but for the indemnities, and the risk undertaken by the indemnifying creditors was significant, so the indemnifying creditors should receive the whole available amount as a real benefit for assuming that risk. American Express International Inc.'s written offer to assist financially was a sufficient indemnity within s 109(10), even though it did not sign the proffered indemnity form, because no prescribed form was required by the Act.

Court Disposition

Application granted; the net amount recovered from BMM Investments Proprietary Limited was ordered to be distributed to the indemnifying respondents in specified proportions.

Orders

  • ['Pursuant to s 109(10) of the Bankruptcy Act, the applicant distribute the net amount after costs, remuneration and other expenses recovered from BMM Investments Proprietary Limited the subject of this application as to 5 per cent to the first respondent, as to 90 per cent to the second respondent and as to 5 per...