In the matter of The Bankruptcy Act and in the matter of an Application Pursuant to Section 109(6) re George Vasil Tollis ex parte Ronald Patrick Colby 1978 FCA 125

In the matter of The Bankruptcy Act and in the matter of an Application Pursuant to Section 109(6) re George Vasil Tollis ex parte Ronald Patrick Colby 1978 FCA 125

The Court was satisfied that property had been recovered or preserved by means of indemnities for costs of litigation given by the scheduled creditors. It was just and equitable to give those indemnifying creditors an advantage over other creditors reflecting the net recovery achieved through the indemnities, calculated as $14,224.90 after deducting legal costs of $775.10 from the $15,000 settlement. Because the four smaller indemnifying creditors undertook an apparently equal exposure to costs despite relatively small proved debts, they were to receive payment in full of their admitted proved debts, with the remaining balance of the settlement sum and interest to be paid to Dusan...

Jurisdiction
Australia
Judgment Date
04 December 1978
Procedural Posture
Bankruptcy Application Under Bankruptcy Act 1966 S 109(6) / Application Seeking Directions and Orders About Any Preference or Advantage to Be Given to Indemnifying Creditors in the Distribution of Recovered Property
Outcome
Orders made giving the indemnifying creditors an advantage over other creditors; matter adjourned indefinitely.
Legal Topics
['indemnity for Costs of Litigation' 'distribution of Recovered Property' 'advantage to Indemnifying Creditors' 'creditor Proofs of Debt']
['bankruptcy and Insolvency'] ['indemnity for Costs of Litigation' 'distribution of Recovered Property' 'advantage to Indemnifying Creditors' 'creditor Proofs of Debt']

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Procedural Posture

Bankruptcy Application Under Bankruptcy Act 1966 S 109(6) / Application Seeking Directions and Orders About Any Preference or Advantage to Be Given to Indemnifying Creditors in the Distribution of Recovered Property

Legal Issues

  1. 1 ['Whether property had been recovered by means of an indemnity for costs of litigation given by creditors within Bankruptcy Act 1966 s 109(6).' 'What order was just and equitable with respect to distribution of the proceeds of the recovered property so as to give indemnifying creditors an advantage over other creditors in consideration of the risk run by them.' 'How the advantage should be shared among the indemnifying creditors where the smaller creditors apparently undertook equal liability for costs despite much smaller proved debts.']

Ratio Decidendi

The Court was satisfied that property had been recovered or preserved by means of indemnities for costs of litigation given by the scheduled creditors. It was just and equitable to give those indemnifying creditors an advantage over other creditors reflecting the net recovery achieved through the indemnities, calculated as $14,224.90 after deducting legal costs of $775.10 from the $15,000 settlement. Because the four smaller indemnifying creditors undertook an apparently equal exposure to costs despite relatively small proved debts, they were to receive payment in full of their admitted proved debts, with the remaining balance of the settlement sum and interest to be paid to Dusan...

Court Disposition

Orders made giving the indemnifying creditors an advantage over other creditors; matter adjourned indefinitely.

Orders

  • ['The applicant may retain from the sum received from Mrs Niki Trakas the legal costs and expenses incurred in connection with the proposed legal proceedings against her, such costs having been taxed.' 'The applicant may retain his taxed costs of and incidental to the application.' 'The indemnifying creditors set...