AFSA recently decided on a registered trustee’s request for remuneration approval, under subsection 162 (4) of the Bankruptcy Act 1966 (the Act).
Upon reviewing the request, a number of administrative errors were identified.
- The correct priority of payments under section 109 of the Act had not been followed.
- Creditors had not been given an opportunity to approve the trustee’s remuneration before their debts were paid in full.
- The trustee had made errors in the estimate required to annul the bankruptcy. These errors were compounded by the trustee’s objection to discharge and a caveat lodged on jointly owned property.
The request for remuneration approval also included charges for work that was not deemed necessary, reasonable or commensurate with the nature and complexity of the administration.
After discussions with the trustee, the request was withdrawn and a new request was submitted to AFSA for approximately 50 per cent of the original request—representing $24,000 less than the original remuneration amount. This naturally increased the amount of the surplus returned to the bankrupt.
The trustee also agreed to withdraw both the objection to discharge and the caveat on the jointly owned property.
A number of policy documents are relevant to trustee remuneration, including:
- Inspector-General Practice Statement (IGPS) 15 - Assessment by the Inspector-General of a trustee's remuneration approval request
- Inspector-General Practice Statement (IGPS) 16 - Reviewing remuneration of trustees and costs of third party service providers
- Inspector-General Practice Direction (IGPD) 6 - Remuneration entitlements of a registered bankruptcy trustee
- IGPD18: Trustee remuneration notifications