In the Matter of CHRISTOPHER JANOS PERI (a bankrupt) v In the Matter of the Insolvency Act 1986 [2002] EWHC 799 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

(On appeal from Oxford County Court

sitting in bankruptcy)

[2002] EWHC 799 (Ch)

Case No Case No: 278 of 1998

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Between

In the Matter of CHRISTOPHER JANOS PERI (a bankrupt)

In the Matter of the Insolvency Act 1986

PETER WILLIAM ENGEL

(trustee of the property of the above-named bankrupt)Appellant

CHRISTOPHER JANOS PERI (a Bankrupt)Respondent

Before

Mr Justice Ferris

Miss Raquel Agnello (instructed by Veale Wasbrough of Orchard Court, Orchard Lane, Bristol BS1 5DS) for the Appellant

Mr. Steven Thompson (instructed by Mark Johnson-Watts, solicitor, of 31 Beaumont Street, Oxford OX1 2NP) for the Respondent

Hearing date: 13th February 2002

Date 29 April 2002

[1]Mr Justice Ferris: This is an appeal by the trustee in bankruptcy from an order made by District Judge Bowman in the Oxford County Court on 20th August 2001 whereby a bankruptcy order made against Mr. Christopher Janos Peri on 11th January 1999 was annulled subject to certain conditions. Notwithstanding the annulment it is convenient to continue to refer to Mr. Peri as "the bankrupt".

[2]On 19 th November 1998 a bankruptcy petition was presented to Oxford County Court by a creditor, Mr. V. A. Raspopin. A bankruptcy order was made on that petition on 11 th January 1999. The appellant, Mr. Peter William Engel, was appointed the bankrupt's trustee in bankruptcy on 1 st April 1999.

[3]During the course of the bankruptcy a number of applications to the court were made and various transactions were carried out, none of which it is necessary to mention further.

[4]On 4th May 2001 the bankrupt initiated an application to the court seeking, so far as material to this appeal, the following relief: "1. An order that the bankruptcy of the above-named bankrupt be annulled. 2. That the Court do enquire as whether one creditor, namely Mr. V.A. Raspopina, should be properly admitted to proof and, if appropriate, give directions to establish the correct amount to be admitted to proof. 3. That the Court do enquire as whether one creditor, namely Oxford Carpet & Flooring Studio, should be properly admitted to proof and, if appropriate, give directions to establish the correct amount to be admitted to proof.

[5]As appears from paragraphs 2 and 3 of the relief sought by the bankrupt's application, not all the bankruptcy debts had been paid or secured at the time of the application. Whether, on an application of this kind, the court could do what was asked by paragraph 2 of the application was resolved by order of District Judge Payne made on 18 th June which provided that this part of the application should be treated as an application under Rule 6.105 of the Insolvency Rules. At that stage it seems to have been contemplated that it would be determined in advance of the application to annul. Paragraph 3, relating to the indebtedness to Oxford Carpet & Flooring Studio, appears to have been left on one side. It may indeed have been resolved prior to the hearing before District Judge Payne. If it was still alive, it would have been dealt with in the same way as paragraph 2.

[6]Annulment of bankruptcy orders is governed by Section 282(1) of the Insolvency Act 1986, which provides:

"(1) The court may annul a bankruptcy order if it at any time appears to the court- (a) that, on any grounds existing at the time the order was made, the order ought not to have been made, or (b) that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the court."

[7]In a witness statement made by the bankrupt's solicitor on 9th August 2001 it was stated that the bankrupt had decided that the Raspopin debt would be paid in full. Accordingly the court was asked to approach the annulment application on the footing that all debts were ascertained and had been or would be paid in full from third party funds, any debts which had not actually been so paid being secured by means of a payment into court.

[8]In the meantime, however, another point had arisen. The trustee produced information as to the expenses of the bankruptcy which the bankrupt considered to be excessive and desired to challenge. The trustee was informed of this in a letter to his solicitors dated 14th July 2001 and on 9th August 2001 the bankrupt initiated an application to the court ("the section 303 application") for "An order under s.303 of the Insolvency Act 1986 or under the Court's inherent jurisdiction in bankruptcy reversing or modifying the decision of the Trustee ... to fix his remuneration at or about £25,515.43 and to incur legal fees at or about £15,944.16 or refixing his remuneration and legal fees incurred at a reasonable level or such other order or direction as the Court thinks fit on the grounds that the remuneration of the said Trustee and the legal fees incurred by the trustee are excessive."

[9]The application to annul and the section 303 application came before District Judge Bowman on 20th August when he made the order appealed from. So far as material this order provided "1. That the Bankruptcy order of 11 January 1999 be annulled pursuant to [section 282(1)(b)] and the Petition herein filed on 19 November 1998 be dismissed with costs in the Bankruptcy conditional upon:a. [The trustee's solicitors] confirming in writing to [the bankrupt's solicitor] that they have received payment in full for the creditors' claims outstanding at the date hereof and for the petitioning creditor's costs of the Petition;

b. [The bankrupt's solicitor] making payment to the trustee in the sum of £18,000 on account of the Bankrupt's liability for the costs and expenses of the Bankruptcy (such liability as hereinafter ordered);

c. [The bankrupt's solicitor] making payment into court in the sum of £21,000 as security for the costs and expenses of the bankruptcy to abide the determination of the bankrupt's pending application dated 9 August 2001 under section 303 of the Act (or under the court's inherent jurisdiction);

d. The trustee's costs of the bankrupt's said application dated 9 August 2001 being secured for by payment into court in the sum of £2000. 2. .... 3. That upon the annulment taking effect, the bankrupt's application under rule 6.105(2) of the Insolvency Rules [i.e. the applications concerning the amount due to Mr. Raspopin] be dismissed with costs in the bankruptcy. 4. .... 5. The costs and expenses of the bankruptcy be paid by the former bankrupt. 6. The level of the costs and expenses of the bankruptcy (including the fees of the trustee) be determined by the court pursuant to the former bankrupt's said application dated 9 August 2001 (unless agreed).".

[10]At the hearing of this appeal I was told, and there was no dispute about this, that the third party who was providing the funds needed to secure the annulment of the bankruptcy order was the bankrupt's wife. At the hearing on 20th August 2001 the bankrupt's solicitors came to court with cheques provided by the wife for the amounts which, under the order that was eventually made, were to be paid into court. It seems that it had been envisaged that these sums would be paid into court forthwith. It was found, however, that the Oxford court office was unable to accept payment by this means in an insolvency case and that payment in would have to be effected in London, with the result that payment would be delayed for a number of days. I understand that it was the District Judge himself who suggested that the administrative difficulties be overcome by expressing the order for annulment as being conditional upon the payments into court being made.

[11]The arguments presented on this appeal fall generally under two heads namely(i) an attack on the section 303 application, which, it is said, the District Judge should have dismissed and

(ii) an attack on the concept that a conditional order for annulment can be made. THE SECTION 303 APPLICATION

[12]On behalf of the trustee in bankruptcy Miss Agnello argued(a) that the bankrupt had no standing to make an application under section 303;

(b) that section 303 does not enable the court to fix the trustee's remuneration; and

(a) Want of standing

[13]The relevant part of section 303 is subsection (1) which provides "(1) If a bankrupt or any of his creditors or any other person is dissatisfied by any act omission or decision of a trustee of the bankrupt's estate, he may apply to the court and on such an application the court may confirm, reverse or modify any act or decision of the trustee, may give him directions or may make such other order as it thinks fit."

[14]Although the section specifically mentions the bankrupt as a possible applicant it was argued that having the status of being the bankrupt is not by itself sufficient. An applicant under section 303, whether he be the bankrupt, a creditor, or other person, must also be dissatisfied with the act, omission or decision complained of. I think that this view of the matter accords with the wording of the section. The argument was then taken a stage further by saying that a person can only be 'dissatisfied' if he can show that he has some substantial interest which has been adversely affected by whatever is complained of. This accords with the view expressed by Jeremiah Harman J in Port v Auger

[1994] 1 WLR 862

at pages 873-4.

[15]It is at the next step in the argument that I part company with Miss Agnello. She contended that a bankrupt cannot be said to have the requisite interest unless it can be shown that there will be a surplus after all the bankruptcy debts and the expenses of the bankruptcy have been paid in full. There will be no such surplus in the present case. There was originally a substantial deficit in the bankruptcy and the bankrupt's wife is making available only the amount of money required to meet the debts and expenses, not to provide a surplus.

[16]This proposition was founded upon Re a Debtor, ex parte The Debtor v Dowell

[1949] Ch 236

, where a bankrupt sought to challenge certain aspects of the administration of his estate by the trustee in bankruptcy under section 80 of the Bankruptcy Act 1914, which was in terms similar to those of section 303 save that the word 'aggrieved' appeared instead of 'dissatisfied'. Charles Harman J said, at page 240, "This motion ... raises a question of some importance in bankruptcy law, namely, to what extent, if any, can the bankrupt call the trustee in his bankruptcy to account for his management and disposition of the estate. The point, of course, can only arise where the bankrupt can show that there is, or will, or might (but for the trustee's action or inaction), be a surplus in the trustee's hands after satisfying in full all the claims of the creditors. Where, as in the vast majority of cases, the estate is insolvent, the bankrupt has clearly no interest in it, and it matters not to him how it is administered, but the bankrupt has a statutory right to any surplus under s.69 of the Act, and is, therefore, clearly concerned to increase, if he can, its amount."

[17]Later Charles Harman J emphasised that the bankrupt's only interest was in the surplus, if there should be one. At page 244 he dealt with particular claims in respect of the trustee's remuneration and expenses and said "As to paras 5 and 6 [of the notice of motion], I have already pointed out that the bankrupt has no right to interfere in such matters as the trustee's remuneration or the costs, charges and expenses which he incurs unless such payments amount to misconduct ... Apart from that, s.82 shows that it is for the creditors to control the remuneration and costs of the trustee ..."

[18]While this decision will obviously be applicable in the great majority of cases where a bankrupt seeks to interfere with the day to day administration of his estate in the course of the bankruptcy, I do not think it can be regarded as laying down a universal requirement that a bankrupt must show that there will or may be a surplus before he has a standing to apply under section 303. What he has to show is that he has "some substantial interest which has been adversely affected by whatever is complained of" (see Port v Auger at page 874A).

[19]Whether the bankrupt can do this must depend on the facts of the particular case. In the context of an application for annulment under section 282(1)(b) the amount of the trustee's remuneration and expenses may be a matter of considerable significance, because it affects the amount of money required to be paid in order to satisfy the court of the matters referred to in the subsection. In my view the bankrupt has a clear interest in this, for he will want the annulment to be obtained as cheaply as possible. This will clearly be the case where the bankrupt is persuading a third party to lend him the money or intends to enter into an obligation to indemnify a third party who puts up the necessary funds. I consider that it will also be so even where there is to be no formal obligation as between the bankrupt and the third party. The prospects of the third party making funds available are likely to be increased if the amount required is kept to a minimum. Further the bankrupt is likely to feel under a moral obligation to indemnify the third party even where he is under no legal obligation.

[20]I conclude therefore that, on the footing that the amount of the trustee's remuneration and expenses in this case involves an act, omission or decision of the trustee (which is a matter to which I must return) the bankrupt has the requisite standing to challenge these matters under section 303. (b) Can the trustee's remuneration be fixed on the section 303 application?

[21]What I have referred to as the section 303 application is, in fact, somewhat more complex than that description suggests. It is expressed to be based not only on section 303 but also on the inherent jurisdiction of the court. Further it relates both to the trustee's remuneration and to the legal fees incurred by him. I think it is necessary, therefore, to approach this head of Miss Agnello's argument quite generally.

[22]The fixing of the remuneration of a trustee in bankruptcy is governed by rules 6.138 to 6.142 of the Insolvency Rules 1986. The effect of these rules, so far as they are material to this case, can be summarised as follows:(a) The remuneration is to be either (i) a percentage of the assets realised or distributed or (ii) ascertained by reference to the time properly given by the trustee or his staff in attending to the matters arising in the bankruptcy;

(b) The choice between (i) and (ii) is to be made by the creditors' committee if there is one or, if there is none, by a meeting of creditors;

(d) If the remuneration is not fixed in accordance with the foregoing provisions it is to be on the scale prescribed for the official receiver;

(e) If the trustee considers that the remuneration fixed as mentioned in (a) to (d) above he can seek an increase from the court under rule 6.141;

(f) A creditor whose debt is at least 25 per cent by value of the creditors, or who has the concurrence of this proposition of creditors may apply to the court under rule 6.142 for an order that the trustee's remuneration be reduced.

[23]In the present case, at a meeting of creditors held on 23rd June 2000 resolutions were passed approving the trustee's receipts and payments account for the period to 24th May 2000 and fixing the trustee's remuneration by reference to the time properly spent in attending to the matters arising in the insolvency. No further relevant resolution of the creditors has been passed. The figure in respect of remuneration which the bankrupt seeks to challenge is, as I understand it, the trustee's calculation of what he considers that he ought to receive on the basis of time properly spent.

[24]Miss Agnello submitted that Insolvency Rules 6.138 to 6.142 contain a comprehensive code for the fixing of the trustee's remuneration, that nothing in section 303 enables the court to go outside this code and that there is no inherent jurisdiction in the court to fix a trustee's remuneration. I think that it is right to say that the rules do proceed on the basis that they provide a comprehensive code, but it seems to me that it is a defective one. The assumption behind rule 6.138(2) appears to be that the only decision which needs to be made by creditors is to chose between(i) a percentage basis and

(ii) a time spent basis. Where the choice is in favour of a percentage basis this may indeed be the only decision that needs to be made. If, however, the chosen basis is the time spent basis there are a number of other matters which need to be decided, including the appropriate charging rate and how much time it is reasonable for the trustee and the members of his staff to spend in attending to relevant matters. The rules do not appear to give the creditors a voice in these matters, except insofar as they are able to apply to the court for the remuneration to be reduced under rule 6.142. This does not appear to me to be particularly satisfactory. It seems to assume that, in a time spent case, the remuneration will, in the absence of a successful challenge under rule 6.142, be whatever the trustee calculates to be due to him in accordance with his own charging rates for the time recorded or claimed to have been spent by himself and his staff. It is even less satisfactory in a case of the present kind, where the trustee's remuneration may be a significant element in the determination of what sum the bankrupt has to procure to be paid in order to have his bankruptcy annulled. There is nothing in rule 6.142 which enables the bankrupt, as distinct from a creditor, to apply for the remuneration to be reduced.

[25]Under the law in force before the Insolvency Act 1986 came into effect the remuneration of a trustee in bankruptcy was governed by section 82 of the Bankruptcy Act 1914 and rules 335 and 336 of the Bankruptcy Rules 1952. It is unnecessary to consider these in any detail. It will suffice to say that, although the wording was very different from the wording of the present provisions, they were like the current provisions in leaving the fixing of remuneration primarily to a meeting of creditors and in prescribing what appears to be an exhaustive code. There are however two decisions under this regime which indicate that the court itself can fix remuneration where, by reason of unusual circumstances, justice requires this.

[26]The first of these decisions is Re Colgate (a bankrupt)

[1986] Ch 439

. In that case a trustee in bankruptcy had tried on five occasions to hold a meeting of creditors to pass a resolution fixing his remuneration under section 82 he had failed because, although the meetings were properly convened, no creditors attended. He then applied to the court for an order fixing his remuneration, relying on section 105(1) of the 1914 Act, which provided "Subject to the provisions of this Act, every court having jurisdiction in bankruptcy under this Act, shall have full power to decide all questions of priorities, and all other questions whatsoever, whether of law or fact, which may arise in any case of bankruptcy coming within the cognisance of the court, or which the court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case ..."

[27]In Colgate the Bankruptcy Registrar held that section 105 did not enable the court to fix the trustee's remuneration because section 82 amounted to a provision of the Act which, in effect, overrode section 105 by providing an exhaustive regime for the fixing of remuneration. On appeal to the Court of Appeal a different view was taken. May LJ, with whom Lloyd LJ and Sir David Cairns agreed, said:

"In my judgment the object of section 105 is to give this court or the bankruptcy court wide powers of doing justice in a particular case, and in the particular circumstances of the instant appeal one must invoke those powers to do justice because the machinery laid down by section 82 of the Act of 1914 has in the event, and after numerous attempts to make it work, broken down."

[28]A similar view was taken by a divisional court consisting of Evans-Lombe and Rimer JJ in Upton v Taylor

[1999] BPIR 168

. The facts there were somewhat complicated, but in essence the task before the court was to ascertain what sum the defendant Taylor would have to pay the trustee in bankruptcy in order to enable all creditors to be paid in full after taking into account the remunerations of the trustee. Taylor argued that the amount of remuneration claimed by the trustee was excessive and asked that it be fixed by the court. The issue was whether the court had jurisdiction to do this.

[29]Giving judgment Rimer J, with whom Evans-Lombe J agreed, referred to Re Colgate and continued ([1999] BPIR at page 181) "Like all cases Colgate was a decision on its own facts, and I consider that it would be unsafe to regard it as establishing a general principle that, so long as it may in theory be available, the s.82 machinery must always be resorted to and exhausted before any question of invoking the s.105 jurisdiction arises. It is not difficult to envisage cases in which the operation of the s.82 machinery may perhaps be the recipe for possible injustice. If, for example, in this case the trustee had realised not just the £13,499.90 but also the £78,000 surplus realised by Mr. Taylor, he would be able to pay all the creditors in full, and would have a large surplus potentially available for the payment of substantial remuneration to himself. The ordinary situation in which the s.82 machinery is operated is that of an insolvent estate, in which the creditors have a real commercial interest in seeing that the trustee's remuneration is no more than fair. In the example given, however, the creditors invited to vote on the trustee's remuneration would have no like commercial interest since they will anyway be paid in full. They might well therefore be prepared to vote for whatever remuneration the trustee proposes to them. If such a resolution were to result in the voting of excessive remuneration then that would work an injustice on the bankrupt, as the person directly affected by the vote, although he would at least be entitled under s.82(2) to endeavour to persuade the DTI to fix the remuneration. Thus a creditors' resolution under s.82(1) is not necessarily the last word on the subject of remuneration."

[30]I pause to observe that, under the current provisions, the bankrupt no longer has anything equivalent to the right to apply to the DTI given by section 82(2). His position is, in economic terms, similar to that of Mr. Taylor in Upton v Taylor . In other words, although the amount of the trustee's remuneration is a matter of immediate concern to him, the statutory regime gives him no express right to make representations concerning it.

[31]Rimer J continued (at page 182 H) "In my judgment, the court has a jurisdiction under s.105(1) to bring this litigation to a prompt conclusion by itself fixing the trustee's remuneration. The jurisdiction under s.105(1) which the Court of Appeal applied in Colgate cannot be one which simply springs up when the s.82(1) machinery has been shown to be incapable of operating. It must be a jurisdiction which can be called upon whenever the justice of a particular case demands it. I consider that this is such a case and that the court ought to exercise the jurisdiction. Further, I consider that the court also has an inherent jurisdiction under the principle of Ex parte James to take steps to fix the fair remuneration of the trustee."

[32]The current equivalent of what was previously section 105 of the 1914 Act is section 363 of the Insolvency Act 1986. By section 363(1) "Every bankruptcy is under the general control of the court and ... the court has full power to decide all questions of priorities and all other questions, whether of law or fact, arising in any bankruptcy" This reproduces the language of that part of section 105 which, in Colgate and Upton v Taylor, was found to confer the necessary jurisdiction to fix remuneration. In my judgment the jurisdiction continues to exist.

[33]Accordingly although I am doubtful whether section 303 is strictly relevant to the fixing of remuneration, because it seems to me that no act, omission or decision of the trustee is involved, I find that jurisdiction exists by virtue of section 363. The fact that the application has invoked the wrong section is, in my view, something which clearly can and should be cured by amendment. In addition, as Upton v Taylor shows, reliance can be placed on the inherent jurisdiction invoked in Ex parte James .

[34]So far in this section of my judgment I have considered the section 303 application only insofar as it relates to the remuneration of the trustee. However it relates also to the legal fees incurred by the trustee and asks that these be 'refixed' by the court. This part of the application seems to proceed on the basis of a misapprehension of the court's powers in respect of legal fees. The court has no power either to fix or to re-fix these. The decision whether to obtain legal advice was one for the trustee to take. Having obtained legal advice it was for him to decide whether to pay or challenge his solicitor's bill. It is not for the court to do any of this. If, however, the trustee acts outside the generous scope of his discretion in these matters it may be possible to challenge his accounts to the extent that they show that the trustee has acted unreasonably or improperly in incurring legal or other costs.

[35]A challenge to the trustee's decision in relation to such costs is therefore possible, although the circumstances need to be quite unusual for the challenge to have a real prospect of success. So far as procedure is concerned, the incurring of legal fees will inevitably have been the result of an act or decision on the part of the trustee, so that section 303 affords a means of bringing the challenge before the court.

[36]In the result, while I consider that Miss Agnello's argument that section 303 does not enable the court to fix the trustee's remuneration is technically correct, the court has other powers which enable it to fix such remuneration and these can, after appropriate amendment, be exercised in the section 303 application. As to legal fees, section 303 itself confers the necessary jurisdiction, although the challenge to the legal fees actually incurred may well be a difficult one to make successfully. (c) Can the section 303 application be entertained once the bankruptcy has been discharged?

[37]Miss Agnello's argument was that section 303 proceeds on the basis that there is a bankrupt and a trustee in bankruptcy. Where, however, a bankruptcy is annulled this restores the erstwhile bankrupt and everyone else to the position which existed before the bankruptcy order was made as if the order had not been made. Accordingly once the bankruptcy is annulled there is no bankrupt and no trustee in bankruptcy and section 303 has no application.

[38]While it is true that the general effect of an annulment is that the erstwhile bankrupt is to be treated as if no bankruptcy order had been made against him and he is to be restored to his previous position, I do not think it right to say that the fact that a bankruptcy order was in fact made is to be wholly disregarded for all purposes. The reality is that the order was made and, while it subsisted, it had effects, some of which will be enduring. Thus the person appointed to be trustee will have been a duly appointed trustee between the time of his appointment and the time that he is released under Insolvency Rule 6.214. Any sale or other disposition made by the trustee under his powers as trustee remains valid (see section 282(4)) and property which remains vested in the trustee at the time of the annulment falls to be dealt with under section 282(4)(b). The trustee will remain under the duties and obligations imposed upon him by the Act and the relevant rules until he obtains his release. In particular he is required to submit his final account in accordance with Rule 6.214. It is clearly implicit in this scheme that the final account, when submitted, will be open to challenge.

[39]All this indicates, in my judgment, that an annulment does not have the effect of requiring the bankruptcy order to be treated for all purposes as if it never had been made. In relation to matters consequential upon the annulment it is recognised that, while the order subsisted, there was a bankrupt and a trustee in bankruptcy and a requirement that the assets and liabilities of the bankrupt be dealt with in a particular way. The manner in which a challenge to the propriety of anything done while the order subsisted is to be made is not spelt out, but once it is recognised that there was a bankrupt and a trustee in bankruptcy there appears to me to be no difficulty in concluding that sections 303 and 363 continue to have effect for the purpose of enabling questions in relation to acts done or omitted while the order subsisted to be determined.

[40]In any event the bankruptcy order still subsisted in this case when the application under section 303 was initiated. Even if the proposition advanced by Miss Agnello were otherwise well-founded it gets nowhere, on the facts of this case, unless it could be said that, even though the application under section 303 or 363 was properly constituted when it was made, that application cannot be determined by the court unless the bankruptcy remains subsisting at the time of the determination. I see no warrant for this extension of the proposition. CAN A CONDITIONAL ORDER FOR ANNULMENT BE MADE?

[41]I turn now to Miss Agnello's submission that there is no jurisdiction to annul a bankruptcy order subject to conditions. Her argument was that where, as in this case, issues were outstanding concerning the proper amount of the remuneration of the trustee in bankruptcy and the proper amount of his expenditure on legal charges, the court must resolve these matters, which affect the amount of the expenses of the bankruptcy, before considering whether or not to annul the bankruptcy.

[42]In my judgment there is no justification for this. The requirements which must be satisfied before the court has a discretion to annul a bankruptcy order under section 282(1)(b) are those specified in the statute, namely that it appears to the court that the bankruptcy debts and expenses of the bankruptcy have all been paid or secured for to the satisfaction of the court. In many cases, of course, the existence of a dispute about the amount of the debts or bankruptcy expenses will prevent the court being so satisfied. Such a dispute will inevitably mean that the court cannot be satisfied that the debts and expenses have actually been paid. But the concept that the debts and expenses may be "secured for" is more flexible. I see no reason why, if the court is satisfied that the debts and expenses cannot exceed a particular amount and payment of this amount is fully secured, the court should not conclude that it is satisfied as to the statutory matters.

[43]It appears to me that the machinery laid down in relation to disputed debts and untraced creditors recognises that this may be an appropriate way in which to proceed. Rule 6.211(3) provides "If a debt is disputed, or a creditor who has proved can no longer be traced, the bankrupt must have given such security (in the form of money paid into court, or a bond entered into with approved sureties) as the court considers adequate to satisfy any sum that may subsequently be proved to be due to the creditor concerned and (if the court thinks fit) costs." Rule 6.211 deals generally with the matters which must be proved to the satisfaction of the court at the hearing of the annulment application. I think it is clear that in a Rule 6.211(3) case the court, on being satisfied that security has been given as required by the Rule, may grant an immediate annulment.

[44]In my view the only special features of the present case were that(i) the judge does not appear to have been satisfied on 20th August that all the bankruptcy debts had in fact been paid, which must be why he imposed the condition which is contained in paragraph 1(a) of his order requiring this matter to be the subject of written confirmation from the trustee's solicitors; and

(ii) the security which was to be given in respect of certain bankruptcy expenses by means of payments into court in accordance with paragraph 1(c) and (d) of his order was not actually in place on the date that the order was made.

[45]The District Judge's order was perhaps a little unwise because it might have produced a difficult situation if the conditions had not been satisfied or if there had been a dispute whether they were satisfied or not. There might also have been some doubt about precisely when the annulment took place on the footing that the conditions were satisfied. A better way of dealing with the position might have been for the judge to say that the order for annulment, in unconditional form, would not be perfected by the court office until evidence had been produced showing that the trustee was satisfied that all the bankruptcy debts had been paid (something which would ordinarily be covered by the trustee's report under Rule 6.207, but which seems to have been in doubt here) and that the requisite payments into court had been made. But the fact that there was, or might have been, a better way of doing in substance what was in fact done does not provide any support for the view that there was no jurisdiction in the court to do it in the chosen way. GENERALLY

[46]Looking at the matter more generally I have to say that I find it difficult to understand what lies behind this appeal. The satisfaction of the conditions imposed by the order appealed from has given rise to no difficulty. It is not suggested that any of the bankruptcy debts remain outstanding. The costs and expenses of the bankruptcy which are not in dispute have either been paid or are secured by the money in court. The disputed items are also fully covered by the money in court. The only point which remains outstanding is the precise quantification of the bankruptcy expenses so far as they consist of the trustee's remuneration and the legal costs incurred by him.

[47]I find it difficult to understand the trustee's concern in respect of these matters, unless it be to prevent there being any scrutiny by the court of the amount of his remuneration and the propriety of his expenditure on legal costs. If this were to be his goal I would find it wholly inappropriate, unworthy and unacceptable on the part of an office holder. But if he is content to have his remuneration fixed by the court within the parameters of the creditors' resolution under Rule 6.138, why is he so concerned by the section 303 application? And why did he argue before me that the section 303 application was misconceived in respect of remuneration and would have been misconceived even if the bankruptcy had remained subsisting because, he contended, Rules 6.138 to 6.142 constitute an exhaustive code in respect of the remuneration of a trustee in bankruptcy? No satisfactory answers to these questions were provided in the course of the hearing.

[48]In these circumstances I am happy to conclude that, for the reasons which I have given, I find that there is no substance in this appeal, which must be dismissed.

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