Thorn v Mielnikowski[2024] QSC 249

SUPREME COURT OF QUEENSLAND

Introduction

1. [1]
   The applicant, Simon John Thorn, is the trustee in bankruptcy for the bankrupt estate of Philip Cinzio. 
2. [2]
   The first respondent, Ms Mielnikowski, was Mr Cinzio’s partner before he became bankrupt.
3. [3]
   In March 2009, Ms Mielnikowski and Mr Cinzio purchased a property described as Lot 2 on RP 200881, title reference 16695114, located at Logan, which I will refer to as the Steele Road property. They were tenants in common in equal shares.
4. [4]
   Mr Cinzio became a bankrupt on 8 March 2016 and the Official Trustee was appointed as the trustee of the bankrupt estate, which included Mr Cinzio’s interest in the Steele Road property. 
5. [5]
   Between March 2016 and April 2022, the Official Trustee administered the bankrupt’s estate including following Mr Cinzio’s discharge from bankruptcy on 9 March 2019. During this time, the Official Trustee in Bankruptcy sought to negotiate with the first respondent regarding the equitable interests of Mr Cinzio’s estate and the first respondent in the Steele Road property. No agreement could be reached.  
6. [6]
   On 26 April 2022, Mr Thorn became the trustee of Mr Cinzio’s estate which, despite his discharge, was yet to be finalised.  Mr Thorn and the first respondent could also not reach an agreement about the parties’ equity in the Steel Road property.
7. [7]
   On 6 September 2023, Mr Thorn filed an originating application seeking relief pursuant to s 38 of the Property Law Act 1974 (Qld) (the PLA) for the sale of the Steele Road property then owned as tenants-in-common by the first respondent and Mr Thorn (in his capacity as trustee in bankruptcy for Mr Cinzio).
8. [8]
   On 14 November 2023, Matthew Flowers and Andrew Weatherley were appointed as Statutory Trustees for the sale of the Steele Road property.  They have now sold the property and paid the secured creditors. 
9. [9]
   There are now two applications before the court.  The first is Mr Thorn’s application for orders as to the distribution of the net proceeds of the sale of the property sold by the Statutory Trustees (the Distribution Application).  The second is the Statutory Trustees’ application for an uplift in their professional costs and outlays associated with the sale of the property (the Remuneration Application). 
10. [10]
    I deal first with the Distribution Application.

Distribution application

Legal Principles

11. [11]
    The legal interest of the parties in the Steele Road property is as registered owners as tenants in common in equal shares. The purpose of an application brought under s 38 of the PLA is to enable the subject property to be vested in the trustee for sale, who then proceeds to sell the property and divide the net proceeds between the owners in the proportions that reflect their beneficial entitlements.^[1]
12. [12]
    When a co-owner is declared bankrupt, his or her share of co-owned property vests in the Official Trustee in Bankruptcy.^[2]  The Official Trustee has no greater rights against the co-owner than the bankrupt had before the bankruptcy. This court must therefore determine what Mr Cinzio’s rights were at the date of bankruptcy; namely, 8 March 2016.
13. [13]
    Section 42 of the PLA sets out the court’s powers in a proceeding such as the Distribution Application.  Section 42 relevantly provides:

“In proceedings under section 38 or 41 the court may on the application of any party to the proceedings or of its own motion—

1. determine any question of fact arising (including questions of title) in the proceedings or give directions as to how such questions shall be determined; and

2. direct that such inquiries be made and such accounts be taken as may in the circumstances be necessary for the purpose of ascertaining and adjusting the rights of the parties.”

14. [14]
    Section 42 therefore gives the court power in proceedings under ss 38 or 41 to determine any question or fact arising in the proceeding as may in the circumstances be necessary for the purpose of ascertaining and adjusting the rights of the co-owners.
15. [15]
    In Muller v Zielonkowsky,^[3] Mullins J (as her Honour then was) observed that where the relationship between de facto partners has broken down, and Part 19 of the PLA has no application (as is the case here), it is usual for the partner who claims a greater beneficial interest to bring a proceeding that establishes the quantum of that beneficial interest in reliance on authorities such as Muschinski v Dodds^[4] or Baumgartner v Baumgartner.^[5] 
16. [16]
    In Muller, the applicant and the respondent were the registered owners as joint tenants of a certain property.  The parties had been in a relationship since 1993 and separated in 1998.  The purchase price of the property was $103,000 and the parties borrowed $98,000 plus an additional amount to meet borrowing expenses.  To pay the deposit, the applicant had contributed $4,500 and the parties together borrowed $3,000 from the respondent’s parents.  At the time, both parties were employed full time, the applicant earning approximately $750 per week and the respondent earning a few hundred dollars per week.
17. [17]
    The parties had a joint account linked to their loan and they each made payments of the loan repayments.  Between September 1995 and April 1998, they deposited almost equal amounts (between $7,300 and $7,500) and used those funds to pay rates, insurance, food and household expenses.
18. [18]
    From April 1998, the respondent reduced her contribution to the mortgage repayments to $50 per week and the applicant took over the responsibility for all rates and insurance.  At the time the respondent left the property in September 1998, the balance outstanding under the loan was $90,000.
19. [19]
    The applicant remained living in the property for some years and carried out renovations to it; for example, he spent approximately $2,000 on carpet and floor coverings.  By 2000, the renovations were completed and the applicant (with his now new wife) moved out of the property and rented it.  The applicant used the rent to pay the mortgage payments, rates, insurance, and other expenses.  He replaced items in the property such as a cooktop, swimming pool filter, fencing, and attended to re-wiring.
20. [20]
    Between the time of separation in 1998 and March 2006 (shortly prior to the hearing of the application), the applicant had made payments under the mortgage of approximately $92,000 and had reduced the mortgage by some $14,000.  In the same period, he had paid $27,000 for rates, maintenance and other expenses.
21. [21]
    In Muller’s case, as here, it was the jurisdiction under s 42 of the PLA upon which the applicant relied to seek a declaration of the extent of the parties’ interests in the proceeding, on the basis that their beneficial entitlements differed from their registered interests. In respect of the applicant, former de facto partner of the respondent co-owner, the latter who had effectively abandoned the property after the breakdown of the de facto relationship, Mullins J said:^[6]

“Theoretically, the respondent has remained an owner of the property since she and the applicant separated.  Practically, however, the applicant has been the owner of the property since separation…”

22. [22]
    Her Honour then referred to the decision of Mason and Deane JJ in Muschinski where the court imposed constructive trust to prevent unconscionable reliance on the legal title by one co-owner of the property after the failure of the de facto relationship between the co-owners and their joint venture in respect of their property development.  Her Honour set out the relevant equitable principle as described by the High Court in Muschinski at 620:

“Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it.  The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do.”

(citations omitted)

23. [23]
    Mullins J concluded that in Muller’s case, with the benefit of the knowledge of what had transpired, the separation of the parties was the appropriate stage at which to determine their interests in the property.  Her Honour observed:

“[34] …Their relationship had failed by that stage and their subsequent conduct has resulted in the property being treated as that of the applicant.  The respondent effectively abdicated her interest in the property, leaving the applicant to manage the property, as if it were his own, but without the power to deal with the property absolutely.  Apart from preserving the capital value of the respondent’s interest in the property at or soon after the date of separation, it would be artificial to attempt to adjust the transactions that have occurred since separation.  Because separation is the critical event in this matter for determining the parties’ interests, issues such as occupation rent are not relevant.  It would be unconscionable for the respondent now to claim any greater interest in the property than that reflected by her interest at separation, subject to capital growth.  In particular, it would be unconscionable for the respondent to claim anything approaching a one-half interest in the property.  In accordance with Muschinski, it is therefore appropriate to impose a constructive trust to reflect the beneficial entitlement of the parties determined around the time of separation”.

  (my underlining)

24. [24]
    Her Honour then determined that the value of the property at the time of separation was $100,000 and the amount owed to the bank was $90,000. The net equity therefore was $10,000. Having regard to the close to equal contributions of the parties to the purchase of the property, and the repayment of the mortgage, at the time of separation the respondent’s interest was equivalent to one-half of the net equity, or five per cent of the value of the property.
25. [25]
    Thereafter, in order to reflect what had transpired since separation, the respondent, having abandoned the property and abdicated her interest in it, Mullins J concluded that that justified treating the applicant’s interest in the property as 95 per cent and the respondent’s interest as 5 per cent. 
26. [26]
    The issue for determination before me therefore is to ascertain the beneficial entitlements to the Steele Road property as between the applicant, acting as the Trustee in Bankruptcy of the bankrupt’s estate, and the first respondent.  That analysis requires consideration of the factual matters between the first respondent and Mr Cinzio dating back from the purchase of the property until separation, and thereafter from separation to date.

Factual background to the Distribution Application question

27. [27]
    Mr Cinzio took no part in the proceedings before me. 
28. [28]
    Ms Mielnikowski had filed affidavits on 9 October 2023 (first affidavit) and two on 30 July 2024 (second and third affidavits) all of which were read by the applicant, Mr Thorn, in his case.  At the hearing, Ms Mielnikowski was given leave to read and file a fourth and fifth affidavit, both sworn on 19 August 2024.
29. [29]
    Ms Mielnikowski was not required for cross-examination.  Except as otherwise stated below, Ms Mielnikowski’s evidence is unchallenged. That does not mean it ought to be uncritically accepted.
30. [30]
    The applicant made some criticism in submissions as to the quality of the evidence contained in the first respondent’s affidavits.  The applicant has urged me to only have regard to what is properly contained in the affidavit evidence before the court.  I propose to proceed on that basis but in doing so I also have regard to the fact that the applicant did not require the first respondent for cross-examination or challenge any of the factual matters contained in her affidavits. Indeed, the applicant read and relied upon the respondent’s material. I also take into account that the respondent was self-represented throughout.
31. [31]
    Ms Mielnikowski and Mr Cinzio met and became romantically involved in May 1998. Their relationship broke down when Ms Mielnikowski became pregnant.  Their daughter Eve was born in February 2007.  Shortly after, they resumed a friendship but lived apart.
32. [32]
    In March 2009, Mr Cinzio and Ms Mielnikowski jointly purchased the property at Steele Road.  They obtained a no deposit home loan. They received a $14,000 First Home Buyer’s Grant which was their only contribution to the purchase.^[7]
33. [33]
    There is no evidence before me as to what they paid for the property, and it does not appear in any of the subsequent valuation evidence. The Statutory Trustees submit that the purchase price paid on 13 March 2009 was $365,000. While there is nothing in the evidence to prove this, no party challenged it. I accept it is correct because of that, but also because it can fairly be concluded that the purchase price was something in the vicinity of the value of the loan, plus the Home Buyer’s Grant of $14,000 given the parties had a no deposit home loan. 
34. [34]
    After purchase, Ms Mielnikowski and Eve moved into the house on the Steele Road Property and Mr Cinzio moved into a caravan on the same land. Ms Mielnikowski and Mr Cinzio kept their finances separate, save that they would put money in a joint account to pay the mortgage.
35. [35]
    Mr Cinzio suffered from mental health problems. He became unemployed, and gradually contributed less and less to the mortgage. Ms Mielnikowski continued to pay the mortgage, although not always in full.
36. [36]
    Gradually, Mr Cinzio stopped contributing to all the outgoings, being the rates, utilities and mortgage repayments.  Ms Mielnikowski says that since 2011 she has solely been responsible for:

    1. making repayments on the mortgage of the property;
    2. paying the rates, utilities and other bills related to the property;
    3. maintaining the property; and
    4. making improvements to the property including but not limited to fixing the damage to electricals, including a water pump and tank as well as windows on the property, general repairs and removing rubbish from the yard.
37. [37]
    By reference to evidence that I set out below, I find that the 2011 date is unlikely to be the correct date at which Ms Mielnikowski entirely took over responsibility for all the outgoings.  However,  I find that between 2011 and early 2016 Ms Mielnikowski was responsible for most, but not all, the outgoings. The evidence that supports those findings is as follows.
38. [38]
    First, between 2011 and 2016, Mr Cinzio and Ms Mielnikowski’s relationship was on again and off again.  In 2016, their relationship ceased. When their relationship ended, they did not enter into any kind of arrangement in relation to the property at Steele Road.  There were no family law proceedings.  Mr Cinzio simply left the property and all the responsibility for it with Ms Mielnikowski. Ms Mielnikowski and Eve remained living at the property.
39. [39]
    Second, Ms Mielnikowski produced,^[8] without objection, statements by Mr Cinzio’s brother (signed) and father (unsigned). The bankrupt’s father said that Ms Mielnikowski was in a relationship with the bankrupt when they bought the property on Steele Road but “not long after they bought the property”, the bankrupt left the relationship and became eligible for a disability pension from Centrelink.  Due to the bankrupt’s mental challenges, he was not able to act responsibly in meeting commitments to the mortgage for the property and in fact ceased all contact with Ms Mielnikowski and Eve. The bankrupt’s father states that he is “well aware” of Ms Mielnikowski’s efforts to “solely meet the financial responsibility while, at the same time, caring for her daughter’s educational and social need[s]”.
40. [40]
    It is impossible to identify what date is the date “not long after” the purchase of the property in March 2009, but the bankrupt’s father’s description is likely more closely aligned to 2011, as Ms Mielnikowski asserts, than some years later.
41. [41]
    The signed letter from the bankrupt’s brother, Adam, speaks of his “understanding” that his brother had ceased any contributions to the finances of the property while Ms Mielnikowski had “bravely soldiered on, attempting in various ways to meet the financial burdens of the property as well as providing for her daughter Eve”. There is no reference to dates in this letter.
42. [42]
    Both letters contain hearsay, although no objection was taken to them by Mr Thorn, and in fact the affidavits in which they were contained were read by the applicant in his list of material. They are of lesser weight than the further evidence I refer to below, but they provide uncontested context from the bankrupt’s own family members.
43. [43]
    Third, on 2 March 2011, Ms Mielnikowski’s Superannuation provider, UniSuper, approved her application for release of benefits of $4,909 on the grounds of financial hardship. Ms Mielnikowski deposes that this amount went on the mortgage. The date of this lends some support Ms Mielnikowski’s evidence that she was funding the mortgage by 2011.
44. [44]
    Fourth, on 16 December 2013, the Youth and Family Service (Logan City) Inc (Logan Service) wrote to the Commonwealth Bank in relation to the home loan account number 631672807 noting that the service was assisting Mr Cinzio who was in financial hardship due to unemployment.  The letter said that Mr Cinzio “…was able to maintain the loan repayments until he had exhausted his savings” but does not say when that occurred. The letter also records that Mr Cinzio had lost his employment in 2011 when he was suffering from severe stress and depression.^[9] The letter requested the bank accept $150 per fortnight from him, while Ms Mielnikowski “…is able to maintain her payments”.
45. [45]
    The 2011 date of lost employment supports Ms Mielnikowski’s evidence that it was 2011 when Mr Cinzio stopped contributing to the outgoings, and the information comes from instructions that Mr Cinzio himself had given to the Logan Service.  The home loan account number referred to is the same one contained in the exhibits to which I refer below. This is significant evidence.
46. [46]
    Fifth, Ms Mielnikowski produced a number of bank statements, the content of which bears setting out in some detail. Many of those statements had been provided to the Official Trustee in Bankruptcy at various times, and later to the applicant.^[10]
47. [47]
    The earliest bank statement in evidence^[11] is from 1 January 2014, two years before Mr Cinzio became a bankrupt. It is the joint Home Loan account in the names of Ms Mielnikowski and Mr Cinzio, and it bears the same number as set out at in the letter referred to at [44] above. As at 1 January 2014, the amount owed under the Home Loan was $342,253.56. That bank statement demonstrates that in the six months between 1 Jan 2014 and 30 June 2014, in repayment of the debt jointly owed:

    1. Ms Mielnikowski paid $21,800; and
    2. Mr Cinzio paid $1,797.04.
48. [48]
    Mr Cinzio’s payments of $1,797.04 included 11 deposits of $150.00 per fortnight ($1,650), which appear to be those that had been sought by the Logan Service letter to the Commonwealth Bank of 16 December 2013 as set out at [44] above.
49. [49]
    Of Ms Mielnikowski’s $21,800, $14,000 was money she had inherited from her father.^[12] Again, this evidence was contained in the affidavit Ms Mielnikowski read by the applicant.
50. [50]
    Chronologically, the next bank statement in evidence is for the period 1 July 2014 to 16 July 2014^[13] showing one payment of $2,250 said to be made by Ms Mielnikowski, and nothing attributable to Mr Cinzio.
51. [51]
    There is no evidence in the form of bank statements showing that Mr Cinzio made any mortgage payments between 30 June 2014 and 10 February 2015. The borrowings however continued to go down, suggesting that Ms Mielnikowski’s  payments were the only source of such debt reduction. The bank statements show that as at 30 June 2014 the amount owing on the Home Loan was $328,361.52, while at 10 February 2015 it was down to $325,469.13.
52. [52]
    I accept Ms Mielnikowski’s evidence that she continued to make the payments to the bank after this period. Her evidence is supported by the Home Loan Transaction history for the period 11 Feb 2015 to 15 June 2015, a period of 17 weeks and 5 days, in which she paid $8,200, or $462.91 per week. Mr Cinzio made payments during this time of $3,800; that is, just less than half of Ms Mielnikowski’s.
53. [53]
    Thereafter, there is only one other period in which any bank statements evidence payments made by Mr Cinzio, and that is in the period 3 July 2015 to 3 October 2016. Ms Mielnikowski attributes a sum of $4,200 to Mr Cinzio’s payments over that 65-week period (an average of approximately $64.19 per week). While Mr Cinzio’s payments during this period ceased completely after 14 December 2015, Ms Mielnikowski continued to make payments for the remaining 42 weeks, totalling $13,524 (an average of $206.70 per week).
54. [54]
    In May 2015, Ms Mielnikowski made a second application for release of funds from her superannuation, and on this occasion, a sum of $8,218.00 was paid to her.^[14]
55. [55]
    After December 2015, there is no evidence of any payments by Mr Cinzio. Given his bankruptcy in March 2016, it is fair to conclude he made no further contributions after December 2015. Certainly, the applicant does not produce evidence to suggest that he did so contribute, and Ms Mielnikowski deposes that he did not. It seems common ground that he abandoned the property, and his family, around the time of his bankruptcy.
56. [56]
    The evidence establishes that Ms Mielnikowski continued to make contributions after Mr Cinzio’s ceased his contributions in December 2015:

    1. In the period between 14 January 2016 and 10 December 2018 (a period of almost 3 years, or 151 weeks and 5 days), Ms Mielnikowski paid $55,056.56. This is an average of approximately $363 per week;
    2. Ms Mielnikowski’s payments from mid-December 2018 became much less frequent.  Between 11 December 2018 and 10 February 2019, Ms Mielnikowski did not make any payments, but between 11 February 2019 and 10 April 2019 (8 weeks and 2 days) Ms Mielnikowski paid $1000. This is an average of approximately $121 per week;
    3. Between 11 April 2019 and 10 May 2021, Ms Mielnikowski did not make any payments. 
    4. Between 11 May 2021 and 30 June 2021 (7 weeks and 1 day), Ms Mielnikowski paid $900 or approximately $126 per week;
    5. Between 1 July 2021 and 31 December 2021 (26 weeks and 1 day), Ms Mielnikowski paid $4,024.15 or approximately $154 per week;
    6. Between 1 January 2022 and 30 June 2022 (25 weeks and 5 days), Ms Mielnikowski paid $3,636 or approximately $141 per week;
    7. Between 1 July 2022 and 10 November 2022 (18 weeks and 6 days), Ms Mielnikowski paid $7,299 or approximately $387 per week;
    8. Between 11 November 2022 and 31 December 2022 (7 weeks and 1 day), Ms Mielnikowski paid $3,500 or approximately $454 per week;
    9. Between 1 January 2023 and 12 February 2023 (6 weeks), Ms Mielnikowski paid $1,250 or approximately $208 per week;
    10. Between 13 February 2023 and 12 March 2023 (3 weeks and 6 days), Ms Mielnikowski paid $400 or approximately $104 per week;
    11. Between 13 March 2023 and 12 April 2023 (4 weeks and 2 days), Ms Mielnikowski paid $100 or approximately $24 per week; and
    12. Between 13 April 2023 and 10 May 2023 (3 weeks and 6 days), Ms Mielnikowski did not make any payments.
57. [57]
    The bank statements may or may not be a compete record of all payments made. They are, however, the only ones produced by either party, one of whom is a self-represented litigant, to demonstrate the contributions to the mortgage repayments over the period since the purchase of the property in 2009 (pre-bankruptcy) through to trial.
58. [58]
    I find that Ms Mielnikowski alone was responsible for meeting the mortgage payments which were made between January 2016 and May 2023. That is consistent with the bank statement records evidencing the bankrupt’s last payment in December 2015, and with the date of bankruptcy in March 2016. The applicant did not suggest Mr Cinzio had made any payments after that time, and Ms Mielnikowski deposed that he did not.
59. [59]
    Whilst there are no bank statements in evidence before me for the period 2011 to 2014, I am cautious to uncritically accept Ms Mielnikowski’s evidence that she made all the repayments on the mortgage during that period. It seems unlikely that Mr Cinzio stopped contributing entirely in 2011, even though the statements of his father and brother might support that inference. It seems more likely that his payments became smaller, irregular, and unreliable when he lost his employment in 2011 until he then exhausted his savings. It does however seem likely he had ceased paying anything by December 2013 when the Logan Service wrote to the bank on his behalf, so whatever contributions he made between 2011 and December 2013, they were small and irregular.
60. [60]
    I am however satisfied that by the time he left the relationship and the property in 2016, coinciding with the time of his bankruptcy, he had entirely stopped contributing to the mortgage repayments. In all likelihood, the true date was earlier.
61. [61]
    Sixth, the fact of Mr Cinzio’s bankruptcy in March 2016 broadly supports Ms Mielnikowski’s narrative, that process itself being one that normally arises over a lengthy period of time.
62. [62]
    I am satisfied that there is sufficient documentary evidence, supporting Ms Mielnikowski’s affidavit evidence, for me to find that:

    1. when Ms Mielnikowski and Mr Cinzio bought the property in 2009, their only “equity” was a $14,000 contribution by way of First Home Buyers’ Grant;
    2. that equity, such as it was, was shared equally between them;
    3. the Home Loan they took out (approx. $351,000) plus the Home Buyers’ Grant of $14,000 represented the value of the property in 2009, ie about $365,000;
    4. the Home Loan was reduced between 2009 (approx. $351,000) and the date of bankruptcy in March 2016 ($321,409.22), but that reduction of some $30,000 was almost entirely attributable to Ms Mielnikowski’s contributions, not those of Mr Cinzio;
    5. the value of the property in March 2016 was broadly reflected by the size of the loan at that date ($321,409.22) plus the First Home Buyer’s Grant ($14,000), plus the amount paid off the mortgage in those six years ($30,000) being a total of $365,409.22;
    6. Mr Cinzio’s contributions to the mortgage between 2011 and late 2015 were small and irregular;
    7. Ms Mielnikowski’s contributions to the mortgage between 2011 and March 2016 were much greater than Mr Cinzio’s;
    8. there has been no contribution to the mortgage payments by Mr Cinzio at all since 8 March 2016; and
    9. all contributions to the mortgage since March 2016 have been made by Ms Mielnikowski.

Rates and outgoings

63. [63]
    I turn to Ms Mielnikowski’s evidence that Mr Cinzio stopped contributing to the rates, utilities and general maintenance of the property in 2011, such that for the 12 years between 2011 and the date the property was sold, the sole responsibility for those outgoings fell to Ms Mielnikowski.  Much of the evidence I have referred to above is relevant to this issue to the extent that it demonstrates Mr Cinzio’s poor financial position. I do not repeat it.
64. [64]
    On 21 April 2016, just after Mr Cinzio became a bankrupt, Ms Mielnikowski wrote to the Official Trustee in Bankruptcy advising (in relation to issues other than the mortgage dealt with above) that:

    1. Mr Cinzio had not paid the rates or electricity “for a number of years” prior to the date of the email in April 2016;
    2. she had paid for the cost of solar which was installed at the property at a cost of $16,000;
65. [65]
    There is documentary evidence to support these assertions:

    1. the application for purchase of a Solar PV System was made in Ms Mielnikowski’s own name, with no reference to Mr Cinzio, on 29 November 2013. It was in fact for a sum of $12,574, not $16,000;^[15]
    2. solar payments are evidenced in the following bank statements, all of which are contained in Exhibit 1 of these proceedings:
    1. Smart Access Statement 18 (1 April 2014 to 16 July 2014);
    2. Smart Access Statement 22, notwithstanding that only two of the seven pages are in evidence;
    3. Smart Access Statement 23 (1 August 2015 – 30 September 2015);
    4. Smart Access Statement 24 (1 October 2015 – 13 January 2016);
    5. Smart Access Statement 25 (14 January 2016 – 31 March 2016); and
    6. Smart Access Statement 26 (1 April 2016 – 27 July 2016).
    3. two letters from Ms Mielnikowski’s superannuation fund demonstrate hardship withdrawals of $4,909 allowed on 2 March 2011 and $8,218 on 6 May 2015;
    4. as to rates, exhibited to the first respondent’s third affidavit sworn 29 July 2024 is correspondence from the acting senior recoveries officer of the finance branch of the City of Logan who advised:
    1. between January 2011 and March 2016, the total received in respect of rates was $6,587.91;
    2. from April 2016 to May 2023, the total received in respect of rates was $10,180; and
    3. although there were three years of unpaid rates (which was rectified out of the settlement sum on 11 July 2024) there had been payments made in that period.  Between January 2021 and May 2023, the sum paid was $4,630.
66. [66]
    On 30 January 2017 Ms Mielnikowski wrote to the Trustee in Bankruptcy noting, amongst other things, that the rates were in arrears by $1,800 and that she considered that she alone was responsible for them.
67. [67]
    All the above supports Ms Mielnikowski’s evidence that she alone was responsible for the outgoings on the Steele Road property, probably since around 2011, on an ongoing basis.

Support of the child

68. [68]
    Since Eve’s birth in February 2007, Ms Mielnikowski alleges she has been solely responsible for Eve’s care.  She has had full-time custody of Eve and has attended to paying all costs associated with Eve including school fees, clothing, food and all other expenses. 
69. [69]
    The Official Trustee in Bankruptcy first asked the first respondent for information demonstrating that she was solely supporting her child Eve on 9 February 2023,^[16] suggesting, it seems to me, that he considered that factor as a relevant one to her equity in the property.
70. [70]
    On 17 May 2023, in response to a request by Ms Stokes, the applicant’s assistant, regarding the cost of raising a child on her own, the first respondent provided a detailed breakdown of her estimate of costs of raising a child which she had extracted from Wikipedia.

Before-tax income: $59,410 to $102,870 (Average = $79,940)

71. [71]
    In addition, the applicant’s assistant sought and obtained from Ms Mielnikowski, the details of the fees which she had paid for both primary school and high school at the school where the child Eve had attended.  The first respondent identified that the school fees were payable during the years of Prep and Years 4, 5, 6, 10 and 11.  The first respondent identified that in the other years of school, her child was home schooled. 
72. [72]
    The first respondent attached a uniform list to the email and identified that she had purchased uniforms and accessories in Prep, Grade 4 and Grade 9.
73. [73]
    The first respondent went on to identify the extra costs associated with the homeschooling years during which she was not liable to pay school fees.  She identified that the fees were $1,000 per year as well as extra costs for excursions and extra-curricular activities.  She was unable to make a reliable estimate in respect of excursion costs and extra-curricular activities and did not do so but for one exception.  She described that over the two and a half years prior to May 2023, her daughter had incurred $600 per month on pursuing the sport of skating.  Additionally, the first respondent had paid $10,000 for the cost of skates, stockings and dresses as well as competition fees.  That sum was over and above the $600 per month that she had identified.  She provided further particulars that her child had competed in a State skating competition and had been placed third and was travelling to Perth for a national competition in a few weeks’ time.  She provided an estimate of costs for attending that competition of $3,000.  Further, she identified the child had started going to the gym for three months which cost $27 per fortnight.  She was unable to estimate the costs associated with the other activities such as swimming, dance and gymnastics.

Submissions on the Distribution Application

74. [74]
    The applicant submits that the court starts with the proposition that the property proceeds ought to be divided 50/50^[17] but with an adjustment in favour of the applicant to reflect additional costs which are said to have arisen as a result of the “conduct of the first respondent” following the appointment of the Statutory Trustees.
75. [75]
    The applicant seeks the following orders in the distribution application:

    1. distribution of the surplus sale proceeds of Steele Road equally between the applicant and the first respondent but with a rebalance in favour of the applicant:
    1. in the amount of $30,000 (plus GST) or such other amount to reflect any uplift in the Statutory Trustees’ fees;
    2. in an amount to be fixed to reflect the cost of the originating application and this application;
    2. alternatively, that the distribution of the balance of the sale proceeds in a manner that the court considers appropriate.
76. [76]
    Additionally, the applicant sought an order that the first respondent pay the costs of the application in an amount to be fixed, payable from her share of the surplus sale proceeds.
77. [77]
    The first respondent contended that she ought to obtain a much a greater share of the proceeds for distribution, probably something approaching 100% but certainly no less than 80%. The order she seeks is effectively encompassed by the applicant’s proposed alternative order that the distribution of the balance of the sale proceeds in a manner that the court considers appropriate. 

Conclusion on the distribution application

78. [78]
    I reject the applicant’s approach to the distribution.
79. [79]
    I propose to adopt a similar approach to that taken by Mullins J (as her Honour then was) in Muller. In doing so, I am conscious that parties to domestic relationships are not normally in a position to give accurate evidence about their respective financial contributions, in particular to the acquisition of property. Consequently, a broad-brush approach is adopted of necessity.^[18]
80. [80]
    Next, I am conscious that the burden of proof is of critical importance, and a party seeking relief must place evidence before the court establishing the entitlement to that relief.
81. [81]
    The applicant in Muller’s case was represented and provided a careful analysis, and evidence of, the amounts he had spent on the property over the years.  The first respondent here was not represented and did not have the benefit of careful preparation of her evidence demonstrating her contributions to the property since the bankrupt left in 2011.  The court is entitled to extend some latitude to a self-represented litigant in the way described by Justice Applegarth in Mbuzi v Hall^[19] provided that in doing so injustice and prejudice is not occasioned to other parties. Nevertheless, as can be seen from the evidence I have set out above, there is a substantial body of evidence from which the court can approach the task in a principled way, following the approach in Muller.
82. [82]
    In some respects, the evidence is lacking, an example being the value of the property at the time Mr Cinzio abandoned it in 2016. I am therefore conscious when I approach the calculation of the parties’ equity at the time Mr Cinzio abandoned the property to rely upon the documentary evidence which is available to me (mostly in the form of banking records) to provide the evidential basis from which to make findings and draw reasonable inferences in a way which provides for a fair and equitable outcome and which does not engage in speculation. In doing so, I also have had regard to the fact that the first respondent was not required for cross-examination on any issue, and the bankrupt was not called to give evidence to challenge her evidence. 
83. [83]
    I find that Mr Cinzio and Ms Mielnikowski had virtually no equity in 2009 when they purchased the Steele Road property. They had obtained a no deposit home loan. Their only ‘contribution’ was the First Home Buyers’ Grant of $14,000. So, the price paid must have been represented by that $14,000 plus the value of the loan at that time, which I find must have been about $351,000 given the purchase price which the Statutory Trustee identifies of $365,000.
84. [84]
    I test that figure, however, against the earliest evidence of the value of the loan, which was in 2014. On 1 January 2014, the balance was $342,253.56. There might be some reason to infer that the loan balance in 2014 may have been higher than the borrowings in 2009, Mr Cinzio having made only small and irregular contributions to it between 2011 and 2014, and Ms Mielnikowski not being financially able to pay the loan in full. That might suggest the loan in 2009 was smaller than the $342,253.56 owed in 2014. Against that, however, the bank statements also show that only 6 months later, on 30 June 2014, the Home Loan was down to $328,361.52, and at 3 July 2015, it was down further to $320,473.49. Those two facts evidence that decreases were in fact being made to the principal. If that same reduction had been applied between 2009 and 2014, perhaps the loan was greater than $342,253.56 in 2009.
85. [85]
    While the evidence is unsatisfactory, an example will suffice to demonstrate why unfairness is not visited on either party by the mathematical imprecision:

    1. If it is assumed the loan was $300,000 in 2009, with the First Home Buyer’s grant of $14,000, the price paid for the property was $314,000. The equity of $14,000 represented 4.45% of the value;
    2. If it is assumed the loan was $351,000 in 2009, with the First Home Buyer’s grant of $14,000, the price paid for the property was $365,000. The equity of $14,000 represented 3.83% of the value;
    3. If it is assumed the loan was $400,000 in 2009, with the First Home Buyer’s grant of $14,000, the price paid for the property was $414,000. The equity of $14,000 represented 3.38% of the value.
86. [86]
    In each scenario, only one half of that equity belonged to Mr Cinzio, being 1.69% at the low end of the range, and 2.225% at the high end. In short, at the date of purchase, neither Mr Cinzio nor Ms Mielnikowski had much equity. I adopt the figures in (b) above given the accepted position that the price paid for the property was $365,000.
87. [87]
    At the date Mr Cinzio left the property in 2016, the position was only a little different. The amount owing under the loan in March 2016 was $321,409.22. The unknown at the time of bankruptcy however is the value of the property. If value had risen, so had Mr Cinzio’s equity.
88. [88]
    I assume there would have been some increase in value between 2009 and 2016, but it is unlikely to have been substantial because:

    1. Ms Mielnikowski received a valuation of the property “before covid” of $470,000. That must have been before 2020, so it is fair to assume the value in March 2016 was less;
    2. Ms Mielnikowski received an offer to purchase the property in October 2020 for $440,000, so again, it is fair to assume the value in March 2016 was less;
    3. in October 2023, the unimproved land value for rates purposes was $426,666, so it is fair to assume the rateable value in 2016 was  less;
    4. the valuation that was done in 2024 made clear the property was land value only, the house being described as appealing to buyers as a ‘knock down’. There were not, therefore, building improvements between 2009 and 2016 to be taken into account.
89. [89]
    I therefore conclude it was likely the value of the house in 2016 was likely higher than in 2009, but not markedly so.
90. [90]
    Again, mathematical precision is unlikely to make a significant difference here, as the total equity remained quite small, so:

    1. If it is assumed the property value was $365,000 in 2016, and the outstanding loan was $321,409.22 the equity of $43,590.78 represented 11.94% of the value;
    2. If it is assumed the value was $380,000 in 2016, and the outstanding loan was $321,409.22, the equity of $58,590.78 represented 15.42% of the value;
    3. If it is assumed the value was $400,000 in 2016, and the outstanding loan was $321,409.22, the equity of $78,590.78 represented 19.64% of the value.
91. [91]
    Again, each of those figures would be halved to find the starting percentage representing Mr Cinzio’s equity, leading to a range of between 5.97% and 9.82%.
92. [92]
    As Mullins J did, that equity would then need to be assessed for fairness having regard to a range of factors which had transpired since the parties’ separation. There are several to be considered.
93. [93]
    First, whilst theoretically the bankrupt has remained the owner of the property since he and the first respondent separated, practically speaking the first respondent has been the owner of the property since separation.^[20]  The bankrupt effectively abdicated his interest in the property leaving the first respondent to manage the property as if it were her own but without the power to deal with the property absolutely.^[21] Between March 2016 and the date Ms Mielnikowski vacated the property in June 2024, she and Eve continued to reside there (subject to a period I refer to below). There should be no occupation rent because the mortgage, rates and upkeep generally were substantially paid by Ms Mielnikowski in that period.
94. [94]
    Second, after Mr Cinzio became bankrupt, he began removing parts of the house, damaging the house, water pipes and pumps. Ms Mielnikowski considered it was not safe for her and Eve to continue to live there. They moved out between July 2016 and January 2017, but Ms Mielnikowski continued to pay the mortgage as well as the rent at another location; namely, $270 per week for a property at 26 Limerick Drive. The Bankrupt’s actions may have caused a diminution in value rather than an improvement, but the evidence is insufficient to substantiate either conclusion.
95. [95]
    Third, the Official Trustee in Bankruptcy, and later the applicant, asked Ms Mielnikowski on a number of occasions to provide information in relation to her sole support of the child, Eve. She did so in some significant detail. I understand the request was made in the context of a consideration of equity striving, where possible, to give effect to the notion of practical equality rather than pursue complicated factual enquiries which might ultimately result in significant adjustments.^[22]  I accept her unchallenged as to her support of the child.
96. [96]
    Fourth, in Muller, it was the date that the parties separated that was the relevant date to assess their equity because that was the date the de facto spouse ceased to contribute to the outgoings. In this case, it seems likely the relevant date of ceasing to contribute is much earlier. The evidence supports the findings made above that Mr Cinzio’s payments to the mortgage and other outgoings between 2011 and 2013 were small and irregular, and after 2013 were even less.  The last evidence of any payment by him at all is on 14 December 2015.
97. [97]
    Assuming that the value of the Steele Road property in early 2016 was $400,000 and the mortgage owing was some $321,409.22,^[23] the equity was then $78,590.78, or 19.64%. Mr Cinzio’s half would have then been 9.8%. That figure should be revised down because:

    1. Mr Cinzio’s equity at the time of purchase in 2009 was probably one half of 3.83%, or 1.915% (see para [85(b)] above);
    2. between 2009 and 2011 there is no evidence to suggest Mr Cinzio did anything to increase his equity;
    3. between 2011 and 2016, Mr Cinzio did nothing to improve his equity, and little to maintain it;
    4. Mr Cinzio’s contributions to the mortgage, rates and outgoings between 2011 and 2016 were substantially less than Ms Mielnikowski’s;
    5. any decreases to the mortgage indebtedness (which created the greatest improvement to equity overall) between 2011 and 2016 were attributable solely, or largely, to Ms Mielnikowski; and
    6. probably by late 2015, but certainly by March 2016, Mr Cinzio had stopped all contributions.
98. [98]
    Doing the best I can, I calculate Mr Cinzio’s equity at March 2016 at 6%. Broadly, that attributes one half of the increase in equity between 2009 and March 2016 to Mr Cinzio (which I consider to be generous to him) and rounded up to the nearest whole number.^[24]
99. [99]
    The applicant contends that even if I accepted that the first respondent had made contributions by way of mortgage payments, rates or otherwise in excess of those made by the bankrupt, that would result in the first respondent being an unsecured creditor in the estate of the bankrupt and would not demonstrate that she has a greater equity in the property. 
100. [100]
     The only authority relied upon in support of this proposition is Squire v Rogers,^[25] where Deane J, as his Honour then was, said:

“…In no case can the co-owner who has improved the property obtain more than his outlay, though such outlay may have trebled the value of the property…”.

101. [101]
     Respectfully, that is a different proposition entirely.  That sentence was said in the context of a larger paragraph dealing with capital expenditure upon permanent improvements to land by one joint owner without the authority of the co-owner.  It does nothing to support the proposition that even if the first respondent had made contributions greater than the bankrupt to the mortgage repayments and the rates that she would then be an unsecured creditor in his estate.
102. [102]
     Furthermore, that submission ignores the proper approach in Muller.
103. [103]
     Having assessed Mr Cinzio’s equity at 6% raises a number of other issues.

Adjustments to equity finding on Distribution Application?

104. [104]
     The applicant submits that between 2016 and 2023, the Official Trustee, and then the applicant, sought to determine the interests of Ms Mielnikowski and Mr Cinzio’s estate, but an agreement could not be reached. This is true. The applicant seeks to lay blame for that at Ms Mielnikowski’s feet, suggesting that the Distribution Application costs are costs thrown away by Ms Mielnikowski’s conduct. The applicant describes Ms Mielnikowski’s production of documents in her affidavits as “random or convoluted” and submits that the applicant has been “left to guess” how Ms Mielnikowski comes up with the figures she contends for a higher distribution in her favour.
105. [105]
     I do not accept this characterisation of the facts.
106. [106]
     Ms Mielnikowski has been self-represented throughout, and at times has been emotional about the effect of Mr Cinzio’s bankruptcy on her and her child. It is also true that her affidavits are a mix of evidence and submissions, but the first of those affidavits was not filed until September 2023. A careful examination of the exhibits to her affidavits, being the letters and emails she wrote to the Official Trustee from 2016 onwards, and the documents she provided, demonstrates a logical argument advanced by her as early as 2016, long before any affidavit was put together. That argument is found in the following:

     1. on 11 March 2016, the Official Trustee wrote to Ms Mielnikowski in relation to the Steele Road property advising her, amongst other things, that she would need to provide evidence if she was to claim a greater interest in the property than what was apparent from the title.  Ms Mielnikowski responded on 21 April 2016 enquiring what type of evidence she needed to supply.  She outlined that she had been paying solar instalments that had cost her $16,000 and that Mr Cinzio had not paid the rates or electricity “for a number of years now”.  She advised that when her father passed away, she used $14,000 from her inheritance^[26] to pay the outstanding mortgage and later used $5,000 of her superannuation.  She explained that she had found it hard to make the repayments on the house, but she had resumed paying whenever she could.  At times she had paid extra;^[27]
     2. on 18 October 2016, Ms Mielnikowski advised the Official Trustee, by reference to bank statements, that she had paid $21,800 off the mortgage whereas Mr Cinzio had only paid $1,797.04.^[28] She provided a number of home loan statements and a variety of other bank statements to the Official Trustee.^[29]  The bank statements included handwritten notes and colour coding to separate her payments from those of Mr Cinzio that she relied upon to justify her claim for a higher equity;
     3. on a date which is unclear on the material, it appears that Ms Mielnikowski may have offered to buy out the trustee’s interest in the Steele Road property for $6,000. The offer is not in evidence. I infer some offer (the terms of which are not clear) was made based upon a reply email on 26 October 2016, the trustee responded, on a qualified basis that “At this stage the Official Trustee accepts your offer based on the information currently available”. The trustee then set out a series of conditions including the execution of a Deed of Indemnity, the need to transfer the monies by 16 November 2016, that Ms Mielnikowski would be responsible for lodgement of all Titles Office documents and mortgage transfers etc. It seems that the conditional counter-offer was not accepted by Ms Mielnikowski;
     4. on 17 January 2017, Ms Mielnikowski advised the Official Trustee that she no longer had the finances to pay out $6,000 because she had continued to pay the mortgage to try and lower the arrears, as well as pay the rates;^[30]
     5. on 15 November 2019, Ms Mielnikowski offered to split the equity in the property on an 80/20 basis in her favour.^[31] That offer represented a substantial alteration in her previous position;
     6. on 27 November 2019, an internal file note of the Official Trustees in Bankruptcy records that the trustee had been told, amongst other things, that Ms Mielnikowski had been making the mortgage payments on the property and that the bankrupt had taken things from the house and sold them;^[32]
     7. on 13 December 2019, the Official Trustee in Bankruptcy wrote to Ms Mielnikowski rejecting her offer of 80/20 and recording that it had received her supporting documentation which had evidenced her payments towards the mortgage.  The trustee had calculated that on the current evidence the equity split was 62.95% in favour of her and 37.05% in favour of the bankrupt estate;^[33]
     8. on 13 January 2020, Ms Mielnikowski provided further paperwork to the Official Trustee in Bankruptcy providing evidence of the two superannuation withdrawals, the payments for the solar panels and the $14,000 of inheritance from her father which she had used to pay the mortgage;^[34]
     9. on 16 January 2020, a representative of the Australian Financial Security Authority performed a further calculation demonstrating that Ms Mielnikowski’s supporting documentation supported a conclusion of 67.59% of the equity in her favour and the balance in favour of the bankrupt’s estate. Rounding, the trustee made an offer of 68/32 in Ms Mielnikowski’s favour;^[35]
     10. on 28 February 2020, Ms Mielnikowski wrote to solicitors on behalf of the Official Trustee in Bankruptcy articulating that she claimed a constructive trust in her favour to the extent that she had paid a mortgage, rates and other expenses for the property both before and after Mr Cinzio became a bankrupt.  She identified that she had provided documentation of some of those payments and was endeavouring to provide further documentation.  She enquired what further information was being sought by the Official Trustee;^[36] and
     11. on 27 April 2021, the Official Trustee wrote to Ms Mielnikowski again recording the list of bank statements that  Ms Mielnikowski had provided for the period between 2014 and 2016 which included home loan statements and bank statements as well as other material relevant to the purchase of the solar system.  A request was made for some further information relevant to rates, water charges and other outgoings.^[37]
107. [107]
     What can be seen from the above is that there was a lengthy period of requests for information and responses by Ms Mielnikowski in relation to the Official Trustee’s enquiries.  The information was such that the Official Trustee, by December 2019, considered it was in a position to calculate an equity split of 62.95% to Ms Mielnikowski and 37.05% to the bankrupt.  Furthermore, at that stage, there were no complaints about the delay in the provision of information.  Similarly, by January 2020, the Official Trustee further considered it was in a position to make a calculation, based on the information that Ms Mielnikowski had provided, increased to 68% equity in her favour and 32% in the bankrupt’s favour. 
108. [108]
     In the context where Ms Mielnikowski herself had offered an 80/20 split in November 2019, nothing about that information suggests that the Official Trustee was “left to guess” how the first respondent justified the higher percentage which she sought for the distribution, as the applicant submitted before me.
109. [109]
     Over the following years, there was relatively little progress. Some of that is explained by the material which demonstrates that various persons who had the conduct of the matter in the office of the Official Trustee went on leave, the matter was passed through different sets of hands, and each of the new people with the conduct of the matter had to familiarise themselves with it.  I make no criticism of any person in relation to that, but neither is Ms Mielnikowski to blame in that period. Simply, it is clear that little happened between April 2021 and February 2023 when Mr Thorn first wrote to Ms Mielnikowski advising of his intention to realise the bankrupt’s equity in the property.  At that point, he re-commenced negotiations by offering a 68% to 32% split in Ms Mielnikowski’s favour.^[38]  Again, Mr Thorn did not appear to be “guessing” in February 2023.
110. [110]
     Whilst the Bankruptcy Trustee may well have been frustrated by the slow progress of the finalisation of the bankrupt’s estate, that frustration was plainly shared by the first respondent, who wrote to Mr Thorn’s office on 7 February 2023 and said:

“I have been trying to negotiate with the trustee’s [sic] for many years, for what the trustees would deem fair.  I think 0% is fair.  He abandoned the property, his daughter and myself with no warning.  Even though he is liable, he still refuses to contribute to making a house payment or paying towards the rates.  This is very frustrating as you can imagine.  How is he entitled to any percentage?

At present Philip’s daughter and I live here at 101-111 Steele Road, Logan Village…It is our home.  Philip went bankrupt, I did not.  I have been working with the bank to pay the mortgage on a single parent income.  I will continue trying to pay the mortgage so my daughter and I have a roof over our heads.  Even though Philip refuses to meet his obligation of paying half the home loan; like we agreed on in the very beginning, I have continued to pay my share and his.  I am currently working full time and I am in the process of applying for a second job, so I can pay the loan in these difficult times (High Interest Rates)…”.

111. [111]
     Mr Thorn’s office was sympathetic in its approach, but nevertheless sought further information, as it was entitled to do.  That occurred later in February 2023. Mr Thorn’s assistant encouraged Ms Mielnikowski to provide information regarding estimates of expenses for maintaining the child including school fees and other expenses.  In May 2023, Ms Mielnikowski responded with a significant level of detail in that regard which I have set out above.
112. [112]
     From that point, things moved quite swiftly.  By early September 2023, Mr Thorn had filed an application for the appointment of Statutory Trustees for Sale which order was ultimately made in this court on 14 November 2023.
113. [113]
     A fair assessment of the process between the date of bankruptcy in March 2016 and the ultimate order for the appointment of a Statutory Trustee for Sale in November 2023 in fact demonstrates a slow approach to the resolution of the Steele Road property, but I find that no part of that was anymore attributable to Ms Mielnikowski’s conduct than to the conduct of the Bankruptcy Trustee.  It seems to me, in fact, having regard to the percentages which I have set out at paras [85] and [90] above, Ms Mielnikowski’s offer to settle the proceedings on an 80/20 basis in November 2019 represented a fair assessment which it would have been in the bankrupt’s estate’s interests to accept.  Had that offer been accepted, there is good reason to think the property could have then been sold without any need to appoint a Statutory Trustee for sale. 
114. [114]
     In all the circumstances, there should be no adjustment in favour of the bankrupt’s estate to reflect any matters said to be attributable to Ms Mielnikowski’s conduct. The delays were not all of her making. Ms Mielnikowski provided information which was sought of her, and the trustee was in a position to, and did, assess the relative equities by late 2019. There was no “guessing” required by the Bankruptcy Trustee by that date. The matter could have been settled for a share of equity which was manifestly favourable to the trustee at that time.
115. [115]
     Additionally, when the matter came on for the appointment of the Statutory Trustee, the matters which I have dealt with were largely unknown by the judge who heard the matter in the busy applications list. Ms Mielnikowski opposed the application, but the order was made. Ultimately his Honour was persuaded to order the costs of the application against Ms Mielnikowski. His Honour did so, no doubt, having been persuaded that the need for the order was caused by Ms Mielnikowski’s conduct. His Honour could not have then known the full facts after a trial would reveal something else. Neither the order nor the costs order was appealed.
116. [116]
     Whilst the above might have constituted a reason to reduce the Bankruptcy Trustee’s equity, I have concluded rather that the equity remains at 6%. The consequences of the matters set out above are, I conclude, better reflected in the costs orders.

Remuneration application

117. [117]
     The second application before me is the Statutory Trustees’ application for an uplift in their remuneration. There is a related issue that arises out of the trustees’ fees, and that is where the burden of them ought to fall, if they are ordered.
118. [118]
     The order which was made appointing the Statutory Trustees for sale on 14 November 2023 (the November order) included, at order 2, a provision that the Statutory Trustees were entitled to:

“(a) charge reasonable professional fees in accordance with the WCT Advisory schedule of hourly rates, conditional upon the professional fees being charged on a time-basis, and not exceeding $15,000 (plus GST);

2. execute any document necessary for the purpose of performing their duties and carrying out this order;

3. retain solicitors, counsel, accountants or other agents for the purpose of performing their duties and carrying out this order;

4. do all other things necessary and incidental to the carrying out of this order; and

5. apply to the Court for orders or directions relating to the performance of their duties or carrying out this order.”

119. [119]
     Further additional orders were made in respect of the proceeds of sale and costs as follows:

“6. Following any sale of the Property in accordance with order 5 above, the sale proceeds are to be applied as follows.

1. First, in satisfaction of the Statutory Trustees’ costs of care, preservation, and realisation of the Property (including any costs incurred in obtaining vacant possession).

2. Second, in satisfaction of the Statutory Trustees’ professional fees.

3. Third, in satisfaction of secured debts owed to the Second Respondent.

4. Finally, the balance (if any):

1. to the applicant and the first respondent in such proportions as may be agreed by them; or, if no agreement can be reached by the applicant and the first respondent

2. into Court.

7 The first respondent pay the applicant’s costs the application (sic) with such costs to be paid, in the first instance, from the first respondent’s interest in the proceeds of sale (if any).”  

120. [120]
     By order 2, therefore, the Statutory Trustees’ professional fees were capped as not exceeding $15,000 plus GST.
121. [121]
     The Statutory Trustees gave evidence that they had not in fact agreed to cap their fees, only that they had been asked for an estimate, which they gave at between $15,000 and $20,000 plus GST.
122. [122]
     The Statutory Trustees do not depose to when it was that they first became aware that their fees had been capped. Attached to Mr Flowers’ affidavit are the Statutory Trustees’ time recording sheets, and it can be seen from that document that Mr Weatherly recorded time for reviewing the order and considering it when it was emailed to him on 14 November 2023.^[39] Mr Flower deposes to having reviewed those records and satisfied himself that they are accurate.^[40] I find therefore that the Trustees knew of the capped fees on the day the November order was made.
123. [123]
     The application for the uplift of fees was filed on 28 June 2024 (the Remuneration Application).  At that point, it had been seven and a half months since the November order appointing the Statutory Trustees. That application sought a variation of the November order such that the Statutory Trustees be entitled to charge reasonable professional fees in accordance with the WCT Advisory schedule of hourly rates, conditional upon the professional fees being charged on a time basis, and not exceeding $45,000 plus GST.
124. [124]
     The Statutory Trustees also sought an order that the costs of the Remuneration Application be paid from the proceeds of the sale of the Steele Road property with the same priority as the Statutory Trustees’ costs in paragraph 6(a) of the 14 November 2023 order, being the Statutory Trustees’ costs “…of care, preservation, and realisation of the Property…”.
125. [125]
     On 13 August 2024, the Statutory Trustees filed an amended application seeking that they be at liberty to uplift their professional costs to be charged on a time charge basis in the sum of $45,000 plus GST.
126. [126]
     No explanation is offered as to why the Remuneration Application was not made earlier. There might be many reasons, but I cannot infer that any one is more probable than the other.
127. [127]
     The Statutory Trustees contend that the power to allow for an uplift of fees arises out of either:

     1. Order 2(e) of the November order, being the power to apply for orders or directions relating to the performance of their duties or carrying out of the order; or
     2. Rule 668(1)(a) of the Uniform Civil Procedure Rules 1999 (Qld), where facts arising after an order is made entitling the person against whom the order is made to be relieved from it.
128. [128]
     No party, including Ms Mielnikowski, takes issue with the power. The issue is the quantum of the fees. Ms Mielnikowski contends the proposed new fees are too high. The applicant, Mr Thorn, also submitted that the fees were too high and ultimately submitted the fees ought to be fixed at $37,500 plus GST.
129. [129]
     Similar considerations apply to Statutory Trustees’ remuneration as apply to the remuneration of Receivers. In the well-regarded text of Kerr & Hunter on Receivers and Administrators,^[41] it has been said that the court must award such sum as is reasonable and proportionate in all the circumstances and which takes into account matters such as:

     1. the time properly given by the receiver and their staff to the receivership;
     2. the complexity of the receivership;
     3. any special responsibility of an exceptional kind which falls on the receiver;
     4. the effectiveness with which the receiver appears to have carried out their duties; and
     5. the value and nature of the subject matter of the receivership.^[42]
130. [130]
     The overriding principle to be applied is that the remuneration is fair and reasonable. This is to be determined by the Court, even in the absence of a contradictor.^[43] Even where there is detailed evidence, the assessment of reasonableness may come down to a matter of “judicial impression”.^[44] On such an application, the Statutory Trustee must show:

     1. the work undertaken was appropriate or necessary;
     2. the work done by particular persons, how long it took to do that work, the hourly rates and the reasonableness of those rates;
     3. the level of detail is proportionate to the size of the estate and the volume of work performed;
     4. whether it was reasonable for the applicant to perform the work and whether the amount claimed for it is reasonable.
131. [131]
     The onus to demonstrate reasonableness of costs lies on the party seeking the amount to be paid.^[45]
132. [132]
     On behalf of the Statutory Trustees, Mr Flowers has sworn two affidavits.  In his first affidavit, he deposes to the fact that the estimate of professional fees to act as Statutory Trustee was based on what would be called a “standard” or “typical” Statutory Trustee appointment without any knowledge of the background of the matter, the property or what steps may need to be taken to perform the obligation.  He deposed that the “typical” Statutory Trustee sale involves the following steps:

     1. one public sale process commenced within a reasonable time after the relevant court order is made;
     2. cooperation by the occupants in vacating the property in a timely manner to allow the sale process to proceed;
     3. cooperation between the parties with respect to the sale process;
     4. the occupants removing their personal belongings in a timely manner and at their own time and cost;
     5. the property upon appointment being in a reasonable condition with a standard level of care and maintenance;
     6. one valuation required before the sale of the property; and
     7. the marketing process being carried out with vacant possession.
133. [133]
     The Statutory Trustees submitted that they had in fact incurred professional costs of $70,878.50 in relation to this appointment. It is said that they wrote off $19,769 plus GST “purely for commercial reasons”. The fees are therefore claimed as $51,109.50.
134. [134]
     Mr Flowers contends that, for a variety of reasons, this appointment was not standard or typical. I return to the context of those non-standard matters shortly.  However, I set out a summary of the Statutory Trustees professional fees of $51,109.50 that was broken down as follows:^[46]

Summary of Statutory Trustees’ fees

135. [135]
     For the time being, I put aside the $6,824.50 for the costs of the application because it seems unlikely that is recoverable as part of the Remuneration Application. The professional fees therefore would amount to some $45,000, whereas a standard or typical matter would incur costs of $15,000 to $20,000 plus GST.
136. [136]
     Before considering those non-standard professional costs, the context of them is important to bear in mind.
137. [137]
     First, the valuation for this property was obtained from JLL on 29 November 2023; that is, about two weeks after the November order appointing the Statutory Trustees. The “as is” value of property was assessed at $560,000, with the range being between $520,000 and $600,000. On any view, the value was modest. The cost of that valuation was $770.00.^[47]
138. [138]
     Second, the valuation included a description of the property as “poor condition”, “uninhabitable”, “incomplete works”, “gutted kitchen”, “gutted bathroom”, and “knock down”, accompanied by photographs that substantiated that language. Knowing this, the Statutory Trustees must have appreciated that they ought to take a conservative approach when incurring any outlays or professional costs which could not reasonably be thought to maintain or preserve, improve or substantially improve,^[48] the value of the property.
139. [139]
     Third, the Statutory Trustees must have appreciated that there was a substantial debt owed to the Commonwealth Bank. The time recording sheets upon which the Statutory Trustees rely show that they were drafting correspondence with the CBA on 16 November 2023, just two days after they were appointed, so they knew of the existence of security over the property. The Statutory Trustees do not depose to when it was that they became aware that the mortgage to the bank was some $380,000 but it seems likely to have been information they would have known early in the trusteeship, given the importance of the size of the debt, and therefore the net equity, to the Bankruptcy trustee and Ms Mielnikowski.
140. [140]
     Fourth, and in the same vein, the Statutory Trustees must also have appreciated there were other debts affecting the net equity, including unpaid rates. The first drafting of correspondence to the Logan City Council is time recorded by the Statutory Trustees on 16 November 2023. Again, the outstanding rates to the Logan City Council must have increased the Statutory Trustees’ awareness of the size of the liabilities, and therefore the net equity, to the Bankruptcy Trustee and Ms Mielnikowski.
141. [141]
     When this context is understood, the Statutory Trustees should have appreciated early that they were appointed for a small value property, which likely had a low level of net equity. They ought to have been alert to exercise prudence in incurring professional costs and outlays given that the indemnity against trust assets is not available where the liability is unreasonable or unnecessary and therefore not properly incurred.^[49]
142. [142]
     In addition to the claim for professional costs, I set out the outlays incurred below. Counsel for the Statutory Trustees contended that all these outlays were ones contemplated by the November order, and no part of the Remuneration Application involved the court “approving” these outgoings. That is correct, but the nature and extent of the outlays inform, at least, the enquiry as to whether the work for which further remuneration is sought was appropriate or necessary, and whether it was reasonable to perform the work, which in turn informs whether there ought to be an uplift of fees in respect of that work. Those enquiries invoke considerations of proportionality. 
143. [143]
     The outlays in fact incurred fell into two categories. The first is those that were, effectively, unavoidable:

     1. Rates: $10,032.05;
     2. CBA mortgage: $387,768.33;
     3. Solicitor’s fees on conveyance: $2,719.80;^[50] and
     4. Real estate agents commission on sale: $16,762.00.
144. [144]
     The second category contains those outlays which seem to me to be arguably unnecessary, of little benefit to the sale price, or disproportionate in cost to the value of the asset:

     1. Rubbish clean up: $1,532,30;
     2. Two valuations, one in late November 2023 at a cost of $770 and a second in June 2024 at a cost of $660;
     3. Property maintenance (slashing): $2,277;
     4. Property maintenance (rubbish removal), in circumstances where it is not explained how this item differs from (a) above, which was incurred only 13 days prior: $561;
     5. Smoke alarm compliance inspections: $231;
     6. Ongoing yard maintenance: $456.50;
     7. Property maintenance (chop and dispose of fallen trees): $418;
     8. Ongoing yard maintenance: $456.50;
     9. Skip bin hire: $860;
     10. Agent to obtain keys post settlement: $350;
     11. Locksmith to change locks post settlement: $788;
     12. Upgrade to interconnected smoke alarms: $499; and
     13. Professional fees of Moresol: $1,650.
145. [145]
     The invoices set out at (a) to (l) above were all incurred by Moresol, who were engaged by the Statutory Trustees to manage the property and assist with its sale and maintenance. Their professional costs, which appear at (m), were $1,650.
146. [146]
     At first blush, none of these outlays in [143] might seem particularly unreasonable. But each of them leads to further professional costs of the Statutory Trustees, as well as the professional costs of Moresol, and, it seems, professional costs of the lawyers engaged by the Statutory Trustees.
147. [147]
     As to the two valuations obtained, the first was in November 2023 and cost $770. That valuation is in evidence.
148. [148]
     The Statutory Trustees then incurred the cost of a second because, Mr Flowers’ deposes, the first was ‘no longer current’ after three months.^[51] The second valuation cost $660 and was not produced in evidence.
149. [149]
     As experienced insolvency practitioners, the Statutory Trustees  ought to have been aware that valuations are sometimes an expensive exercise.  In many cases, there will be no need to obtain a formal valuation having regard to the cost of it.^[52]  Often an appraisal from a competent real estate agent will be sufficient to enable the trustee to sell the property at the best price that can reasonably be obtained.^[53] 
150. [150]
     The cost of two valuations was arguably unnecessary.  But having obtained an order that included the ability to “retain…agents for the purpose of performing their duties and carrying out [the] order” it is implicit that the Statutory Trustees were empowered to choose to pay for such an outlay. Their judgement in doing so might however reflect upon the reasonableness of their costs in carrying out the order.
151. [151]
     The costs in [143] and [144], being a total of $9,977 (including the valuations), again, whilst being ones the Statutory Trustees could choose to incur, were, it seems to me, of doubtful value to the realisation of this particular property.  While I accept the property was in  poor condition, given it was “a knock down” being sold for land value, I find it difficult to accept that the costs incurred were reasonable in the particular circumstances of this case.
152. [152]
     Next, the Statutory Trustees engaged lawyers on 15 November 2023, and continued to engage them throughout the period of the trusteeship. The limited information in relation to those fees is contained in submissions and described as services that were for “legal advice and services performed on behalf of the Statutory Trustees in relation to carrying out their obligations under the Order…” and being “…costs relat[ing] to the care, preservation and realisation of the Property…”. Those lawyers’ fees are entirely separate from the lawyers’ fees incurred for the conveyancing on the sale. They amount to $17,659.42, they have all been paid, and the information in relation to them is the following:

     1. Invoice 8175 dated 31 January 2024 for legal advice and correspondence between 15 November 2023 and 30 January 2024: $13,210.47;
     2. Invoice 8195 dated 12 February 2024 for legal advice and correspondence between 1 and 6 February 2024: $568.70;
     3. Invoice 8204 dated 28 February 2024 for legal advice and correspondence between 13 and 28 February 2024: $2,226.95; and
     4. Invoice 8213 dated 7 March 2024 for legal advice and correspondence between 1 and 7 March 2024: $1,653.30.
153. [153]
     There is a further unpaid invoice numbered 8258 of $15,144.30 for legal services provided to the Statutory Trustees between 16 April and 28 June 2024.
154. [154]
     The total of the legal fees paid or claimed by the Statutory Trustees is $32,803.72. The sum does not include the legal costs in respect of this Remuneration Application. They are said to amount to another $28,600 (incl GST).
155. [155]
     In addition to the lawyers’ fees of $32,803.72, there is another sum of $6,424.25 attributed to the Statutory Trustees ‘engaging’ with those lawyers. No part of the description in the submissions or the invoices provides any information as to what the legal services were actually for, it being otherwise obvious that lawyers were engaged for legal advice. The affidavit evidence is scant.^[54]
156. [156]
     While I am prepared to assume that the legal costs must have fallen within the scope of the November order, otherwise they would not be properly payable, there is little evidence before me as to what the purpose of them was. The legal fees alone are very significant in the context of such a small value pool, but when added to those fees are the Statutory Trustees’ own fees related to the legal advice, I am unable to conclude, on the evidence offered, that that component of those fees over and above that which would be “standard” are reasonable and proper.
157. [157]
     Additionally, the cost of the Statutory Trustees’ legal fees for the Remuneration Application were said to be $28,600 (incl GST), although there was an offer to fix the fees at $20,900 (incl GST) plus disbursements of $5,786.14, being a total further sum of $26,686.14.
158. [158]
     Those legal costs are to be further increased, it is said, by an unidentified amount for the Statutory Trustees having to respond to the Court’s request for further submissions. Part of that request for further submissions was directed to the actual net proceeds of sale available for distribution. That request arose because the Statutory Trustees deposed to, and produced a settlement statement, describing the amount held in trust for distribution was $137,397.92. That was incorrect. The true amount was $204,397.92. The Statutory Trustees had failed to account for the $67,000 deposit on the sale. That fact had to be drawn to the Statutory Trustees’ attention by the Court.
159. [159]
     After deducting the unpaid legal fees in [153] above, the net proceeds available for distribution are now said to be $189,253.62,^[55] but that sum is still to be reduced by:

     1. any deduction for further remuneration that this court may order;
     2. the costs of the remuneration application itself (if ordered); and
     3. the costs of the further submissions the court requested (if ordered).
160. [160]
     I approach the claim for an uplift in remuneration therefore in the context of a small value pool (approx. $189,000) from which significant sums are, or might be, still to be deducted. Nevertheless, whilst proportionality is a factor, the focus must still be on whether it is fair and reasonable to allow the claim, or any part of it, having regard to the reasonableness of the work done.
161. [161]
     The primary reasons given for the Statutory Trustees’ proposed increase in fees are all related to Ms Mielnikowski’s conduct. It is maintained that she was difficult to deal with, repeatedly failed to vacate the property when ordered to do so, offered to buy the property, and wasted costs when she was not in fact in a position to purchase, and was generally un-cooperative. Additionally, it is asserted that the property was in an extremely poor condition such that the Statutory Trustees were required to undertake maintenance outside the usual scope of a typical appointment.
162. [162]
     As to the poor condition of the property, I have already referred above to considerable outlays spent on property maintenance. Because I accept that I am not being asked to approve or disapprove the outlays, I cannot deny the trustee the right of reimbursement for these outlays.^[56] However, I do not consider it reasonable to increase the remuneration payable to the Statutory Trustees in relation to them. Their professional costs in addition to the outlays would not be fair and reasonable in the circumstances. The evidence does not satisfy me that the work carried out was in fact reasonable in all the circumstances, and it was, I find, disproportionate to the value.
163. [163]
     As to Ms Mielnikowski’s uncooperative conduct, the evidence includes the following:

     1. Ms Mielnikowski offered to purchase the property in November 2023, but that offer was ultimately not proceeded with as Ms Mielnikowski could not obtain finance. The November order allowed until 12 February 2024 for that offer to be completed otherwise Ms Mielnikowski was required to vacate by that date;
     2. Ms Mielnikowski did not vacate by that date, and the Statutory Trustees extended time until 25 February 2024. They advised that if the property was not vacated by then, they would apply to the Court for a warrant of possession, and advised that the costs would be deducted from her share of the proceeds;
     3. Ms Mielnikowski did not vacate, and a further extension was given until 4 March 2024. The Statutory Trustees repeated that they would apply to the Court for a warrant of possession, and advised that the costs would be deducted from her share of the proceeds;
     4. Ms Mielnikowski did not vacate. On 3 March 2024, she advised she and her daughter had nowhere to go and advised that she was hoping to apply for a variation of the court order to allow her to stay in the property until it was sold;
     5. On 4 March 2024, the Statutory Trustees conferred in person with Ms Mielnikowski and reached an agreement permitting Ms Mielnikowski to stay in the property for longer on certain conditions, including regarding access so that the property could be marketed for sale;
     6. On 13 March 2024, Moresol sent correspondence to Ms Mielnikowski outlining time frames for work to the property and the need for Ms Mielnikowski to vacate by 4 May 2024, being the auction date;
     7. The auction date was moved back, and on 9 May 2024, the Statutory Trustees wrote again to Ms Mielnikowski stressing, amongst other things, her need to vacate the property by 23 May 2024;
     8. On 10 May 2024, Ms Mielnikowski wrote to the Statutory Trustees asking them to remove/move a skip bin that was blocking her access to the property and her progress in cleaning up. She indicated certain items at the property belonged to Mr Cinzio and that she would not be moving that property or contributing to the cost associated with doing so;
     9. On 19 May 2024, Ms Mielnikowski confirmed she had secured accommodation, but did not specify her moving out date;
     10. On 20 and 21 May 2024, the Statutory Trustees confirmed they would have a skip bin at the property and a worker to move Mr Cinzio’s items;
     11. On 22 May 2024, Ms Mielnikowski advised she was not moving out because her accommodation was not ready and there were some financial issues for her. The Statutory Trustees replied that the auction was the next day, she had had ample time to move her belongings, but the Statutory Trustees would make urgent arrangements to have her belongings removed and to pay for one month’s storage at a local storage facility.
164. [164]
     The evidence shows that the Statutory Trustees dealt with Ms Mielnikowski quite fairly and sensitively. The Statutory Trustees appeared to take into account, as was the fact, that Ms Mielnikowski and her daughter had nowhere else to go. Evicting them would have resulted in homelessness, and the Statutory Trustees were not insensitive to their plight; they allowed reasonable extensions of time when it was appropriate to do so for Ms Mielnikowski to obtain accommodation. While I accept that the numerous extensions Ms Mielnikowski required were unlikely to be “standard”, it is hard to see how allowing Ms Mielnikowski and her daughter to stay in the property until after the sale was achieved in fact dramatically increased the Statutory Trustees costs from a ‘standard” amount of $15,000 or $20,000 to the $45,000 sought.
165. [165]
     While the costs of skip bins, and extra yard work, as just two examples, were almost certainly not “standard”, they are covered by the outlays incurred, and by Moresol’s costs in arranging them. Some of those costs in any event seem to be attributable to the bankrupt’s belongings and rubbish being present on the property – a matter the Statutory Trustees had to contend with, but were not caused by,  and therefore ought not be borne by, Ms Mielnikowski.
166. [166]
     I am conscious that neither of the Statutory Trustees was required by Ms Mielnikowski for cross-examination on the extra work they were required to carry out, so their evidence is unchallenged. But in the same way that I do not uncritically accept Ms Mielnikowski evidence, nor do I uncritically accept theirs.
167. [167]
     I do not accept that dealing with stakeholders such as banks (in relation to unpaid mortgage repayments) and the council (in respect of unpaid rates) is anything unusual in the context of a statutory trustee for sale. I am not satisfied that any extra costs were incurred merely because those liabilities were outstanding.
168. [168]
     Other costs have not been proven to be appropriate or necessary in the context of this small value pool. For example, much time was spent, and significant outlays were incurred, on trying to improve the condition of the property^[57] which was clearly earmarked as a “knock down”. While the property was ultimately sold for more than the first valuation, the second valuation is not in evidence, and it is therefore not possible to draw a causative link between the time spent and money expended resulting in a greater sale price, rather than the mere movement of a buoyant real estate market. The Statutory Trustees’ professional costs in dealing with the expenses were also duplicated, it seems, by Moresol, who themselves charged for organising slashing, rubbish skips, yard maintenance and the like. There seems significant double handling in respect of these costs, in addition to the arguable imprudence of incurring the costs in the first place. I can make no reduction for the outlays incurred but I do not make any uplift for the extra work said to have been carried out by the Statutory Trustees in relation to the property’s condition.
169. [169]
     I recognise that the photographs demonstrate the property was in a poor condition. That fact ought to have heightened the cautious approach to the incurring of professional costs, not added to them, as seems to have been the case.
170. [170]
     Further, some of the Statutory Trustees’ fees, it seems to me, are ones which ought not be charged at all. For example, there are instances of time recording of the Statutory Trustees’ time records in relation to adjustment of equity issues between Ms Mielnikowski and the Bankruptcy Trustee. These are not ones relevant to the Statutory Trustees’ role. Indeed, at the hearing, counsel for the Statutory Trustees rightly conceded the Distribution Application was of no interest to his client. The Statutory Trustees should not recover the costs associated with performing work that was not required to perform their duties or carry out the order.
171. [171]
     While I accept that Ms Mielnikowski’s failed offer of purchase wasted the costs associated with that offer, I find it difficult to accept that one failed offer is not a common enough circumstance in any sale of property that it would not be considered “standard”.
172. [172]
     I do accept that Ms Mielnikowski would not have been an easy co-owner for the Statutory Trustees to manage. She was emotional and not always rational. I accept that that is not a cost that would be considered usual or standard. This would likely have incurred some professional costs. However, there seems to have been significant double handling between the property agent (Moresol), the Statutory Trustees and the Statutory Trustees’ solicitors revealed by the time sheets and the summary of costs set out at para [134] above. 
173. [173]
     Overall, in the context of the very significant outlays incurred in such a small value pool, the Statutory Trustees have not satisfied me that their claimed fees of $45,000 were reasonable and proper in all the circumstances.
174. [174]
     I am, however, prepared to make some allowance for the extra costs incurred in the various extensions of time allowed to Ms Mielnikowski to vacate so that she was not left homeless, for the costs of the unsuccessful offer made by Ms Mielnikowski, and for the time spent for dealing with Ms Mielnikowski in a way which would not be usual or standard. The assessment of the reasonableness of those costs in a case such as this ultimately does come down to a matter of “judicial impression”.  I allow a further $10,000 plus GST for the cost of the further remuneration.
175. [175]
     The total remuneration therefore is fixed in the sum of $25,000 (plus GST), being $10,000 (plus GST) more than the November 2023 order.
176. [176]
     The Statutory Trustees’ professional fees of $15,000 (plus GST) have already been paid from the proceeds of the sale, and no change is made to that. The applicant seeks that Ms Mielnikowski bears the burden of the further remuneration, and it is appropriate that she do, she being responsible, I find, for those extra costs having been incurred. The burden of the further $10,000 (plus GST) will be paid from the first respondent’s proceeds of sale.

Costs

177. [177]
     Costs were argued before me, although obviously without the benefit of these reasons. It is appropriate having regard to the small sum for distribution that I decide the cost issues without the need for further submissions.
178. [178]
     Ms Mielnikowski has already been ordered to pay the costs of the November 2023 application. There was no appeal against that order. The applicant submits that it is a ‘commercial and sensible proposal’ to fix its costs of the November 2023 application at $5,700 plus outlays of $5,577.97. I agree it is commercial and sensible to do so, and I order those costs be fixed at $5,700 plus outlays of $5,577.97.
179. [179]
     The Distribution Application would not have been necessary had Ms Mielnikowski’s 80/20 offer of 15 November 2019 been accepted.  The Bankruptcy Trustee was wrong to reject that offer when the bankrupt’s equity in 2019 was demonstrably smaller than 20%. The costs which followed have been caused by that refusal to accept a reasonable offer. That refusal was not, of course, Mr Thorn’s – it occurred long before his involvement – but the 80/20 position was maintained by Ms Mielnikowski long into Mr Thorn’s appointment. Indeed, it was her stated position on the hearing of this application.
180. [180]
     The usual consequence of refusing to accept a reasonable offer would be for an order that the applicant pay the first respondent’s cost of the Distribution Application. Here, the first respondent was self-represented so there will be few, if any, costs. Rather than order the applicant pay Ms Mielnikowski’s costs, I conclude that the appropriate order is that the applicant receive his costs of the Distribution Application out of the bankrupt’s equity in the Steele Road property. No part of the applicant’s costs can be deducted from Ms Mielnikowski’s share of the equity.
181. [181]
     As to the Remuneration Application, whilst it was successful, it was only marginally so. The Statutory Trustees were seeking an additional $30,000 over and above the November 2023 order ($15,000), but I have allowed only $10,000, being one-third of that which was sought.
182. [182]
     Ms Mielnikowski submitted that the Statutory Trustees’ costs could be fixed up to $20,000 plus GST. The applicant also took the view that the amount claimed by the Statutory Trustees was too high, and only reached some in principle agreement to what they considered the fees ought to be on the day of the hearing ($37,500 versus the claimed $45,000).
183. [183]
     The Statutory Trustees asked for its costs on the indemnity basis. In light of the limited success of the application, I would not so order. However, the figures submitted^[58] provide me with a guide to fix those costs. The Statutory Trustees contended that their indemnity costs as at 21 August 2024 were $28,600 (incl GST) but were prepared to fix the costs at $20,900 (incl GST) plus disbursements of $5,786.14 (of which $5,500 incl GST was counsel’s fees). In light of the limited success of the application, the Statutory Trustees should have $11,000 (incl GST) of those costs, plus the disbursements of $5,786.14. Those costs should be paid with the same priority as the Statutory Trustees’ costs referred to in paragraph 6(a) of the November 2023 Order.
184. [184]
     After the trial concluded, I requested further submissions going to:

     1. a better explanation of the outlays for the purpose of assessing the reasonableness of the claimed professional costs; and
     2. an explanation as to the whereabouts of the deposit monies of $67,000.
185. [185]
     Both of those issues should have been dealt with in the initial material.
186. [186]
     Disturbingly, the deposit monies had been completely overlooked by both the Statutory Trustees in their affidavits, and in submissions. The explanation was “oversight”. When the pool for distribution was said to be $137,397.92, but was in fact $204,397.92, the “oversight” was significant by a factor of almost 50%. Neither the bankruptcy trustee nor Ms Mielnikowski should have to bear the costs associated with such a mistake. The Statutory Trustees must bear their own costs of and incidental to those further submissions, including disbursements.
187. [187]
     I therefore order that:

     1. The net proceeds of sale of 101-111 Steele Road Logan Village in the state of Queensland be distributed:
     1. 94% to the first respondent;
     2. 6% to the applicant;
     2. The applicant is entitled to his costs, including his costs of the Distribution Application filed 19 July 2024, solely out of the bankrupt’s equity in the Steele Road Property;
     3. Paragraph 2(a) of the order of Crowley J made on 4 November 2023 be varied such that the Statutory Trustees be entitled to charge reasonable professional fees in accordance with the WCT Advisory schedule of hourly rates, fixed in the sum of $25,000 (plus GST);
     4. The burden of the additional $10,000 (plus GST) of the Statutory Trustees fees be paid from the first respondent’s share of the proceeds of sale of the Steele Road Property;
     5. The Statutory Trustees’ costs of the Remuneration Application filed 13 August 2024 be fixed in the sum of $11,000 (incl GST), plus the disbursements of $5,786.14;
     6. The Statutory Trustees’ costs of the Remuneration Application in (e) above be paid with the same priority as the Statutory Trustees’ costs referred to in paragraph 6(a) of the November 2023 Order; and
     7. The costs ordered to be paid by the first respondent to the applicant by order dated 14 November 2023 be fixed at $5,700 plus outlays of $5,577.97.