The Full Federal Court confirmed that where broad and generalised allegations of trustee maladministration are made under ss 90-10 and 90-15 of the Insolvency Practice Schedule (Bankruptcy), the Court may adopt a two-stage approach requiring the applicant first to demonstrate substantial grounds warranting an inquiry before embarking on a full merits hearing; the supervisory power does not operate as a reverse-onus or 'show cause' mechanism requiring the trustee to justify its administration. The Court also held that an interlocutory application filed in a proceeding does not survive the discontinuance of that proceeding (r 15.11 being confined to cross-claims), and that issue estoppel arising from a prior final determination of the trustee's authority to commence and conduct proceedings — in respect of which leave to appeal was refused — precluded re-litigation of those issues under the guise of a supervisory inquiry.
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