relation of the proposed trustee to the estate was such that it would be difficult for him to act with impartiality that was enough, though in fact notwithstanding the difficulty he would not be likely to act otherwise than with impartiality. All I have to determine is whether the facts disclose such a relation.]

Reed, Q.C., and Carrington, for Foster :

Each case of this kind must be decided on its special circumstances. The judgments of the Lord Justices in In re Lamb (2) mean that the Court is to look at the particular facts, and see whether they are such as are on a reasonable view likely to prevent the proposed trustee acting with impartiality. Here the facts shew that Foster was not in any real sense an accounting party. He had discharged himself in the account, and he had offered his cheque for any amount which might be claimed. If Foster's appointment is set aside a trustee under a deed of arrangement can never become trustee under the debtor's subsequent bankruptcy. That would be a misfortune, as the trustee under such a deed is the most fit and proper person to act.

[VAUGHAN WILLIAMS, J.: The question for me is, is Foster an accounting party? If he is, I must uphold the Board of Trade's objection.]

VAUGHAN WILLIAMS, J.: This is a case under section 21 of the Bankruptcy Act, 1883. That section says: [his Lordship read the section, and continued:] In this particular case the creditors did unanimously appoint Mr. Foster as trustee in the bankruptcy. He had been appointed with a Mr. Brown as trustee of a deed under which the bankrupt had assigned his property to trustees for the benefit of his creditors—such an assignment being an act of bankruptcy. The acting trustee was really Mr. Brown, but in point of title Mr. Foster was also one of the assignees, and as such undoubtedly became accountable to the estate of the bankrupt for his dealings with the estate as trustee de son tort. I say de son tort, because people who act during the time a deed of assignment is available for the purposes of a petition, are acting in that capacity. The Board of Trade do not apparently approve of the person who is

trustee under such a deed as this being also trustee in the bankruptcy. No doubt from a creditor's point of view there is a great deal to be said for a person who has acted as the trustee under the deed continuing to act as trustee in bankruptcy, as such a person is often a person of good position and of good repute, and of unimpeached character for honour and propriety, and after bankruptcy it would often be a great saving to creditors that the person acting as the trustee should continue as such; the expenses would often be less and the estate realised often much more; on the other hand, there are cases not unfrequent where the trustee under the deed is nominated either in the debtor's interest or in some other interest than that of the creditors, or, where he considers that the estate exists for his own personal benefit. In these cases it is undesirable that he should be trustee in the bankruptcy. The position taken up by the Board of Trade is that, on the balance it is undesirable that the trustee under such a deed should be trustee in the bankruptcy, and in all these cases it makes objection to the appointment. Here the creditors have requested the Board of Trade to notify the objection to the High Court. In my opinion I ought, in this case, to find in favour of the validity of the objection, that is, I find that the trustee, Mr. Foster, as trustee under the deed of assignment, is accountable to himself as trustee in the bankruptcy, and his position is a position which is in fact likely to make him other than impartial. I am not finding on the facts of this case, that Mr. Foster will be placed in a position in which he will be likely to be other than impartial; on the contrary, the counsel for the Board of Trade, on being asked if there was any item in the account which there was ground for impeaching, said he could not say so, as the account had not been examined. I merely decide that the objection of the Board of Trade is a valid objection, because the trustee, as trustee under the deed, will have to account to himself in bankruptcy, and this makes it difficult for him to act with impartiality. I thought when I decided In re Lamb (2) that I ought to perform the same duties which the Board of Trade in the first instance have to perform, that is, to decide whether in any particular case the Board of Trade ought or ought not to object to the appointment of any particular person as trustee, having regard to all the facts of the case: for instance, the amount of interest of

the proposed trustee. I still think it would have been to the advantage of the creditors if the law had been as I supposed, and if I had the right to exercise that discretion. But the Court of Appeal decided otherwise. I therefore content myself with saying that I decide this case on the ground that the trustee will have to act in a matter in which he is personally interested.

Solicitors: George Robson, for Foster.

The Solicitor, for the Board of Trade.

IN RE GEORGE GALLARD, EX PARTE HARRIET GALLARD.

1895, Nov. 15. LORD ESHER, M.R., AND LOPES AND KAY, L.JJ. Bankruptcy-Costs of Trustee-Taxation-Solicitor of Trustee employing Member of Committee of Inspection-Profit-Costs-Retainer-Managing Clerk on Committee-Bankruptcy Rules, 1886, 1890, r. 317.

Where the London solicitor of a trustee in bankruptcy employs as his country agent a member of the committee of inspection without the sanction of the Court, and pays the agency bill, the trustee cannot be allowed such costs on taxation so far as they represent the personal profit-costs of the solicitor committee-man.

What are profit costs explained.

A firm of solicitors ought not to accept a retainer from a committee of inspection where one of the committee is a managing clerk of the firm.

THIS was an appeal from a decision of Vaughan Williams, J., reported ante, p. 67. The receiving order against G. Gallard-the above bankrupt-was made in 1887, and one James Harris was on 6 October, 1887, appointed trustee in the bankruptcy by the creditors with a committee of inspection. The committee of inspection consisted, among others, of Williams, a member of a Brighton firm of solicitors, Williams & Cooper; Hunt, the managing clerk of the trustee's solicitors; and Stretton, the principal creditor. The committee of inspection appointed Messrs. Ashurst, Morris, Crisp & Co., solicitors to the trustee. In the course of the liquidation Messrs. Ashurst & Co. found there was certain work in the bankruptcy necessary to be done at Brighton-the public examination of

the debtor and the defence of an action in the Brighton county court-and they employed Williams & Cooper to do the work. No sanction of the Court to Williams making a profit was obtained under Rules 317, 317A (1). Williams & Cooper did the work, and sent in in the usual way to the trustee's solicitors an agency bill of costs for 1391., which was paid by the trustee's solicitors, Messrs. Ashurst. This was one of the items which the trustee claimed to be reimbursed out of the estate. The taxing-master disallowed the whole of the sum in question (except out-of-pocket expenses) under Rule 317 of the Bankruptcy Rules, 1886 and 1890. On appeal to VAUGHAN WILLIAMS, J., the learned Judge varied the taxing-master's order by disallowing 401. only out of the 1391., being of opinion that that was all that represented "profit" by Williams.

A creditor-Miss Gallard-appealed.

Cooper-Willis, Q.C., and Eneas Mackintosh, for the appeal.

Reed, Q.C., and Muir Mackenzie, for the trustee.

LORD ESHER, M.R.: I think, notwithstanding the great knowledge and experience of the learned Judge of the Court below, that in this case he has done two things with which I for

(1) Rules 317, 317A of the Bankruptcy Rules, 1886, 1890, are as follows:-

"317. No member of a committee of inspection of an estate shall, except under and with the sanction of the Court, directly or indirectly, by himself or any employer, partner, clerk, agent, or servant, be entitled to derive any profit from any transaction arising out of the bankruptcy, or to receive out of the estate any payment for services rendered by him in connection with the administration of the estate, or for any goods supplied by him to the trustee for or on account of the estate. If it appears to the Board of Trade that any profit or payment has been made contrary to the provisions of this Rule they may disallow such

payment or recover such profit, as the case may be, on the audit of the trustee's account.

"317A. Where the sanction of the Court under Rule 317 of the Bankruptcy Rules, 1886, to a payment to a member of a committee of inspection for services rendered by him in connection with the administration of the estate is obtained, the order of the Court shall specify the nature of the services, and shall only be given where the service performed is of a special nature. No payment shall under any circumstances be allowed to a member of a committee for services rendered by him in the discharge of the duties attaching to his office as a member of such committee."

one cannot agree. The sanction of the Court mentioned in Rule 317 was not obtained. The learned Judge has said, when the case come before him after the whole transaction was closed, that he could then give the sanction of the Court. I am of opinion that upon the true construction of the Rule 317 he could not do it then, but that the sanction must be given before the things are done which are in question. The words of the Rule are, "except under and with the sanction of the Court." Now if these particular moneys in question are profits at all, they are not profits which are earned under the sanction of the Court. I think, therefore, that from beginning to end, this must be taken to have been done without the sanction of the Court, and the learned Judge could not give that sanction on the hearing.

Then the second point is this: The rule says that no member of a committee of inspection shall directly or indirectly derive any profit. Now, this applies to Mr. Williams. Messrs. Ashurst & Co., in my opinion, made a mistake in employing Mr. Williams.

The learned Judge has, and I have not the least doubt perfectly rightly, held that they never intended to do anything wrong, and I will take that as being so. Therefore, there is no blemish whatever upon their personal character or honour. But they have made a mistake in employing Mr. Williams to act for them whilst he was a member of the committee of inspection, without having previously obtained the sanction of the Court to do so. Now comes the question whether Mr. Williams can be paid by Messrs. Ashurst & Co. or by anybody more than his disbursements out of pocket? Can he make a profit? The learned Judge held, and I think rightly, that he could not make a profit. But Mr. Williams, after having been paid all disbursements, and also the rest of his charges in his bill of costs, says that those charges are not all profit. It is said he keeps an expensive office with many clerks, and that a proportionate part of such expense must be deducted; and that what remains is the only profit he makes. In my opinion, that is a most dangerous view to take. I think a solicitor's profits are what he gets on his bill of costs beyond his disbursements out of pocket. Those are his profits. Therefore, what ought to have been taken off here, in the case of Mr. Williams, was not the 401. but it was the 401. and the 751. Therefore, what [the master did in taxing