Abdi v Equitable Financial Solutions Pty Ltd & Anor - [2020] FCCA 2521

FEDERAL CIRCUIT COURT OF AUSTRALIA

ABDI v EQUITABLE FINANCIAL SOLUTIONS PTY LTD [ACN 151 172 039] & ANOR

[2020] FCCA 2521

Catchwords:

CONSUMER LAW – Costs – Where first respondent intends to conduct business of raising funds in relation to a Shariah-compliant investments program – where first respondent accepts appointment by applicant as its Wakeel agent to invest its funds and to repay principle and profit in consideration for agency fee – where first respondent accepts investment by applicant – where investments are not fully repaid – where condition of first respondent’s investment license was that it would participate in dispute resolution scheme conducted by Credit and Investments Ombudsman – where Ombudsman makes determination that first respondent repay investment – where first respondent does not repay monies – where proceedings ensued – proceeding allocated to Consumer Protection List – where first respondent placed in administration – where second respondent overseas and does not provide instructions when matter listed for directions – costs ordered – where proceeding set down for hearing – jurisdiction put in issue – applicant discontinues proceeding – second respondent seeks costs on indemnity or party/party basis – applicable principles – discretionary considerations – relevance of conduct – no order as to costs – Registrar directed to supply copy of reasons for judgment to Australian Securities & Investments Commission.

Legislation:
Corporations Act 2001 (Cth), s 131A
Federal Circuit Court of Australia Act 1999 (Cth), ss 3, 21, 42, 43, 79
Federal Circuit Court Rules 2001 (Cth), rr 13.01, 21.02

Cases cited:

Ahmed v Minister for Immigration and Multicultural Affairs [2000] FCA 1436

Alrjoob v Minister for Home Affairs[2018] FCA 1144

AOJ15 v Minister for Immigration and Border Protection [2017] FCA 675

BEL17 v Minister for Immigration and Border Protection [2020] FCA 1045

Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876

Hobson v BWL Pty Ltd (No 3) [2012] FMCA 439

Ingui v Ostara [2003] FMCA 132

JT Stratford & Son Pty Ltd v Lindley (No 2) (1969) 1 WLR 1547

Kaur v Minister For Immigration, Citizenship, Migrant Services and Multicultural Affairs (Costs), [2020] FCA 1247

MZZKH v Minister for Immigration and Border Protection [2013] FCCA 2287

O’Neill v Mann [2000] FCA 1680

Re Minister for Immigration & Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622

Yates Property Corporation Pty Ltd v Boland [2000] FCA 1106

Zaghoul v Jewellery & Gift Buying Service Pty Ltd [2020] FCA 1045

Applicant:

DULMAR ABDI

First Respondent:

EQUITABLE FINANCIAL SOLUTIONS PTY LTD "EFSOL"

Second Respondent:

USMAN SIDDIQUI

File Number:

MLG 2905 of 2019

Judgment of:

Judge A Kelly

Hearing date:

16 March 2020

Date of Last Submission:

24 March 2020

Delivered at:

Melbourne

Delivered on:

14 September 2020

REPRESENTATION

Counsel for the Applicant:

Mr F.C. Brimfield

Solicitors for the Applicant:

Mykyta Lawyers

Counsel for the Respondents:

Ms M. Harris

Solicitors for the Respondents:

Cordoba Legal

ORDERS

(1) The application to set aside the order for costs made on 12 November 2019 against the second…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] FCCA 2521
Decision Date: 14 September 2020

CaseChat Overview and Summary

In the proceeding before Judge A Kelly, the applicant, Abdi, had initiated legal action against the first respondent, Equitable Financial Solutions Pty Ltd, and the second respondent, Usman Siddiqui. The dispute arose from an investment program where the first respondent, acting as a Wakeel agent, accepted funds from the applicant for Shariah-compliant investments. Following the first respondent's failure to fully repay the principal and profit, and despite a determination by the Credit and Investments Ombudsman requiring repayment, the applicant commenced proceedings. The matter was allocated to the Consumer Protection List, and subsequent to the first respondent entering administration and the second respondent failing to provide instructions, costs were ordered. The proceeding was later set down for hearing, at which point the jurisdiction was challenged, leading the applicant to discontinue the proceeding. The second respondent then sought costs on an indemnity or party/party basis.

The court was required to determine whether to set aside a prior costs order made against the second respondent and to consider the second respondent's applications for indemnity or party/party costs following the applicant's discontinuance of the proceeding. The court also had to consider the broader discretionary factors relevant to awarding costs, including the conduct of the parties.

Judge A Kelly dismissed the application to set aside the order for costs made against the second respondent on 12 November 2019. Furthermore, the court dismissed the second respondent's applications for indemnity or party/party costs. The reasoning behind these decisions was not detailed in the provided text, but the court exercised its discretion in relation to costs. As a consequence of the judgment, the Registrar of the Court was directed to provide a copy of the reasons for judgment to the Australian Securities and Investments Commission.

Orders

Orders of the court

ORDERS

(1) The application to set aside the order for costs made on 12 November 2019 against the second respondent, Usman Siddiqui, be dismissed.

(2) The second respondent’s applications for the costs of this proceeding on an indemnity, alternatively a party/party, basis be dismissed.

(3) Direct that the Registrar of the Court furnish a copy of these reasons for judgment to the Australian Securities & Investment Commission.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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