Australian Securities and Investment Commission v Piggott Wood and Baker (a firm) (No 2)

[2006] FCA 1796

FEDERAL COURT OF AUSTRALIA

Australian Securities & Investment Commission v Piggott Wood & Baker (a firm) (No 2) [2006] FCA 1796

COSTS – Liquidator’s application for remuneration

Held: Liquidator’s costs to be paid from Guarantee Fund

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION v PIGGOTT WOOD & BAKER (A FIRM) (NO 2)

TAD 42 OF 2001

HEEREY J
21 DECEMBER 2006
MELBOURNE (HEARD IN HOBART)

IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY	TAD 42 OF 2001

BETWEEN:	AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION Applicant
AND:	PIGGOTT WOOD & BAKER (A FIRM) Respondent

JUDGE:	HEEREY J
DATE OF ORDER:	21 DECEMBER 2006
WHERE MADE:	MELBOURNE (HEARD IN HOBART)

THE COURT ORDERS THAT:

1.Barry Keith Hamilton recover his costs of and incidental to the interlocutory applications dated 22 September and 5 December 2006 out of the Guarantee Fund.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	TAD 42 OF 2001

BETWEEN:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Applicant
AND:	PIGGOTT WOOD & BAKER (A FIRM) Respondent

JUDGE:	HEEREY J
DATE:	21 DECEMBER 2006
PLACE:	MELBOURNE (HEARD IN HOBART)

REASONS FOR JUDGMENT

1. In Australian Securities and Investments Commission v Piggott Wood & Baker (a firm) [2006] FCA 1774 I upheld the Liquidator’s claim for remuneration for work done and expenses incurred in responding to requests by ASIC for information as to the progress of the winding up. I directed the parties to file written submissions on costs. Notwithstanding the very tight time frame dictated by the onset of the long vacation, the parties have provided concise and well argued submissions, for which I thank them.

2. Because the Liquidator has succeeded in obtaining the relief claimed there will be an order that he recover his costs of and incidental to the interlocutory applications dated 22 September and 5 December 2006 out of the Guarantee Fund.  These are part of his costs and expenses in terms of the Winding Up Order as amended.

3. While it is true that the Liquidator failed in his primary submission that the District Registrar’s confirmation of the remuneration and expenses in question was final and conclusive, the making of that submission did not significantly increase costs.  The hearing was disposed of in a day.

4. The payment of the Liquidator’s costs out of the Guarantee Fund is consistent with the terms of the Winding Up Order as amended and s 108(2)(a)(iii) of the Legal Profession Act 1993 (Tas).   Payment out of the proceeds of the winding up is not appropriate.  I am informed that there is no present fund against which costs orders could operate and there is no guarantee that there will be any further funds in fact recovered.  Moreover, the fund derived from recovered monies is not a pooled fund and there would be great practical difficulty in apportioning the costs across individual loans.

5. Counsel for ASIC undertakes on behalf of his client not to seek or otherwise procure payment of costs.  I should note in this context that nothing in my substantive decision should be taken as criticism of ASIC, which has been acting properly in performance of its statutory functions and, through its counsel, provided the Court with helpful submissions.

6. The Solicitors’ Trust was given leave to be heard, read affidavits and made submissions opposing the Liquidator’s application.  It was reasonable for it to do so in order to protect the integrity of the Guarantee Fund.

7. As I read its counsel’s submissions, the Trust does not seek any costs order for itself.  Presumably this is because its costs will be recovered from the Guarantee Fund as an ordinary cost of administering the Fund.  If there is any doubt about this, I would be prepared to make such an order.

8. However, the Trust did seek an order that ASIC should pay a “substantial proportion” of the Liquidator’s costs since the Liquidator’s application was brought as a result of ASIC’s stance.  I do not propose to make such an order.  ASIC has not acted unreasonably.  In substance this was a case where both the Liquidator and ASIC were seeking the advice and directions of the Court in the course of a winding up by the Court.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

Associate:

Dated:        21 December 2006

Counsel for the Applicant:	P Tree SC
Solicitors for the Applicant:	Toomey Maning & Co
Counsel for the Respondent:	A Abbott
Solicitor for the Respondent:	Australian Government Solicitor
Counsel for the Solicitors’ Trust	M Daly
Solicitors for the Solicitors’ Trust	Page Seager
Date of Submissions:	20 December 2006
Date of Judgment:	21 December 2006