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Badge v Smithdene Pty Ltd

Badge v Smithdene Pty Ltd

Case [2021] FCCA 1195 31 May 2021

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FEDERAL CIRCUIT COURT OF AUSTRALIA
Badge v Smithdene Pty Ltd [2021] FCCA 1195

File number(s): MLG 2343 of 2016

Judgment of: JUDGE RIETHMULLER

Date of judgment: 31 May 2021

Catchwords: BANKRUPTCY – costs application – allowed

Legislation:
Bankruptcy Act 1966 (Cth) ss 81, 120, 139D, 139E

Federal Circuit Court Rules 2001

Federal Circuit Court (Bankruptcy) Rules 2016, r. 13.01

Federal Court Rules 2011, rr. 25.03, 25.12, 40

Cases cited:
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119

Bitek Pty Ltd v IConnect Pty Ltd [2012] FCA 506 at [18]; 290 ALR 288

Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330

Foley v Gay [2016] FCA 273

Law Society of New South Wales v Foreman’s (No 2) [2994] NSWCA 69; (1994) 34 NSW LR 408

LFDB V Ms S M (No 2) [2018] FCA 2062

Seven Network Ltd v News Ltd [2007] FCA 2059

Specsavers Pty Ltd v The Optical Superstore Pty Ltd (No 4) [2012] FCA 652,

Number of paragraphs: 53

Date of last submissions: 23 November 2020

Date of hearing: 23 November 2020

Place: Melbourne (via Microsoft Teams)

Table of Corrections

3 June 2021 In cover page appearances ‘Mr Morris’ added as Counsel for the Applicant.

3 June 2021 In Order 1 the letter‘s’ added to the word ‘Respondent’ to read as ‘Respondents’.

3 June 2021 ‘Judge’ added to cover page for ‘Judgment of’ to read as ‘Judge Riethmuller’

3 June 2021 ‘Judge’ added to orders page to read as ‘Order made by Judge Riethmuller’.

Solicitor for the Applicant: Hutchinson Legal

Counsel for the Applicant: Mr Bigmore and Mr Morris

Solicitor for the Respondents: Thomas Egan & Associates

Counsel for the Respondents: Mr Moon
ORDERS

MLG 2343 of 2016

IN THE MATTER OF MICHAEL DAVID BADGE

BETWEEN:
MICHAEL DAVID BADGE

Applicant

AND:
SMITHDENE PTY LTD

First Respondent

AND:
JOAN WENDY MEURS

Second Respondent

ORDER MADE BY:

JUDGE RIETHMULLER

DATE OF ORDER:

31 May 2021

THE COURT ORDERS THAT:
1.The Respondents pay the Applicant’s costs fixed in the sum of $251,972.32.

REASONS FOR JUDGMENT
JUDGE RIETHMULLER:
BACKGROUND

The applicant in this matter seeks costs, following the settlement of proceedings, to recover assets from the respondents. The proceedings were settled between the parties in April 2020 for the sum of $100,000.00, following the acceptance of a formal offer made by the respondents.
Procedural history
The proceedings have had a long and complex procedural history, far greater than most cases in this jurisdiction. Following commencement of proceedings, the respondents filed a defence and requested further and better particulars of the Statement of Claim in December 2016. A number of interlocutory events were undertaken leading up to a Mediation before a Registrar of the Court in August 2017.
Following the mediation, the applicant was ordered to file and serve Affidavit material by November 2017. In September 2017, the applicant served an Amended Statement of Claim. The matter was listed for hearing in mid-2018.
In early 2018, an…

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.

Continue reading Badge v Smithdene Pty Ltd

Details

AGLC: Badge v Smithdene Pty Ltd [2021] FCCA 1195
Case: [2021] FCCA 1195
Decision Date: 31 May 2021

CaseChat Overview and Summary

In *Badge v Smithdene Pty Ltd*, the applicant sought an order for costs against the respondents following bankruptcy proceedings. The matter came before Judge Riethmuller.

The central legal issue before the court was the determination of the quantum of costs to be awarded to the applicant, specifically focusing on what costs were "fairly and reasonably" incurred, having regard to the principles of proportionality in litigation.

Judge Riethmuller reasoned that while the total expenditure by both parties on the litigation was substantial, the awarded costs should reflect a proportionate amount relative to the issues, complexity, length, and value of the proceedings. Applying this principle, the court fixed the costs payable by the respondents to the applicant at $251,972.32. The court ordered that the respondents pay the applicant’s costs fixed in the sum of $251,972.32.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. The Respondents pay the Applicant’s costs fixed in the sum of $251,972.32.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I would order $20,000 with respect to the costs application (inclusive of the fee to the cost assessor).CONCLUSION The total that I have reached is $251,972.32 I note that this figure less than two thirds of the amount that either side actually spent on the litigation, however it is a figure that represents the amount of costs ‘fairly and reasonably’ incurred as contemplated by the rules bearing in mind the need for proportionality of costs to the issues, complexity, length and value of the litigation. I therefore order the respondents to pay the applicant costs fixed to $251,972.32.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citations

AGLC Citation

Badge v Smithdene Pty Ltd [2021] FCCA 1195

Most Recent Citation

Boros v Pages Property Investments Pty Ltd, in the matter of Boros (No 2) [2021] FedCFamC2G 377

Cases citing this decision · 2 of 2 shown

Boros v Pages Property Investments Pty Ltd, in the matter of Boros (No 2)
[2021] FedCFamC2G 377 Para 8

…es Kedesch Mitchell (No 2) [2020] NSWSC 1513, [23]-[25]; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121, [8] and Badge v Smithdene Pty Ltd [2021] FCCA 1195, [21]-[25]. I consider it is appropriate to accept the respondent’s submission and that costs of $28,328.85 should be ordered to be payable consequent…
Bates v Bechara (No 2)
[2021] FCCA 1809

…FCA 332 Badge v Smithdene Pty Ltd [2021] FCCA 1195 Baghti & Baghti [2012] FamCA 711 Bates v Bechara [2021] FCCA 1693 Bechara v Bates (2021) 388 ALR 414 Bechara v Bates (No 2) [2020] FCA 659 Bechara v Bates (No 3) [2015] NSWSC 1588 Bechara v Bates (No 4) [2015] NSWSC 1722 Bechara v Bates [2018] FCA 460 Boensch v Som…

View all 2 citing cases →

Cases cited in this decision · 13 of 13 shown

LFDB v MS S M (No 2)
[2018] FCA 2062 Para 22

…ed to the comments of Kenny J in Bitek Pty Ltd v IConnect Pty Ltd [2012] FCA 506 at [18]; 290 ALR 288, affirmed by Markovic J in LFDB V Ms S M (No 2) [2018] FCA 2062 at paragraph [8], noting that costs should be proportionate to the nature of the proceedings, including the complexity of the case. It appears to me…
Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (in liq) (No 3)
[2017] FCA 330 Para 24

…In the later decision of Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330 (‘ Blairgowrie Trading Ltd ’), His Honour said: 181.But what is claimed for legal costs should not be disproportionate to the nature of the context, the litigation involved an…
Foley v Gay
[2016] FCA 273 Para 23

…Proportionality is often difficult to assess in complex litigation. Beach J said, in Foley v Gay [2016] FCA 273 that: 24.Proportionality looks to the expected realistic return at the time the work being charged for was performed, not the known return at a time remote from when the work was performed; at the later…
Specsavers Pty Ltd v The Optical Superstore Pty Ltd (No 4)
[2012] FCA 652 Para 16

…eved, therefore, does not present a basis for denying costs. The references in argument to Specsavers Pty Ltd v The Optical Superstore Pty Ltd (No 4) [2012] FCA 652, a case in which costs were reduced as a result of the failure of a party to respond to overtures to settle proceedings, do not appear in this case,…
Bitek Pty Ltd v IConnect Pty Ltd
[2012] FCA 506 Para 22

…Counsel for the respondents referred to the comments of Kenny J in Bitek Pty Ltd v IConnect Pty Ltd [2012] FCA 506 at [18]; 290 ALR 288, affirmed by Markovic J in LFDB V Ms S M (No 2) [2018] FCA 2062 at paragraph [8], noting that costs should be proportionate to the nature of the proceedings, including the comple…
Seven Network Limited v News Limited
[2007] FCA 2059 Para 21

…Johnson (No 2) (1995) 57 FCR 119 at paragraph [120]. The expert also noted the comments of Sackville J in Seven Network Ltd v News Ltd [2007] FCA 2059. His Honour’s comments in that decision at paragraphs [25] to [30] bear repeating: 25.The authorities establish a number of principles applicable to a claim for a…
Harrison v Schipp
[2002] NSWCA 213 Para 21

…taxation: Beach Petroleum v Johnson (No 2) , at 120, per von Doussa J, applying Leary v Leary [1987] 1 All ER 261; Harrison v Schipp (2002) 54 NSWLR 738, at 742 [21] per Giles JA. (ii)An order that costs be assessed as a gross sum does not envisage that any process similar to that involved in taxation should take pla…
Charlick Trading Pty Ltd v Australian National Railways Commission
[2001] FCA 629 Para 21

…lls Ltd (1999) 93 FCR 1, at 4-5 [12]-[15], per O’Loughlin J; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629, at [6]-[8], per Mansfield J. (v)Although the methodology permitted by O 62 r 4(2)(c) initially involves a broader approach than on a normal taxation, the provisions of O…
Auspine Ltd v Australian Newsprint Mills Ltd
[1999] FCA 673 Para 21

…done, not upon the propriety of steps taken to ensure maximum success in the cause): Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1, at 4-5 [12]-[15], per O’Loughlin J; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629, at [6]-[8], per Mansfield J. (v)Although the meth…
Easterday, Clark Ervin v Australian Securities Commission
[1996] FCA 793 Para 21

…delay and aggravation involved in protracted litigation, arising out of the taxation of costs: see Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at paragraph [120]. The expert also noted the comments of Sackville J in Seven Network Ltd v News Ltd [2007] FCA 2059. His Honour’s comments in that decision at pa…
Beach Petroleum NL v Johnson
[1993] FCA 392 Para 21

…Both parties ask the court for a lump sum amount for costs, as contemplated by the FCA’s ‘Costs Practice Note (GPN-COSTS)’ dated 25 October 2016 (‘FCA Costs Practice Note’). The parties expressed real concerns about the costs that would be involved if a formal taxation of costs occurred pursuant to …
Stanley v Phillips
[1966] HCA 24 Para 21

…include the principles contained in O 62 r 19 (embodying the ‘ necessary or proper ’ test) and those stated in Stanley v Phillips (1966) 115 CLR 470, at 478, per Barwick CJ (on a party and party taxation the emphasis is upon obtaining adequate representation to enable justice to be done, not upon the propriety of ste…
[2994] NSWCA 69
[2994] NSWCA 69

…td (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330 Foley v Gay [2016] FCA 273 Law Society of New South Wales v Foreman’s (No 2) [2994] NSWCA 69; (1994) 34 NSW LR 408 LFDB V Ms S M (No 2) [2018] FCA 2062 Seven Network Ltd v News Ltd [2007] FCA 2059 Specsavers Pty Ltd v The Optical Superstore Pty Ltd…

Legislation cited in this decision · 4

Bankruptcy Act 1966 (Cth)
120, 139D, 139E, 81 5 mentions (from Para 5)
Federal Court Rules 2011 (Cth)
25.03, 25.12, 40 4 mentions (from Para 15)
Federal Circuit Court (Bankruptcy) Rules 2016 (Cth)
13.01 2 mentions (from Para 16)
Federal Circuit Court Rules 2001 (Cth)
1 mention (from Para 15)

File number(s):	MLG 2343 of 2016
Judgment of:	JUDGE RIETHMULLER
Date of judgment:	31 May 2021
Catchwords:	BANKRUPTCY – costs application – allowed
Legislation:	Bankruptcy Act 1966 (Cth) ss 81, 120, 139D, 139E Federal Circuit Court Rules 2001 Federal Circuit Court (Bankruptcy) Rules 2016, r. 13.01 Federal Court Rules 2011, rr. 25.03, 25.12, 40
Cases cited:	Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 Bitek Pty Ltd v IConnect Pty Ltd [2012] FCA 506 at [18]; 290 ALR 288 Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330 Foley v Gay [2016] FCA 273 Law Society of New South Wales v Foreman’s (No 2) [2994] NSWCA 69; (1994) 34 NSW LR 408 LFDB V Ms S M (No 2) [2018] FCA 2062 Seven Network Ltd v News Ltd [2007] FCA 2059 Specsavers Pty Ltd v The Optical Superstore Pty Ltd (No 4) [2012] FCA 652,
Number of paragraphs:	53
Date of last submissions:	23 November 2020
Date of hearing:	23 November 2020
Place:	Melbourne (via Microsoft Teams)

Table of Corrections
3 June 2021	In cover page appearances ‘Mr Morris’ added as Counsel for the Applicant.
3 June 2021	In Order 1 the letter‘s’ added to the word ‘Respondent’ to read as ‘Respondents’.
3 June 2021	‘Judge’ added to cover page for ‘Judgment of’ to read as ‘Judge Riethmuller’
3 June 2021	‘Judge’ added to orders page to read as ‘Order made by Judge Riethmuller’.

Solicitor for the Applicant:	Hutchinson Legal
Counsel for the Applicant:	Mr Bigmore and Mr Morris
Solicitor for the Respondents:	Thomas Egan & Associates
Counsel for the Respondents:	Mr Moon

MLG 2343 of 2016
IN THE MATTER OF MICHAEL DAVID BADGE
BETWEEN:	MICHAEL DAVID BADGE Applicant
AND:	SMITHDENE PTY LTD First Respondent
AND:	JOAN WENDY MEURS Second Respondent

ORDER MADE BY:	JUDGE RIETHMULLER
DATE OF ORDER:	31 May 2021