Batterham v Goldberg Trading as Turner Freeman - [2014] FCCA 302

FEDERAL CIRCUIT COURT OF AUSTRALIA

BATTERHAM v GOLDBERG TRADING AS TURNER FREEMAN & ORS

[2014] FCCA 302

Catchwords:
BANKRUPTCY – Bankruptcy notice – application to set aside bankruptcy notice – where applicant involved in prior proceedings – where applicant’s solicitors changed during prior proceedings – where applicant’s second solicitors retained the same counsel – where counsel appeared on behalf of applicant in High Court proceedings – where neither counsel nor solicitors had entered into the form of costs agreement required under the Legal Profession Act 2004 (NSW) with applicant – where an account submitted to applicant by solicitors for disbursement of counsel’s fees – where fees not paid – where costs assessment sought on solicitor client basis – where costs assessor’s decision not disputed and bankruptcy notice issued – whether solicitors were correct creditor for the purpose of the bankruptcy notice – where High Court decision includes the phrase “Appeal dismissed with costs” – whether High Court Rules extend power of that court to taxation of costs on solicitor and own client basis – whether assessment of solicitor and own client costs should be made in High Court – whether costs certificate invalid and judgment obtained in Local Court void – whether provisions of Legal Profession Act and Legal Profession Rules 2004 (NSW) constitute a code – whether provisions of Legal Profession Act and Legal Profession Rules 2004 (NSW) inconsistent with provisions of High Court of Australia Act 1979 (Cth) and High Court Rules 2004 (Cth) and invalid – application dismissed.

Legislation:

Legal Profession Act2004 (NSW)
Australian Constitution s.109
Bankruptcy Act 1966 (Cth)

Abigroup Ltd v Abignano (1992) 112 ALR 497
Batterham v QSR Ltd (2006) 225 CLR 237
Berowra Holdings Propriety Ltd v Gordon (2006) 225 CLR 364
Woolf v Snipe (1933) 48 CLR 677

Applicant:

PETER JAMES BATTERHAM

First Respondent:

TERENCE LOUIS GOLDBERG TRADING AS TURNER FREEMAN

Second Respondent:

ARMANDO GARDIMAN TRADING AS TURNER FREEMAN

Third Respondent:

THADY BLUNDELL TRADING AS TURNER FREEMAN

File Number:

SYG 3219 of 2013

Judgment of:

Judge Raphael

Hearing date:

13 February 2014

Date of Last Submission:

13 February 2014

Delivered at:

Sydney

Delivered on:

13 February 2014

REPRESENTATION

Counsel for the Applicant:

Mr P E King

Solicitors for the Applicant:

Robert Balzola and Associates

Counsel for the Respondents:

Mr Golledge

Solicitors for the Respondents:

Sally Nash & Co

ORDERS

Application dismissed.
The applicant to pay the respondents’ costs, including any reserved costs, to be taxed if not agreed in accordance with the Federal Circuit Court (Bankruptcy) Rules 2006 (Cth).

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 3219 of 2013

PETER JAMES BATTERHAM

Applicant

And

TERENCE LOUIS GOLDBERG TRADING AS TURNER FREEMAN

Respondent

ARMANDO GARDIMAN TRADING AS TURNER FREEMAN

Respondent

THADY BLUNDELL TRADING AS TURNER FREEMAN

Respondent

REASONS FOR JUDGMENT

There comes before the court the hearing of an amended application to set aside bankruptcy notice BN166203 issued on 18 October 2013 and for a declaration that the bankruptcy notice is defective and invalid. Although there are a number of…

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: [2014] FCCA 302
Decision Date: 13 February 2014

CaseChat Overview and Summary

The applicant, Mr. Batterham, sought to set aside a bankruptcy notice issued by the respondent, Goldberg, trading as Turner Freeman. The dispute arose from unpaid legal fees incurred by Mr. Batterham in prior High Court proceedings. Mr. Batterham's solicitors had changed during these proceedings, but the same counsel was retained. Crucially, neither the solicitors nor counsel had entered into the form of costs agreement required by the *Legal Profession Act 2004* (NSW). An account was rendered for disbursement of counsel's fees, which remained unpaid, leading to a costs assessment sought on a solicitor-client basis. This assessment was not disputed, and the bankruptcy notice was subsequently issued.

The primary legal issues before the court were whether the solicitors were the correct creditor for the purpose of the bankruptcy notice, and whether the High Court's power, as extended by its Rules, encompassed the taxation of costs on a solicitor and own client basis. Further questions arose regarding whether an assessment of solicitor and own client costs should have been made in the High Court, whether a costs certificate was invalid, and consequently, whether a judgment obtained in the Local Court was void. The court also considered whether the provisions of the *Legal Profession Act 2004* (NSW) and its associated Rules constituted a code, and if so, whether they were inconsistent with and therefore invalid by reason of the provisions of the *High Court of Australia Act 1979* (Cth) and the *High Court Rules 2004* (Cth).

Judge Raphael reasoned that the *Legal Profession Act 2004* (NSW) and its Rules did not operate to invalidate the costs assessment or the subsequent judgment. The court found that the provisions of the NSW Act and Rules were not inconsistent with the Commonwealth legislation and Rules governing the High Court. The assessment of costs, even on a solicitor-client basis, was considered valid, and the solicitors were therefore the correct creditor for the bankruptcy notice. The application to set aside the bankruptcy notice was dismissed.

Orders