Bechara v Reidy

In *Bechara v Reidy*, heard before Judge Barnes of the Federal Circuit Court of Australia, the applicants sought an order under section 58(3) of the *Bankruptcy Act 1966* (Cth). The application was dismissed by the Court pursuant to rule 13.03C(1)(c) of the *Federal Circuit Court Rules 2011* (Cth) due to the non-appearance of the applicants. Following this dismissal, the respondent sought an order for costs against the applicants.

The central legal issue before the Court was whether it possessed the power to award costs in favour of a non-party, and if so, what factors were relevant to the exercise of that discretion. The Court was required to consider the scope of its general power to award costs and the specific circumstances that might justify departing from the usual rule that costs follow the event, particularly when the costs are sought against a party who was not directly involved in the substantive proceedings.

Judge Barnes reasoned that the Court's general power to award costs under the *Federal Circuit Court Rules* extends to ordering costs in favour of a non-party in exceptional circumstances. The Court considered the principles established in cases concerning non-party costs, noting that such orders are not to be made lightly. The discretion to award costs against a non-party requires a careful balancing of various factors, including the non-party's involvement in the litigation, the potential for abuse of process, and the overall justice of the case. In this instance, the Court found that the circumstances warranted the exercise of its discretion to award costs in favour of the respondent.