Black v Mills (No.5)
[2019] FCCA 841
•9 May 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BLACK v MILLS (No.5) | [2019] FCCA 841 |
| Catchwords: COSTS – Application by unsuccessful petitioning creditor – short form bill of costs – debt paid in part – solvency established – doubt over balance of the asserted debt – conduct of the respondent – no order as to costs. |
| Legislation: Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) Federal Court Rules 2011 (Cth) |
| Cases cited: Black v Mills (No 2) [2015] FCCA 1973 Black v Mills (No 3) [2017] FCCA 380 Black v Mills (No 4) [2019] FCCA 129 Cachia v Hanes (1994) 120 ALR 385 |
| Applicant: | RICHARD BLACK |
| Respondent: | BERNADETTE MILLS |
| File Number: | SYG 556 of 2018 |
| Judgment of: | Judge Driver |
| Hearing date: | 2 April 2019 |
| Date of last submission: | 5 April 2019 |
| Delivered at: | Sydney |
| Delivered on: | 9 May 2019 |
REPRESENTATION
| The Applicant appeared in person |
| The Respondent appeared in person |
ORDERS
There be no order as to costs in respect of the creditor’s petition presented on 2 March 2018 and subsequently amended.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 556 of 2018
| RICHARD BLACK |
Applicant
And
| BERNADETTE MILLS |
Respondent
REASONS FOR JUDGMENT
Introduction and background
On 28 February 2019, I gave judgment in the principal proceedings in this matter.[1] In that judgment, I dismissed the creditor’s petition presented by Mr Black against Ms Mills, finding that Ms Mills had established solvency. While not deciding the issue, I also noted doubts concerning the underlying debt claimed.
[1] Black v Mills (No 4) [2019] FCCA 129
Notwithstanding the outcome in the principal proceedings, Mr Black has sought a costs order. I heard that costs application on 2 April 2019 and reserved judgment on it.
Consideration
Ordinarily, costs follow the event. The fact that Mr Black was unsuccessful on the petition prima facie indicates that no costs order should be made in his favour. Ms Mills represented herself and makes no application for costs. Mr Black also represented himself but he is a solicitor and I accept that a lawyer in person may recover legal costs.[2]
[2] Cachia v Hanes (1994) 120 ALR 385
Rule 13.03(2) of the Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) (Federal Circuit Court Bankruptcy Rules), applying the rules of the Federal Court of Australia in bankruptcy, makes provision for the recovery of costs by an unsuccessful petitioning creditor on the dismissal of the petition. A short form bill scale of costs is prescribed under the Federal Court Rules 2011 (Cth) (Federal Court Rules) which are applied in this Court. Mr Black’s claim for costs is limited to the costs allowable under item 14.2 of Schedule 3 to the Federal Court Rules ($2,088) and disbursements ($2,290) pursuant to rule 13.03(3)(b) of the Federal Circuit Court Bankruptcy Rules. The total claim is $4,378.
The provision for costs on dismissal of a petition covers circumstances where, for example, there has never been any doubt (or any real doubt) that a debt was due and payable to the petitioning creditor but the debtor has been tardy in paying it. In those circumstances, where the debt is ultimately paid and the petition is dismissed, it is frequently appropriate to make a costs order in favour of the petitioning creditor to compensate the creditor for some of the costs incurred on the petition. There is, however, no entitlement to costs of a petition, regardless of the outcome. It depends on the circumstances.
The circumstances in the present matter are that Mr Black had secured a judgment debt, to which he added costs awarded against Ms Mills in earlier bankruptcy proceedings in this Court.[3]
[3] In Black v Mills (No 2) [2015] FCCA 1973 the Court awarded Mr Black costs thrown away following the setting aside of earlier orders at the request of Ms Mills
Ms Mills did not comply with the bankruptcy notice served upon her, which led to the present petition. The creditor’s petition was presented on 2 March 2018 and there were numerous interlocutory hearings. Ms Mills opposed the petition on the basis that there was in reality no debt and also on the basis of solvency, which was ultimately established.
Mr Black maintains that he should receive a costs award because of alleged unconscionable conduct by Ms Mills in her conduct of the proceedings. He asserts that Ms Mills has been inconsistent and argumentative and had engaged in excessive delay in dealing with that part of the debt claimed under the petition which was indisputable.
For her part, Ms Mills contends that the present petition should never have been brought. She maintains that she has been unreasonably pursued by Mr Black over several years for a debt which, on her analysis, does not exist.
An earlier petition brought by Mr Black against Ms Mills was dismissed. The Court refused to make a costs order on the dismissal of that petition.[4] The Court found that Ms Mills in that case had not acted unreasonably in contesting the petition and that there was real doubt over both the issue of solvency and the issue of the existence of the debt.
[4] Black v Mills (No 3) [2017] FCCA 380
Given the litigation history of this matter, Mr Black must have known that bringing a second petition was attended by significant risks. The debt was small and, for the greater part, the debt was both contested and contestable. Solvency was also an issue and ultimately Ms Mills paid that part of the debt which was incontestable.
I do not accept that Ms Mills has behaved unconscionably in her conduct of this case. She is a litigant in person who has experienced intense frustration in seeking to rid herself of the debt claims brought against her by Mr Black. The amounts in issue have been small and Ms Mills has established that she could pay them but she does not see why she should, when she does not accept that Mr Black ever acted for her as a legal practitioner. Ms Mills has taken some licence in her descriptions of Mr Black, to which he takes exception, but, in my view, some allowance needs to be made in the conduct of proceedings by litigants in person. I am not persuaded that the conduct of these proceedings by Ms Mills calls for an award of costs.
Conclusion
The appropriate order, in my opinion, is an order that there be no order as to costs.
That is the order which I shall make.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge Driver
Date: 9 May 2019
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