Boros v Pages Property Investments Pty Ltd, in the matter of Boros (No 2)

[2021] FedCFamC2G 377

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

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

File number(s):	MLG 1307 of 2021
Judgment of:	JUDGE A KELLY
Date of judgment:	23 December 2021
Catchwords:	BANKRUPTCY – COSTS – Where orders made affirming orders made by registrar – where orders made dismissing an application for review – where orders made dismissing an application for extension of time – where applicant submitted costs be paid to respondent as agreed or taxed and no special costs order should be made – where respondent submitted applicant pay costs on indemnity basis – costs should follow event – applicable principles – quantification of costs.
Cases cited:	Badge v Smithdene Pty Ltd [2021] FCCA 1195 Boros v Pages Property Investments Pty Ltd, in the matter of Boros [2021] FedCFamC2G 118 Burns v Media Options Group Pty Ltd and Ors (No 2) [2013] FCCA 2016 Calderbank v Calderbank [1975] 3 All ER 333 Colgate Palmolive Co v Cussens Pty Ltd (1993) 46 FCR 225 Oshlack v Richmond City Council (1998) 193 CLR 72 Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 The Estate of Frances Kedesch Mitchell (No 2) [2020] NSWSC 1513 Umoona Tjutagku Health Service Aboriginal Corporation v Walsh (2019) 268 FCR 401
Division:	Division 2 General Federal Law
Number of paragraphs:	8
Date of last submission/s:	12 October 2021
Date of hearing:	On the papers
Place:	Melbourne
Solicitor for the Applicant:	Craddock Murray Neumann
Solicitor for the Respondent:	WMD Law

ORDERS

MLG 1307 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

ATTILA BOROS

Applicant

AND:

PAGES PROPERTY INVESTMENTS PTY LTD

Respondent

ORDER MADE BY:	JUDGE A KELLY
DATE OF ORDER:	23 DECEMBER 2021

THE COURT ORDERS THAT:

1.The applicant pay the respondent’s costs fixed in the sum of $28,328.85.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT

JUDGE A KELLY

Introduction

1. These reasons explain why orders for costs have been made in relation to the applicant debtor’s application for review of the exercise of power by a registrar who made an order dismissing an application to set aside a second bankruptcy notice.  They should be read in conjunction with the reasons published on 6 October 2021, being Boros v Pages Property Investments Pty Ltd, in the matter of Boros [2021] FedCFamC2G 118.

2. On 6 October 2021, orders were made affirming an order by a registrar on 19 August 2021 to extend compliance with a bankruptcy notice BN 253121 (second notice) to 26 August 2021 while dismissing an application filed on 18 June 2021 to set aside the second notice with costs.

3. Pursuant to that order, the parties were afforded an opportunity to file submissions in relation to costs.  The respondent sought its costs of the application on an indemnity basis and in a gross sum of $28,328.85.  The application for costs was grounded upon a Calderbank letter served by the respondent on 15 September 2021 to which no reply was received together with other factors as identified in its submissions.

4. The applicant, who accepted that costs should follow the event, submitted he should be ordered to pay the respondent’s costs as agreed or taxed.  The history of the parties’ litigation confirms that there is no utility in the adoption of a course that would provide for the costs to be agreed between the parties.  Likewise, having regard to the relatively modest sum being claimed, I consider the court should adopt its usual practice of fixing the costs in a gross sum. 

5. The applicant also sought no special costs order should be made and that an award of indemnity costs was not justified as there were no special or unusual features in the proceedings which indicate conduct that was plainly unreasonable or involved some ‘delinquency’ which would warrant a departure from the usual course that costs be paid ordinarily.  I disagree.

6. The principles governing the award of costs on an indemnity basis are well-settled and have been frequently summarised: see, eg, Colgate Palmolive Co v Cussens Pty Ltd (1993) 46 FCR 225, 233-234; Oshlack v Richmond City Council (1998) 193 CLR 72, [44]; Umoona Tjutagku Health Service Aboriginal Corporation v Walsh (2019) 268 FCR 401 at [46]-[49]; and Burns v Media Options Group Pty Ltd and Ors (No2) [2013] FCCA 2016 at [12]-[13]. The making of an order for costs entails the exercise of discretion.

7. The applicant properly accepted that the offer was made in accordance with the settled principles governing the making of such an offer: Calderbank v Calderbank [1975] 3 All ER 333. The respondent correctly submitted the applicant’s refusal – including his failure to respond to service – of a Calderbank offer made on 15 September 2021 was unreasonable.  By that letter, the respondent communicated its preparedness to forgo substantial costs in exchange for the discontinuance of the application.  The applicant obtained a less favourable result than the offer made, one factor which supports the award of costs on an indemnity basis.  The procedural history in Boros v Pages Property Investments Pty Ltd, in the matter of Boros [2021] FedCFamC2G 118 amply supports an inference that the applicant has been quite prepared to deploy litigation including in this proceeding as a delaying tactic and to do so in circumstances where the application had no real prospect of success.

8. The evidence before me indicates that the respondent’s costs and disbursements in the proceeding are nearly $31,500 and that it submits a gross sum of $28,328.85 is appropriate.  Reference was made to the principles stated in The Estate of Frances 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 upon these reasons for judgment.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of Judge A Kelly.

Associate:

Dated:       23 December 2021