Cetinkaya v Official Trustee in Bankruptcy

This appeal concerns the question of who should bear the costs, given that the continuation of the appeal has become futile and has therefore been discontinued. The case is an appeal from a decision of the Federal Magistrates Court in Cetinkaya v Official Trustee in Bankruptcy [2011] FMCA 288. The Cetinkayas, who were bankrupts, sought to challenge the conduct of the Official Trustee, who was the trustee of their bankrupt estates, in relation to a proceeding they had commenced against Unal in the County Court of Victoria. The appeal was ultimately discontinued due to the futility of continuing it.

The primary legal issue before the court was whether rule 36.73(4) of the Federal Court Rules should determine the costs in this case, given that notice of discontinuance was filed. Additionally, the court had to decide if an adverse costs order was justified due to the unreasonable conduct of a party. The court examined whether the Cetinkayas' appeal was unreasonably commenced or whether any party acted unreasonably in the conduct of the appeal.

The court held that no order as to costs should be made. The strict application of rule 36.73(4) would result in injustice, as the consent orders impliedly granted the Cetinkayas leave to withdraw and reserved the question of costs if they did. Despite the terms of the rule, the question of costs falls to be considered in accordance with the court's discretion. The court found that the appeal had become futile and that no party sought its continuance. Furthermore, there was no basis for an order that the Cetinkayas pay the costs of the appeal to either Unal or the Official Trustee. The court was not satisfied that the appeal was unreasonably commenced, and there was no allegation of unreasonable conduct by the Cetinkayas.

ORDERS:
1. There be no order as to the costs of the appeal.