Credit Solutions Group Pty Ltd v Russell
[2018] FCCA 1303
•25 May 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CREDIT SOLUTIONS GROUP PTY LTD v RUSSELL | [2018] FCCA 1303 |
| Catchwords: COSTS – Applicant’s applications for costs of the adjournment and costs in the proceedings generally – orders made for the filing of evidence and written submissions in support of costs applications – no documents filed by the applicant – no order as to costs. |
| Legislation: Bankruptcy Act 1966 (Cth), s.43 Federal Circuit Court of Australia Act 1999 (Cth), s.79 |
| Cases Cited: Yates Property Corp Pty Ltd v John Boland & Ors [1997] FCA 760; (1997) 147 ALR 685 |
| Applicant: | CREDIT SOLUTIONS GROUP PTY LTD ACN 104529875 |
| Respondent: | BRIAN BENJAMIN RUSSELL |
| File Number: | SYG 697 of 2016 |
| Judgment of: | Judge Nicholls |
| Hearing date: | Matter determined on the papers |
| Date of Last Submission: | 3 May 2018 |
| Delivered at: | Sydney |
| Delivered on: | 25 May 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr D F Elliot |
| Solicitors for the Applicant: | Spectrum Legal Group |
| Respondent: | In person via video-link |
ORDERS
The applicant’s applications for costs made on 27 October 2017 and 3 April 2018 are dismissed.
There be no order as to costs.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 697 of 2016
| CREDIT SOLUTIONS GROUP PTY LTD ACN 104529875 |
Applicant
And
| BRIAN BENJAMIN RUSSELL |
Respondent
REASONS FOR JUDGMENT
Credit Solutions Group Pty Ltd ACN 104529875 (“Credit Solutions”) has made two applications for costs in this matter. One, the costs of an adjournment of the final hearing in this matter which was sought by, and granted to, Mr Russell. Two, costs in the proceedings in general.
The substantive matter involved a creditor’s petition made by Credit Solutions seeking that a sequestration order be made pursuant to s.43 of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”) against Mr Russell’s estate.
The final hearing in the matter was set down for 17 October 2017. This was later rescheduled to 27 October 2017. On that date, Credit Solutions was represented by counsel. Mr Russell represented himself and appeared via video-link. Mr Russell sought an adjournment of the final hearing, primarily for the reason that he was, at that time, incarcerated, which limited his ability to properly prepare for a final hearing.
Mr Russell was granted an adjournment. Orders made by the Court on 27 October 2017, amongst other things, listed the matter for final hearing on 3 April 2018, and provided time for the filing of further evidence by the parties. Credit Solutions made an application for their costs thrown away as a result of the adjournment application, and this application was also set down for hearing on 3 April 2018.
On 3 April 2018, Credit Solutions was again represented by counsel and Mr Russell appeared in person via video-link. Credit Solutions conceded that they could not proceed on the creditor’s petition as it had expired on 24 March 2018 (pursuant to an order made by the Court on 1 May 2017). An order was made that the creditor’s petition be dismissed.
Credit Solutions pressed their application for costs thrown away as a result of the adjournment. They also made an application for costs in the proceedings in general.
Orders were made that Credit Solutions file and serve evidence by way of affidavit, and written submissions in support of their two applications for costs by 13 April 2018 and for Mr Russell to file and serve evidence by way of affidavit and written submissions in reply by 27 April 2018.
The parties agreed that the costs applications were to be decided “on the papers”, unless the Court required anything further from the parties.
Credit Solutions did not file any evidence, or written submissions in support of their applications for costs by the required date (or at all). Mr Russell also did not file any documents by 27 April 2018.
On 3 May 2018, Mr Russell filed written submissions and an affidavit. He noted that Credit Solutions had not filed anything in support of their applications for costs, and sought an order that there be no order as to costs.
As is often said, costs follow the event. The event in the substantive proceedings was that the creditor’s petition was dismissed. Mr Russell was the successful party. He has not sought costs. In relation to the adjournment, Mr Russell was also successful in his application to adjourn the final hearing. Again, he has not sought costs for this.
Credit Solutions has sought costs for both of these events. Despite opportunity to provide argument, and any evidence on which to base such argument, Credit Solutions has elected not to do so.
In relation to the substantive outcome, the dismissal of the application followed the expiration of the creditor’s petition. Parties, particularly when represented by solicitors, must accept responsibility for allowing such an outcome. No application was made before the expiry of the time, for an extension of the time within which to comply with the relevant bankruptcy notice.
In these circumstances, and in the absence of any evidence from Credit Solutions, it cannot be said that Credit Solutions’ legal costs were incurred as a result of any conduct by Mr Russell. Nor is there any other factor in the circumstances that would argue in favour of the making of a costs order.
In relation to the adjournment, as set out above, Mr Russell was successful. However, it may have been the case that Credit Solutions could have raised some argument (supported by evidence) that it incurred legal costs in circumstances where its legal representatives attended Court at the final hearing on 27 October 2017, and were prepared to proceed on their application.
However, it is Credit Solutions that has made the application for costs. The absence of argument, and any evidence in support from Credit Solutions, means the application is left unexplained. It is not for the Court to speculate as to what may otherwise have been the relevant argument or submission.
Costs are awarded in the exercise of the Court’s discretion. Section 32 of the Bankruptcy Act provides the power to the Court, as a Court of bankruptcy, to make a costs order in a bankruptcy matter in which the application has been dismissed. Rule 13.01 of the Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) sets out the bases on which such a costs order may be may be made. The power to award costs also derives from s.79 of the Federal Circuit Court of Australia Act 1999 (Cth). The power to award costs is unfettered, but plainly it must be exercised judicially in the context of the Federal Circuit Court Rules 2001 (Cth) (see Yates Property Corp Pty Ltd v John Boland & Ors [1997] FCA 760; (1997) 147 ALR 685).
As the party that seeks costs, Credit Solutions’ lack of argument and evidence, despite opportunity to provide both, means that it has not sought to engage with the consideration of the exercise of the Court’s discretion.
Conclusion
In the circumstances, both applications for costs are to be dismissed. The order that I will also make is that there be no order as to costs in this matter.
I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judge Nicholls
Date: 25 May 2018
Key Legal Topics
Areas of Law
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Insolvency
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Civil Procedure
Legal Concepts
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Costs
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Jurisdiction
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