FEDERAL COURT OF AUSTRALIA
Culleton v Balwyn Nominees Pty Ltd (No 2) [2017] FCAFC 12
Appeal from: Balwyn Nominees Pty Ltd v Culleton [2016] FCA 1578 File number(s): WAD 2 of 2017 Judge(s): ALLSOP CJ, DOWSETT AND BESANKO JJ Date of judgment: 10 February 2017 Catchwords: BANKRUPTCY AND INSOLVENCY – where appellant’s appeal against making of a sequestration order dismissed – where respondent awarded costs – where respondent sought to vary terms of costs order – whether costs of creditor respondent should be taxed and paid out of the appellant’s estate in accordance with s 109(1)(a) Bankruptcy Act 1966 (Cth) Legislation: Bankruptcy Act 1966 (Cth) s 109 Cases cited: Guss v Johnstone [2000] FCA 1584
Joossé v Deputy Commissioner of Taxation [2004] FCAFC 245; 137 FCR 576
Mearns v Australian Litigation Fund Pty Ltd [2006] FCAFC 168
Date of hearing: Determined on the papers Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 10 Counsel for the Appellant: Mr PE King Solicitor for the Appellant: Maitland Lawyers Counsel for the Respondent: Mr MG Lundberg and Mr A Rompotis Solicitor for the Respondent: King & Wood Mallesons ORDERS
WAD 2 of 2017 BETWEEN: RODNEY NORMAN CULLETON
Appellant
AND: BALWYN NOMINEES PTY LTD
Respondent
JUDGES:
ALLSOP CJ, DOWSETT AND BESANKO JJ
DATE OF ORDER:
10 FEBRUARY 2017
THE COURT ORDERS THAT:
1.Order 2 of the Full Court made on 3 February 2017 be varied by substituting the following for the order made on 3 February 2017:
The appeal be dismissed and the respondent’s costs on appeal (including reserved costs) be taxed and paid out of the estate of the appellant in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
The Full Court delivered judgment in this appeal on 3 February 2017: Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8. The orders of the Full Court were:
1. Paragraphs 13, 14 and 17 of the affidavit of the appellant dated 11 January 2017, the whole of the affidavit of the appellant dated 18 January 2017 and the whole of the affidavit of Ioanna Culleton dated 18 January 2017 be rejected.
2. The appeal be dismissed with costs.
3. All proceedings under the sequestration order made on 23 December 2016 against Rodney Norman Culleton be stayed until midnight (Australian Eastern Daylight Savings Time) on Monday 6 February 2017.
These orders were varied by an order made by the Chief Justice in Chambers later on 3 February 2017, after consultation with the other judges that determined the appeal. This order was as follows:
1. Order 3 of the Full Court is varied by extending the stay to 4:15PM Australian Eastern Daylight Saving Time on Wednesday 8 February.
2. Leave is granted to the respondent to argue to oppose such…
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- Case
- [2017] FCAFC 12
- Decision Date
CaseChat Overview and Summary
The legal issue at hand was whether the costs of the creditor respondent should be taxed and paid out of the appellant's estate, as provided by section 109(1)(a) of the Bankruptcy Act. The appellant argued that these costs should not be paid out of his estate, while the respondent contended that they should be treated as costs of the bankruptcy under the statute. The court was required to interpret the relevant statutory provisions and determine the appropriate classification of the costs in question.
In resolving this matter, the Court noted that the primary judge had already made a costs order that was to be paid out of the appellant's estate. The Court found that the primary judge had the power to make such an order under section 109(1)(a) of the Bankruptcy Act, which allows the taxing master or the court to order that the costs of a creditor be paid out of the bankrupt's estate. The Court further held that the respondent, as a creditor, was entitled to have its costs paid from the appellant's estate, and the appeal against the costs order was dismissed.
The Court varied the earlier order to reflect that the respondent's costs on appeal, including reserved costs, were to be taxed and paid out of the appellant's estate in accordance with section 109(1)(a) of the Bankruptcy Act. This decision affirmed the respondent's entitlement to have its costs covered by the appellant's estate, consistent with the statutory provision.
Orders
Orders of the court
1. Order 2 of the Full Court made on 3 February 2017 be varied by substituting the following for the order made on 3 February 2017:
The appeal be dismissed and the respondent’s costs on appeal (including reserved costs) be taxed and paid out of the estate of the appellant in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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