FEDERAL COURT OF AUSTRALIA
Dlaw Pty Ltd v Rusca Bros Services Pty Ltd [2020] FCA 1038
Appeal from: Rusca Bros Services Pty Ltd v DLaw Pty Ltd, in the matter of Rusca Bros Services Pty Ltd [2019] FCA 1865 File number: NSD 2063 of 2019 Judge: GLEESON J Date of judgment: 21 July 2020 Date of publication of reasons: 27 July 2020 Catchwords: PRACTICE AND PROCEDURE – where appellant seeking to file notice of discontinuance with no order as to costs – where Federal Court Rules 2011 r 36.37(4) provides that an appellant who files a notice of discontinuance under r 36.37(1) must, unless the parties otherwise agree, pay the costs of each respondent – principle that costs should follow the event – where court did not dispense compliance with r 36.73(4) Legislation: Federal Court Rules 2011 rr 1.33, 1.34, 36.05, 36.73(1). 36.73(4) Date of hearing: 21 July 2020 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 21 Solicitor for the Appellant/Applicant: J Doyle of Doyles Construction Lawyers Counsel for the Respondent: Mr A Vincent Solicitor for the Respondent: Gillis Delaney Lawyers ORDERS
NSD 2063 of 2019 BETWEEN: DLAW PTY LTD (ACN 052 127 349)
Appellant
AND: RUSCA BROS SERVICES PTY LTD (ACN 154 554 551)
Respondent
JUDGE:
GLEESON J
DATE OF ORDER:
21 JULY 2020
THE COURT DIRECTS THAT:
1.The appellant file a notice of discontinuance of the appeal in accordance with Form 126 on or before 4 August 2020.
THE COURT ORDERS THAT:
2.Leave be granted to the respondent to file by 21 August 2020 an application to have its costs, payable pursuant to r 36.73(4) of the Federal Court Rules 2011, determined by the Court on a lump sum basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised from transcript)GLEESON J:
This proceeding was commenced by a notice of appeal filed on 12 December 2019, appealing from a decision of a single judge of the Court (Markovic J) setting aside a statutory demand served by the appellant (DLaw) on the respondent (Rusca): Rusca Bros Services Pty Ltd v DLaw Pty Ltd, in the matter of Rusca Bros Services Pty Ltd (No 2) [2019] FCA 1865 (Rusca Bros No 2). On 26 March 2020, leave was granted to DLaw to file and serve an application for an extension of time for leave to appeal, leave was granted to Rusca to file a notice of objection to competency of the appeal and the matter was adjourned for case management on 21 May 2020.
On 30 April 2020, DLaw filed an application for extension of time (Form 67). The application states that DLaw “applies for an extension of time under rule 36.05 to file a notice of appeal (including an application for leave to appeal)”. Annexed to the application was a judgment of Markovic…
Keep reading for free
Create a free CaseChat account to read Dlaw Pty Ltd v Rusca Bros Services Pty Ltd and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2020] FCA 1038
- Decision Date
CaseChat Overview and Summary
The court held that Dlaw could not discontinue the appeal without paying the costs of the appeal to Rusca. The court found that Rule 36.73(4) of the Federal Court Rules 2011 provides that an appellant who files a notice of discontinuance must, unless the parties otherwise agree, pay the costs of each respondent. This is consistent with the usual rule that the costs of a proceeding follow the event. In this case, the event was that Dlaw no longer wished to pursue the appeal. Dlaw had not demonstrated that there should be a departure from the ordinary course in this case. The court did not consider it appropriate to refer the file to ASIC for investigation. The court found that it was practicable and appropriate to make a lump-sum costs order.
ORDERS:
1. Dlaw must file a notice of discontinuance with the court promptly.
2. Rusca is granted leave to file by 21 August 2020 an application to have its costs, payable pursuant to r 36.73(4) of the Federal Court Rules 2011, determined by the Court on a lump sum basis.
Orders
Orders of the court
2. Leave be granted to the respondent to file by 21 August 2020 an application to have its costs, payable pursuant to r 36.73(4) of the Federal Court Rules 2011, determined by the Court on a lump sum basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Rule 1.34 provides that the Court may dispense with compliance with any of the Rules, either before or after the occasion for compliance arises.Consideration In effect, DLaw’s proposed orders require dispensation from r 36.73(4). Rule 36.73(4) is consistent with the usual rule that the costs of a proceeding follow the event. In this case, the event is that DLaw no longer wishes to pursue the appeal. In the ordinary course, DLaw should pay the costs of the proceeding that it has commenced but not pursued successfully. DLaw argues that it should not pay the costs of the appeal for the following reasons:(1)the company has been through an insolvency process, being an administration which commenced on about 23 December 2019 and concluded with the execution of a deed of company arrangement on 13 February 2020, returning control of the company to Rusca. Mr Doyle, DLaw’s solicitor, gave evidence from the Bar table that, by the DOCA, Rusca’s debt to Dlaw was compromised; and(2)as a result, the aim of DLaw’s statutory demand was effectively achieved. DLaw has not demonstrated that there should be a departure from the ordinary course in this case. The relevant event, acknowledged by DLaw’s intention to file a notice of discontinuance, is that the appeal has failed, or will fail for want of prosecution. Even if the relevant event was Rusca’s administration, that event was concluded prior to the first case management hearing, at which orders were made for the prosecution of the appeal. Accordingly, by failing to file a notice of discontinuance earlier, DLaw has put Rusca to additional cost and there is no good reason why it should not be compensated for that cost. Accordingly, I will make an order directing DLaw to file a notice of discontinuance promptly, will not dispense with compliance with r 36.73(4) and will not order that there be no order as to costs. Dlaw’s proposal that the file should be referred to ASIC for investigation is based on the observation that the administrator formed the view that Rusca was insolvent as at 31 July 2019, if not earlier. Accordingly, Mr Doyle submitted, Rusca was insolvent when the Court heard the application to set aside the statutory demand. Mr Doyle stated that the hearing was on 8 August 2019, although Rusca No 2 records the date of the hearing as 8 July 2019. Mr Doyle also submitted that there was evidence before the Court below that Rusca was trading insolvent since 2017. The Court is not in a position to reach an informed view about whether the matters identified by Mr Doyle warrant examination by ASIC and, accordingly, I will not refer the file to ASIC for investigation. Mr Doyle can raise those matters with ASIC himself, if he considers that worthwhile. Finally, paragraph 4.1 of the Court’s Costs Practice Note (GPN-COSTS) states:The Court’s preference, wherever it is practicable and appropriate to do so, is for the making of a lump-sum costs order. I am satisfied that it is practicable and appropriate in this case, where the relevant costs are likely to be discrete and readily identified, to make a lump-sum costs order. Accordingly, I will grant leave to Rusca to seek determination of the costs that will be payable under rule 36.73(4) determined by the court on a lump-sum basis.