DUNCAN v McVEIGH and Anor (No.2)

[2004] FMCA 838

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DUNCAN v McVEIGH & ANOR (No.2) [2004] FMCA 838

BANKRUPTCY – Costs.

Applicant: TOM DUNCAN

First Respondent: DEAN ROYSTON McVEIGH

Second Respondent: EQUUSCORP PTY LTD

File No: MLG 906 of 2004

Delivered on: 18 October 2004

Delivered at: Melbourne

Hearing Date: 18 October 2004

Judgment of: Riethmuller FM

REPRESENTATION

Counsel for the Applicant: Mr P. Fary

Solicitors for the Applicant: Russell Kennedy

Counsel for the First Respondent: Excused from attending

Solicitors for the First Respondent: G R Campbell

Counsel for the Second Respondent: Mr M.R. Scott

Solicitors for the Second Respondent: Phillip Allen Clark

ORDERS

1. The Applicant do pay the Second Named Respondent’s costs of and incidental to the application up to and including 23 August 2004, such costs to be taxed in default of agreement.

2. The Applicant do pay the Second Respondent’s costs of and incidental to the creditor’s petition of $3,833.90 — such costs to be paid within 30 days.

3. The Applicant do pay the First Named Respondent’s reasonable costs, charges and expenses of the bankruptcy and the annulment application and the parties have liberty to apply if unable to agree thereon.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 906 of 2004

TOM DUNCAN

Applicant

and

DEAN ROYSTON McVEIGH

First Respondent

and

EQUUSCORP PTY LTD

Second Respondent

REASONS FOR JUDGMENT

1. This is an ex tempore judgment.

2. This matter was adjourned for me to consider the matter of costs. 

3. The applicant concedes that he should bear the costs up to and including the directions hearing on 23 August 2004 in this matter, a time by which he had filed his material and the other parties would have had a reasonable opportunity to peruse the material to determine whether or not they wished to continue to oppose his application for an annulment of the bankruptcy or in other respects continue to participate in the proceedings.

4. At the end of the day he has been successful in obtaining an annulment of the bankruptcy. 

5. In considering the question of costs the underlying principle is that costs normally follow the event.  This is because the outcome of the matter usually determines who was correct or had the appropriate claim and that party ought not to bear a cost consequence when they ultimately achieve what in law they ought to have had throughout. 

6. In this case the situation is a little different.  The applicant achieved an annulment, but this was only required as a result of his conduct earlier in the proceedings.  On any version of the case he would have had to attend today to persuade me to make the orders that I made earlier in the day.  In these circumstances it is not appropriate that another party ought to pay any of the applicant's costs.

7. To the extent that the second respondent participated in the proceedings, by the time of the directions hearing it must have been apparent on the applicant's material that he was most likely to get over the threshold question and that really it was simply a question of costs.  No offers were made, but rather, the second respondent determined that it would continue to participate in the proceedings and actively oppose the annulment application by the applicant, not simply seek orders for their costs to that date.  Had it limited its involvement to a request for its costs up to and including the directions hearing (and conceivably some small time after that to obtain counsel's opinion and the cost of that opinion), then, had the applicant refused to meet those costs it would have been quite proper for them to continue to agitate for those costs and if I had so ordered obtain the costs of today.

8. It appears to me that the real issue today was whether or not I would exercise the discretion to annul the bankruptcy, an issue on which the second respondent has not been successful.  I do not think that it is appropriate in these circumstances that the costs of the second respondent from the date of directions hearing to and including today be met by the applicant. 

9. In the circumstances I propose to order that the applicant pay the costs of the trustee and the second respondent up to and including the directions hearing of 23 August 2004, the costs of the trustee in the bankruptcy and I make no order as to costs for the period 24 August 2004 to date. 

10. As the First Respondent did not attend this hearing I cannot decide questions as to the appropriateness of his costs and expenses.

    
    

    I therefore give the parties liberty to apply on this issue.

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Riethmuller FM

Associate: 

Date: