FEDERAL COURT OF AUSTRALIA
Fewin Pty Ltd v Burke (No 2) [2016] FCA 739
File number: NSD 1222 of 2015 Judge: MARKOVIC J Date of judgment: 23 June 2016 Catchwords: PRACTICE AND PROCEDURE – application for indemnity costs Legislation: Federal Court of Australia Act 1976 (Cth) s 43
Federal Court Rules 2011 r 39.04Cases cited: Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 11) [2009] FCA 590
Colgate Palmolive Co v Cussens Pty Ltd (1993) 46 FCR 225
Fewin Pty Ltd v Burke [2016] FCA 503
Silverfox Co Pty Ltd v Lenard’s Pty Ltd (No 3) (2004) 214 ALR 621
Yevad Products Pty Ltd v Brookfield [2005] 147 FCR 282
Date of hearing: 10 March 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 19 Counsel for the Applicants: Mr A P Cheshire SC Solicitor for the Applicants: Martin Place Lawyers Counsel for the First Respondent: Mr J T Johnson Counsel for the Second Respondent: Mr M J Heath Solicitor for the Second Respondent: Australian Government Solicitor Counsel for the Third Respondent: The Third Respondent did not appear
Table of Corrections 28 June 2016 In the Appearances on the cover page “Counsel for the First Applicant: Mr J J Johnson” and “Counsel for the Second Applicant: Mr A P Cheshire SC” has been amended to “Counsel for the Applicants: Mr A P Cheshire SC” 28 June 2016 In the Appearances on the cover page “Counsel for the Respondents: Mr M J Heath” has been amended to “Counsel for the First Respondent: Mr J T Johnson” and “Counsel for the Second Respondent: Mr M J Heath” 28 June 2016 In the Appearances on the cover page “Solicitors for the Respondents: Gillis Delaney Lawyers” has been amended to “Solicitor for the Second Respondent: Australian Government Solicitor” 28 June 2016 In the Appearances on the cover page “Counsel for the Third Respondent: The Third Respondent did not appear” has been added. ORDERS
NSD 1222 of 2015 BETWEEN: FEWIN PTY LTD ABN 64 051 132 453
First Applicant
RONALD MICHAEL COSHOTT
Second Applicant
LJILJANA COSHOTT (and another named in the Schedule)
Third Applicant
AND: JOHN BURKE
First Respondent
OFFICIAL TRUSTEE IN BANKRUPTCY
Second Respondent
MAXWELL WILLIAM PRENTICE
Third Respondent
JUDGE:
MARKOVIC J
DATE OF ORDER:
23 JUNE 2016
THE COURT ORDERS THAT:
1.The applicants pay the Inspector-General in Bankruptcy’s costs of the interlocutory application filed on 29 January 2016 to set aside the subpoena to produce documents issued on 18 December 2015 at the request of the applicants on an indemnity basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MARKOVIC J:
On 12 May 2016 I made orders and gave judgment in three interlocutory applications which have been filed in these proceedings: see Fewin Pty Ltd v Burke [2016] FCA 503 (Fewin v Burke). Two of those interlocutory applications concerned the…
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- Case
- [2016] FCA 739
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was whether the Inspector-General was entitled to indemnity costs in relation to the application to join her as a party and the subpoena for document production. The court had to consider whether the applications were so lacking in merit that the applicants should be required to pay the Inspector-General's costs on an indemnity basis. The court also had to determine if there were any special circumstances that would warrant an indemnity costs order.
The court found that the Inspector-General's application for indemnity costs in relation to the joinder application should not be granted. The correspondence upon which the Inspector-General relied had not been previously considered by the court and was not unreasonable in its contents. The court noted that the Inspector-General had not provided any special reason or unusual feature that would cause the court to depart from the usual practice of awarding costs on a party-and-party basis. The court upheld the previous order that the applicants pay the Inspector-General's costs of the joinder application on the usual basis. However, the court did grant the Inspector-General's application for indemnity costs in relation to the subpoena for document production, finding that the subpoena was without merit and should be set aside.
In conclusion, the Federal Court of Australia determined that the Inspector-General in Bankruptcy was entitled to indemnity costs in relation to the subpoena for document production issued by Fewin Pty Ltd. However, the court found that the Inspector-General was not entitled to indemnity costs in relation to the application to join her as a party. The applicants were ordered to pay the Inspector-General's costs of the subpoena application on an indemnity basis, but the costs of the joinder application were to be paid on the usual party-and-party basis.
Orders
Orders of the court
1. The applicants pay the Inspector-General in Bankruptcy’s costs of the interlocutory application filed on 29 January 2016 to set aside the subpoena to produce documents issued on 18 December 2015 at the request of the applicants on an indemnity 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
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
In the absence of a resolution of the matter between the parties the matter proceeded to judgment and the subpoena issued by the applicants to the Inspector-General was set aside.CONSIDERATIONApplication for indemnity costs in relation to the application to join the Inspector-General The applicants submit that their counsel was not favoured with copies of the correspondence upon which the Inspector-General now relies, they understood that there was no Calderbank offer and that the Inspector-General’s application is based on the general law. They also submit that, given the finding at [66] of the judgment in Fewin v Burke in relation to the costs of the joinder application, the Inspector-General should not be permitted to re-agitate her claim for costs on an indemnity basis and that, in any event, there has already been a finding that there is no special reason or unusual feature that would cause the Court to depart from the usual practice of awarding costs. It is not the case that the applicants’ counsel was not favoured with a copy of the correspondence on which the Inspector-General relies in support of her application for indemnity costs. That correspondence was provided to counsel for the applicants appearing before me on 19 May 2016 when the Inspector-General’s applications for indemnity costs were to be heard. In any event, the correspondence is between the parties’ solicitors and must have been received by the applicants’ solicitors. There can be no issue that the applicants were not aware of the correspondence. Further, counsel who appeared for the applicants did not oppose its tender. In Fewin v Burke at [66] in considering the submission in the Inspector-General’s written submissions that, if the application to join her was refused, she should be awarded costs on an indemnity basis I said:In her written submissions the Inspector-General submits that if the application to join her is refused, an order should be made that the applicant should pay her costs on an indemnity basis. No further submissions were made as to why that should be so. While the application has not succeeded, there is no special reason or unusual feature that would cause the Court to depart from the usual practice in awarding costs. The Inspector-General is entitled to her costs of the application but that order will be made on the usual party and party basis. At that time, quite properly, the letter dated 15 January 2016 from the Inspector-General’s solicitors to the applicants’ solicitors by which they invited the applicants to withdraw their application, set out their reasons why they should do so and put them on notice that if they did not withdraw the application they would rely on the letter to seek costs on an indemnity basis was not before the Court. The Inspector-General seeks to vary that order on the basis of the evidence now before the Court. I have considered the letter from the Inspector-General’s solicitor. Having done so I do not think that the rejection of the Inspector-General’s offer contained in the letter dated 15 January 2016 was unreasonable. The joinder application failed but not only for the reasons raised by the Inspector-General in the letter. I do not think the applicants’ pursuit of the joinder application was so unreasonable or that it could be said there was no chance of its success. It remains the case that there is no special reason or unusual feature that would cause the Court to depart from the usual practice in awarding costs. The costs order made by me on 19 May 2016 that the applicants pay the Inspector-General’s costs of the application to join her should not be disturbed and those costs should be paid on the usual basis.The application to set aside the subpoena