Fewin Pty Ltd v Prentice (No 2)

[2017] FCA 102

FEDERAL COURT OF AUSTRALIA

Fewin Pty Ltd v Prentice (No 2) [2017] FCA 102

File number:

NSD 25 of 2016

Judge:

MARKOVIC J

Date of judgment:

16 February 2017

Catchwords:

COSTS – where the applicants enjoyed substantial success – whether the court should depart from the rule that costs follow the event – respondent ordered to pay a proportion of the applicants’ costs

BANKRUPTCY AND INSOLVENCY – trustee’s right to indemnity for litigation costs – whether trustee should be disentitled from relying on indemnity

Legislation:

Bankruptcy Act 1966 (Cth) s 32

Federal Court of Australia Act 1976 (Cth) s 43

Cases cited:

Adsett v Berlouis (1992) 37 FCR 201

Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd (No 2) [2010] FCA 277

Maxwell-Smith v Donnelly (No 2) [2011] FCA 259

New South Wales Lotteries Corporation Pty Ltd v Kuzmanovski (No 2) [2011] FCAFC 152

Pantzer v Wenkart (2006) 153 FCR 466

Principal Strategic Options Pty Ltd, in the matter ofCoshott v Coshott [2001] FCA 664

Queensland North Australia Pty Ltd v Takeovers Panel (No 2) (2015) 236 FCR 370

Re Beddoe; Downes v Cottam [1893] 1 Ch 547

Date of hearing:

Determined on the papers

Date of last submissions:

2 December 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:

33

Counsel for the Applicants:

Mr A P Cheshire SC

Solicitor for the Applicants:

Comino Prassas Solicitors

Counsel for the Respondent:

Mr J T Johnson

Solicitor for the Respondent:

O’Neill Partners Commercial Lawyers

ORDERS

NSD 25 of 2016

BETWEEN:

FEWIN PTY LIMITED ACN 051 132 453

First Applicant

RONALD MICHAEL COSHOTT
Second Applicant

AND:

MAXWELL WILLIAM PRENTICE

Respondent

JUDGE:	MARKOVIC J
DATE OF ORDER:	16 FEBRUARY 2017

THE COURT ORDERS THAT:

1.The respondent is to pay 70% of the applicants’ costs of the proceeding as agreed or taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MARKOVIC J:

1. On 20 October 2016, I made declarations and gave judgment in Fewin Pty Ltd v Prentice [2016] FCA 1239 (Fewin v Prentice).  The parties have now filed and served submissions going to the issue of costs of the proceeding and have consented to the Court determining that issue on the papers without the need for an oral hearing.  

2. The declarations made in Fewin v Prentice related to the conduct of a meeting of creditors of the former bankrupt, Robert Coshott, that took place on 16 December 2015 (Creditors’ Meeting).  In particular, declarations were made that:

   (1)the respondent, Mr Prentice, who is the trustee of the bankrupt estate of Robert Coshott (Coshott Estate), was not entitled to vote on the election of the person to preside at the Creditors’ Meeting as proxy for Stephen Michael Barry and Martin Pearce Board (Messrs Barry and Board);

   (2)the proxies given by the Australian Taxation Office (ATO