Frigger v Trenfield (No 9)

[2024] FCA 1486

FEDERAL COURT OF AUSTRALIA

Frigger v Trenfield (No 9) [2024] FCA 1486  

File number:

WAD 66 of 2021

Judgment of:

LOGAN J

Date of judgment:

13 December 2024

Catchwords:

COSTS – where an originating application for setting aside of sequestration orders and the annulment of bankruptcies on the basis of fraud entirely unsuccessful – where the respondents applied for costs and the respondent petitioning creditor sought costs from the bankrupt estates in the same priority as the trustee’s costs under s 109(1)(a) of the Bankruptcy Act 1966 (Cth) – costs application allowed

Legislation:

Bankruptcy Act 1966 (Cth) ss 32, 109

Federal Court of Australia Act 1976 (Cth) s 43

Cases cited:

Frigger v Trenfield(No 8) [2024] FCA 1438

Thompson v Lane (Trustee) (No 4) [2022] FCA 616

Division:

General Division

Registry:

Western Australia

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Number of paragraphs:

6

Date of hearing:

13 December 2024

Counsel for the Applicants:

The applicants appeared in person

Counsel for the First Respondent:

Mr S Majteles

Solicitor for the First Respondent:

Johnson Winter & Slattery

Counsel for the Second Respondent:

Mr B Ashdown

Solicitor for the Second Respondent:

Herbert Smith Freehills

ORDERS

WAD 66 of 2021

BETWEEN:

ANGELA CECILIA THERESA FRIGGER

First Applicant

HARTMUT HUBERT JOSEF FRIGGER

Second Applicant

AND:

KELLY TRENFIELD

First Respondent

MERVYN JOHN KITAY

Second Respondent

HERBERT SMITH FREEHILLS

Prospective Respondent

ORDER MADE BY:	LOGAN J
DATE OF ORDER:	13 DECEMBER 2024

THE COURT ORDERS THAT:

1.The first respondent’s costs be paid out of the estates of the bankrupts.

2.The second respondent’s costs be paid out of the estates of the bankrupts, with the same priority accorded by s 109(1)(a) of the Bankruptcy Act 1966 (Cth), the Trustee’s costs.

3.In each instance the costs for which this order provides be fixed by a registrar on a lump sum basis.

4.That the interlocutory application be dismissed.

5.The costs of each respondent of an incidental to that application form part of the costs to be fixed by a registrar on a lump sum basis, in accordance with the costs order made this day in respect of the substantive proceeding.

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

REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)

LOGAN J:

1. Upon the dismissal of the substantive application in these proceedings, each of the respondents unremarkably sought an order for costs. I say unremarkably because whilst there is to be found, in s 32 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act), a discretionary power in respect of the awarding of costs, every bit as wide as that conferred by s 43 of the Federal Court of Australia Act 1976 (Cth), it is trite that the ordinary way in which such discretion is judicially exercised is by an order which sees costs follow the event. The relevant event here is the order of dismissal. These reasons for judgment must be read with those given for that order of dismissal: see Frigger v Trenfield(No 8) [2024] FCA 1438.

2. On the application, my attention was helpfully drawn by Mr Ashdown of counsel to an earlier judgment of mine, coincidentally, in respect of another failed application for annulment of bankruptcy: see Thompson v Lane (Trustee) (No 4) [2022] FCA 616 (Thompson v Lane). For the reasons given in that judgment, the following orders were made: 

   (1)The [trustee’s] costs be paid out of the bankrupt’s estate. 

   (2)The [petitioning creditor’s] costs be paid out of the bankrupt’s estate with the same priority accorded by s 109(1)(a) of the Bankruptcy Act to the trustee’s costs.

   (3)In each instance, the costs for which this order provides be fixed by a registrar on a lump sum basis. 

3. Orders of just that kind were promoted by the respondents.  As against that, Mr and Mrs Frigger submitted that any consideration of the awarding of any costs should be deferred.  The principal reason for that was, it was submitted, that there is an unresolved application to be heard by Colvin J next year in relation to the conduct of the first respondent, Mrs Trenfield, the Trustee in Bankruptcy.  As I observed in the course of the submissions which Mrs Frigger made on her own behalf and on behalf of Mr Frigger, there is a certain logic in being cautious with respect to an order for costs in favour of a trustee whose conduct is the subject of an application to the Court. 

4. That logic does not, though, in my view, extend to offer a reason why the second respondent, Mr Kitay, should be denied the benefit of an order in respect of costs.  Particularly that is so given that the active contradictor, as the reasons for judgment reveal, was more Mr Kitay than the Trustee.  Further, in relation to the costs of the Trustee, the Trustee was named as a party, and named in a way which sought, even in these proceedings, adverse findings. 

5. So I am not persuaded that the determination of costs should be deferred.  Instead, it seems to me, for like reasons to those which I gave in Thompson v Lane, and having regard also to authorities which I discussed in that case, that the present is a case which warrants an order for costs in like terms to the orders made in Thompson v Lane. 

6. Accordingly, the orders in respect of costs will be:

   (1)The first respondent’s costs be paid out of the estates of the bankrupts.

   (2)The second respondent’s costs be paid out of the estates of the bankrupts, with the same priority accorded by s 109(1)(a) of the Bankruptcy Act 1966 (Cth), the Trustee’s costs.

   (3)In each instance the costs for which this order provides be fixed by a registrar on a lump sum basis.

   (4)That the interlocutory application be dismissed.

   (5)The costs of each respondent of an incidental to that application form part of the costs to be fixed by a registrar on a lump sum basis, in accordance with the costs order made this day in respect of the substantive proceeding.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Logan.

Associate:       

Dated:       18 December 2024