Hinsas P/L trading as Greenearth Nurseries v Sanney, F. trading as About Nature

[1993] FCA 824

JUDGMENT No, 824 ,93 ...,,, ,., .,,,,,,, ,..,

NOT SUITABLE FOR DISTRIBUTION

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IN THE FEDERAt COURT OF AUSTRA.LIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY )	NN 1196 of 1993

)

BANKRUPTCY DIVISION 1

BETWEEN :  HINSAS PTY LIMITED tradina as
GREENEARTH NURSERIES

Applicant

AND :  FRANK SANNEY tradincr as ABOUT NATURE

Respondent

CORAM: Burchett J.

PLACE: Sydney

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19 NOV l993
FEDERAL COURT OF

EX TEMPORE REASONS FOR JUDGMENT

PRINUPAL REQISTRY

BURCHETT J.:

This is a debtor's application in respect of a bankruptcy notice. I note that the debt has now been paid. Mr Armfield of counsel for the creditor has valiantly put everything that could be put in favour of making a costs order on an indemnity basis against the debtor in the circumstances, which he says are special. However, assuming everything in M r Armfield's favour as regards the ultimate result which would have been obtained if the proceedings had gone on, nevertheless, I am not persuaded that the circumstances are so special as to call for an indemnity costs order.

I notice that in the unreported decision of The Public Trustee v. Annous: The Estate of Bader Ali Taleb, a decision

of Powell J, given on 31 July 1992, his Honour made the
statement:

"I have often enough expressed the view that an order that costs be taxed on an indemnity basis is justified only where the relevant party's conduct has involved an abuse of process, in the sense that the court's time and resources and the litigants' money have been wasted on fraudulent or totally frivolous and thoroughly unjustified claims or

defences. "

In that particular case, his Honour made an indemnity costs order, but he made it on the basis that what was involved was a "cold blooded forgery".

In Raqata Developments Ptv Limited v. Westpac Bankinq Corporation, another unreported decision, this time of Mr Justice Davies, delivered on 5 March 1993, his Honour, while expressing himself in somewhat less colourful tens, seems to me to have taken very much the same view. He said that each case must be considered on its own particular facts, having regard to the general principle that the usual award of

unless there are special circumstances to justify the making	party/party costs to the successful party should be made
of a different order. He spoke of a case that was unduly prolonged by groundless contentions, and it seems to me that he indicated that that was the kind of case which he regarded as appropriate for the making of such an order. I have obtained some guidance from the decision in Raqata Develo~ments, because it seems to me that inherent in the view his Honour took is the proposition that parties should not be punished for being practical, and that if a party discovers that a contention he was going to mount is unlikely to succeed, and accepts the logic of that by withdrawing the contention, far from punishing him for it by an order for costs on an indemnity basis, the court ought to recognise that he has at least saved the public the expense necessarily involved in the maintenance of court proceedings. He may also have saved his opponent something, although in this case Mr Armfield would claim that little has been saved to his client because of the very late stage at which the other party made the payment. However, even in this case, it was suggested when the case was set down for hearing that it might spill over into tomorrow, and had that been so the solicitor and client component of the costs of M r Armfield's client would doubtless have been increased.
In all the circumstances, I think the appropriate order to make, having noted that the amount in the Bankruptcy Notice has been paid, is simply to order that the debtor pay the costs of the creditor of and incidental to the proceedings in respect of the Bankruptcy Notice. It is so ordered. I dismiss the debtor's application.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Burchett.

Associate: & Date: 18 November 1993 V

Counsel for the Applicant:	Mr J.E. Armfield
Solicitors for the Applicant:	Messrs John H. Maait & Co.
Solicitor for the Respondent:	Mr A.C. MacPherson of
Messrs Teece, Hodgson
& Ward
Date of hearing:	1 November 1993