Justina Marguerite Fitzgibbon v Copperhead Pty Ltd

[1998] FCA 1567

CATEGORY: NO QUESTION OF PRINCIPLE

FEDERAL COURT OF AUSTRALIA

COSTS – costs awarded against a third party to the proceedings – costs awarded on an indemnity basis – no point of general principle

JUSTINA MARGEURITE FITZGIBBON V COPPERHEAD PTY LTD & ANOR
NG 7995  of   1998

MADGWICK J
17 NOVEMBER 1998
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 7995  of   1998

BETWEEN:

JUSTINA MARGEURITE FITZGIBBON
APPLICANT

AND:

COPPERHEAD PTY LTD
FIRST RESPONDENT

BRIAN BUFFIER
SECOND RESPONDENT

JUDGE(S):

MADGWICK

DATE OF ORDER:

17 NOVEMBER 1998

WHERE MADE:

SYDNEY

SHORT MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The second respondent pay the costs of the applicant and the first respondent on an indemnity basis.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 7995 of 1998

BETWEEN:

JUSTINA MARGEURITE FITZGIBBON
APPLICANT

AND:

COPPERHEAD PTY LTD
RESPONDENT

BRIAN BUFFIER
SECOND RESPONDENT

JUDGE(S):	MADGWICK
DATE:	17 NOVEMBER 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(revised from transcript)

HIS HONOUR:  In this matter the applicant seeks her costs on an indemnity basis against the second respondent in connection with her application to add the second respondent as a party to the proceedings, and for the principal relief which she obtained in the proceedings, namely to set aside bankruptcy notice NI 1624 of 1998 as an abuse of process. 

The applicant, Ms Fitzgibbon, was associated with a company known as Hagley Pty Ltd.  The second respondent, Mr Buffier, was an accountant and he and/or a company with which he was associated, namely Copperhead Pty Ltd, provided accountancy services to Ms Fitzgibbon and/or Hagley Pty Ltd.  It was evidently Mr Buffier's belief that Ms Fitzgibbon and/or Hagley Pty Ltd owed Copperhead Pty Ltd money for accountancy fees.  This debt was an old one.  As Mr Buffier was well aware, Copperhead Pty Ltd was placed in liquidation and a liquidator, Mr Condon, a chartered accountant, had been appointed. 

Mr Buffier became aware that Ms Fitzgibbon was visiting Australia in August of this year for a couple of days (she apparently now mainly resides overseas).  Mr Buffier was anxious that effective steps might be taken to try to secure the payment of a debt adjudged to be due by Ms Fitzgibbon to Copperhead Pty Ltd by a default judgment obtained in the Local Court arising out of the service of process on Ms Fitzgibbon's son.

Mr Buffier caused a bankruptcy notice to be issued in the name of Copperhead.  He described that company’s registered office as 13 George Street, Hunters Hill and he describes himself as the creditor’s (that is Copperhead's) authorised agent.  He advised Ms Fitzgibbon that payment of the debt could be made to the company, "care of Buffier & Associates, 13 George Street, Hunters Hill."

The liquidator, Mr Condon, knew nothing of these proceedings until after they were instituted.  Once informed, he quite properly obtained legal advice as to whether he could or should in some way purport to authorise ex post facto the issue of the bankruptcy notice, and in substance whether he should take over the conduct of any proceedings that might follow from the bankruptcy notice.  He also appeared in these proceedings in an attempt to see that the correct information was put before the Court and to seek costs against Mr Buffier necessitated by Mr Buffier's intermeddling.

The liquidator did not authorise Mr Buffier to apply for the issue of a bankruptcy notice nor, on Mr Buffier's own account of the matter, did any person apparently in the employ of the liquidator authorise the issue of a bankruptcy notice.  Mr Buffier's account is that he telephoned the liquidator's office and spoke with "a female person whose name I do not now recall."  He established that this woman was "involved in the liquidation of Copperhead".  He advised her that he was a former director of the company and had been advised that Ms Fitzgibbon was a judgment debtor of the company, was going to be in Lavender Bay in a few days time and that it would be in the interests of the liquidator to take out a bankruptcy notice against her and arrange to have it served.  He advised that he had been unable to locate Ms Fitzgibbon for some years.  The sensible response from the person concerned, according to Mr Buffier was, “I doubt that we would be able to do anything in that time.”  Mr Buffier then says the following conversation occurred.  Mr Buffier said "Maybe I should see what I can do about getting a bankruptcy notice issued and served."  The woman in the liquidator's office replied "Yes, okay, and I will get back to you."  It is a spectacular notion that an accountant

should think that he had been thereby authorised by the liquidator to do anything, far less issue a bankruptcy notice and advise the judgment debtor that payment of moneys could be made to a company in liquidation in care of Mr Buffier's address.

Mr Buffier has asserted, though not on oath, that he had not informed the liquidator of the debt or the supposed debt from Ms Fitzgibbon to Copperhead because he had been unable to serve a writ of execution founded on the judgment upon Ms Fitzgibbon and had written the debt off as a bad one.  Mr Buffier disingenuously refers to the fact that Ms Fitzgibbon has used various names in her lifetime.  As he was intimately associated with her, in a business and professional sense in the way that I have briefly mentioned, it's unlikely that Mr Buffier was unaware of various marriages that Ms Fitzgibbon has had and her consequent changes of name.

No notice was given to require Mr Buffier to attend for cross‑examination and one must be careful as to the extent to which inferences can be drawn against him.  It is enough to say that the material before the Court suggests that, on their face, his assertions as to his belief that he was legally justified in issuing the bankruptcy notice cannot be accepted.  It follows that he instituted proceedings which were quite unmeritorious insofar as his authority to institute the proceedings was concerned, that his conduct as a professional man and an accountant has been quite inappropriate and, as I have earlier found, the proceedings were an abuse of the process of the Court.

The matter is an exceptional one.  It is perfectly clear that Mr Buffier has an interest of some kind, albeit only a sentimental one as to the rights of Copperhead Pty Limited or of some creditor of the company in pursuing Ms Fitzgibbon, and that he sought effectively to become Copperhead Pty Limited for the purpose of the institution of the proceedings.  In my view, whether the matter is treated as (a) one appropriate for the application of the principles as to the award of indemnity costs against a party to litigation or (b) as one where the principles which apply are those which might justify the award of costs against a third party, and secondly whether it is further appropriate to order costs against a third party on an indemnity basis, this is a case that calls for an award of indemnity costs against Mr Buffier.

The order of the Court will be that the second respondent pay the costs of the applicant and the first respondent on an indemnity basis.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick

Associate:

Dated:             17 November 1998

Counsel for the Applicant:	R Eassie
Solicitor for the Applicant:	Patrick Woods and Co
Solicitor for the Respondent:	Australian and International Attorneys
Date of Hearing:	17 November 1998
Date of Judgment:	17 November 1998