Kalatzis Nominees Pty Ltd v Fisher
[2010] FMCA 831
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KALATZIS NOMINEES PTY LTD v FISHER | [2010] FMCA 831 |
| BANKRUPTCY – Application for review of sequestration order – failure to pay sums into court – whether there are special or unusual features justifying the imposition of an award for indemnity costs. |
| Bankruptcy Act 1966 |
| Colgate Palmolive Co & Anor v CussonsPty Ltd (1993) 118 ALR 248 |
| Applicant: | KALATZIS NOMINEES PTY LTD |
| Respondent: | RICHARD SIMON FISHER |
| File Number: | BRG 756 of 2010 |
| Judgment of: | Burnett FM |
| Hearing date: | 21 October 2010 |
| Date of Last Submission: | 21 October 2010 |
| Delivered at: | Brisbane |
| Delivered on: | 21 October 2010 |
REPRESENTATION
| Solicitors for the Applicant: | Leonard Legal |
| Solicitors for the Respondent: | Eliadis Lawyers |
ORDERS
That the application be dismissed.
That the Applicant pay the Respondent's costs of and incidental to the application to be assessed on an indemnity basis, including reserved costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 756 of 2010
| KALATZIS NOMINEES PTY LTD |
Applicant
And
| RICHARD SIMON FISHER |
Respondent
REASONS FOR JUDGMENT
(Ex Tempore)
Mr Venegas, solicitor for the respondent debtor has applied for leave to withdraw. I will permit the debtor’s solicitor leave to withdraw. I am satisfied that the respondent debtor is aware that the matter is on today. I am satisfied that he is aware that his solicitor, Mr Venegas, has informed him that he would be withdrawing from further acting today.
This is an application brought by the debtor for review of a sequestration order made on 25 August 2010 by Registrar Baldwin sequestrating his estate.
To the point of the return of the application, the debtor has been represented by Mr Venegas, a solicitor with Leonard Legal and, on occasion, by counsel. This morning, Mr Venegas appeared on behalf of the debtor and informed the court that he sought leave to withdraw, principally because the debtor had not given him instructions and he was unable to comply with directions in relation to the filing of material.
Leave to withdraw was granted on the basis of Mr Venegas' information to the court that the debtor was aware that the application was to proceed today and also that Mr Venegas would be withdrawing. There was no explanation for the applicant's failure to appear and in the circumstances, I am satisfied that he was aware of the proceeding continuing today and, in that event, it is appropriate to proceed to determine the application in his absence pursuant to O 13, r 3A.
As I have noted, the application was one for the review of sequestration order. The principal grounds advanced in the application for review were largely that the applicant was solvent.
Directions were issued, requiring the applicant to pay money into court to at least cover the sum the subject of the original sequestration proceeding by way of security pending what was then anticipated to be a trial about the merits.
Initially, an affidavit was read in the application wherein the debtor's solicitor indicated that, following a telephone conversation with the debtor on 6 October, Mr Venegas asked the debtor:
"Simon”
he being the debtor
“are you able to get funds paid into court pursuant to order 1?”
That being the order made on 29 September, to which the debtor said:
“The money is being transferred into a solicitor's trust account today and I've just spoken to that solicitor. He has informed me that he holds instructions to pay the money into the Federal Magistrates Court in Melbourne. I have called the registry in Melbourne and they have informed me that they can accept the payment.”
Everybody in this application has proceed on the premise that Mr Fisher could, in fact, get the money, and that he was in fact solvent as he contended in his affidavit that was filed with the review application.
At the last mention of this matter, I was somewhat sceptical about the failure to pay the sums into court, particularly given that there was no affidavit material placed before the court to indicate why it was that, despite assurances to his solicitor made on 6 October, there were no funds produced in accordance with those assurances.
I am further aware that the debtor has informed his solicitor that he has not paid the money which he was required to pay by reason of the order made on 29 September, nor has he addressed the orders directed to him in relation to placing material before the court to inform it of prospects of funds that were said to have been in transit, arriving at court.
The only conclusion that I think can reasonably be drawn is that the assurance given by the debtor to his solicitor had no foundation and was, in fact, incorrect. Underlying that assurance was the principal premise advanced by the debtor that he was in fact solvent.
Those facts are relevant to this application for this reason: Mr Eliadis, who appears for the creditor, seeks costs on the application, and that the costs be assessed on an indemnity basis. It is well settled that the approach to considering indemnity costs is to commence from the premise first that costs ordinarily follow the event and, to that end, Mr Eliadis’ client is prima facie entitled to a costs order, given that the application will be dismissed.
Secondly, however, the court must then consider whether there are special or unusual features justifying the imposition of an award of indemnity costs; Colgate Palmolive Co & Anor v CussonsPty Ltd (1993) 118 ALR 248. Some of the factors which have been referred to in Colgate Palmolive Co & Anor v CussonsPty Ltd at 254 are matters such as whether or not a party has been prosecuting a claim which that party knew, or would reasonably have known, had little merit in law or fact.
In this instance, where the applicant has sought to prosecute a review application based upon contended solvency, but has failed to put before the court any evidence beyond a broad statement which is unverified to demonstrate solvency, the only reasonable conclusion that one can draw is that, in fact, the debtor is, indeed, insolvent and had no reasonable basis to assert otherwise.
It follows, having regard to those matters, that the debtor ought not to have prosecuted an application which he ought to have appreciated would have put the creditor to unreasonable costs, and in the circumstances, I am satisfied by that factor alone that an order for indemnity costs is justified.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 1 November 2010
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