Karson v Esanda Finance Corporation Ltd (No.2)
[2004] FMCA 1012
•14 December 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KARSON v ESANDA FINANCE CORPORATION LTD (No.2) | [2004] FMCA 1012 |
| BANKRUPTCY – Application to set aside Bankruptcy Notice – where evidence revealed no grounds. COSTS – Whether court should order indemnity costs and make a costs order against the debtor’s solicitors. |
Federal Court Act and Rules
| Applicant: | MANUAL KARSON |
| Respondent: | ESANDA FINANCE CORPORATION LIMITED ACN 004 346 043 |
| File No: | SYG 3426 of 2004 |
| Delivered on: | 14 December 2004 |
| Delivered at: | Sydney |
| Hearing date: | 14 December 2004 |
| Judgment of: | Raphael FM |
REPRESENTATION
| Solicitors for the Applicant: | Konstan Lawyers |
| Counsel for the Respondent: | Mr M Cohen |
| Solicitors for the Respondent: | Blake Dawson Waldron |
ORDERS
Applicant to pay the respondent's costs on a solicitor and a client basis to be taxed if not agreed pursuant to the Federal Court Act and Rules.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 3426 of 2004
| MANUAL KARSON |
Applicant
And
| ESANDA FINANCE CORPORATION LIMITED ACN 004 346 043 |
Respondent
REASONS FOR JUDGMENT
These proceedings were commenced by way of an application dated 23 November 2004 seeking that a bankruptcy notice issued and dated 17 September 2004 and addressed to the applicant be set aside upon grounds appearing in an affidavit annexed. In paragraph 3 of the affidavit the applicant deposes to the fact that the bankruptcy notice was based on a certificate of judgment annexed to the bankruptcy notice which he says in the second paragraph had been served on him on 8 November 2004.
In paragraph 4 of the affidavit he refers to an application for leave to pay the judgment debt by instalments which was dated 22 November 2004 and received by the court on 24 November 2004. An application to pay by instalments is not an application to set aside the judgment and until such time as it is granted it does not have the effect of staying the orders. The time the bankruptcy notice was served upon the applicant whether on 8 November, as he says, or on 24 October as Mark Gerard Slater a process server who filed an affidavit dated 28 October 2004 says, is irrelevant. The bankruptcy notice was valid at the time it was issued and would not be made invalid by the subsequent granting of an instalment notice.
The applicant also deposes to the fact that he is solvent and he would be able to re-finance his debts if certain caveats or writs that have been filed against his property were removed.
As Mr Cohen argues, the affidavit does not really reveal any grounds upon which I could set aside the bankruptcy notice whatever the date upon which it was served.
The matter came before me for hearing and was adjourned until today 14 December 2004, for the applicant to file further evidence. It appeared at the first hearing that there would be a genuine dispute between the parties as to the date of service. Today, for reasons which I have already given in the absence of the applicant himself, I was not prepared to grant a further adjournment.
In those circumstances the applicant's solicitor sought leave to withdraw the proceedings, which I have granted. The question before me now is whether to accede to Mr Cohen's request for indemnity costs to be paid. Mr Cohen's basis for claiming indemnity is that there was never any grounds upon which the applicant could have set aside the bankruptcy notice and that the whole proceedings were an abuse of process. Mr Luong refutes this, but without the assistance of instructions from his client is somewhat hampered. Mr Cohen also asks for an order that in the event that Mr Karson, the debtor, fails to pay any indemnity costs ordered that his solicitors be required to indemnify the respondent.
Without wishing to go into all the authorities on the question of the granting of an order for indemnity costs in relation to a matter that has really only taken up the time of the court for approximately 15 minutes on one day and 20 minutes today, I would indicate that I do not consider the bringing of the proceedings constitute such an abuse of the processes of the court that I would in my discretion grant an absolute indemnity as to costs.
On the other hand there is much in Mr Cohen's argument that it would not appear that there were any real grounds for attempting to set aside this bankruptcy notice, at least as deposed to by the applicant in the only documents that are before the court. The order I am prepared to make in those circumstances is that the applicant is to pay the respondent's costs on a solicitor and own client basis to be taxed if not agreed pursuant to the Federal Court Act and Rules. I am not prepared to make any order of indemnity against the solicitor as requested.
I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Raphael FM
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