Kerr (Trustee), in the matter of Cross (Bankrupt) v Bechara (No 2)

In Kerr (Trustee), in the matter of Cross (Bankrupt) v Bechara (No 2), the court was called upon to determine the allocation of costs arising from a dispute involving the bankrupt estates of Gabriel Cross and Rosabelle Cross. The parties involved in the proceedings were David John Kerr, the trustee of the estates, Maria Bechara and Feridun Akcan, two creditors, and Mark Petrucco, who was the successor in title to the claims of Rockwell Olivier (Sydney) Pty Ltd. The central issue was the resolution of competing applications concerning the treatment of a claim by Rockwell Olivier (Sydney) Pty Ltd in the administration of the bankrupt estates, particularly the validity of a mortgage dated 7 March 2013, and the subsequent allocation of costs. The court had to decide whether the costs related to the mortgage issue should be borne by the opposing creditors or by the trustee.

The court's reasoning was influenced by the nature of the participation and opposition in the proceedings. Mark Petrucco, as the successor to Rockwell Olivier (Sydney) Pty Ltd, was primarily interested in the validity of the mortgage. His claims were opposed by Maria Bechara and Feridun Akcan, who were added to the proceedings due to their interest in the substantive relief sought by the trustee. Petrucco succeeded on the issue of the mortgage's validity, while the trustee did not take a firm stance on the matter. The court found that the usual practice in such cases would see Petrucco receiving an order for his costs from the opposing parties. However, the court noted that the quantum of Petrucco's claim remained uncertain, and while Bechara and Akcan were unsuccessful in their opposition, they persuaded the court not to determine the quantum issue.

The court's decision on costs allocation was informed by these factors, and it ultimately ordered that Maria Bechara and Feridun Akcan pay the costs of David John Kerr and, from 16 January 2015, Mark Petrucco, in relation to the specific issue addressed in paragraph 6 of the application. This decision recognised the roles and oppositions of the parties in the proceedings and aimed to fairly allocate the costs in accordance with the established practices.

The final orders of the court were that Maria Bechara and Feridun Akcan were to pay the costs of David John Kerr and, from 16 January 2015, Mark Petrucco, in connection with the specified issue, as agreed or taxed. The entry of these orders is governed by Rule 39.32 of the Federal Court Rules 2011.