Khatri and Lane (Trustees) v McDonald, in the matter of Wilkie (Bankrupt) (No. 2)

[2018] FCA 722

FEDERAL COURT OF AUSTRALIA

Khatri and Lane (Trustees) v McDonald, in the matter of Wilkie (Bankrupt) (No. 2) [2018] FCA 722

File number:

QUD 160 of 2017

Judge:

LOGAN J

Date of judgment:

4 May 2018

Catchwords:

PRACTICE AND PROCEDURE – costs following the primary judgment – application for adjournment by Respondent – costs made in accordance with Court GPN-INT – discretion under s 51A Federal Court of Australia Act 1976.  Held – adjournment dismissed – costs allowed.

Legislation:

Bankruptcy Act 1966 (Cth) s 120(1)

Federal Court of Australia Act 1976 (Cth) s 51A

Cases cited:

Khatri and Lane (Trustees) v McDonald, in the matter of Wilkie, (Bankrupt) (2018) FCA 543

Date of hearing:

4 May 2018

Date of last submissions:

4 May 2018

Registry:

Queensland

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Category:

Catchwords

Number of paragraphs:

7

Solicitor for the Applicant:

Australian Law Partners

Counsel for the Respondent:

The Respondent did not appear

ORDERS

QUD 160 of 2017

IN THE MATTER OF THE BANKRUPT ESTATE OF THE LATE ANTHONY ALFRED WILKIE

BETWEEN:

RAJ KHATRI AND MORGAN LANE AS TRUSTEES OF THE BANKRUPT ESTATE OF THE LATE ANTHONY ALFRED WILKIE (A BANKRUPT)

Applicant

AND:

ALISTAIR GARRY MCDONALD

Respondent

JUDGE:	LOGAN J
DATE OF ORDER:	4 MAY 2018

THE COURT ORDERS THAT:

1.Pursuant to s 51A, Federal Court of Australia Act 1976 (Cth), and for the purposes of para 3 of the Court’s order of 20 April 2018, herein, the amount of interest to the date of judgment is fixed in the sum of $59, 569.01.

2.In addition to the sum of $149,650.53, ordered to be paid by the respondent to the applicants, pursuant to para 3 of the order of 20 April 2018, the respondent is to pay the applicants the sum of $59,569.01.

3.The respondent pay the applicants the costs of, and incidental, to the application for the fixing of interest, to be taxed if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(Revised From Transcript)

LOGAN J:

1. On 20 April 2018, for reasons which I published that day, I gave judgment in favour of the applicants, Messrs Raj Khatri and Morgan Lane, as trustees of the bankrupt estate of the late Anthony Alfred Wilkie (a bankrupt), against Mr Alistair Garry McDonald, in respect of an application that a particular charge over equitable property in favour of Mr McDonald be declared void as against the applicants by virtue of the operation of s 120(1) of the Bankruptcy Act 1966 (Cth): see Khatri and Lane (Trustees) v McDonald, in the matter of Wilkie, (Bankrupt) (2018) FCA 543, (principal judgment).  These reasons for judgment must be read in conjunction with the principal judgment.

2. Para 4 of the orders made on 20 April 2018 envisaged that on or before 1 May 2018, the parties would bring in short minutes of orders fixing the amount of interest to be allowed to the trustees in respect of the judgment sum of $149,650.53 specified in para 3 of the orders made on 20 April 2018.  Para 4 of the orders made that day further envisaged that in default of the bringing in of short minutes of orders by the parties, either party might apply, on two clear days’ notice to the other, for the determination of the amount of that interest. 

3. Suffice it to say, notwithstanding the endeavours of the solicitors for the bankruptcy trustees, it has not proved possible for minutes of orders in respect of interest to be brought in consensually as was envisaged by the first part of para 4 of the orders of 20 April 2018.  The bankruptcy trustees have given notice by email to Mr McDonald of a disposition to seek the fixing of interest by the Court.  I have deemed the email notice to be sufficient in terms of an application to the Court for that purpose. 

4. It is quite certain that Mr McDonald has had notice of this;  so much is readily to be inferred from an email sent by him today to the Court’s registrar.  In that, he notifies that he is travelling in Western Australia, does not understand the emails earlier from, it seems, both the Court and the bankruptcy trustees’ solicitors, and requests an adjournment. 

5. Mr McDonald did not, as he should have, also direct that particular correspondence to the bankruptcy trustees’ solicitors.  I have, though, ensured that it has been drawn to the attention of those solicitors.  Suffice it to say, the bankruptcy trustees oppose the granting of an adjournment on the basis that the fixing of interest ought to be a quite straightforward step, and that the practice and procedure in relation to the fixing of interest is notified on the Court’s website as well as in more detail in the court’s practice note GPN-INT, which is also published to the world at large on the Court’s website.

6. The bankruptcy trustees, by their solicitors, gave notice to Mr McDonald by email of a detailed calculation of interest.  The interest calculation which they notified and which is exhibited to Mr Lee’s affidavit notifies on its face that it is calculated in accordance with the practice note mentioned.  That practice note envisages that persons disposed to seek interest should verify independently the accuracy of the interest rates published in the Court’s website by reference to the website of the Reserve Bank of Australia.  For the purposes of this morning’s application, the bankruptcy trustees have tendered the Cash Rate page of the Reserve Bank’s website.  They have done so by inviting that to be noted in its electronic form.  I have inspected that page and the cash rates specified there.  I consider that those cash rates are admissible in evidence as a business record of the Reserve Bank.  I am quite satisfied that the rates there specified correspond with the rates which have been used by the trustees in their interest rate calculation.  There is no reason why the Court should not proceed to judgment in respect of the awarding of interest forthwith.  Mr McDonald has had notice, and it is sufficient notice in my view;  further, the rates concerned are readily verifiable via the means which I have mentioned.

7. The upshot, then, is that as a matter of discretion under s 51A of the Federal Court of Australia Act 1976 (Cth), there is an ability of the Court to award interest up to judgment; there is an evidentiary foundation established for the awarding of that interest, and an expectation created by the practice note as to the ordinary way in which that discretion will be exercised, by reference to those published cash rates of the Reserve Bank. Mr McDonald has provided no reason why the discretion should not be exercised in the ordinary way in respect of the allowance of pre-judgment interest. The total calculated by the trustees in respect of interest is $59,569.01. The detailed rationale for that calculation appears as an annexure to Mr Lee’s affidavit filed by leave today. It is that rational of which Mr McDonald has had due notice.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

Associate:  

Dated:        25 May 2018