Kitay, in the matter of Frigger (No 2)

In the matter of Frigger (No 2), the petitioners sought a sequestration order against the Friggers, who opposed the petition on various grounds. The primary legal issues before the court were whether the Friggers could pay their debts, whether the costs order was valid, and whether there were claims in other proceedings that warranted dismissing or adjourning the petition. The court also considered whether the liquidator required approval for a costs agreement under the Corporations Act, and the appropriate approach to assessing costs when a costs agreement allows for charging above scale.

The court found that the Friggers had access to a superannuation fund that they refused to use to pay the costs order, thereby demonstrating their ability to pay their debts. The court held that the petition should not be refused solely on the basis that the Friggers could pay their debts. Regarding the costs order, the court determined there was no fraud or miscarriage of justice, as the Friggers had not demonstrated any error in the assessment by the Registrar. The court also held that approval under s 477(2B) of the Corporations Act was not required for the costs agreement entered into by the liquidator. Finally, the court found that the indemnity principle was satisfied, and the award of indemnity costs was proper.

The court exercised its discretion against refusing the petition, as the Friggers could pay their debts, and there was no demonstrated error in the costs assessment. The court granted the sequestration order, assessed the costs of the first applicant, and allowed the supporting creditors to apply for orders for costs. The date of the act of bankruptcy was noted as 8 November 2017. Entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.