Laughton v Gye

[2019] FCA 2165

FEDERAL COURT OF AUSTRALIA

Laughton v Gye [2019] FCA 2165

File number:

NSD 394 of 2018

Judge:

BURLEY J

Date of judgment:

20 December 2019

Catchwords:

COSTS – consideration of costs – whether applicant was a secured creditor under s 4 of the Bankruptcy Act 1966 (Cth) following payment into the Supreme Court of New South Wales – whether respondent entitled to indemnity costs – respondent entitled to part of his costs on an ordinary basis – applicant awarded a lump sum for his share of the costs under r 40.02(b) of the Federal Court Rules 2011 (Cth)

Legislation:

Bankruptcy Act 1966 (Cth) ss 4, 44

Federal Court Rules 2011 (Cth) r 40.02(b)

Legal Profession Act 2004 (Cth) (repealed) ss 368(5), 373

Cases cited:

Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29; 93 ALJR 1007

Dura (Australia) Constructions Pty Ltd (in liq) (recs and mgrs. apptd) v Hue Boutique Living Pty Ltd (formerly SC Land Richmond Pty Ltd) [2014] VSCA 326; 49 VR 86

Gye v Laughton [2018] NSWSC 1026

Gye v Laughton [2019] NSWSC 121

London Scottish Benefit Society v Chorley (1884) 13 QBD 872

Date of last submission:

5 December 2019

Registry:

New South Wales

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Category:

Catchwords

Number of paragraphs:

17

Counsel for the Applicant:

Mr J. Wyner

Counsel for the Respondent: 

Mr V. Gray

Solicitor for the Respondent:

Mr C. A. Gye

ORDERS

NSD 394 of 2018

BETWEEN:

GREGORY ALLAN LAUGHTON

Applicant

AND:

CLEMENT ANTHONY GYE

Respondent

JUDGE:	BURLEY J
DATE OF ORDER:	20 DECEMBER 2019

THE COURT ORDERS THAT:

1.That the respondent pay the applicant’s costs of the Creditor’s Petition prior to 12 July 2018 in the sum of $4,138.30.

2.That the applicant pay the respondent’s costs of the Creditor’s Petition from 12 July 2018 (excluding the costs of the 18 July 2018 case management hearing) in a sum 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

BURLEY J:

1. This is the last remnant of protracted proceedings brought by the applicant Gregory Laughton SC in respect of fees charged for work done pursuant to a written retainer against a solicitor, Clement Gye. Mr Gye was also the controlling director of the corporate client who was the ultimate consumer of Mr Laughton’s legal services.

2. The issues between the parties concern the payment of costs as follows:

   (1)Whether Mr Laughton’s costs of his Creditor’s Petition prior to 12 July 2018, and any costs awarded for the period following 12 July 2018, should be assessed on a lump sum basis or as taxed;

   (2)Whether, following a payment into court of the money the subject of the Creditor’s Petition on 12 July 2018, Mr Laughton ceased to be an unsecured creditor within s 4 of the Bankruptcy Act 1966 (Cth), with the consequence that he is required to pay Mr Gye’s costs of the Creditor’s…