MIS Funding NO.1 PTY LIMITED v Marks-Isaacs
[2012] FMCA 951
•22 August 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MIS FUNDING NO.1 PTY LIMITED v MARKS-ISAACS | [2012] FMCA 951 |
| BANKRUPTCY – Award of costs on dismissal of creditor’s petition. |
| Federal Court Rules Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) |
| Applicant: | MIS FUNDING NO 1 PTY LIMITED ACN 119 268 905 |
| Respondent: | SIMON MARKS-ISAACS |
| File Number: | SYG 1927 of 2011 |
| Judgment of: | Driver FM |
| Hearing date: | 22 August 2012 |
| Delivered at: | Sydney |
| Delivered on: | 22 August 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr D Neggo |
| Solicitors for the Applicant: | Voros Lawyers |
| Counsel for the Respondent: | Mr S Y Reuben |
| Solicitors for the Respondent: | Peter M Wayne & Associates |
ORDERS
By consent, the petition filed on 30 August 2011 as amended by leave on 14 May 2012 is dismissed.
The respondent debtor is to pay the applicant creditor’s costs in accordance with 13.03(2) and 13.03(3)(b) of the Federal Magistrates Court (Bankruptcy) Rules 2006.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1927 of 2011
| MIS FUNDING NO.1 PTY LIMITED |
Applicant
And
| SIMON MARKS-ISAACS |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
I have before me a creditor’s petition in amended form. The original petition was filed on 30 August 2011 and the amended petition was filed in court by leave on 14 May 2012. That in itself indicates that the matter has had a somewhat protracted history. The respondent debtor is a disappointed investor in a forest investment scheme, which has got into difficulties. The petitioning creditor claims monies due which have a connection to that investment.
Over the course of the proceedings, various issues have been raised in opposition to the petition. The petition was amended by leave in May after the issue of undisclosed security over a forest investment was raised on behalf of the debtor. The history of the matter also discloses that while the debtor has been reluctant to meet all demands made on him and has been unable to pay amounts demanded in full at the time of those demands, he has had a genuine interest in meeting his obligations over time. Several agreements have been entered into with a view to amounts due being paid by instalments. Unfortunately, due to default, other or continued proceedings have been necessary.
The amount sought in the amended petition was ultimately paid yesterday by Mr Marks-Isaacs, together with an additional amount in respect of a costs order in other proceedings. The intention of that payment was plainly to bring to an end these bankruptcy proceedings. The applicant creditor concedes that it would be appropriate in the circumstances to dismiss the petition.
There is a remaining issue of costs of these proceedings. The creditor seeks its costs to be taxed in accordance with the Federal Court Rules. The debtor opposes any order as to costs and, indeed, submits that in relation to at least one adjournment of the proceedings, he should recover costs thrown away.
Having heard from counsel for the parties, it is my firm view that it would be unproductive to attempt to deconstruct the course of the proceedings to determine where the merits of costs arguments lie at particular points of time. The proceedings have been protracted; that is, in part, a consequence of difficulties the debtor has encountered in meeting payments he has agreed to make and in part because of his determination to identify and have dealt with all issues bearing upon the petition, including the issue of security held by the applicant creditor. In that regard, it appears to be accepted that the amount claimed by the creditor having been paid, that security has been exhausted or discharged.
Having regard to the length of the proceedings, the work properly undertaken on behalf of the applicant creditor and the very late payment by the respondent debtor, my view is that a costs order in favour of the applicant creditor should be made. However, it should not be a costs order at large or subject to taxation. The Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) (“the Federal Magistrates Court (Bankruptcy) Rules”) provide for a short form bill of costs in circumstances, such as the present, where it is appropriate to dismiss a petition but the Court recognises that the petition was properly brought.
The present petition was properly brought, at least in its ultimate amended form. The creditor should receive some recompense for its costs. The short form bill amount provided for in rule 13.03(2) is, in my view, adequate recompense, together with proper disbursements incurred, referred to in sub rule 13.03(3)(b). It would not, in my view, be appropriate to add an addition, adjournment costs reserved or awarded on any particular day during the course of the proceedings because the merits of such adjournments have waxed and waned over the course of the proceedings.
By consent, I will order that the petition filed on 30 August 2011 as amended by leave on 14 May 2012 is dismissed.
I will order that the respondent debtor is to pay the applicant creditor’s costs in accordance with 13.03(2) and 13.03(3)(b) of the Federal Magistrates Court (Bankruptcy) Rules.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Driver FM
Date: 17 October 2012
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