Newman (Trustee), in the matter of Cameron-Clarke (Bankrupt) v Mackay (No 2)
[2024] FedCFamC2G 527
•11 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Newman (Trustee), in the matter of Cameron-Clarke (Bankrupt) v Mackay (No 2) [2024] FedCFamC2G 527
File number(s): MLG 771 of 2023 Judgment of: JUDGE J YOUNG Date of judgment: 11 June 2024 Catchwords: BANKRUPTCY – COSTS – whether costs should be awarded following successful application of trustee – where respondents have not participated in proceedings – exercise of court’s discretion – costs awarded in fixed sum Legislation: Conveyancing Act 1919 (NSW) s 66G
Bankruptcy Act 1966 (Cth) ss 30, 32, 58, 77(1)(g)
Federal Circuit and Family Court of Australia 2021 Act (Cth) s 214
Judiciary Act 1903 (Cth) s 79
Federal Circuit and Family Court of Australia (Bankruptcy) Rules 2021 (Cth) rr 13.01(1),(2), (3)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 22.02(1)
Federal Court Rules 2011 pt 40, r 40.01, 40.02
Cases cited: Newman (Trustee), in the matter of Cameron-Clarke (Bankrupt) v Mackay [2023] FedCFamC2G 1139
Washington v Qantas Airways Limited (2014) 107 IPR 144
Division: Division 2 General Federal Law Number of paragraphs: 32 Date of last submission/s: 27 March 2024 Date of hearing: On the papers Place: Melbourne Solicitor for the Applicant: Mills Oakley Solicitor for the First Respondent: Did not participate Solicitor for the Second Respondent: Did not participate ORDERS
MLG 771 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF GRAEME LEE CAMERON-CLARKE, BANKRUPT
BETWEEN: PHILLIP NEWMAN AS TRUSTEE OF THE BANKRUPT ESTATE OF GRAEME LEE CAMERON-CLARKE
Applicant
AND: WENDY LYNETTE MACKAY
First Respondent
GRAEME LEE CAMERON-CLARKE
Second Respondent
ORDER MADE BY:
JUDGE J YOUNG
DATE OF ORDER:
11 JUNE 2024
THE COURT ORDERS THAT:
1.The Applicant’s costs fixed in the amount of $15,523.00 be paid from the bankrupt
estate of Graham Cameron-Clarke in accordance with the Bankruptcy Act 1966 (Cth) and r 13.01 of the Federal Circuit and Family Court of Australia (Bankruptcy) Rules 2021.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE J YOUNG:
INTRODUCTION
The applicant, Philip Newman (Trustee), is the trustee in bankruptcy of the second respondent, Graeme Lee Cameron-Clarke. The first respondent, Wendy Lynette Mackay, is the spouse of the second respondent.
This matter came before me on 31 July 2023 by an Application of the Trustee seeking orders pursuant to ss 30, 58 and 77(1)(g) of the Bankruptcy Act 1966 (Cth), s 66G of the Conveyancing Act 1919 (NSW) and s 79 of the Judiciary Act 1903 (Cth) (Substantive Application).
On 4 December 2023 I delivered judgment in the proceedings. For the reasons set out in Newman (Trustee), in the matter of Cameron-Clarke (Bankrupt) v Mackay [2023] FedCFamC2G 1139, I ordered, amongst other things, that the respondents provide vacant possession of the property known as Lot X, W Street, W Locality, New South Wales (more particularly described in Folio Identifier XXX) (Property), the Trustee and David Charles Quin be appointed as statutory trustees for the sale of the Property.
Presently before the Court is an application for costs made by the Trustee following judgment in their favour in the Substantive Application (Costs Application). The Trustee applied to the Court for orders that the respondents pay the Trustee’s costs fixed in the amount of $15,523.00. For the reasons that follow, I have determined that it is appropriate that costs be awarded in the fixed amount of $15,523.00 to be paid from the bankrupt estate of the second respondent.
PROCEDURAL BACKGROUND
The factual background in the present case is summarised in the reasons for judgment delivered on 4 December 2023 and need not be repeated here.
No material was filed by the first or second respondent in relation to the Substantive Application.
The Substantive Application was heard on 31 July 2023 with no appearance being made by either the first or second respondent.
As set out above, on 4 December 2023 I delivered judgment in favour of the Trustee and made orders for vacant possession of the Property, appointment of the Trustee and David Charles Quin as statutory trustees for the sale of the Property and certain ancillary orders (December Orders). The December Orders also included the following orders in relation to costs:
10. Pursuant to r 22.02(1) of the rules, the Applicant may apply for an order that the Court set the amount of the Applicant’s costs of this proceeding, such application to be made by the Applicant filing and serving (in accordance with the same procedure for service set out in paragraph 14(a)(i) and (b) of these Orders), by no later than 1 January 2024, an Affidavit on which the Applicant relies for such an order.
11. If by 15 January 2024, the Respondents do not file any Affidavit in relation to costs in response to any Affidavit the Applicant may file pursuant to paragraph 10 of these Orders, the Court will be at liberty to set the Applicant’s costs pursuant to r 22.02(2)(a) of the Rules, or alternatively make an order under r 22.02(2)(c) of the Rules referring the costs for taxation under part 40 of the Federal Court Rules 2011 (Cth).
In accordance with order 14 of the December Orders, the Trustee served the December Orders on the first and second respondent.
On 29 December 2023, the Trustee’s solicitor filed an affidavit seeking the time for compliance with order 10 of the December Orders be extended. The Court was not minded to grant the extension.
On 18 January 2024 the Trustee’s solicitor filed a further affidavit seeking the time for compliance with order 10 of the December Orders be extended, along with an affidavit of Mr Grisenti, an Accredited Costs Law Specialist. In his affidavit, Mr Grisenti deposed that the Trustee’s costs of the Substantive Application be fixed at $15,523.00 (inclusive of disbursements).
On 7 February 2024, the parties were notified by email that the matter was listed for Directions Hearing on 13 February 2024.
On 13 February 2024 orders were made extending the time for compliance with orders 10 and 11 of the December Orders (February Orders). In accordance with order 3 of the February Orders, the Trustee served the February Orders on the first and second respondent.
On 14 March 2024 orders were made in Chambers (March Orders) which ordered, amongst other things, that the matter be listed for a costs hearing on 26 April 2024 (Costs Hearing) and each party to file and serve any written submissions with respect to the Costs Application. The March Orders included a notation that if no material was filed by the respondents in accordance with order 3 of the March Orders, the Costs Application would be determined on the papers.
In accordance with order 5 of the March Orders, the Trustee served the March Orders on the first and second respondent.
On the material before the Court, I am satisfied that the December Orders, the February Orders and the March Orders have been served on the first and second respondent and as such, the first and second respondents are on notice of the Costs Application and the Costs Hearing. Accordingly, I am satisfied that the first and second respondents have had an adequate opportunity to file any material in response to the Costs Application and to be heard in relation to the Costs Application. No material was filed by the respondents in accordance with order 3 of the March Orders. I am also satisfied that the respondents have also been on notice that in the absence of any material being filed by them in relation to the Costs Application the matter would be determined on the papers and that in all the circumstances it is appropriate to so proceed.
CURRENT PROCEEDINGS
As stated above, the respondents did not participate or file any material in the Substantive Application, nor have they participated or filed any material in relation to the Costs Application.
The applicant relies on the following material in support of the Costs Application:
(1)the affidavit of Mr Grisenti filed on 18 January 2024; and
(2)written submissions filed on 27 March 2024.
LEGISLATIVE PROVISIONS
This Court has a broad discretion to order costs to the successful party in a proceeding.
Section 214 of the Federal Circuit and Family Court of Australia 2021 Act (Cth) (FCFCOA Act) provides:
(1) This section does not apply to:
(a) family law or child support proceedings; or
(b) proceedings in relation to a matter arising under:
(i) the Fair Work Act 2009; or
(ii) section 14, 15 or 16 of the Public Interest Disclosure Act 2013.
Note 1:Paragraph (a)—see section 117 of the Family Law Act 1975 in relation to family law or child support proceedings.
Note 2:Subparagraph (b)(i)—see section 570 of the Fair Work Act 2009 for proceedings in relation to matters arising under that Act.
Note 3:Subparagraph (b)(ii)—see section 18 of the Public Interest Disclosure Act 2013 for proceedings in relation to matters arising under section 14, 15 or 16 of that Act.
(2)The Federal Circuit and Family Court of Australia (Division 2) or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.
(3)Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Circuit and Family Court of Australia (Division 2) or Judge.
Note:For further provision about the award of costs, see Division 4 of Part 6 and paragraphs 192(4)(d) and (e).
Pursuant to r 22.02(1) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (FCFCOA Rules), an Application for an order for costs may be made: (a) at any stage in a proceeding; (b) within 28 days after a final decree or order is made; or (c) within any further time allowed by the Court.
Relevant to the present application, the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) provides that the Court may make such orders as to costs “as it thinks fit” in any proceeding before it: s 32 of the Bankruptcy Act.
In bankruptcy proceedings, the entitlement to costs is governed by the Federal Circuit and Family Court of Australia (Bankruptcy) Rules 2021 (Cth) (Bankruptcy Rules).
Pursuant r 13.01(1) of the Bankruptcy Rules, unless the Court orders otherwise, a person who is entitled to costs in a proceeding in which the Bankruptcy Act applies, is entitled to costs in accordance with pt 40 of the Federal Court Rules 2011 (Federal Court Rules). The award of such costs is at the Court’s discretion and may be fixed: rr 13.01(2) and (3) of the Bankruptcy Rules.
Pursuant to r 40.01 of the Federal Court Rules, if an order is made that a party pay costs, the costs are to be costs as between party and party “incurred fairly and reasonably in the conduct of the litigation”.
Rule 40.02 of the Federal Court Rules provides that:
A party or a person who is entitled to costs may apply to the Court for an order that costs:
(a)awarded in their favour be paid other than as between party and party; or
(b)be awarded in a lump sum, instead of, or in addition to, any taxed costs; or
(c) be determined otherwise than by taxation.
Note 1: The Court may order that costs be paid on an indemnity basis.
Note 2: The Court may order that costs be determined by reference to a cost assessment scheme operating under the law of a State or Territory.
There is no rigid formula to be applied to the determination of costs and the exercise of discretion will require regard be had to the facts and law at issue in the proceedings: Washington v Qantas Airways Limited (2014) 107 IPR 144.
CONSIDERATION
The Trustee seeks that their costs be fixed in the sum of $15,523.00 and to be paid from the bankrupt estate of the second respondent. An itemised statement of costs and disbursements is provided for at paragraphs [13] and [14] of Mr Grisenti’s affidavit. Mr Grisenti’s affidavit provides that the total amount of costs and disbursements recoverable by the Trustee in these proceedings is $15,523.00. I accept that evidence and consider those costs to have been incurred in the fair and reasonable conduct of the proceeding.
The Trustee was the successful party in the Substantive Application and there is nothing before the Court to warrant any departure from the orthodox approach that costs follow the event. Accordingly, there is nothing before the Court to indicate that the Trustee ought not be awarded costs as sought.
An order that costs be fixed in the amount of $15,523.00 will avoid the need for, and costs associated with, taxation. I consider that the costs of a taxing process would be disproportionate to the quantum of costs sought. An order for costs fixed in the amount sought will also allow the effective resolution of the reasonable costs incurred by the Trustee.
There being no opposition to such an approach, and on the basis of the evidence before the Court, I am satisfied it is appropriate to fix the costs as sought.
CONCLUSION
For the above reasons, I make the orders set out at the commencement of this judgment.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of Judge J Young. Associate:
Dated: 11 June 2024
0
2
7