Radnor Enterprises Pty Ltd v Nicholls (No.3)
[2019] FCCA 1337
•22 May 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RADNOR ENTERPRISES PTY LTD & ORS v NICHOLLS (No.3) | [2019] FCCA 1337 |
| Catchwords: BANKRUPTCY – COSTS – Application pursuant to liberty to apply to set aside or vary costs orders – whether costs orders should be varied – costs order varied. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.139ZS(1A), 139ZQ |
| Cases cited: Radnor Enterprises Pty Ltd & Ors v Nicholls (As Trustee of the Property of Boniface, A Bankrupt and Trustee of the Property of Ogston, A Bankrupt) [2017] FCCA 2313 |
| First Applicant: | RADNOR ENTERPRISES PTY LTD (ACN 010 185 814) |
| Second Applicant: | MARK ANDREW BONIFACE |
| Third Applicant: | MARGARET FIONA OGSTON |
| Respondent: | ALAN RICHARD NICHOLLS, AS TRUSTEE OF THE PROPERTY OF MARK ANDREW BONIFACE, A BANKRUPT AND TRUSTEE OF THE PROPERTY OF MARGARET FIONA OGSTON, A BANKRUPT |
| File Number: | SYG 210 of 2014 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | On the papers |
| Date of Last Submission: | 17 April 2019 |
| Delivered at: | Sydney |
| Delivered on: | 22 May 2019 |
REPRESENTATION
| Solicitors for the Applicants: | Mr R Phair of Proctor Phair Lawyers |
| Solicitors for the Respondent: | Ms K McLean of McLean & Associates |
ORDERS
Pursuant to order 3 of the orders pronounced on 5 March 2019 order 2 of those orders is set aside.
Instead of order 2 of the orders made on 5 March 2019:
(a)The applicants pay the respondent’s costs, other than:
(i)the respondent’s costs thrown away because of the order made on 22 March 2018 vacating the date that had been set for the hearing of the application referred to in order 1 of the orders made on 5 March 2019; and
(ii)the respondent’s costs of and incidental to the hearing of the determination of the separate question determined on 22 September 2017.
(b)The respondent pay the applicants’ costs of and incidental to the hearing of the determination of the separate question determined on 22 September 2017.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 210 of 2014
| RADNOR ENTERPRISES PTY LTD (ACN 010 185 814) |
First Applicant
| MARK ANDREW BONIFACE |
Second Applicant
| MARGARET FIONA OGSTON |
Third Applicant
And
| ALAN RICHARD NICHOLLS, AS TRUSTEE OF THE PROPERTY OF MARK ANDREW BONIFACE, A BANKRUPT AND TRUSTEE OF THE PROPERTY OF MARGARET FIONA OGSTON, A BANKRUPT |
Respondent
REASONS FOR JUDGMENT
Introduction
On 5 March 2019 I published reasons for judgment in this matter, and made an order for costs.[1] I reserved to the parties, however, liberty to apply to vary or discharge the order for costs I made (Order). The applicants (Mr Boniface and Ms Ogston) apply to vary the Order. The respondent (Trustee) opposes the variation sought by the applicants.
[1] Radnor Enterprises Pty Ltd & Ors v Nicholls (No.2) [2019] FCCA 480
The parties have filed written submissions, and have agreed that I determine the application for variation without any further hearing. These reasons for judgment, therefore, consider the application for a variation of the Order. They assume familiarity with the reasons for judgment I published on 5 March 2019.
Parties’ submissions
The applicants submit I should vary the Order in two ways. First, I should order that the Trustee pay the applicants’ costs up to and including 22 September 2017, being the date on which I published my reasons for judgment determining a separate question.[2] The second variation is that the costs to which the Trustee is entitled be confined to issues in relation to the construction of the deed of settlement to the exclusion of any work outside that issue.
[2] Radnor Enterprises Pty Ltd & Ors v Nicholls (As Trustee of the Property of Boniface, A Bankrupt and Trustee of the Property of Ogston, A Bankrupt) [2017] FCCA 2313
In support of their application that the Trustee should pay the applicants’ costs up to and including 22 September 2017, the applicants submit that the determination of the separate question was a discrete issue raised by the Trustee that was decided against the Trustee. In support of their application to make an order restricting the Trustee’s costs to the issue of the construction of the deed, the applicants rely on the matters stated by their solicitor, Mr Phair, in his letter to the Trustee’s solicitor dated 14 February 2018.[3] Mr Phair these said:
You will note from our clients’ evidence, the Applicants purposely chose to narrow the argument to be determined to the question of whether the settlement deed precludes or ought to preclude the trustee from issuing the section 139ZQ notices.
In the circumstances we submit the volume of evidence which we have now last night received from your client totalling 4,686 pages is exorbitant and unnecessary and regardless of the outcome of the proceeding our clients should not be liable for your client’s costs which will no doubt be unreasonable and disproportionate to the claim.
[3] Being annexure “F” to “Submissions by Applicants of Costs Order 2”
The Trustee submits the Order should not be varied to require the Trustee to pay the applicants’ costs of the separate question because the parties consented to the Court determining the separate question; the separate question that I determined “was not the question that was ultimately determined”; the applicant did not file an application for an extension of time until five months after I determined the separate question, and the extension of time was not granted.[4] The Trustee submits I should not make an order limiting costs because it was not until counsel for the applicants stated at the hearing that the applicants accepted the truth of the facts stated in the notices issued pursuant to s.139ZQ of the Bankruptcy Act 1968 (Cth) (Act) (notices).[5]
[4] Respondent’s Submission in Costs, [26]
[5] Respondent’s Submission in Costs, [29]
Should the Order be varied?
In my opinion, the Trustee should pay the costs of and incidental to determination of the separate question. The issue was raised by the Trustee; it was a discrete issue which, had it been determined in favour of the Trustee, would have resulted in the dismissal of the application; although the question I determined was not the question the parties formulated, it was the question which I found the parties litigated at the hearing; and the question was determined against the Trustee.
That the applicants did not file an application for an extension of time until five months after I determined the separate question is not causally relevant to the costs the parties incurred in litigating the separate question. Nor is the fact that the applicant failed in their application to obtain an order extending time causally relevant to the costs the parties incurred in litigating the determination of the separate question. The applicants’ failure to obtain an extension of time was premised on the Court having power to grant an extension of time if the preconditions for doing so existed, even though the applicants applied to set aside the time after the 60 day period provided for by s.139ZS(1A) of the Act. The purpose of hearing the separate question was to determine whether the Court had such power in the first place.
I am not satisfied it is appropriate to make an order confining the costs to the issue of the construction of the deed in the manner sought by the applicants. The submission assumes that the evidence of the transactions to which the deed referred was irrelevant to the question of the proper construction of the deed. That assumption, however, is not warranted. In the reasons for judgment I published on 5 March 2019 I set out the relevant principles concerning the construction of deeds and the identification of the subject matter of contracts made in writing. It is apparent from my reasons for judgment that I referred to matters external to the terms of the deed to place the question of construction I was required to decide in its appropriate factual context. The evidence the Trustee filed, therefore, was not irrelevant.
Disposition
I propose to set aside the Order and instead order that:
a)the applicants pay the respondent’s costs other than:
(i)the respondent’s costs thrown away because of the order made on 22 March 2018 vacating the date that had been set for the hearing of the application referred to in order 1 of the orders made on 5 March 2019; and
(ii)the respondent’s costs of and incidental to the hearing of the determination of the separate question determined on 22 September 2017; and
b)the respondent pay the applicants’ costs of and incidental to the hearing of the determination of the separate question determined on 22 September 2017.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 22 May 2019
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