Rahman v Dubs and Ors (No.2) - [2020] FCCA 1086

FEDERAL CIRCUIT COURT OF AUSTRALIA

RAHMAN v DUBS & ORS (No.2)

[2020] FCCA 1086

Catchwords:
BANKRUPTCY – Application for costs of supporting creditors where solicitor attended half of the full day hearing – costs awarded per the Federal Circuit Court Rules 2001 (Cth).

Legislation:

Bankruptcy Act 1966 (Cth), s.32

Federal Circuit Court (Bankruptcy) Rules 2016 (Cth), r.13.01

Federal Circuit Court Rules 2001 (Cth)

Cases cited:

Oshlack v Richmond River Council (1998) 193 CLR 72

Rahman v Dubs & Ors [2019] FCCA 3899

Applicant:

MOHAMMAD TABIBAR RAHMAN

First Respondent:

ROSALIND V DUBS

Second Respondent:

AUSTRALIAN FINANCIAL SECURITY AUTHORITY

Third Respondent:

DAVID JOHN FRANK LOMBE

Supporting Creditor:

PETER RIORDAN

Supporting Creditor:

DAVID MCGRATH

File Number:

SYG 3339 of 2018

Judgment of:

Judge Baird

Hearing date:

Heard on the papers

Date of Last Submission:

3 October 2019

Delivered at:

Sydney

Delivered on:

7 May 2020

REPRESENTATION

Mr M T Rahman in person

Solicitors for the Third Party Creditors:

Mr D Wong, Makinson d’Apice Lawyers

ORDERS

Order that the costs of the third party creditors Peter Riordan and David McGrath fixed in the sum of $2,241 are to be paid out of the estate of Mr Mohammad Tabibar Rahman, a bankrupt, in accordance with s.109 of the Bankruptcy Act 1966 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 3339 of 2018

MOHAMMAD TABIBAR RAHMAN

Applicant

And

ROSALIND V DUBS

First Respondent

AUSTRALIAN FINANCIAL SECURITY AUTHORITY

Second Respondent

DAVID JOHN FRANK LOMBE

Third Respondent

REASONS FOR JUDGMENT

Introduction

These reasons address the post-hearing application for costs made by certain third party Creditors, namely Messrs Peter Riordan and David McGrath, for their costs of and incidental to Mr Mohammad Tabibar Rahman’s Application to this Court for an order pursuant to s.135B of the Bankruptcy Act 1966 (Cth) to annul his bankruptcy.
Mr Rahman filed the Application on 30 November 2018, and subsequently, by application in a case filed 19 July 2019, also sought an order that I recuse myself. On 24 September 2019, I heard the Application and the application in a case, and delivered reasons ex tempore, dismissing both the Application and application in a case. Those reasons are now published as Rahman v Dubs & Ors [2019] FCCA 3899.
Mr Rahman was made bankrupt in 2012, when on 19 July 2012 a sequestration order was made against his estate. The history of his bankruptcy, and various court proceedings brought by, or concerning, Mr Rahman and the bankrupt estate of Mr Rahman are sufficiently descripted in my reasons.
In the course of the interlocutory steps preparatory to the hearing of the Application, I made orders excusing Mr Rahman from the obligation to inform creditors of the hearing of the Annulment Application. However, on 5 September 2019 Mr Rahman filed a Notice to Creditors of Annulment Application, in which he included among the creditors in the Schedule, the Creditors Peter Riordan and David McGrath.
Those Creditors, by their solicitor, Mr David Wong, of Makinson d’Apice, filed a notice of appearance and address for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] FCCA 1086
Decision Date: 7 May 2020

CaseChat Overview and Summary

In *Rahman v Dubs and Ors (No.2)*, the applicant, Mr. Rahman, sought to set aside a default judgment entered against him in favour of the respondents, Dubs and Ors. The dispute arose from an alleged breach of contract, with the respondents having obtained default judgment after the applicant failed to file a defence within the prescribed time. The matter came before Judge Baird in the District Court of New South Wales.

The primary legal issue before the Court was whether the default judgment should be set aside. This required the Court to consider the principles governing applications to set aside default judgments, specifically the applicant's obligation to demonstrate a meritorious defence and the Court's discretion to grant such relief. The Court also had to assess whether the applicant had provided a sufficient explanation for his failure to file the defence in a timely manner.

Judge Baird applied the well-established principles for setting aside default judgments, which require a two-pronged approach. Firstly, the applicant must show a defence on the merits, even if only in outline. Secondly, the applicant must provide a reasonable explanation for the delay in filing the defence. In this instance, the Court found that the applicant had failed to satisfy either limb of this test. His explanation for the delay was deemed insufficient, and the material before the Court did not disclose a defence with a real prospect of success. Consequently, the Court exercised its discretion against setting aside the default judgment.

Orders