Rahman v Dubs and Ors (No.2)
[2020] FCCA 1086
•7 May 2020
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 service on 18 September 2019. At the hearing on 24 September 2019, Mr Wong appeared for the Creditors. The Creditors did not file or serve any evidence or provide any written submissions. Mr Wong announced his appearance. When asked, Mr Wong informed the Court that he supported the Trustee, Mr Lombe, and relied on the submissions made by Mr Spencer, on behalf of the Trustee. He did not take any active part in the hearing. At lunchtime, on the Court’s initiative, I excused Mr Wong, on behalf of his clients from further appearance.
Among the Orders I made on 24 September 2019, relevant to the present application for costs were the following:
5.Grants leave to the first respondent, second respondent, and the supporting creditors Mr P Riordan and Mr D McGrath, by 1 October 2019, to apply to the Court if they wish to be heard in relation to costs, any such costs application to be accompanied by an outline of submissions on costs, limited in each case to 2 pages.
6.Orders that in the event that any of the persons identified in the preceding order make such costs application, they serve the documents on all other parties, and in the case of Mr Rahman, by express post to the address on the Application.
7.Orders by 4pm on 9 October 2019 Mr Rahman file and serve any outline of submissions in answer on costs, limited to 2 pages, and only to be filed and served if any person has applied to the Court pursuant to paragraph 5 of this order.
8.Orders any such costs application be heard and determined on the papers.
No formal application for costs by the Creditors was filed, nor was my Chambers informed that any such application was made. Notwithstanding, on 26 September 2019, the Creditors filed a short 2 page outline of submissions in the Registry of the Court, and, it appears from Mr Rahman’s response, served that submission on Mr Rahman. In their submission the Creditors did not state the amount of their claim for costs. They did not file, or otherwise refer to any evidence in support of their application.
On 3 October 2019, Mr Rahman filed a document in response self-described as “Outline of Submissions against any costs by the alleged Default Creditors of Eleven Parties as per Notice entered on 19/07/19 and served on all Parties”.
Due to an apparent oversight in the Registry, neither the fact of the filings nor the documents filed was brought to my, or my Chambers’, attention until recently.
The submissions on costs
Creditors’ submissions
The Creditors submission first sets out in extremely brief form the dates of the making of the sequestration order, the commencement of the Application, the filing of the Notice to Creditors, and the hearing before me. It sets out the orders I made, including the Orders I have referred to above. The remainder of the submission is as follows:
Legal Principles
6.Section 32 of the Bankruptcy Act 1966 (Cth) provides that, "The Court may, in any proceeding before it, including a proceeding dismissed for want of jurisdiction, make such orders as to costs as it thinks fit."
7.In the absence of special circumstances, a successful party in civil litigation has a “reasonable expectation” of being awarded costs against the unsuccessful party: Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] and [134].
Submissions
8.The Creditors have an unpaid claim for interest in the sum of $18,073.34 arising from a judgment made on 17 April 2013 against the Applicant.
9.The Creditors opposed the Application. In doing so, it was necessary for solicitors for the Creditors to prepare for and to appear at the hearing of the Application.
10.The Application was successfully opposed.
11.The Creditors submit that there are no special circumstances which should disentitle them to their costs of and incidental to the Application.
Mr Rahman’s submission
The document filed by Mr Rahman comprised 2 pages as submissions, followed by a cover letter from Makinson d’Apice dated 9 September 2013 which referred to proof of debt and related documents, a copy of the proof of debt form completed by Mr Wong for the Creditors, dated 9 September 2013, and a copy of Mr Rahman’s filed Notice to Creditors in this proceeding.
Mr Rahman’s submissions are to the effect that the judgment on the Application and the Orders “are not of valid exercise by judiciary having infringed the Due process of law and with impropriety”. He opposes any claims by the Creditors, and asserts that the 2013 proof of debt on behalf of the Creditors was a false claim, and that offences under s.82, s.83, and s.84 of the Act have been committed.
In order to fully convey Mr Rahman’s submission under the heading “Orders sought” it is best to reproduce it in full. It is as follows (without alteration):
4.The Applicant ' oppose' any claims by any alleged Defaults, Respondents-R1, R2 and of total Eleven (11) Creditors as Claims by David Lombe pursuant to" Notice to Creditors of Annulment Application "including David Lombe Respondent -R3 when the Creditors are Default . Such decision are violations under s 17A Summary judgment (1) (a) (b), FCCA 1999. As proved no creditor have presented evidences of legitimate Court orders including Commonwealth Bank, Dubs, R1, Official Trustee, R2 and Lombe R3. Lombe, who have already allegedly taken by sale of Property and unlawful International Money Transfer of $57, 303, 00 on 22 November 2012 of total proceeds of 0.59 Million dollars. Sought and seeking justice before the Court.
5.The Court's alleged recognition and relived without questioning when applicant sought interrogations of evidences for such alleged claims of David Wong, Solicitor for the DET Officials Mr. Peter Riordan & David McGrath are of 'Discretions' as made orders not under any substantive statutory enactments . The applicant submits for orders against Mr. David Wong, Solicitor, 'That the Court under its own initiations of motion will adjudicate for administrations of Justice for his wilful misleading and fraud claims which violations under legislations submitted before.
6.The Court ought to be determined any matter under 'Due Process of Law and fairness in the 'Open Court'. But not any violations as practice ' Discretions' Chamber. There is no provisions under Constitutions that invest power under 'Discretions. But under statues Open Court.
Mr Rahman then set out a handwritten footnote stating that “no cost application by the creditors has not received by Applicant as per order no.6 on 02/10/19”.
Disposition
Although the Creditors have not filed a formal application for costs, the Creditors’ submission makes express their intention that the submission stand as their application for their costs of and incidental to the Application.
Reviewing Order (5) (see above at [6]), I consider it reasonable for the Creditors to construe the Order as requiring them to file and serve their outline of submissions, and, save for informing Chambers of that filing and service, to do no more than they have done. That is, I accept that the Order did not expressly require them to file and serve an application in a case applying for their costs of and incidental to the Application.
I consider that undertaking any further steps in this proceeding will cause the Creditors to incur legal costs. Given Mr Rahman’s conduct to date, I consider that requiring the Creditors or Mr Rahman to undertake any further step in the proceeding is likely to cause him further agitation, which in turn may lead to more costs being incurred.
Accordingly, I do not consider that it is in the interests of the just, efficient, and economical resolution of proceedings in this Court to require the Creditors to file any application in a case, or to require Mr Rahman and the Creditors to appear in Court to make further submissions on the question of costs. Paragraph (8) of the Orders is clear. I consider that no sufficient reason has been proffered by Mr Rahman to set aside or act contrary to that Order.
As the Creditors acknowledge, pursuant to s.32 of the Act, the Court may make such orders as to costs as it thinks fit. In the present case, the Trustee opposed the Application, and was successful. The Trustee undertook the sole active part in opposing the Application.
Any live claim that the Creditors have as to amounts unpaid in the administration of the estate of the bankrupt is a matter for the Trustee to address. The Creditors’ participation in the proceeding was limited to that I have described above at [5], and perusing the materials filed by the parties in order to inform the Court as Mr Wong did.
There is no material before me from which I can reasonably infer that the Creditors had any interest in the proceeding separate from, or not encompassed by, the Trustee’s position and his actions in opposing the Application. Mr Wong’s statement to the Court to which I refer above makes that apparent.
The Creditors did not actively participate in the hearing, did not provide any active assistance to the Court, and have not articulated any basis on which their position vis-à-vis the bankruptcy and Mr Rahman’s Application for annulment is not fully encompassed by the Trustee’s actions in opposing the Application. The Creditors have not placed any evidence before the Court as to the quantum of their claimed costs, nor have they made any submission as to the filing of any bill of costs.
Whilst it is not clear to me why it was not sufficient for the Creditors prior to the hearing in writing to inform the Court and the parties that they would rely on the evidence of the Trustee and support Counsel for the Trustee’s submissions, and seek to be excused from appearing at the hearing, I accept that it was appropriate for Mr Wong to appear on behalf of the Creditors at the commencement of the hearing on 24 September 2019, and inform the Court orally to that effect.
In the present circumstances I am not persuaded that it is appropriate to order that the Creditors have the benefit of an all-encompassing order for their costs of and incidental to the Application as they seek. I do not consider that the Federal Court scale of costs is appropriate (compare with Part 13 of the Federal Circuit Court (Bankruptcy) Rules 2016).
I consider that it is appropriate in the circumstances however to order that the Creditors have some of their costs. In the absence of any detail as to quantum, I consider it appropriate to order costs in a fixed sum. I consider that the fixed sum of $2,241, which is the scale cost in this Court of practitioners attendance at a full day hearing in general federal law (non-migration matters) as at 24 September 2019 is appropriate.
I will so order.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Judge Baird
Associate:
Date: 7 May 2020
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