Re: Collins; Ex Parte: Pipkin (Trustee) v Collins

[1989] FCA 878

JUDGMENT MO. ........ ~ ~ f ~ m 1

C A T C H W O R D S

BANKRUPTCY - Practice and Procedure - Costs - court may make such order as it thinks fit - conduct of unsuccessful parties - minors unaware of transactions - no fraud or positive misconduct on part of wife - no order for costs against respondents.

Bankruptcy Act 1966 ss.32, 120

Re: ROBERT WAYNE COLLINS A Bankrupt

B E T W E E N :
KEVIN MICHAEL PIPKIN Trustee of the Estate of Robert Wayne

Collins, a Bankrupt

Applicant

- and -

HELEN COLLINS, NIGEL VIVIAN ROBERT COLLINS, NARITA YVETTE COLLINS and NADANA RENE COLLINS

Respondents

FISHER J.
ADELAIDE

21 JULY 1989

OF AUSTRALIA

LIB WRY

IN THE FEDERAL COURT OF AUSTRALIA )

)

SOUTH AUSTRALIA DISTRICT REGISTRY )

1

GENERAL DIVISION	)	N0.704 of 1984
BANKRUPTCY DISTRICT OF THE STATE )	)
1
OF SOUTH AUSTRALIA	)

Re: ROBERT WAYNE COLLINS

A Bankrupt

B E T W E E N :

KEVIN MICHAEL PIPKIN Trustee of the Estate of Robert Wayne Collins, a Bankrupt

Applicant

- and -

HELEN COLLINS, NIGEL VIVIAN ROBERT COLLINS, NARITA WETTE COLLINS and NADANA RENE COLLINS

Respondents

JUDGE MAKING ORDER	F1 SHER J .
WHERE MADE	ADELAIDE
DATE OF ORDER	21 JULY 1989
THE COURT ORDERS THAT:

1. The Trustee be entitled to his taxed costs out of the bankrupt estate.

2.        There be no further order as to costs.

Note: Settlement and entry of order is dealt with in Bankruptcy

m 124.

IN THE FEDERAL COURT OF AUSTRALIA )

)

SOUTH AUSTRALIA DISTRICT REGISTRY )

1

GENERAL DIVISION	)	No. 704 of 1984
)
BANKRUPTCY DISTRICT OF THE STATE	) )
OF SOUTH AUSTRALIA	j

Re: ROBERT WAYNE COLLINS

A Bankrupt

B E T W E E N :

KEVIN MICHAEL PIPKIN Trustee of the Estate of Robert Wayne - Collins, a Bankrupt

Applicant

- and -

Respondents

EX TEMPORE REASONS FOR JUDGMENT

FISHER J. :

21 JULY 1989

In this matter I have given consideration to the

question of costs. It is perfectly apparent that the trustee is

entitled to his costs to be paid out of the bankrupt estate. Having been substantially successful in the matter, in the	ordinary course it might be said that he should get his costs as
against the respondents and a fair assessment would be as to three quarters thereof.
Counsel for the trustee applied for an order that the respondents pay his costs on the basis that except in exceptional

circumstances costs should follow the event. Counsel for the respondents opposed such an order but is unable to direct my attention to any contrary or relevant authority.

Section 32 of the Bankruptcy Act 1966 provides that the Court may make such order as to costs as it thinks fit. However, it does appear that on occasions a much more flexible approach has been adopted in bankruptcy proceedings and that it is not appropriate to say that unless there is some exceptional circumstance, costs follow the event.

It also appears that frequently notice is taken of the conduct of the unsuccessful parties.

In this matter three of the respondents were infants at the time the two properties were registered in their and their mother's names. There is no evidence that they played any part or were even aware that their father had executed on their behalf

an acceptance of the transfers. In Re Hook (1905) W.N. N.S.W.45

Walker J. of the Supreme Court indicated that in his view it was not appropriate in the Bankruptcy matter before him to make an

order for costs against infants unless they had been guilty of	fraud or misconduct.
It follows that in this matter it is proper that I refrain from making any order as against the three infant respondents.

There are also instances where Courts have departed from

the accepted rule and refrained from making orders against a wife or children who have been transferees under settlements declared void. I refer to Cohen v Lintz (1884) 10 V.L.R.(Eq) 149 where Mr. Justice Molesworth refused to order a wife to pay the successful trustee's costs saying on p.224:

"I thought it a very hard case on the woman and did not

on that account give costs against her."

In Shiels v Drysdale [l8801 6 V.L.R. (Eq) 126, the trial

Judge indicated at p.131 that he would not make an order against the unsuccessful defendant daughter of the bankrupt. There have also been cases where unsuccessful wives have not been ordered to pay the trustee's costs on the ground that the particular wife in question had no separate estate.

Furthermore in. the somewhat special circumstances of Hutton v Wilkinson (19061 Q.S.R.237 costs did not follow the event, but the unsuccessful wife was allowed her costs out of the monies she was directed to pay to the successful trustee. By the same token, there have also been occasions when the practice of costs following the event has not been adhered to and the trustee has not been ordered to pay the costs of a wife who has been	entirely successful. I refer to Re Nassoor (1935) 8 A.B.C.	167
where Judge Lukin said at p.168:

"On the question of costs I recognize that the respondent (wife) has been almost entirely successful but I must recognize that the fact that the insurance of the goods has been in the bankrupt's name for so long a time and that claims thereon have been made by

. the bankrupt on the ground of a loss to his property have naturally led the Official Receiver to believe that the goods were the goods of the bankrupt. I think that in the circumstances he should not be asked to pay the respondent's costs."

In this matter the respondent wife had, prior to the relevant transactions, suffered the experience of the matrimonial home being sold at the behest of a mortgagee. When she was apprised of the opportunity to acquire on the initiative of her husband, a family home and a home for her mother, she took legal advice on the matter. She entered into the transactions in reliance upon advice that they were legal and that the purchase moneys had come from a business acquaintance of her husband and arose out of an overseas transaction as a gift to her.

It cannot be said, to the extent that it is appropriate to apply the test applicable to infants, that she was guilty of any fraud or positive misconduct. In my opinion the appropriate order in this matter is that the trustee is entitled to his taxed costs on a priority basis out of the estate, but that I do not order that the trustee's costs be paid by the respondents.

I cannot see there can be any unfairness in this to the unsecured creditors, as over the years the dwelling houses have been preserved and there doubtless has been a substantial increase in their value. The order of the Court is that the

trustee is entitled to his taxed costs out of the estate but
there be no further order as to costs.	I also extend the time
for any appeal to 14 days from this date.

preceding pages are a true copy I certify that this and the 3

of the Reasons for Judgment of

Mr Justice Fisher.

Associate 3-	W&
w e d : 2l	3-5 1089.