Re Devy, Andrew Laurence Ex Parte BBC Hardware Ltd
[1997] FCA 587
•24 Jun 1997
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
No QP 619 of 1995
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND
RE:ANDREW LAURENCE DEVY
Debtor
EX PARTE:BCC HARDWARE LIMITED
ACN 000 003 378 (formerly known as
Burns Philp Hardware Ltd
Judgment Creditor
S J GURNSEY & CO
Applicant
ANDREW LAURENCE DEVY
Respondent
CORAM: Spender J
PLACE: Brisbane
DATE: 24 June 1997
MINUTES OF ORDER
THE COURT ORDERS THAT:
The notice of motion filed 13 May 1997 be dismissed.
The applicant on the motion pay the costs of the respondent to the motion, to be taxed if not agreed.
Note:Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
No QP 619 of 1995
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND
RE:ANDREW LAURENCE DEVY
Debtor
EX PARTE:BCC HARDWARE LIMITED
ACN 000 003 378 (formerly known as
Burns Philp Hardware Ltd
Judgment Creditor
S J GURNSEY & CO
Applicant
ANDREW LAURENCE DEVY
Respondent
CORAM: Spender J
PLACE: Brisbane
DATE: 24 June 1997
REASONS FOR JUDGMENT
A notice of motion filed on 13 May 1997 on behalf of S.J. Gurnsey and Company sought orders:
“1. That pursuant to Federal Court Rules O 62, r. 11 the decision of Registrar Allen (as a taxing officer) made on 29th April 1997 be reviewed.
2.That the Respondents Messrs Baker Johnson Solicitors pay the costs of and incidental to this Application.
3.Such further or other order or direction as this Court may deem [fit].”
Mr Devy was declared bankrupt on 12 December 1996 in respect of an act of bankruptcy which occurred on 28 October 1996.
The decision referred to in the notice of motion was the subject of reasons for decision of the Taxing Officer of the Federal Court, Mr Allen, dated 30 April 1997. On 18 June 1996, his Honour Hill J ordered that the applicant on a motion, Sally Gurnsey and Co, pay to Mr Devy his costs of successfully resisting an application for the substitution of a petitioning creditor. In relation to those proceedings, Baker Johnson appeared on Mr Devy's behalf.
It appears from Mr Allen's reasons for decision that a bill of costs was filed by Baker Johnson pursuant to the order of Hill J. On the taxation of those bill of costs, Baker Johnson sought to appear, but Sally Gurnsey and Co objected to Baker Johnson appearing.
Mr Allen records that the contention on behalf of Sally Gurnsey and Co was that “Baker Johnson have no instructions from Mr Devy's trustee in bankruptcy to appear, and all rights in respect of the order for costs have vested in the trustee in bankruptcy.”
He noted that “Baker Johnson venture no claim to be instructed by anyone, but appear in their own right as the possessors of a lien upon the costs.” Mr Allen noted:
“ I am concerned only with standing to appear upon the taxation and maintain a claim to items of costs to which objection has been taken.”
In reliance on a decision of the Full Court of the Federal Court ( Wilcox, Ryan and Gummow JJ) in Worrell (as trustee of the estate of Wedgwood) v Power & Power (1993) 118 ALR 237, Mr Allen concluded that Baker Johnson did have standing to appear on the taxation.
It is clear from the judgment of the Full Court in Worrell v Power & Power (supra) that when Hill J made the order in favour of Mr Devy on 18 June 1996, Baker and Johnson, as Mr Devy's solicitors, had equitable rights in the order which arose by reason of their exertions. Those rights were created forthwith on the making of the order and therefore before the commencement of the relation-back period.
The Full Court noted, at 246, that:
“ …the lien involves more than a personal right of the solicitor to approach the court to obtain a charging order, and that the lien arises when the judgment for costs is obtained, and before there has been a taxation of costs.”
At 247, the Court noted:
“ …although the solicitors acquired no legal title to the right of Mr Wedgwood to receive the costs, they acquired a right which was analogous to that which would be created by a present equitable assignment of the benefit of the costs order; that brought with it a right to have their costs paid out of the moneys which were subsequently received in February 1992.”
In the context of this case, the position is that Baker Johnson had a right analogous to that of a present equitable assignment of the benefit of the costs order obtained by Mr Devy. That, in my opinion, gave them sufficient standing to appear in relation to the taxation of that costs order. It may be that the trustee has an interest in the benefit of that costs order and could also appear on the taxation, but it appears to me that Baker Johnson had standing to appear on the taxation and to contend as to the correctness of the items for costs claimed in the bill of costs in that matter.
That does not, of course, mean that there can be any order by the taxing officer that Baker Johnson should be paid any amount out of the taxed costs. Their rights, as appears from the facts in Worrell v Power & Power, are rights to be paid out of moneys to which the primary entitlement is that of the Trustee. It may be that there are complications concerning that right, (dealing with matters of relation back or questions of cross-claims and the like), but, for the disposition of the present notice of motion, it seems to me that the decision of the Taxing Officer was correct and that Baker Johnson had standing to appear and to maintain the correctness of the items of costs in the bill.
I order that the motion be dismissed.
It seems to me that the ordinary rule as to costs should apply in this case and that I should order that the respondents to the motion have their costs of the motion to be taxed, if not agreed.
I certify that this and the preceding four (4) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.
Associate
Date: 24 June 1997
Solicitor for the applicant : Mr M Fisher of S J Gurnsey & Co
Counsel for the respondent : Mr M D Martin
instructed by : Baker Johnson
Date of hearing : 24 June 1997
0
0
0