Re Firepower Operations Pty Ltd (in liq) (No 3) - [2010] FCA 141

FEDERAL COURT OF AUSTRALIA
Hughes, in the matter of Firepower Operations Pty Ltd (In Liquidation) (No 3) [2010] FCA 141

Citation: Hughes, in the matter of Firepower Operations Pty Ltd (In Liquidation) (No 3) [2010] FCA 141

Parties: IN THE MATTER OF FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549) (IN LIQUIDATION)
BRYAN KEVIN HUGHES AS LIQUIDATOR OF FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549) (IN LIQUIDATION)

File number: WAD 197 of 2009

Judge: SIOPIS J

Date of judgment: 26 February 2010

Catchwords: COSTS – examinee failed to attend Court in answer to an examination summons – whether Court has power to award costs against a non-party in respect of proceeding brought under the Corporations Act 2001 (Cth) – indemnity costs – whether costs are payable forthwith.

Legislation:
Corporations Act 2001 (Cth) ss 596A, 1335(2)
Federal Court of Australia Act 1976 (Cth) s 43

Federal Court (Corporations) Rules 2000 rr 11.10, 11.10(2)

Cases cited: Hughes, in the matter of Firepower Operations Pty Ltd (In Liquidation) (No 2) [2009] FCA 1457
In the matter of Charles Henry Pty Ltd (In Liquidation): Burness (in his capacity as Liquidator) v Latimer [2005] FCA 343
Crosby and Bryant, in the matter of Australian Motor Finance Limited (Receivers and Managers Appointed) and Australian Motor Finance Corporate Pty Ltd (Receivers and Managers Appointed) [2009] FCA 707
Consolidated Byrnes Holdings Ltd v Hardel Investments Pty Ltd (2009) 176 FCR 348
UTSA Pty Ltd (In liquidation) v Ultra Tune Australia Pty Ltd [1999] 1 VR 204
Re Struthers, Liquidator of Project Management, Architecture and Construction Interior (PACI) Pty Ltd (No 3) (2005) 64 NSWLR 392
Re Wridgemont Display Homes Pty Ltd (1992) 39 FCR 193
Australian Forest Managers Limited (in liq) v Bramley (1996) 65 FCR 13
Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225

Date of last submissions: 8 December 2009

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 29

Counsel for the Plaintiff: Mr Richard Douglas

Solicitor for the Plaintiff: Jarman McKenna

Counsel for Mr Johnston: The Hon T Carmody SC

Solicitor for Mr Johnston: Russo Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 197 of 2009

IN THE MATTER OF FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549) (IN LIQUIDATION)

BRYAN KEVIN HUGHES AS LIQUIDATOR OF FIREPOWER OPERATIONS PTY LTD (ACN 112 074 549) (IN LIQUIDATION)
Plaintiff

JUDGE:

SIOPIS J

DATE OF ORDER:

26 FEBRUARY 2010

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Mr Timothy Francis Johnston is to pay:
(a)the wasted costs of the liquidator in respect of his failure to appear at the examination in this Court on 26 November 2009;
(b)the costs of the liquidator of the notice of motion dated 26 November 2009.

2.Mr Timothy Francis Johnston is to pay the costs of the liquidator referred to in Order 1(a) and Order 1(b) above on an indemnity basis, such that Mr Johnston is to pay the liquidator’s costs save insofar as they were unreasonably incurred.
3.The costs referred to in…

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: [2010] FCA 141
Decision Date

CaseChat Overview and Summary

The case of Hughes, in the matter of Firepower Operations Pty Ltd (In Liquidation) (No 3) [2010] FCA 141 involved the liquidator of Firepower Operations Pty Ltd seeking costs from Mr Timothy Francis Johnston, who had failed to attend an examination ordered by the Court. The Federal Court of Australia was asked to decide whether it had the jurisdiction to order that Mr Johnston pay the liquidator's costs, whether the costs should be awarded on an indemnity basis, and whether they should be ordered to be paid forthwith.

The court found that the Federal Court of Australia Act 1976 (Cth) and the Corporations Act 2001 (Cth) did not prevent the Court from making an order for costs against non-parties in proceedings brought under the Corporations Act. The Federal Court (Corporations) Rules 2000 also provided a sufficient basis for the Court to order that Mr Johnston pay the liquidator's wasted costs and the costs of the notice of motion. The Court further found that the circumstances of Mr Johnston's failure to attend the examination and his deliberate disregard of the Court summons warranted an order that costs be payable on an indemnity basis. Finally, the Court decided that the costs should be payable forthwith, as the episode in question was a separate and finalised event.

The court's decision was that Mr Johnston was to pay the wasted costs of the liquidator in respect of his failure to attend the examination and the costs of the liquidator of the notice of motion on an indemnity basis, such that Mr Johnston is to pay the liquidator’s costs save insofar as they were unreasonably incurred. The costs were to be paid forthwith.

Orders