Re Hedge, I.B. Ex Parte Goddard, H.P

[1994] FCA 351

RE :  IAN BRIM HEDGE

Debtor

EX PARTE: HOWARD PERCIVAL GODDARD and

MARJORY ANN GODDARD

Creditors

MINUTES OF ORDERS

. '\

JyDGE MAKING ORDERS:	Drummond J	.. , ..
DATE OF ORDERS:	23 May, 1994	-L ..-.-
W E R E MADE:
THE COURT ORDERS THAT:

1.         The costs order made 6 May, 1994 is revoked.

2.         The trustee of the composition pay to the solicitors for the respondents the respondents' costs of and incidental to the application and to the issue and service of the bankruptcy notice when taxed.

1. The trustee of the composition pay the costs described in order 2 in priority to the payment of all other debts and fees payable out of those moneys.

NOTE :	Settlement and entry of orders is dealt with in Rule
124 of the Bankru~tcv  Rules.

JN THE FEDERAL COURT OF AUSTWIA	)	Bankruptcy Notice
GENERAL DIVISION	1	No. 1337 of 1993
BANKRUPTCY DISTRICT OF	)
THE STATE OF OUEENSLAND	)

RE :  IAN BRIAN HEDGE

Debtor

EX PARTE: HOWARD PERCIVAL GODDARD and

MARJORY ANN GODDARD

Creditors

GORAM:  Drummond J

PLACE: Brisbane

RmX:  23 May, 1994

REASONS FOR JUDGMENT

This is an application to revoke the costs order which I made in the judgment which I gave on 6 May last in this matter. I ordered for the reasons which I there gave that there should be no order for costs in respect of the debtor's application to set aside the bankruptcy notice issued

by the respondents to the application. A major reason why I

took that view was that, in a without prejudice letter which

was put before me on the hearing, the applicant had made the proposal which, in effect, was successful at the hearing. However, I overlooked, in having regard to that without prejudice letter, that, even though it was exhibited to an affidavit by the applicant's solicitor, there was agreement between counsel at the bar table at the outset of the hearing that I should not have regard to that letter. The order has not been perfected, so it is open to me to revoke it and I will revoke the costs order in question.

Counsel for the respondents submits that now that the matter is once again open, the respondents to the application should have the costs. The basis for that submission is that the application to set aside the bankruptcy notice was brought by the applicant in support of the proposition, the only proposition advanced up to the start of the hearing so far as the admissible evidence before me is concerned, that the taxed costs of the respondents' earlier petition which was dismissed because of the entry into the composition by the debtor gave rise to a debt provable in the composition. That issue was litigated before me and the applicants failed on that particular issue for the reasons I gave in my judgment of 6 May last.

The order which I made setting aside the bankruptcy
notice, but ordering that the taxed costs be paid out of the

creditors, was made upon an amendment to the application, composition moneys in priority to payments to all other

leave to make which was only sought at the start of the hearing. Counsel for the respondents did not oppose that leave. It was only on that basis that the applicant succeeded in having the bankruptcy notice set aside. It seems to me that in those circumstances the respondents should have the costs of the proceedings up to the making of the amendment. That effectively means that they should have the whole costs of proceedings on the application given that the amendment was

only made at the start of the quite short hearing on 24 March. I will therefore order that the applicant pay the respondents' costs of and incidental to the applicant's notice of motion. I further order that the trustee of the composition pay to the solicitors for the respondents the respondents' costs of and incidental to the application and to the issue and service of the bankruptcy notice to be taxed, out of the moneys received by the trustee in priority to the payment of all other debts and fees payable out of those moneys.

I make that order on the basis that, just as the issuing of the petition can be seen to have been for the benefit of the creditors generally by having provoked the debtor to propose the composition, the respondents, in the events which happened, were left with no option but to also participate in the application heard before me.

I certify that this and the preceding

two pages are a true copy of the
reasons for judgment herein of the
Honourable Mr. Justice Drummond.

Associate: pd

Date:  23 May, 1994

Solicitors for the applicant:	Alan Barrel1
Counsel for the respondents:	P. McQuade
Solicitors for the respondents:	Minter Ellison Morris Fletcher
Date of Hearing:	23 May, 1994