Re Nicolson, O. v Ex parte British Airways Plc

[1988] FCA 138

IN THE FEDERAL COURT	OF AUSTRALIA )
GENERAL DIVISION	1
BANKRUPTCY DISTRICT OF THE STATE	) No. B.1516 of 1987

OF NEW SOUTH WALES AND	THE	1
AUSTRALIAN CAPITAL	TERRITORY	)
- RE :

ODETTE NICOLSON

Debtor

EX PARTE:

BRITISH AIRWAYS PLC

Creditor

EX-TEMPORE REASONS FOR JUDGMENT

I BURCHETT J.

This is an application under s.31A(6) of the Bankru lPtcy

Act 1966 for what is described, in that subsection, as a review of the exercise of power by the Registrar. The exercise of power

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in question is an order that the debtor pay the costs of the

creditor, including reserved costs, of an application for substituted service, and of an application for setting aside a bankruptcy notice, as agreed or as taxed.

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It seems to me that different considerations may apply

! to the two applications referred to in that order.

So far as the application for setting aside the

bankruptcy notice is concerned, that was an applicatlon brought

by the debtor, who claimed that the notice had been issued

prematurely in view of the fact that she was appealing agasnst

the decision which founded the bankruptcy notice. In fact, she did appeal, or sought leave to appeal - It is not quite clear to

me which - but at any rate lt 1 s clear that the appeal or

attempted appeal failed. After a number of adjournments of the application to set aside the bankruptcy notice, which involved the making of orders extending the period for compliance with the notice, and after the appeal procedure had finally terminated unfavourably to the debtor, there was an application to pay the debt by instalments, and apparently agreement was reached upon the acceptance of instalments which have now been paid for some time. Nothing has been put before me which persuades me that there is any error in the Registrar's order that the costs of that application for the setting aside of the bankruptcy notice

ought to be paid by the debtor. Indeed, I am positively

satisfied that the order is appropriate.

However, it seems to me that different considerations

apply to the order in respect of the application for substituted

service. That application was in its nature ex parte. It

appears to have been served quite voluntarily by the creditor by mail, and as a result the debtor appeared. There seems to have

been some arrangement, in lieu of the making of an order for

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substituted service, aimed at actual service being effected in an

agreed manner, but that arrangement broke down following the

death of a near relative of the debtor. Subsequently, at a

further appearance before the Registrar, at which the debtor was
present, the debtor was personally served.

I do not think the fact that the debtor, havlng been

given notlce, actually attended can make her any more liable to an order for costs than she would have b en had she remained away. Nor do I think there is any logic in ordering a debtor to pay the costs of an application for substituted service, but not costs of obtainlng the issue of the bankruptcy notice. The fact is that It is not suggested by counsel for the creditor that

there has ever been a practice of making orders of this kind
simply on the basis that a bankruptcy notice has issued, and been
served in some manner, and the payment of the debt has thereafter
been effected or compromised. Assuming that there is
jurisdiction to make the order, it seems to me that it would be a
departure from the normal course which the special circumstances
of this case are not sufficient to justify.

For these reasons, I think the application to review the order of the Registrar should be dismissed so far as concerns the application for setting aside the bankruptcy notice, but should be allowed so far as concerns the application for substituted service. As the parties have had shared success upon this

present application, I think it is appropriate that each party
should pay its or her own costs of the	application. I think, as

the matter has been brought before the court to exercise its
power of review under the provision to which I referred at the
commencement of the judgment, 1t 1s perhaps most convenient that
I make an actual order of the court, as I do, that the debtor pay
the costs of the creditor, including any reserved costs, of the
application for the setting aside of the bankruptcy notlce, but

there be no order as to the costs of the application for

substituted service. I so order.

I	certify that this and the
preceding three	( 3 ) pages are

a true copy of the Reasons for

Judgment herein of his Honour

Mr. Justice Burchett.

- wu Associate

Dated:	2 2 March, 1988.
Mrs. Nicolson represented by:	Mr. I.E. Pryke
Counsel for the Creditor:	Mr. V.R.W. Gray
Solicitors for the Creditor:	Messrs Minter Ellison
Date of hearing:	2 2 March 1988