Re Zervas, C

[1985] FCA 429

429

Bankruptcv - appllcatlon to set aslde Bankruptcy Notice - I -.

Iudqment debt based on order for costs - whether oblimatlon to

pay costs was ?omt and several or several - whether In

compromlslng clalm Iudgment debtor was released from hls debt -

clear that order of court comprlsed several llablllty for costs.

In re E.W.A. a debtor !1901, 2 K.B. 642

Matter No. 542 of 1985

Re : CON ZERVAS

FQRST?ZR J.

ADELAIDE

2 SEPTEMBD. 1985

IN THE FEDERAL COURT ;)F AUSTRALIA I

l

SOUTH AUSTRALIAN DISTF.ILT REGISTRY)

I No. 542 of 1985

G.EI~JEF.AL DIVISION	)
1

RE: i O N ZEFVAS

THE COURT ORDERS THAT:

1. Application refused wlth costs.

l!!:

Settlement and entry of orders is dealt with In Order 36

uf the Federal ICourt Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

)

SOUTH AUSTRALIAN DISTRICT REGISTRY)

) NO. 542 of 1985

GENERAL, DIVISION	)
1

BANKRUPTCY	DISTRICT	OF	SOUTH	)
1
AUSTRALIA	)

RE: CON ZERVAS

REASONS FOR JUDGMENT

m: Forster, J.:

The ludsment debtor (Zervas) has applled for an order

that the bankruptcy notice served upon him dated 18th June 1985

be set aside. The notlce recited that Gregory’s Superstores

Pty Ltd (in liquidation) (Gregorys) claimed that $2,231-75 was

due to it under an order for costs obtamed in the Industrial

Court of South Australia registered in the Local Court of

Adelaide on 28th February 1985. I re~ected the application with

costs on 23rd August 1985 and said that I would give written

reasons later which I now do.

The genesis of the judgment debt lies in three actions

taken In the Industrlal Court of South Australia by the judgment

debtor, his wlfe and one Papakoustantinou (Pappas) wlth respect

to the dismissal of each from the employment of Gregorys. An

Industrial Maglstrate made determinations in each matter that the

2 .

dismissals were harsh, unjust or unreasonable and ordered that

each applicant be re-employed. Appeals were taken by Gregorys

to a Judge of the Industrial Court. Her Honour upheld the Maglstrate's declsion wlth respect to Mrs Zervas but with respect

to Zervas and Pappas her Honour allowed the appeals wlth respect

to the order for re-employment but left Intact thr Magistrate's finding that the dismissals were harsh, unjust or unreasonable.

Her Honour made orders for costs whlch included the followmg :

" 2 .	That the respondents Mr. Pappas and Mr. Zervas
do pay to the appellant its costs and
dlsbursements of and incidental to their
proceedings at first instance, the proceedings
on appeal but that the sald respondents do
have their costs and disbursements to be paid by the appellant of and incidental to the application for further evidence.
3 .	That with regard to all proceedings the costs
attributable to each of the respondents be
regarded as a third of the whole of the costs of each of the proceedings."

Taxation of these costs was embarked upon and the

taxation was eventually settled at $6,650-25. The judgment

debt, the basls of the bankruptcy notlce,	is one third of this
amount together with some approprlate fees.

Pappas took proceedings aqainst Gregorys in the Supreme

Court. These proceedings were settled on the basis set out in a

letter of 17th August 1984 from Gregorys' solicitors to Pappas'

solicitors who were also incidentally the solicitors for Zervas.

I set out the terms of the letter in full :

.'

3.

"Dear Sirs,

GREGORYS SUPERSTORES PTY. LIMITED	(IN LIQUIDATION)
CLAIM BY MR. P. PAPAKONSTANTINOU
We have now received instructions	that our client

is prepared to settle thls matter on the basis

suggested by your client sometlme ago. As you

know the suggestion was that your cllent withdraw

his claim that he commenced against our client at

the Supreme Court and our client do not pursue

your client for the cost of the Industrial Court action. We sucrgest that when the matter comes on

before the Court again on the 29th of August, 1984

we inform it that the matter settled on this

basis. "

It is argued that the obligation of Pappas and Zervas to

pay costs to Gregorys was a joint and several one and that by

comprornislng the claim against Pappas in the way that it did

Gregorys released the judgment debtor from his debt. In re

E m . a debtor (1901) 2 K . B . 642 1s referred to. It is conceded

by counsel for Greqorys that if the order for costs created a

.

loint and several debt then Zervas is entitled to succeed in his

present application. It is argued however that the relevant

debts of Pappas and Zervas were and are several debts. I

accepted this latter argument and ordered that the application be

dismissed for the reasons which follow.

The three employees took separate proceedings before the

Industrial Magistrate. Three separate appeals were brought by

Greaorys. Since these appeals had to a great extent a common

substratum of fact they were, for convenience, heard together.

There were three separate results of the appeals. Mrs Zervas

4 .

succeeded in keeping the judgment she had obtained and had an

order for costs made In her favour and the appeals against.Pappas

and Zervas were in part successful. The success of Mrs Zervas

and the judgments against Pappas and Zervas were reflected in the

orders for costs made by her Honour. As the same counsel

appeared for the three respondents to the appeal and the appeals

were heard together and, I presume, in order to save the time,

expense and difficulty involved in taxinu three bllls, her Honour adopted the eminently sensible approach of suggesting In effect that there be only one blll taxed and that the costs attributable

to each of the respondents be regarded as a third of the total

costs of both proceedlngs. Going no further it seems to me

perfectly clear that her Honour intended that each of the two

unsuccessful parties that is Pappas and Zervas should bear one

third of the taxed costs of Gregorys. Her Honour's orders

quoted above plainly anticipate that each owes a several debt to

Gregorys aGounting to one third of the costs. With respect I

agree entirely with her Honour's approach. There were three

separate proceedings, one had a result entirely dlfferent from

the other two. The mere fact that the appeals were for

convenience heard together and also that for convenience only one

bill was taxed cannot in my view render the several obligations

to pay costs any less several.

Counsel for the ludgment debtor before me who was also

solicitor and counsel for all three applicants before the

Industrial Court, swore an affidavit in whlch he deposed to the

.. .'

5.

fact that he made an offer to Gregorys' solicitors to discontinue

the Supreme Court proceedings by Pappas in consideration of

Gregorys discontinuing its claim against Pappas and Zervas for

costs ordered to be paid by the Industrial Court. No letter has

been produced setting out this offer and I presume therefore that

it was made orally. However this may be, the letter from

Gregorys' solicltors made it plain that it was only the claims by

and against Pappas that were being compromised and, perhaps

through overslght, the solicitor for the judgment debtor did not complain of the terms of this letter. The present proceedings

seem to me to be a rather desperate and fruitless attempt to

accomplish what, whether by misunderstanding or not, was	not
accomplished in August 1984.

I certify that this and

the k preceding pages are

a true copy of the Reasons

for Judgment of Mr Justice

Forster.

.	_	.
.- --,I .,r'

Assoclate ,'