Roy Galvin & Co Pty Ltd v Ives
[2013] FCCA 1645
•25 October 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ROY GALVIN & CO PTY LTD v IVES | [2013] FCCA 1645 |
| Catchwords: COSTS – Application for costs of creditors petition and application for substituted service of creditors petition – whether or not costs for application for substituted service to be awarded on indemnity basis. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.58(3), 82 Bankruptcy Regulations 1996 (Cth), reg.16.01(1) and (2) |
| Carantinos v Magafas [2009] FCA 627 Colgate-Palmolive Company & Anor v Cussons Pty Ltd (1993) 46 FCR 225 |
| Applicant: | ROY GALVIN & CO PTY LTD |
| Respondent: | BENJAMIN WILLIAM IVES |
| File Number: | PEG 142 of 2013 |
| Judgment of: | Judge Lucev |
| Hearing date: | 20 September 2013 |
| Date of Last Submission: | 20 September 2013 |
| Delivered at: | Perth |
| Delivered on: | 25 October 2013 |
REPRESENTATION
| Counsel for the Applicant: | Ms K M Woods |
| Solicitors for the Applicant: | Park Linfoot Legal Solutions |
| For the Respondent: | No appearance |
ORDERS
The respondent pay the applicant’s costs of the Creditors Petition in the sum of $6722.24.
The respondent pay the applicant’s costs of the applicant’s Interim Application for Substituted Service in the sum of $7784.00.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 142 of 2013
| ROY GALVIN & CO PTY LTD |
Applicant
And
| BENJAMIN WILLIAM IVES |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application, by the applicant, Roy Galvin & Co Pty Ltd ACN 008 719 408[1] for the costs of its application for a creditors petition. The application for a creditors petition was dismissed by the Court on 20 September 2013 because the respondent, Benjamin William Ives[2] filed a debtors petition some days before the application for a creditors petition was due to be heard, and the debtors petition was accepted by the Australian Financial Services Authority.[3] Mr Ives thereby became a bankrupt.
[1] “Roy Galvin”.
[2] “Mr Ives”.
[3] “AFSA”.
When the matter was called on on 20 September 2013 Ms Woods appeared for the applicant, and there was no appearance by Mr Ives. Ms Woods accepted that a debtors petition had been filed and accepted by AFSA. Ms Woods sought orders for:
a)the costs of the creditors petition proceedings in the amount of $6722.24; and
b)the costs of the interim application for substituted service, on an indemnity basis, in the amount of $7784.
Three issues thus arise:
a)can an order for costs be made in these proceedings in circumstances where Mr Ives is already bankrupt;
b)if an order for costs can be made, ought an order be made in the creditors petition proceedings; and
c)if an order for costs can be made, ought an order be made in relation to the interim application for substituted service, and in particular ought an order be made in relation to that application on an indemnity basis?
Litigation History
In order to understand why applications for costs are now made by Roy Galvin, it is, regrettably, necessary to set out the litigation history of this acrimoniously conducted matter.
Creditors petition application
The creditors petition was filed on 25 June 2013 and asserted that Mr Ives of “16 Lakeway Road, Claremont, Western Australia, 6010”[4] owed Roy Galvin the amount of $97,826.86, plus interest, arising from a judgment obtained in the District Court of Western Australia,[5] and from a costs order in the amount of $765, plus interest, from an order in the Federal Magistrates Court of Australia. The alleged date of the act of bankruptcy was said to be within six months before the presentation of the creditors petition dated 20 June 2013. It was alleged that Mr Ives had failed to comply on or before 29 March 2013 with the requirements of a Bankruptcy Notice allegedly served on him on 8 March 2013.
[4] “Lakeway Road Address”.
[5] “District Court Judgment Debt”
The creditors petition was accompanied by an affidavit of service of Ryan Eamonn Lennon sworn 31 May 2013.[6] Mr Lennon’s Service Affidavit deposes to service of a Bankruptcy Notice on Mr Ives outside of 111 St Georges Terrace, Perth following proceedings in the Supreme Court of Western Australia in a matter in which Mr Ives was listed as a plaintiff in Ives v The State of Western Australia in court 1 at 111 St Georges Terrace on 8 March 2013.[7] During the proceedings (which Mr Lennon attended) Mr Ives was identified for Mr Lennon by Ms Woods, a lawyer at Park Linfoot, the lawyers for Roy Galvin,[8] who had been involved in prior proceedings involving Mr Lennon (and who appears as Counsel in these proceedings). Mr Lennon followed Mr Ives once the Supreme Court proceedings were completed into the lift and into the lobby of 111 St Georges Terrace.[9] Mr Lennon then says that as Mr Ives approached the revolving doors leading out of the lobby of 111 St Georges Terrace he said to him “Mr Ives?”, at which Mr Ives turned around, looked at him and nodded his head.[10] Mr Lennon then further said to Mr Ives “Benjamin Ives”, and says that Mr Ives hesitated, did not immediately answer, and then after a second or so said “No”. Mr Lennon says that Mr Ives then turned, and continued to walk towards the revolving doors, and that as Mr Lennon followed him he said “Mr Ives, I know it is you. I have these documents for you”.[11] Mr Lennon says that he had in his hand a letter from Roy Galvin’s lawyers enclosing a copy of the Bankruptcy Notice, and that he reached out and touched the envelope against Mr Ives’ shoulder and said “I have a Bankruptcy Notice for you.”[12] Mr Lennon then says that Mr Ives stepped into the revolving doors leading out of the lobby and onto St Georges Terrace and said to him “Get away from me”, but that Mr Lennon followed Mr Ives into the revolving doors and said to him “I’m going to leave these documents with you.”[13] Mr Lennon says that Mr Ives then stepped out of the revolving doors and walked away from him, but that Mr Lennon followed him, and that as Mr Ives stopped to cross St Georges Terrace he again said to him “Mr Ives I’m going to leave these documents with you”, and with that he stood to his left side and held the envelope containing the letter and Bankruptcy Notice against Mr Ives’ left shoulder and said to him “I’m going to leave this Bankruptcy Notice with you. You are served”.[14] Mr Lennon then says that he let go of the envelope as it was touching Mr Ives, and that the envelope dropped to the ground. He says that Mr Ives walked away, and that he did not see Mr Ives pick up the envelope containing the letter and Bankruptcy Notice.[15]
[6] “Mr Lennon’s Service Affidavit”
[7] Mr Lennon’s Service Affidavit, paras.3-25, and annexure REL4 being judgment on 5 March 2013 in Ives v The State of Western Australia [No. 7] [2013] WASC 62 (CIV 1069 of 2010) and annexure REL1 being the Supreme Court of Western Australia Cause List for 8 March 2013 showing Ives v The State of Western Australia (CIV 169 of 2010) listed in Court 1, Floor 15, of 111 St Georges Tce, Perth at 2.15pm on 8 March 2013.
[8] “Roy Galvin’s lawyers”.
[9] Mr Lennon’s Service Affidavit, paras.7-11.
[10] Mr Lennon’s Service Affidavit, paras.12-13.
[11] Mr Lennon’s Service Affidavit, paras.14-16.
[12] Mr Lennon’s Service Affidavit, para.17-18.
[13] Mr Lennon’s Service Affidavit, paras.19-20.
[14] Mr Lennon’s Service Affidavit, paras.21-22.
[15] Mr Lennon’s Service Affidavit, paras.23-24.
On 27 May 2013 Douglas Patrick Bowen,[16] a law clerk with Roy Galvin’s lawyers, swore an affidavit, filed on 25 June 2013, in which he deposes to service of a letter from Mr Park at Roy Galvin’s lawyers enclosing a copy of the Bankruptcy Notice and sent to an email address being [email protected],[17] on 30 January 2013.
[16] “Mr Bowen”.
[17] “Mr Ives’ Email Address”; affidavit of Douglas Patrick Bowen – Affidavit of Service, sworn 27 May 2013, paras.1, 3 and 4 (“Mr Bowen’s Service Affidavit”).
Roy Galvin also filed on 25 June 2013 an interim application seeking:
a)substituted service:
i)by delivery of the creditors petition to the Lakeway Road Address by prepaid post addressed to Mr Ives; and
ii)by emailing a copy of the creditors petition to Mr Ives’ Email Address; and
b)the costs of the interim application for substituted service on an indemnity basis.
Mr Lennon swore an affidavit in support of the interim application for substituted service on 31 May 2013, which was not filed until 25 June 2013.[18] Mr Lennon said that he had undertaken an Australian Electoral Commission[19] search on 28 May 2013 against an address for Mr Ives at 16 Lakeway “Street” in Claremont in Western Australia, but the AEC outcomes indicated that a current electoral enrolment for Benjamin William Ives for that address could not be confirmed using the details entered.[20] A White Pages search was also attached which showed that a “WB Ives”, not a “BW Ives”, resided in “Lakeway St” in Claremont.[21] Various other documents from earlier proceedings in 2009 and 2011 were attached indicating various addresses for Mr Ives, including the Lakeway Road Address.[22]
[18] “Mr Lennon’s Substituted Service Affidavit”.
[19] “AEC”.
[20] Mr Lennon’s Substituted Service Affidavit, paras.3-5 and annexures REL1 and REL2.
[21] Mr Lennon’s Substituted Service Affidavit, paras.6-7 and annexure REL3.
[22] Mr Lennon’s Substituted Service Affidavit, annexures REL4 and REL6.
The interim application for substituted service came before a Registrar on 9 July 2013 but there was no appearance by Mr Ives. The interim application was adjourned to 15 July 2013 with costs reserved.
On 9 July 2013 Mr Bowen swore an affidavit, filed on 10 July 2013,[23] in support of the interim application for substituted service. Mr Bowen’s Substituted Service Affidavit deposed to service upon Mr Ives at the Lakeway Road Address by express post and by email to Mr Ives’ Email Address of a copy of the interim application for substituted service and Mr Lennon’s Substituted Service Affidavit, together with a covering letter dated 8 July 2013 indicating that the interim application had been listed for hearing at 3.30pm on 9 July 2013 before this Court. Mr Bowen’s Substituted Service Affidavit indicated that the covering letter had been posted at 4.35pm on 8 July 2013,[24] and that the email had been sent to Mr Ives’ Email Address at 4.50pm on 8 July 2013.
[23] “Mr Bowen’s Substituted Service Affidavit”.
[24] Mr Bowen’s Substituted Service Affidavit, para.5.
A further affidavit by Mr Lennon filed on 10 July 2013, sworn 9 July 2013,[25] attested to an attempt by a lawyer for Roy Galvin, Ms Woods, to contact Mr Ives on a mobile telephone number, 0449 039 035,[26] which Mr Ives had listed as his mobile telephone number on an email sent by Mr Ives to a client of Roy Galvin on or about 5 September 2012.[27] Mr Lennon says that he heard Ms Woods during the telephone call say “Hello, Benjamin Ives?” and that after a short pause Ms Woods further said words to the effect of:
“You are Mr Ives? Mr [sic] name is Kelly Woods, I act for Roy Galvin & Co I am looking [for Mr Ives] in relation to some proceedings.”
After a further short pause Ms Woods said “You’re not Mr Ives? Can you put Mr Ives on please?”, following which she indicated that it was very important that she speak with Mr Ives concerning proceedings that afternoon, following which Ms Woods said “I must have the wrong number, did you say?”, and then after a short pause heard Ms Woods say “So you don’t know Mr Ives?” following which the telephone call terminated.[28] Mr Lennon also attaches an email from Mr Ives sent from Mr Ives’ Email Address at 12.10pm on 9 July 2013, in the following terms:
I have no idea what this action is about I have not received any documentation from you, and I draw your attention to the appropriate rules of court regarding the personal service of documents.
I have never lived at 16 Lakeway Road Claremont WA if that is where you are trying to reach me. I access this email account using my blackberry mobile phone.[29]
[25] “Mr Lennon’s Second Substituted Service Affidavit”.
[26] “Mr Ives’ Mobile Telephone Number”.
[27] Mr Lennon’s Second Substituted Service Affidavit, para.3.
[28] Mr Lennon’s Second Substituted Service Affidavit, paras.4-11.
[29] Mr Lennon’s Second Substituted Service Affidavit, annexure REL1 (“Mr Ives’ 9 July 2013 Email”).
Brian McNally, a process server, swore an affidavit on 12 July 2013, filed the same day,[30] about attempts to serve Mr Ives with a letter from Roy Galvin’s lawyers, annexing the creditors petition, and various affidavits. Mr McNally deposes that on 10 July 2013 he called a landline telephone number – 9284 6964 – given to him by Roy Galvin’s lawyers and spoke to a Mrs Ives (said to be Mr Ives’ mother) on that landline number. Mr McNally asked to speak to “Benjamin”, and Mrs Ives replied by saying “he no longer lives here”.[31] Mrs Ives then said that she did not know where Mr Ives lived, but that she was seeing him on the weekend and would pass on a phone number if Mr McNally wanted that. Mr McNally gave Mrs Ives his mobile telephone number, and after a further exchange indicated that he was representing Roy Galvin’s lawyers, following which the conversation terminated after Mr Ives’ mother had grunted at him.[32]
[30] “Ms McNally’s Affidavit”.
[31] Mr McNally’s Affidavit, paras.5 and 6.
[32] Mr McNally’s Affidavit, paras.7-10.
Mr McNally then rang Mr Ives’ Mobile Telephone Number, which was answered by a male who did not identify himself but who said “Hello”.[33] Mr McNally then asked “Is that Ben Ives?”, to which the male person on the other end of the phone responded “Who is calling?”. Mr McNally then said words to the effect of “Hello Ben I have some documents to deliver to you”. The male person on the other end of the telephone then interrupted by saying words to the effect of “I didn’t say that I was Ben Ives, who is Ben Ives? I don’t appreciate people just calling me up? Who are you?”. Mr McNally responded by saying that he had documents to serve, and if he could have an address he would bring the documents to that address. The male person on the other end of the phone then said words to the effect of “People keep calling me, I am not Ben Ives, I don’t know who Ben Ives is”, and said this in a raised and aggressive voice, following which the telephone conversation terminated.[34]
[33] Mr McNally’s Affidavit, paras.11-12.
[34] Mr McNally’s Affidavit, paras.11-16.
On 12 July 2013 an affidavit of Lynn Wilkinson, a legal secretary with Roy Galvin’s lawyers, sworn 12 July 2013,[35] was filed, indicating that a copy of the order of this Court made on 9 July 2013, adjourning the application to 15 July 2013 at 2.30pm, under cover of a letter from Roy Galvin’s lawyers dated 11 July 2013, had been sent to Mr Ives’ Email Address.[36] A reply was received by Ms Wilkinson from Mr Ives from Mr Ives’ Email Address in the following terms:
[35] “Ms Wilkinson’s 12 July 2013 Affidavit”.
[36] Ms Wilkinson’s 12 July 2013 Affidavit, paras.3-4 and annexure LW1.
Do you have instructions to represent your client in the Appeal of a decision of a registrar filed 9/7/13 and personally served on your client 10/7/13 in Roy Galvin & Co Pty Ltd v Benjamin Ives, CIV164 of 2009 in the District Court at Perth?
If you could please advise as RSC 04, r3 states they must be represented?
I have specific questions to ask their solicitor in conferral prior to applying for leave to administer interrogatories and discovery.
I have not been served with an originating process in the Federal court [sic] proceedings and if you allege I am avoiding service it is denied.[37]
[37] Ms Wilkinson’s 12 July 2013 Affidavit, paras.5-6 and annexure LW2.
A letter was sent from Roy Galvin’s lawyers to Mr Ives at the Claremont Address and to Mr Ives’ Email Address on 11 July 2013 in response Mr Ives’ 11 July 2013 email to Roy Galvin’s lawyers. Relevantly, Roy Galvin’s lawyers’ letter said, in part, as follows:
In relation to your comment: “If you alleged I am avoiding service it is denied.” If you are not avoiding service, please provide to me, before 2.00pm on 12 July 2013, an address at which our process server can serve you personally with my client’s Creditors Petition which will remove the requirement [for] my client’s Application for Substituted Service the subject of the Originating Process in the above referred to Federal Court Proceedings [sic].[38]
[38] Ms Wilkinson’s 12 July 2013 Affidavit, paras.7-8 and annexure LW3.
The interim application for substituted service came before a Registrar on 15 July 2013 but was adjourned to 29 July 2013 without appearance by either party. It would appear that the adjournment was as a consequence of a request from the lawyers for Roy Galvin, which request was agreed to by the Registrar.
On 18 July 2013 Mr Ives filed a notice stating grounds of opposition to the interim application for substituted service in which he said he intended to oppose the interim application on the grounds that:
a)he was not avoiding service;
b)Roy Galvin had not attempted to serve documents on him at his home; and
c)his current home address was registered with the Australian Electoral Commission.[39]
[39] “AEC”.
The notice stating grounds of opposition gave Mr Ives’ Email Address as his email address, and gave as a mobile telephone number, Mr Ives’ Telephone Number, being the mobile telephone number which had been rung by the lawyer, Ms Woods, and the process server, Mr McNally.[40]
[40] See paras.12 and 14 above.
In an affidavit sworn by Mr Ives on 18 July 2013[41] he asserted that his contact details, including Mr Ives’ Email Address, which had been used by Roy Galvin in an endeavour to serve the interim application for substituted service, had been provided to Roy Galvin on 19 August 2011 during proceedings in the Federal Magistrates Court of Australia for earlier orders for substituted service in another earlier proceeding.[42] Mr Ives complained that he had only been given three hours’ notice by email (thereby indicating that he had received documents beforehand) for the hearing of 9 July 2013, and that Roy Galvin’s lawyers had had opportunities to confer with him by email prior to applying for substituted service and had not done so.[43] Further, Mr Ives said that Roy Galvin’s lawyers had not conducted an AEC name search which would have indicated his current home address.[44]
[41] “Mr Ives’ 18 July 2013 Affidavit”.
[42] Mr Ives’ 18 July 2013 Affidavit, para.2.
[43] Mr Ives’ 18 July 2013 Affidavit, para.3.
[44] Mr Ives’ 18 July 2013 Affidavit, para.4.
Mr Ives further complained in an annexure to the affidavit and addressed to the “associate to Registrar Stanley” that Roy Galvin’s lawyers had not made a proper effort to contact him because they had not sought to serve him at his address as registered with the AEC. A copy of his electoral enrolment dated 12 June 2013 was attached, but it reveals a different address to that marked as his address for service on Mr Ives’ 18 July 2013 Affidavit and on the notice stating grounds of opposition filed on 18 July 2013, that latter address being 107 Goderich Street, East Perth, whilst the electoral enrolment address, said to be current as at 2 June 2013, is 28/101 Goderich Street, East Perth. The letter from the AEC dated 12 June 2013 also stated that Mr Ives’ enrolled address for “state government enrolment has not been updated … For state government elections your details are: 35A Comet St Dudley Park WA 6210”.[45] A letter from Darryl Moore, Federal Liberal for Perth is annexed as evidence of Mr Ives address. That letter was addressed to Mr Ives at 28/101 Goderich Street, East Perth.[46]
[45] Mr Ives’ 18 July 2013 Affidavit, annexure A, page 5.
[46] Mr Ives’ 18 July 2013 Affidavit, annexure A, page 6.
In an email dated 12 July 2013 Mr Ives advised Mr Lennon as follows:
My current address where I have been sleeping every night since November 2012 is registered with the Australian Electoral Commission, and was updated at the last State Election.
Please ensure the federal court is aware that you didn’t know this when asking for costs if you still want to apply for substituted service.[47]
[47] Mr Ives’ 18 July 2013 Affidavit, annexure A, pages 7-8.
A client rental statement annexed to Mr Ives’ 18 July 2013 Affidavit provides yet a different address of 3/28/107 Goderich Street as Mr Ives’ address.[48]
[48] Mr Ives’ 18 July 2013 Affidavit, annexure A, pages 10-11.
Also attached to Mr Ives’ 18 July 2013 Affidavit is a copy of a Notice of Appeal From a Decision of a Registrar, being an appeal against the District Court Judgment Debt,[49] filed by Mr Ives on 9 July 2013 in the District Court of Western Australia at Perth, stating that the document was prepared by “Benjamin Ives 16 Lakeway Road Claremont WA 6010 Telephone 9284 6964 Fax: (08) 9463 6007 Email: [email protected]”.[50] The Court notes that for the purposes of the District Court Appeal Mr Ives gave the Lakeway Road Address and Mr Ives’ Email Address as his relevant addresses. The Court also notes that the telephone number given is the same landline number rung by Mr McNally on 10 July 2013 when he says he spoke to Mr Ives’ mother.
[49] “District Court Appeal”.
[50] Mr Ives’ 18 July 2013 Affidavit, annexure A, pages 12-13.
On 15 July 2013 at 05:13:01 Mr Ives sent an email to Ms Wilkinson in the following terms:
I’m under no moral or legal obligation to your retarded legal firm.
The proof that I have not been avoiding service, is that you are apparently seeking orders for substituted service without understanding the need to employ normal process servers who look up people’s details with the AEC like everyone else.
No point going to court and telling people you can’t find me and I am avoiding you when you do this.
You have known about this email address since 2011 when you previously discontinued this action against me, why haven’t you emailed me earlier that [sic] to give me two hours notice of a hearing, am I meant to respect that when I can’t even understand why you would do that?
I am not with computer so I can’t send you the documents I send the Federal Court this morning, I can only type text into my blackberry. If the Federal Court won’t give you my address, then I suggest you go to the AEC like I said to you at 7.00am on Friday.[51]
[51] Mr Ives’ 18 July 2013 Affidavit, annexure A, page 16.
Less than an hour later, at 06:04:08 on 15 July 2013, Mr Ives sent a further email to Ms Wilkinson in the following terms:
Moreover, it should not surprise you that I directed you to the AEC, rather than provide you with my address myself.
By doing so I have proved to you, and the court that orders for substituted service are not justified, and neither are the costs of your process servers or whoever else is too thick to consult the AEC.
Because now I have directed you to the AEC, you can go there and get my address and you don’t need an order for substituted service.
Anything less is to acquiesce to an absence of common sense.
Can you confirm whether or not you have been to the AEC to look up my details? If you have when did you do this and what was the result, if not – why not and why waste the courts time with frivolous and vexation applications?[52]
[52] Mr Ives’ 18 July 2013 Affidavit, annexure A, pages 15-16.
More than eight hours later on 15 July 2013 at 2:27:53PM Mr Ives forwarded a letter to the “associate for Registrar Stanley” in which he made the following observations:
I can’t consent to an order for substituted service as it could prejudice me in future hearings, and in any event no costs should be ordered to Galvins as they commenced this interim application, without (1) emailing me first to confer, given they were given the email address by me in open court in 2011, and (2) bothering to look up my details with the AEC.
…
An order for substituted service should not be issued when it is clear that a persons home address has not been attempted once, when it is publicly available.
It is easy to see that the reason Galvins is not withdrawing its application (based on its letter to me today) is in order to seek costs only, and I’m sure they have now checked, otherwise they would say that it is not current information at the AEC.[53]
[53] Mr Ives’ 18 July 2013 Affidavit, annexure A, page 15.
On 24 July 2013 Mr Ives filed a further notice stating grounds of opposition, this time to the creditors petition, on the following grounds:
a)that he had not been served with a notice of bankruptcy;
b)that service of the notice of bankruptcy by Mr Lennon on 8 March 2013 was denied; and
c)an application for an extension of time to file the District Court Appeal, which was an appeal against the District Court Judgment Debt, upon which the creditors petition was based, was listed in the District Court of Western Australia, and that he intended to appeal any adverse decision made against him in the District Court to the Court of Appeal.
An affidavit was sworn and filed on 24 July 2013 by Mr Ives in support of the second notice stating grounds of opposition.[54] Mr Ives’ 24 July 2013 Affidavit asserts that Mr Lennon did not serve the Bankruptcy Notice on Mr Ives on 8 March 2013. Mr Ives says as follows:
8.On the 8th of March 2013, I attended a chambers hearing at the Supreme Court of Western Australia before the Hon Justice Le Miere; at the conclusion of the meeting I entered an empty lift and a man got in after me and said nothing at all to me for the duration of the ride down to ground some 16 floors.
9.On leaving the lift and walking out the building, I heard a voice behind me say, “Benjamin Ives”. I stopped walking momentarily, turned around and immediately said, “no” and continued to walk out of the building. The person then said, “come on Mr Ives I know it’s you”. I ignored the person as I had no idea who they were or what their purpose was. The man then said, “I have some documents for you.” This person then got into the revolving door behind me which caused it to stop. I had to push on the revolving door hard to get it to move and the person said whilst we were stuck in the revolving door and I was pushing to get out, “I’m touching this envelope on your back, and I’m going to leave the documents with you”. As we were able to get out of the revolving door I told him to leave me alone and walked off towards the road.
10.The man left me alone for a few moments and did not approach me as I was waiting for a break in the traffic to be able to cross the road, which was about 20 meters from where the exit to this building was. When the traffic was clear and I was able to cross the street, I heard the slap of an envelope hitting the ground (1 meter onto the road off the footpath) about 3 meters behind me (I was rushing through traffic and in the middle of St Georges Terrace) and whoever this person was saying, “you’ve been served”, behind me. That was the only indication that whoever this person was may have been a process server of some kind. At no time did this person say what the documents were, nor did they say they have a bankruptcy notice for me. That aspect of Ryan Eamonn Lennon’s sworn affidavit is perjury.
11.At the time I was litigating a Supreme Court action against the State of Western Australia as vicariously liable for the actions of police officers. Apparently people had been sending anonymous mail to my parents’ house for several years intending to give it to me, so until I read the affidavit of Ryan Eamonn Lennon yesterday I did not know who this person was or what they were trying to do. I was surprised yet relieved that my action against the WA Police received no media attention and half expected a reporter to try and speak with me at some point.
12.It is my conviction now that Ryan Eamonn Lennon is an unashamed liar. His affidavit states that he told me multiple times he was serving a Notice of Bankruptcy on me, and touched my back with some papers when he said so, and apparently then dropped them to the ground when he did this. None of that occurred and Ryan Eamonn Lennon is fully aware of this and is lying. I have no respect or sympathy for people who feign an appearance of being hurt, when they have been accused of what they are truly guilty of. I am very indignant about this, and am offended.
[54] “Mr Ives’ 24 July 2013 Affidavit”.
Mr Ives’ 24 July 2013 Affidavit also annexes an affidavit of Mr Ives sworn 17 July 2013 in the District Court Appeal.[55] In the District Court Affidavit it is indicated that it is prepared by Mr Ives, giving the Lakeway Road Address as his contact address, and it also gives the Lakeway Road Address as his address in the body of the District Court Affidavit.
[55] “District Court Affidavit”.
On 25 July 2013 Mr Ives filed a notice of appearance in these proceedings listing his address as 28/107 Goderich Street, East Perth, WA 6004, and his telephone number as Mr Ives’ Mobile Telephone Number, being the number which had been rung by Ms Woods and Mr McNally, and Mr Ives’ Email Address as his email address, that being the email address which had been used by Roy Galvin’s lawyers to send documents to Mr Ives from the commencement of these proceedings.
In a Notice of Dispute filed on 25 July 2013 Mr Ives disputed that the Notice of Bankruptcy had been served on him by Mr Lennon on 8 March 2013, and specifically asserted that Mr Lennon had perjured himself in relation to his evidence as to service of the Bankruptcy Notice in Mr Lennon’s Service Affidavit.
On 29 July 2013 Ms Wilkinson, a legal secretary at Roy Galvin’s lawyers, swore an affidavit.[56] Ms Wilkinson attests to the fact that on 23 July 2013 she caused a letter from Roy Galvin’s lawyers enclosing a copy of, amongst other things, the creditors petition dated 25 June 2013 to be sent to Mr Ives at Mr Ives’ Email Address.[57]
[56] “Ms Wilkinson’s 29 July 2013 Affidavit”.
[57] Ms Wilkinson’s 29 July 2013 Affidavit, paras.3-4 and annexure LW1.
Ms Wilkinson also attests to the fact that she received from a firm of process servers a report about their attempts to serve Mr Ives at two addresses, namely 35 Comet Street, Dudley Park and 28/101 Goderich Street, East Perth. The process server’s report confirmed that Mr Ives was unable to be served at either of the addresses referred to, and that 101 Goderich Street, East Perth was a locked apartment complex to which the process server was unable to gain access to the front door.[58]
[58] Ms Wilkinson’s 29 July 2013 Affidavit, paras.5-6 and annexure LW2.
Ms Wilkinson’s 29 July 2013 Affidavit also attaches a copy of a letter from the District Court of Western Australia[59] received by Roy Galvin’s lawyers on 24 July 2013 stating that Mr Ives’ address for service is 35A Comet Street, Mandurah.[60] The Court observes that the District Court Letter, although received by Roy Galvin’s lawyers on 24 July 2013, is dated 9 July 2013, and therefore arguably precedes the filing and service by Mr Ives of the District Court Appeal on the same day, or at least, was sent on the same day the District Court Appeal was filed and at a time at which records might not have been updated.
[59] “District Court Letter”.
[60] Ms Wilkinson’s 29 July 2013 Affidavit, para.7 and annexure LW3.
Ms Wilkinson also refers to various correspondence between Roy Galvin’s lawyers and Mr Ives in the period between 25 and 26 July 2013.[61] The correspondence and email chain set out indicates as follows:
[61] Ms Wilkinson’s 29 July 2013 Affidavit, paras.8-9 and annexure LW4.
a)on 25 July 2013 at 1.47pm Mr Ives sent an email to Roy Galvin’s lawyers in which he requested that a hearing on 29 July 2013 with respect to substituted service be vacated, and indicated that he assumed that any costs would be in the cause;[62]
[62] Ms Wilkinson’s 29 July 2013 Affidavit, annexure LW4, page 69.
b)on 25 July 2013 at 11.01pm Mr Ives sent to Roy Galvin’s lawyers an email in which he had asked whether Roy Galvin’s lawyers were “willing to request that the hearing of the creditors petition be moved” to 29 July 2013;[63]
[63] Ms Wilkinson’s 29 July 2013 Affidavit, annexure LW4, page 80.
c)on 26 July 2013 at 11.59am Roy Galvin’s lawyers sent to Mr Ives a letter, addressed to Unit 28/101-107 Goderich Street, East Perth, but also by email to Mr Ives’ Email Address, which included the following:
Regardless of our client’s position, we cannot sensibly “request” that our client’s Creditors Petition be heard on 29 July 2013 primarily because you maintain that you have not been served with that Creditors Petition.
That initial difficulty cannot be overcome unless you now unequivocally acknowledge that you have been served with:
(a) a copy of my client’s Creditors Petition dated 25 June 2013;
(b) a copy of an Affidavit of Service of my client’s Bankruptcy Notice dated 4 December 2012 of Ryan Eamonn Lennon dated 31 May 2013;
(c) a copy of an Affidavit of Service my client’s Bankruptcy Notice dated 4 December 2012 of Douglas Patrick Bowen sworn on 27 May 2013; and
(d) a copy of an Affidavit of Search of Douglas Patrick Bowen dated 25 June.
I also refer to your comment to me by telephone on 19 July 2013 that you “have not been” and are not avoiding service (contrary to our view).
If you do not accept that you have been served with the above referred to documents, please provide to me a time and place where we can today serve those documents on you.
As you know, such service will “do away” with the need for my client’s Application for Substituted Service subject to the question of costs.
I look forward to receiving your immediate response.[64]
[64] Ms Wilkinson’s 29 July 2013 Affidavit, annexure LW4, page 83.
d)on 26 July 2013 at 1.22pm Mr Ives sent a further email to Roy Galvin’s lawyers advising that he was unable to attend a hearing the following Tuesday, and explaining that inability, but went on to indicate that Roy Galvin had committed the “intentional tort of fraud … in obtaining judgment against me in the District court”;[65]
[65] Ms Wilkinson’s 29 July 2013 Affidavit, annexure LW4, page 88.
e)Roy Galvin’s lawyers responded to Mr Ives, in a letter dated 26 July 2013, sent at 1.48pm, addressed to Unit 28, 107 Goderich Street, East Perth, and by email to Mr Ives’ Email Address advising that:
If you agree to “take” service of my client’s Creditors Petition from us today we will agree to the hearing scheduled for 30 July 2013 being vacated.
If you agree to to “take” service of my client’s Creditors Petition please come to my offices so that service can be effected or provide to me a time and place that we can meet you to effect that service.
I look forward to receiving your immediate response.[66]
f)on 26 July 2013 at 1.53pm Mr Ives replied to Roy Galvin’s lawyers indicating that he had given notice of his objection to substituted service, and asked:
You know where I live honestly, why haven’t you come here and tried serving documents on me, if you are concerned about what I do/do not admit over the email to you on Friday afternoon 1 business day previous to our hearing?[67]
g)at 2.04pm on 26 July 2013 Mr Ives sent a further email to Roy Galvin’s lawyers relating to the suggestion that he agree to take service of the creditors petition, and said as follows:
Why don’t you come to my house instead, how hard would that be? Go again and check the Federal Court Rules 2011 and see if you still think I need to come to your office or whatever you want to do.
Could you please advise the court that you agree to the vacating of the hearing on the 30 July 2013? While you’re at it, why don’t you do the right thing and save your client some money and withdraw your application for substituted service? I see straight through your money orientated, cost order seeking pantomime.[68]
[66] Ms Wilkinson’s 29 July 2013 Affidavit, annexure LW4, page 91.
[67] Ms Wilkinson’s 29 July 2013 Affidavit, annexure LW4, page 92.
[68] Ms Wilkinson’s 29 July 2013 Affidavit, annexure LW4, page 94.
h)at 2.16pm on 26 July 2013 Roy Galvin’s lawyers responded to Mr Ives’ email sent earlier at 2.04pm and indicated as follows:
I’ve attempted to reach an agreement with you by mutual accommodation.
I suggested in my letter to you today an alternative to you coming to my office.
What reasonable time will you want service at your house at Unit 28, 107 Goderich Street, East Perth today?[69]
i)at 2.32pm on 26 July 2013 Mr Ives sent a further email to Roy Galvin’s lawyers as follows:
I have been home since about 10.30. I’m about to leave to go to the gym and watch the Essendon bombers defeat Hawthorn with my dad (we aren’t watching it at 16 Lakeway Road I’m sorry).
You have not attempted to serve documents on my house prior to now. I’m not going any more out of my way than I already have by spending 16 hours in the last week doing this time wasting legal crap; neither am I giving you an excuse – to think/claim or otherwise – you have a right to claim ONE CENT in process server fees.
Besides the above, I’m not under any obligation to you or your client. You can do whatever you like I don’t care.[70]
[69] Ms Wilkinson’s 29 July 2013 Affidavit, annexure LW4, page 97.
[70] Ms Wilkinson’s 29 July 2013 Affidavit, annexure LW4, page 99.
The matter came before Registrar Stanley on 29 July 2013, and the Registrar made the following orders:
1.The Application for Substituted Service be dismissed.
2.The costs of the Application for Substituted Service be reserved.
3.The hearing of the Creditors Petition on 30 July 2013 at 9.30am be vacated.
4.The Creditors Petition be listed for hearing on 12 August 2013 at 9.30am.[71]
[71] Order of Registrar Stanley, 29 July 2013.
As is usually the case in matters dealt with by a Registrar there are no Reasons for Decision in relation to the orders made on 29 July 2013.
On 7 August 2013 in Roy Galvin & Co Pty Ltd v Ives [No. 2][72] the District Court of Western Australia dismissed the District Court Appeal (including the application for an extension of time in which to appeal).[73]
[72] [2013] WADC 128 (“Roy Galvin [No. 2]”). The judgment in Roy Galvin [No. 2] is annexure LW5 to the affidavit of Lynn Wilkinson sworn 9 August 2013 (“Ms Wilkinson’s 9 August 2013 Affidavit”).
[73] Roy Galvin [No. 2], orders following para.47.
On 8 August 2013 Mr Ives sent an email to Ms Wilkinson seeking certain advice in relation to the creditors petition proceedings, and indicating that he may consent to the orders if the questions that he had asked were answered. In the final sentence of the email he added that he been researching the civil liability of a corporation for intentional torts.[74] Quite properly, Roy Galvin’s lawyers responded that they could not answer the questions because there was a conflict of interest.[75] There were then further exchanges on 8 and 9 August 2013 about the appointment of a trustee in the event that Mr Ives went bankrupt.[76]
[74] Ms Wilkinson’s 9 August 2013 Affidavit, annexure LW1.
[75] Ms Wilkinson’s 9 August 2013 Affidavit, annexure LW2.
[76] Ms Wilkinson’s 9 August 2013 Affidavit, annexures LW3 and LW4.
In anticipation of the creditors petition hearing affidavits of search and debt were filed by Roy Galvin on 12 August 2013.
Also on 12 August 2013 an amended notice stating grounds of opposition to the creditors petition was filed by Mr Ives. The amended grounds of opposition were as follows:
1.I have not been served with a Notice of Bankruptcy either personally or otherwise, and the creditors evidence that, Ryan Eamonn Lennon served me with a Notice of Bankruptcy on 8/3/13 is disputed and has been reported to the Legal Profession Complaints Committee for the beguiling perjury that it is;
2.Service of Notice of Bankruptcy by, Ryan Eamonn Lennon on 8/3/13 is denied;2.I have commenced an action against the creditor for damages for fraud, by summons lodged in Supreme Court on 9/8/13 I expect approximately 120% of the amount the creditor alleges I owe them.
3.I have appealed to the Court of Appeal, CACV 92 of 2013, the judgement of the Hon. Justice Herron of the District Court handed down on 7/8/13, which was an application for an extension of time to appeal the judgement of Registrar Kingsley (upon which this present action is based), and the appeal. I intend to appeal any adverse decision made against me
in the District Court to the Court of Appeal. In the Court of Appeal to the High Court.
On 12 August 2013 Registrar Jan made orders with respect to the creditors petition as follows:
1.The Applicant have leave to amend its Creditor’s Petition by including an alternative mode of service of the Bankruptcy Notice.
2.The Applicant file and serve the amended Creditor’s Petition supported by affidavit(s) by 26 August 2013.
3.The Respondent file and serve any further amended Notice of Opposition in accordance with Form 5 together with any supporting affidavit(s) by 10 September 2013.
4.The parties file and serve written submissions by 17 September 2013.
5.The Creditor’s Petition be listed for hearing before a judge on 20 September 2013 at 10.15am.
6.Ryan Eamonn Lennon and the Respondent be available at the hearing for cross-examination if required.
7.The parties file and serve any Notice of Objection to any part of any affidavit(s) filed in these proceedings by 17 September 2013.
8.Any party may apply to relist the Creditor’s Petition on giving 48 hours written notice to the other party.
9.Costs of today be reserved.
On 19 August 2013 Roy Galvin filed an amended creditors petition, addressed to Mr Ives, at Unit 28, 107 Goderich Street, East Perth, Western Australia, 6004. The principal amendment to the creditors petition, apart from Mr Ives’ address, was in paragraph 4 which was amended as follows:
4.The Respondent Debtor’s act of bankruptcy was committed within 6 months before the presentation of this Amended Creditor’s Petition dated
June19 August 2013. The Respondent Debtor, Benjamin William Ives, failed to comply:(a) on or before 20 February 2013 with the requirements of the Bankruptcy Notice served on him by email to the Respondent Debtor’s email address: [email protected] on 30 January 2013; and
(b)alternatively, on or before 29 March 2013,
with the requirements of a Bankruptcy Notice served on him on 8 March 2013 or to satisfy the Court that he had a counter-claim, set-off or cross demand equal to or more than the sum claimed in the Bankruptcy Notice, being a counter-claim, set-off or cross demand that he could not have set up in an action in which the Judgment referred to in the Bankruptcy Notice was obtained.
The matter came on for hearing of the creditors petition before the Court as presently constituted on 20 September 2013.
In anticipation of a hearing before this Court on 20 September 2013 Mr Lennon filed a further affidavit affirmed on that date.[77] Annexed to Mr Lennon’s September 2013 Affidavit was an email dated 13 September 2013 from Mr Ives to the Associate to Judge Lucev, copied to Mr Park at Roy Galvin’s lawyers, and in the following terms:
[77] “Mr Lennon’s September 2013 Affidavit”.
Dear Judge
I have filed a debtors petition, next weeks hearing listed for Friday 20 September is no longer necessary. I won’t be showing up anyway.
Roy Galvin Pty Ltd has included in, “unsecured creditors” at $99,000.00.
Total of unsecured creditors is $401,250.84.[78]
Attached to the above email is a confirmation dated 13 September 2013 of email lodgement of a document with AFSA (the lodgement date is not specified) which indicates that AFSA expects to “be able to action your inquiry/request within one/three business days.”[79]
[78] Mr Lennon’s September 2013 Affidavit, annexure REL1. This email has not been seen by the presiding judicial officer prior to it being read in Mr Lennon’s September 2013 Affidavit.
[79] Mr Lennon’s September 2013 Affidavit, annexure REL1.
Roy Galvin’s lawyers responded to Mr Ives directly indicating that:
In the absence of any evidence from you that you have filed a cogent Debtors Petition, my client will continue with these proceedings.
In any event, we will be seeking a costs order against you in these proceedings.[80]
[80] Mr Lennon’s September 2013 Affidavit, para.4 and annexure REL2.
On 13 September 2013 Mr Ives replied to Mr Lennon by email in the following terms:
In response to your letter, you had a chance to provide me with the total Galvins are claiming against me, and you ignored it so I estimated 99K.
This is academic anyway because I’m going bankrupt and Galvins is getting NOTHING.
They had a chance months ago to get about 20K. They were told if they don’t accept it, I will go bankrupt and they will get nothing. They have gone on to waste probably another 10 or 20K since then on legal fees so they made a 40K mistake because they are so arrogant. Sucked in to Galvins.
The only reason I told you when I did that I had filed a Debtors Petition, was to save them from wasting any more money.
I can’t be bothered, but would it make any difference to you if I put the Debtors Petition [in an affidavit] and filed it in the court? It only takes 3 days maximum normally to be processed anyway, I could have left it, but I’m not interested in childish spite.[81]
[81] Mr Lennon’s September 2013 Affidavit, para.5 and annexure REL3.
Roy Galvin’s lawyers responded to Mr Ives by indicating that they intended to proceed with the creditors petition on 20 September 2013 unless they received confirmation from AFSA that the debtors petition had been accepted and that Mr Ives had been declared bankrupt, but that in any event, they were going to seek a costs order against Mr Ives in the proceedings.[82]
[82] Mr Lennon’s September 2013 Affidavit, para.6 and annexure REL4.
A draft bill of costs for the costs of Roy Galvin against Mr Ives in relation to the creditors petition is attached to Mr Lennon’s September 2013 Affidavit, and seeks costs in the amount of $6,722.24.[83] Also attached to Mr Lennon’s September 2013 Affidavit is an itemised timesheet showing a listing of all of Roy Galvin’s costs incurred in relation to the interim application for substituted service, asserting Roy Galvin incurred costs of $7,784.[84]
[83] Mr Lennon’s September 2013 Affidavit, para.7 and annexure REL5.
[84] Mr Lennon’s September 2013 Affidavit, para.8 and annexure REL6.
When the matter was called on on 20 September 2013 Ms Woods appeared for the applicant, and there was no appearance by Mr Ives. Ms Woods accepted that a debtors petition had been filed and accepted by AFSA. Ms Woods sought orders for:
a)the costs of the creditors petition proceedings; and
b)the costs of the interim application for substituted service, on an indemnity basis.
Can the costs orders sought be made?
In Fitzpatrick v Keelty (No. 2)[85] a single Judge of the Federal Court awarded costs against an applicant in administrative judicial review proceedings, observing that there was “ample authority for the proposition that courts may make costs orders against bankrupts”,[86] and that the Federal Court “should not be constrained in making a costs order because the applicant is bankrupt.”[87]
[85] [2008] FCA 742 (“Fitzpatrick (No. 2)”).
[86] Fitzpatrick (No. 2) at para.11 per Moore J.
[87] Fitzpatrick (No. 2) at para.14 per Moore J.
In Foots v Southern Cross Mine Management Pty Ltd & Ors[88] the High Court was dealing with litigation arising out of a costs order made by the Supreme Court of Queensland.[89] The appeal turned upon the construction of s.82 of the Bankruptcy Act 1966 (Cth),[90] particularly the identification of debts and liabilities provable in bankruptcy, and whether the proceedings in which a costs order was made were proceedings subject to s.58(3) of the Bankruptcy Act requiring leave of the Federal Court or this Court before a creditor takes any fresh step in a proceeding in bankruptcy.[91] Having dealt with the nature of costs orders the majority in the High Court found that no obligation was incurred prior to bankruptcy in respect of a costs order made subsequent to bankruptcy.[92] This was because the proof of a costs order and the proof of an underlying debt were distinct matters, and the risk that a costs order may be made was “not a contingent liability within the sense of s.82(1) … [and the] order for costs itself is the source of the legal liability and there is no certainty that the court in question will decide to make an order.”[93] The High Court went on to find that it could not be said that “exposure to an adverse costs order is ‘incidental’ to liability for the underlying judgment debt.”[94] A costs order is not incidental to a judgment debt, and therefore is not a provable debt for the purposes of s.82 of the Bankruptcy Act.[95]
[88] (2007) 234 CLR 52; [2007] HCA 56 (“Foots”).
[89] Foots CLR at 55 per Gleeson CJ, Gummow, Hayne and Crennan JJ; HCA at para.1 per Gleeson CJ, Gummow, Hayne and Crennan JJ.
[90] “Bankruptcy Act”.
[91] Foots CLR at 55 per Gleeson CJ, Gummow, Hayne and Crennan JJ; HCA at paras.2-3 per Gleeson CJ, Gummow, Hayne and Crennan JJ.
[92] Foots CLR at 65-66 and 75-76 per Gleeson CJ, Gummow, Hayne and Crennan JJ; HCA at paras.35 and 65 per Gleeson CJ, Gummow, Hayne and Crennan JJ.
[93] Foots CLR at 66 and 75-76 per Gleeson CJ, Gummow, Hayne and Crennan JJ; HCA at paras.36 and 65 per Gleeson CJ, Gummow, Hayne and Crennan JJ.
[94] Foots CLR at 66 and 75-76 per Gleeson CJ, Gummow, Hayne and Crennan JJ; HCA at paras.37 and 65 per Gleeson CJ, Gummow, Hayne and Crennan JJ.
[95] Foots CLR at 66 and 75-76 per Gleeson CJ, Gummow, Hayne and Crennan JJ; HCA at paras.37 and 65 per Gleeson CJ, Gummow, Hayne and Crennan JJ.
In Wakeling v Wade (No. 2)[96] a single Judge of the Federal Court held that no leave was required under s.58(3) of the Bankruptcy Act to seek a costs order against a party to litigation who had become bankrupt “because any such costs order, not having been made prior to the presentation of … [the bankrupt’s] debtor’s petition … would not be a liability as at the date of bankruptcy and could not constitute or give rise to a debt provable in such bankruptcy”.[97]
[96] [2011] FCA 1452 (“Wakeling (No. 2)”).
[97] Wakeling (No. 2) at para.12 per Nicholas J, citing Foots.
In the circumstances, there can be no doubt that this Court has jurisdiction to make the costs orders sought by Roy Galvin.
Costs of the creditors petition
The creditors petition was due to be heard on 20 September 2013. Shortly beforehand, Mr Ives filed a debtors petition which was granted. On undisputed evidence before the Court, the debtors petition admitted to debts of $401,250.84 to unsecured creditors, including an amount of $99,000 for Roy Galvin. The Court notes that Mr Ives’ Statement of Affairs is not in evidence. The Court further notes in the amended grounds of opposition to the creditors petition it was asserted first, that Mr Ives had not been served, personally or otherwise, with the Bankruptcy Notice. In this regard, the Court observes that personal service of a Bankruptcy Notice is not required.[98] Service of a Bankruptcy Notice may be effected by means of electronic transmission to a facility maintained by a person for receipt of electronically transmitted documents, or in such a manner, for example, by electronic mail, that the document should, in the ordinary course of events, be received by the person.[99] A Bankruptcy Notice can thus be served by electronic mail, it being a means of service set out in reg.16.01(e) of the Bankruptcy Regulations.[100] The evidence of Mr Bowen indicates that the Bankruptcy Notice was sent to Mr Ives’ Email Address on 30 January 2013. Therefore, failure to comply with the Bankruptcy Notice constituted an act of bankruptcy by 20 February 2013. Second, there is no discernible basis for any conclusion that there is any merit to the action taken by Mr Ives in the Supreme Court of Western Australia against Roy Galvin seeking damages for fraud, in an amount greater than the District Court Judgment Debt. The writ of summons does not assist as to the merits of the action in this regard, and, otherwise, assertions made by Mr Ives in relation to this matter are either bare assertions without corroborative evidence or not sworn evidence in any event. There is simply no tenable basis for concluding that Mr Ives will, as a consequence of the action for fraud in the Supreme Court of Western Australia recover any damages at all against Roy Galvin which could be set off against the debts alleged in the creditors petition. Third, in relation to the appeal to the Western Australian Supreme Court, Court of Appeal, there is no reason to suggest that that appeal will be successful, the reasoning in Roy Galvin [No. 2] appearing to this Court to be, with respect, unimpeachable.
[98] Bankruptcy Regulations 1996 (Cth) (“Bankruptcy Regulations”), reg.16.01(1) and (2); Skalkos v T & S Recoveries Pty Ltd (2004) 141 FCR 107 at 117 per Sundberg, Finkelstein and Hely JJ; [2004] FCAFC 321 at para.31 per Sundberg, Finkelstein and Hely JJ (“Skalkos”); Carantinos v Magafas [2009] FCA 627 at paras.4-5 per Perram J.
[99] Bankruptcy Regulations, reg.16.01(1)(e).
[100] Skalkos FCR at 117 per Sundberg, Finkelstein and Hely JJ; FCAFC at para.31 per Sundberg, Finkelstein and Hely JJ; CSR Ltd (t/as CSR Construction Materials) v Barillaro (2001) 184 ALR 308 at 311-312 per Raphael FM; [2001] FMCA 23 at paras.13-18 per Raphael FM (“Barillaro”).
It is also clear that the rationale behind filing the debtors petition was to prevent Roy Galvin from obtaining the creditors petition. That is clear from Mr Ives’ 13 September 2013 email reply to Mr Lennon in which he indicates that he is going to become a bankrupt and that Roy Galvin will get “NOTHING”, and that Roy Galvin had been “[s]ucked in”.[101]
[101] See para.48 above.
In all the circumstances, the Court is of the view that it would have been inevitable that the creditors petition would have been granted at the hearing on 20 September 2013. In those circumstances, it is appropriate that there be an award of costs to Roy Galvin in relation to the creditors petition proceedings, and that the amount of those costs be the amount sought by Roy Galvin, those costs being, in the Court’s view, a proper and appropriate award of costs within the broad discretion afforded to the Court to award costs under s.79 of the Federal Circuit Court of Australia Act 1999 (Cth).[102]
[102] “FCCA Act”.
Costs for the interim application for substituted service
Roy Galvin seeks indemnity costs for the interim application for substituted service. The Court has the jurisdiction to grant indemnity costs.[103]
[103] Genovese v BGC Construction Pty Ltd (No. 2) [2007] FMCA 601 at paras.38-46 per Lucev FM (“Genovese (No. 2)”).
In determining whether to award indemnity costs the Court has a very wide discretion, to be exercised judicially. What is an appropriate costs or indemnity costs order depends on the circumstances of the case. The normal practice, not to be lightly departed from, is to provide for costs to be on a party – party basis. Nevertheless, there are certain issues to which the Court will give consideration, and have to weigh, when determining whether to make, and the extent of, an indemnity costs order, which should only be made where the issues establish special or unusual circumstances warranting an indemnity costs order. Those issues include:
a)whether a party should have known that there was no prospect of success in the case;
b)where a party alleges fraud or forgery, knowing the accusation to be false, or irrelevant to the issues;
c)where a party precipitately punctuates proceedings by resiling from a previously adhered to view;
d)where a party acts in a high handed manner;
e)whether the party against whom indemnity costs is sought is a self-represented litigant, and whether the self-represented litigant ought escape the consequences of indemnity costs;
f)where a party proceeds “vexatiously” that is “without sufficient grounds for the purpose of causing trouble or annoyance”;
g)where a party proceeds for no good purpose at all due to inertia and carelessness;
h)where a party persists in the making of allegations which ought not have been made, or in undue prolongation of groundless contentions;
i)where a party’s conduct causes loss of time to the Court, and to other parties;
j)where a party imprudently refuses an offer to compromise;
k)whether the award of indemnity costs is sought against a contemnor;
l)having regard to the objects of:
i)encouraging savings of private costs and avoidance of inherent risks, delays and uncertainties of litigation;
ii)saving public cost necessarily incurred in litigation which events demonstrate to have been unnecessary; and
iii)indemnifying one party where the real cause and occasion of the litigation is the attitude adopted by the other party; and
m)the discretion is not so circumscribed that an indemnity costs order may only be made against an ethically or morally delinquent party. The discretionary categories are not closed, and other elements of litigious misconduct may be relevant.[104]
[104] Genovese (No. 2) at paras.47-48 per Lucev FM, where the well-known authorities on indemnity costs: Colgate-Palmolive Company & Anor v Cussons Pty Ltd (1993) 46 FCR 225 and Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd & Ors (1988) 81 ALR 397 were cited, amongst others. Genovese (No. 2) has been applied in subsequent cases including Rana v State Libraries Board of Australia (No. 2) [2008] FMCA 1037 and Klages (WA) Pty Ltd v Walker (No. 2) [2007] FMCA 2138.
In this case:
a)Mr Ives ought to have known that there was no prospect of success in opposing the creditors petition, and indeed that much is evident from the ultimate filing of his debtors petition including a debt in approximately the same sum as the District Court Judgment Debt the subject of the creditors petition;
b)fraud by Roy Galvin has been alleged by Mr Ives, and in the absence of any real evidence to support the accusation, it appears to be a false accusation;
c)Mr Ives cannot hide behind the fact that he is a self-represented litigant: as he points out on at least two occasions in the papers filed by him in these proceedings, he has been a law or legal studies student at Murdoch University, and as is otherwise evident from the papers he has filed in these proceedings, he is a not inexperienced litigator, and appears to be litigious, almost to a fault, threatening to appeal judgments of the District Court to the Court of Appeal, and the Court of Appeal to the High Court, before those judgments are even made;
d)it appears that Mr Ives’ conduct in relation to the issue of service was unnecessary, and resulted in undue prolongation of the matter, contrary to the legislative objects of proceedings in this Court.[105] In particular, his conduct with respect to an address for service was manifestly dissembling. For example, he asserted that he had not lived for some time at the Lakeway Road Address, and that Roy Galvin ought to have served him at what he said was his current home address, according to AEC records, being 101 Goderich Street, East Perth. Within a week of making such an assertion, Mr Ives filed the District Court Appeal, and an affidavit in the District Court in support of an extension of time in respect of the District Court Appeal, both giving his address as the Lakeway Road Address. Further, although he said that his address was registered with the AEC as 101 Goderich Street, when he filed notices of opposition and a notice of appearance in this Court, the address given was 107 Goderich Street. In any event, given the report of the process server for Roy Galvin’s lawyers, it would not have been possible to serve him at 101 Goderich Street, as the property was secured and could not be accessed. Mr Ives also made it plain that he thought that Roy Galvin should serve him at home, but when finally tied down to give a time at which service might be effected, he dissembled, saying he was going to the gymnasium, and then to watch the football with his father, and made, quite pointedly, the statement that he would not be watching the football with his father at the Lakeway Road Address, and that he was under no obligation to assist Roy Galvin, and that they could do whatever they liked. It is in that response that the probable motivation for his conduct emerges, when he indicates that he does not intend to give Roy Galvin an excuse to claim one cent in process server fees.
[105] FCCA Act, ss.3 and 42; Federal Circuit Court Rules 2001 (Cth), r.1.03.
The fact that during the course of these proceedings Mr Ives has given to Roy Galvin three separate addresses (being 101 Goderich Street, and two different addresses at 107 Goderich Street, being Unit 28 and 3/28 at 107 Goderich Street) plus the Lakeway Road Address in the contemporaneous District Court Appeal, is sufficient to highlight the need for an order for substituted service, particularly when taken together with Mr Ives’ conduct, and the process server’s report indicating that access was not available to 101 Goderich Street.
The fact that Roy Galvin’s lawyers already had Mr Ives’ Email Address is irrelevant for the purposes of service of the creditors petition. A creditors petition must be served personally (in the absence of an order for substituted service).[106] Further, the evidence discloses that an AEC address check was done for Mr Ives, but at the time that it was done did not disclose either of the Goderich Street addresses, and in particular, not the 101 Goderich Street address, at which he appeared to have received mail from the AEC and a political candidate, but to which access could not be gained by the process server.
[106] Skalkos FCR at 117 per Sundberg, Finkelstein and Hely JJ; FCAFC at para.31 per Sundberg, Finkelstein and Hely JJ; Barillaro at ALR at 311-312 per Raphael FM; FMCA at paras.13-18 per Raphael FM; University of New South Wales v Sheikholeslami [2008] FMCA 1323 at paras.10 and 43-46 per Lloyd-Jones FM (and cases there cited).
The Court also has had regard to the manner in which Mr Ives has responded to approaches from Roy Galvin during the course of these proceedings, which has significantly lengthened the time which the proceedings have taken, and increased their cost, contrary to the objects and purposes of this Court’s legislation.
Finally, the Court notes that the conduct of Mr Ives in the course of this litigation is not how litigation ought to be conducted, even by a self-represented litigant.
In all the circumstances, the Court is of the view that this would have been an appropriate case for an order for substituted service, personal service being impracticable, and that such an order would likely have been made by a Registrar of this Court on 29 July 2013, but for the fact that four days before 29 July 2013 Mr Ives had filed a notice of appearance listing his address as 28/107 Goderich Street, East Perth, WA 6004, and that he attended the hearing of the application for substituted service on 29 July 2013.
In all the circumstances, and in the exercise of the Court’s broad discretion as to costs, the Court determines that this is a proper case for the grant of indemnity costs. There will therefore be an indemnity costs order in respect of the interim application for substituted service, in the amount sought by Roy Galvin.
Conclusions and orders
The Court has concluded that orders for costs in respect of Roy Galvin’s application for a creditors petition, and Roy Galvin’s interim application for substituted service, ought to be granted in the amounts sought by Roy Galvin. There will be orders accordingly.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Judge Lucev
Associate:
Date: 25 October 2013
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