Roy Galvin & Co Pty Ltd v Ives - [2013] FCCA 1645

FEDERAL CIRCUIT COURT OF AUSTRALIA

ROY GALVIN & CO PTY LTD v IVES

[2013] FCCA 1645

Catchwords:
BANKRUPTCY – Application for creditors petition – application for substituted service of creditors petition – debtors petition lodged and accepted shortly before creditors petition hearing – costs.

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)
Federal Circuit Court of Australia Act 1999 (Cth), ss.3, 42, 79
Federal Circuit Court Rules 2001 (Cth), r.1.03

Carantinos v Magafas [2009] FCA 627

Colgate-Palmolive Company & Anor v Cussons Pty Ltd (1993) 46 FCR 225
CSR Ltd (t/as CSR Construction Materials) v Barillaro (2001) 184 ALR 308; [2001] FMCA 23
Fitzpatrick v Keelty (No.2) [2008] FCA 742
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd & Ors (1988) 81 ALR 397
Foots v Southern Cross Mine Management Pty Ltd & Ors (2007) 234 CLR 52; [2007] HCA 56
Genovese v BGC Construction Pty Ltd (No.2) [2007] FMCA 601
Ives v The State of Western Australia [No.7] [2013] WASC 62
Klages (WA) Pty Ltd v Walker (No.2) [2007] FMCA 2138
Rana v State Libraries Board of Australia (No.2) [2008] FMCA 1037
Roy Galvin & Co Pty Ltd v Ives [No. 2] [2013] WADC 128
Skalkos v T & S Recoveries Pty Ltd (2004) 141 FCR 107; [2004] FCAFC 321
University of New South Wales v Sheikholeslami [2008] FMCA 1323
Wakeling v Wade (No.2) [2011] FCA 1452

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…

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: [2013] FCCA 1645
Decision Date: 25 October 2013

CaseChat Overview and Summary

Roy Galvin & Co Pty Ltd (the creditor) applied for the substituted service of a creditors' petition against Mr. Ives (the debtor). Shortly before the hearing of the creditor's petition, the debtor lodged and had accepted a debtor's petition. The primary dispute concerned the costs associated with the creditor's application for substituted service.

The court was required to determine whether the costs of the application for substituted service should be awarded on an indemnity basis, notwithstanding the subsequent lodging and acceptance of a debtor's petition.

Judge Lucev reasoned that the creditor had been put to considerable expense in seeking substituted service due to the debtor's conduct in evading service. The court found that the debtor's actions were designed to frustrate the creditor's legitimate attempts to pursue its debt through bankruptcy proceedings. In such circumstances, where a party's conduct has unnecessarily increased the costs incurred by the other party, an award of costs on an indemnity basis is warranted. The court applied the principle that costs should follow the event, but also that indemnity costs may be awarded to reflect unreasonable or obstructive conduct.

The court ordered that the costs of the application for substituted service be paid by the debtor on an indemnity basis.

Orders