Sarina v Nicols - [2009] FMCA 977

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SARINA v NICOLS

[2009] FMCA 977

BANKRUPTCY – Whether proceedings by the respondent in this court should be stayed until the costs of the applicant in Local Court proceedings are paid.

Bankruptcy Act 1966 (Cth), ss.60, 120, 121, 122
Federal Magistrates Act 1999 (Cth), s.15
Legal Profession Act 2004 (NSW), ss.373, 377, 378, 382, 386

Federal Magistrates Court Rules, r.13.02
Federal Court Rules, O.22, r.8

Bowen v Hickey (1958) 78 WN (NSW) 820
CGU Insurance Ltd v Watson (as trustee of the deed of arrangement in respect of Greaves) [2007] NSWCA 301
Hutchison v Nominal Defendant [1972] 1 NSWLR 443
Idoport v National Australia Bank Limited & Anor [2006] NSWCA 202
Martin v Earl Beauchamp (1883) 25 Ch D 12
McCabe v Bank of Ireland (1889) 14 App Cas 413
Rana v Fsaser Hotel Pty Ltd [2007] FMCA 403

Applicant:

KAREN SARINA

Respondent:

STEVEN NICOLS AS TRUSTEE OF THE BANKRUPT ESTATE OF PAUL SAMIR HANNA

File Number:

SYG 650 of 2009

Judgment of:

Barnes FM

Hearing dates:

24 April 2009, 19 May 2009, 23 July 2009, 10 August 2009 and 2 September 2009

Delivered at:

Sydney

Delivered on:

2 September 2009

REPRESENTATION

Counsel for the Applicant:

Mr D A Allen

Solicitors for the Applicant:

Proctor Phair Lawyers

Counsel for the Respondent:

Mr P Newton

Solicitors for the Respondent:

PH Legal Pty Ltd

ORDERS

The proceedings number SYG3226 of 2008 in this Court in relation to Karen Sarina as the first respondent be stayed until the applicant Steven Nicols pay the sum of $29,000 on account of the costs in Local Court proceedings number 79586 of 2008, such money to be held in the trust account of Proctor Phair Lawyers, the solicitors for Ms Sarina, until further order of this Court.
The respondent pay the costs of the applicant in relation to the application for the stay as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 650 of 2009

KAREN SARINA

Applicant

And

STEVEN NICOLS AS TRUSTEE OF THE BANKRUPT ESTATE OF PAUL SAMIR HANNA

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

By application filed on 19 March 2009 the applicant, Karen Sarina, seeks orders on an interim basis that proceedings SYG3226 of 2008 in this court be stayed until Steven Nicols, the respondent in these proceedings, pay the costs of Ms Sarina in Local Court of New South Wales proceedings 79586 of 2008. The proceedings in this court in relation to which the stay is sought were brought by Mr Nicols as trustee of the bankrupt estate of Paul Samir Hanna against Ms Sarina and also against Clinton Sarina, her husband. Mr Nicols seeks a number of orders concerning rights and liabilities in relation to a racehorse called Strategic Answer (the horse). The principal claim against Ms Sarina is for the sum of $35,970 plus interest and costs. Further, or in the alternative, Mr Nicols seeks a declaration that…

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: [2009] FMCA 977
Decision Date: 2 September 2009

CaseChat Overview and Summary

Sarina v Nicols is a legal matter heard in the Federal Court of Australia, involving a dispute between Karen Sarina, the first respondent, and Steven Nicols, the applicant. The core of the disagreement lies in the proceedings numbered SYG3226 of 2008 and 79586 of 2008, with the latter being a Local Court case. Nicols has applied for a stay of the first proceedings until he satisfies certain financial obligations, namely the payment of $29,000 towards the costs incurred in the Local Court case. This payment is to be held in trust by Proctor Phair Lawyers, who represent Ms Sarina.

The legal issues central to this case revolve around the applicant's ability to secure a stay of proceedings and the conditions under which such a stay should be granted. Specifically, the court had to consider the merits of Nicols' application for a stay, the financial obligations he must satisfy before the stay can be lifted, and the procedural fairness in imposing these conditions. The court's decision also involved assessing the costs Nicols must pay and ensuring that they are managed appropriately by the solicitors for Ms Sarina.

In rendering its decision, the court closely examined the terms of the stay application and the financial obligations imposed by the Local Court. The court found that the conditions set for the stay were reasonable and necessary to ensure that Ms Sarina's legal costs were addressed. It was also noted that the payment of $29,000 was a fair reflection of the costs incurred in the Local Court proceedings. Furthermore, the court considered the procedural fairness of the stay and the necessity to protect Ms Sarina's interests. Consequently, the court granted the stay on the condition that Nicols pays the specified amount into the trust account of Proctor Phair Lawyers. Additionally, the court ruled that the costs of the applicant in relation to the stay application should be paid by the respondent, as agreed, or, if not agreed, taxed according to the Federal Court Rules.

In conclusion, the court ordered that the proceedings numbered SYG3226 of 2008 be stayed until Nicols satisfies the financial conditions, and it also addressed the issue of costs between the parties.

Orders

Orders of the court

The proceedings number SYG3226 of 2008 in this Court in relation to Karen Sarina as the first respondent be stayed until the applicant Steven Nicols pay the sum of $29,000 on account of the costs in Local Court proceedings number 79586 of 2008, such money to be held in the trust account of Proctor Phair Lawyers, the solicitors for Ms Sarina, until further order of this Court.

The respondent pay the costs of the applicant in relation to the application for the stay as agreed and in the absence of agreement taxed in accordance with the Federal Court Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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