Sarina v O'Shannassy (No 3)

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FEDERAL CIRCUIT COURT OF AUSTRALIA

Sarina v O’Shannassy (No 3) [2021] FCCA 1930

File number(s): SYG 1345 of 2020
Judgment of: JUDGE MANOUSARIDIS
Date of judgment: 20 August 2021
Catchwords: COSTS – application pursuant to liberty to apply to vary order for costs made on delivery of reasons for judgment – application for variation of costs order dismissed
Cases cited:

Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd (No 5) [2010] FCA 605

Sarina v O'Shannassy [2020] FCCA 1625

Sarina v O’Shannassy (No 2) [2021] FCCA 338

Sarina & Anor v O’Shannassy [2019] FCCA 732

Sarina & Anor v O'Shannassy (No.5) [2020] FCCA 2911

Sarina v O'Shannassy (No 6) [2020] FCCA 3422

Number of paragraphs: 9
Date of last submission/s: 23 April 2021
Date of hearing: Decided on the papers
Place: Sydney
Counsel for the Applicant: Mr C Bolger
Solicitor for the Applicant: Kalantzis Lawyers
The Respondent: In person

ORDERS

SYG 1345 of 2020
BETWEEN:

CLINTON SARINA

Applicant
AND:

JOHN O'SHANNASSY

Respondent

ORDER MADE BY:

JUDGE MANOUSARIDIS

DATE OF ORDER:

20 AUGUST 2021

THE COURT ORDERS THAT:

1.The respondent’s application to vary order 2 of the orders made on 26 February 2021 is dismissed.

2.The respondent pay the applicant’s costs of the application referred to in order 1.

REASONS FOR JUDGMENT

  1. On 26 February 2021 I made an order dismissing an interim application filed by the respondent to amend the bankruptcy notice the respondent served on the applicant, and an order setting aside the bankruptcy notice. I also ordered that the applicant pay the respondent’s costs (Costs Order), reserving to the parties liberty to apply to set aside or vary the Costs Order.

  2. The respondent exercised the liberty to apply, after which I made directions for the filing of written submissions. The parties filed written submissions, and they agreed that the question of costs could be determined on the papers.[1] These reasons assume familiarity with the judgment I delivered on 26 February 2021.[2]

    [1] The respondent filed two sets of submissions, one dated 19 March 2021 and one dated 23 April 2021,and the applicant relied on written submissions dated 16 April 2021

  3. The principal basis on which the respondent seeks to vary the Costs Order is that the applicant succeeded on a ground (the post box ground) he first raised on about 14 July 2020 when I granted the applicant leave to amend the application to set aside the bankruptcy notice. The respondent also submits that the many occasions on which the matter was adjourned were not his fault. The respondent submits that had the applicant “made an application to dismiss the Bankruptcy Notice at first instance on the basis of the creditors address being a post office box, then the various and numerous adjournments would not have been necessary”.[3] The respondent submits I should order that each party bear his own costs up to the date of the hearing on 18 February 2021,…

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Details
Case
[2021] FCCA 1930
Decision Date

CaseChat Overview and Summary

This matter came before Manousaridis J of the Federal Circuit Court of Australia concerning an application by the applicant to set aside a bankruptcy notice issued by the respondent. The proceedings had been subject to numerous adjournments, some of which were necessitated by the applicant's requests for extensions of time to comply with the bankruptcy notice. The respondent argued that these adjournments were not due to any fault on their part, but rather the applicant's actions.

The central legal issues before the court were what had occasioned the numerous adjournments of the proceedings and whether the applicant's costs in successfully prosecuting the application to set aside the bankruptcy notice were justified. Specifically, the court had to consider whether the applicant's claim in a separate defamation proceeding constituted a counter-claim, set-off, or cross-demand that could be relied upon to set aside the bankruptcy notice, and whether the respondent's intention to amend the bankruptcy notice had caused further delays.

Manousaridis J reasoned that the ultimate cause of the adjournments was the respondent's issuance of the bankruptcy notice and their subsequent resistance to the applicant's application to set it aside. The court noted that the respondent had even opposed an application for an extension of time, leading to a substantive interlocutory hearing and a prior judgment. The adjournments were also explained by the need to await the determination of the defamation proceeding, as one of the grounds for setting aside the bankruptcy notice relied on the applicant's defamation claim. Furthermore, the respondent's intention to amend the bankruptcy notice after the defamation judgment also contributed to the delays. The court found that the applicant's request to amend the application to include a "post box ground" did not occasion any adjournment or wasted costs. Ultimately, the court was satisfied that the applicant's costs in setting aside the bankruptcy notice were a direct consequence of the respondent's resistance to the application.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

It is the case that there were many adjournments of the proceedings that necessitated the making of orders extending time for compliance with the requirements of the bankruptcy notice; and it may be accepted that none of these adjournments was due to any fault by the respondent. But that does not necessarily mean the adjournments were due to any fault of the applicant. The question is what occasioned these adjournments. The ultimate cause was the respondent’s having served a bankruptcy notice on the applicant and the respondent resisting the applicant’s application to set aside the bankruptcy notice. The respondent’s resistance extended to opposing, on one occasion, the applicant’s application to extend the time for compliance with the requirements of the bankruptcy notice. That resulted in a substantive interlocutory hearing which, in turn, led me to deliver a judgment on 19 June 2020 (19 June Judgment).[8] [8] Sarina v O'Shannassy [2020] FCCA 1625 There are two, more immediate, reasons that explain the regular adjournments. The first relates to the period from 19 June 2020 to 30 October 2020, when I published my judgment in the defamation proceeding that the applicant and Mr Green had commenced against the respondent (Defamation Proceeding).[9] During this period the application to set aside the bankruptcy notice was adjourned because one of the grounds on which the applicant relied for setting aside the bankruptcy notice was that the claim for damages the applicant made in the Defamation Proceeding constituted a counter-claim, set-off, or cross demand equal to or exceeding the amount of the judgment debt on the basis of which the bankruptcy notice was issued, being a counter-claim, set-off, or cross demand the applicant could not have set up in the proceeding in which the judgment was obtained. In my 19 June Judgment I found that it would be more convenient if I not determine whether the claims the applicant made in the Defamation Proceeding constituted such a counter-claim, set-off, or cross demand, independently of my determining the claims made in the Defamation proceeding.[10] That necessarily implied that I would not decide this ground for setting aside the bankruptcy notice until after I determined the claims made in the Defamation Proceeding. The second reason for adjourning the application to set aside the bankruptcy notice relates to the period after 30 October 2020, being the day on which I delivered my judgment in the Defamation Proceeding. The adjournments were occasioned, at least for the most part, by the respondent’s intention to apply to amend the bankruptcy notice.[9] Sarina & Anor v O'Shannassy (No.5) [2020] FCCA 2911[10] Sarina v O'Shannassy [2020] FCCA 1625, at [20] In these circumstances I do not accept that the applicant’s seeking to amend the application in July 2020 to include the post box ground occasioned any adjournment, or otherwise caused the throwing away of any costs the respondent incurred up to the day on which I granted the applicant leave to amend his application. I am satisfied there is nothing in the material before me that could lead me to find that any costs the applicant incurred in successfully prosecuting his application to set aside the bankruptcy notice were not due to the respondent’s having resisted the applicant’s application to set aside the bankruptcy notice, and resisting, on the occasion he did, the applicant’s application to extend the time for complying with the requirements of the bankruptcy notice.

Ratio Decidendi

Legal Principle Established

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