FEDERAL COURT OF AUSTRALIA
Sarks v Cassegrain [2015] FCAFC 38
Citation: Sarks v Cassegrain [2015] FCAFC 38 Appeal from: Sarks v Cassegrain [2014] FCA 972 Parties: ANTHONY BLAKE SARKS v DENIS CASSEGRAIN, CATHERINE DUNN, PATRICK CASSEGRAIN and JOHN CASSEGRAIN File number: NSD 961 of 2014 Parties: CLAUDE CASSEGRAIN v DENIS CASSEGRAIN, CATHERINE DUNN, PATRICK CASSEGRAIN and JOHN CASSEGRAIN File number: NSD 963 of 2014 Judges: EDMONDS, PAGONE AND GLEESON JJ Date of judgment: 19 March 2015 Catchwords: PRACTICE AND PROCEDURE – BANKRUPTCY AND INSOLVENCY – Judgments and Orders – whether order final or interlocutory for the purposes of s 40(1)(g) Bankruptcy Act 1966 (Cth) – where orders contain declaration of liability but damages to be assessed by an inquiry – whether declaration of liability final order for the purposes of issuing a bankruptcy notice or merely interlocutory pending final determination of quantum by inquiry
PRACTICE AND PROCEDURE – Judgments and Orders – whether costs order stayed until conclusion of proceedings – where orders contain declaration of liability but damages to be assessed by an inquiry whether proceedings concluded for the purposes of r 42.7(2) Uniform Civil Procedure Rules 2005 (NSW)
BANKRUPTCY AND INSOLVENCY – whether costs determination “judgment” for the purposes of s 40(1)(g) Bankruptcy Act 1966 (Cth) – whether determination of costs deemed to be a judgment for the purposes of issuing a bankruptcy notice
Legislation: Bankruptcy Act 1966 (Cth) ss 40, 41
Legal Profession Act 2004 (NSW) s 368
Civil Procedure Act 2005 (NSW) s 101
Federal Court Rules 2011 r 40.13
Uniform Civil Procedure Rules 2005 (NSW) r 42.7Cases cited: Abigroup Ltd v Abignano (1992) 39 FCR 74 cited
Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201 cited
Bailey v Marinoff (1971) 125 CLR 529 cited
Carantinos v Magafas [2008] NSWCA 304 considered
Derrawee Pastoral Company Pty Limited v McConochie [1995] NSWCA 123 considered
Frumar v The Owners of Strata Plan 36957 [2010] NSWCA 172 cited
Hurstville City Council v Renaldo Plus 3 Pty Ltd [2006] NSWCA 248 cited
Juul v Northey [2010] NSWCA 211 considered
Ku-Ring-Gai Municipal Council v Bonnici [2002] NSWCA 313 cited
Meehan v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146 considered
Phillips v Walsh (1990) 20 NSWLR 210 cited
Qu v Kuang [2008] NSWSC 991 cited
Roads and Traffic Authority of New South Wales v Palmer (No 2) [2005] NSWCA 140 cited
Worchild v The Drink Nightclub (Qld) Pty Limited (2005) 224 ALR 339 followedDate of hearing: 11 February 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 47 Counsel for the Appellant: Mr MLD Einfeld QC with Mr P Bolster Solicitor for the Appellant: Oliveri Lawyers Counsel for the Respondents: Mr M Ashhurst SC with Mr GB Colyer Solicitor for the Respondents: McCabes Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 961 of 2014
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN: ANTHONY BLAKE SARKS
AppellantAND: DENIS CASSEGRAIN
First RespondentCATHERINE DUNN
Second Respondent
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- Sarks v Cassegrain [2015] FCAFC 38
- Case
- [2015] FCAFC 38
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CaseChat Overview and Summary
The appeal was heard by the Full Court of the Federal Court of Australia, with the parties being Sarks and Cassegrain as appellants against Gerard Cassegrain & Co Pty Ltd as the respondent. The dispute centred on the bankruptcy notices issued to Sarks and Cassegrain under s 40(1)(g) of the Bankruptcy Act 1966, which refers to judgments and orders. The primary issues were whether the orders, which contained a declaration of liability but left damages to be assessed by an inquiry, constituted final orders for the purposes of issuing a bankruptcy notice, and whether the proceedings were concluded for the purposes of staying a costs order until the conclusion of the proceedings.
The court found that the orders were indeed final, even though the quantum of damages was yet to be assessed. The reasoning involved interpreting the combination of orders 10 and 17, which declared liability and set up an inquiry for assessing damages. The court held that the proceedings were concluded for the purposes of r 42.7(2) of the Uniform Civil Procedure Rules 2005 (NSW) because the substantive orders addressing liability were final. The concession made by senior counsel for the appellants was heavily qualified and did not fully capture the nuance of the argument.
The outcome of the appeal was that it was dismissed. The final orders included a dismissal of the appeal and a direction that the appellants pay the respondent's costs, as agreed or taxed.
The court found that the orders were indeed final, even though the quantum of damages was yet to be assessed. The reasoning involved interpreting the combination of orders 10 and 17, which declared liability and set up an inquiry for assessing damages. The court held that the proceedings were concluded for the purposes of r 42.7(2) of the Uniform Civil Procedure Rules 2005 (NSW) because the substantive orders addressing liability were final. The concession made by senior counsel for the appellants was heavily qualified and did not fully capture the nuance of the argument.
The outcome of the appeal was that it was dismissed. The final orders included a dismissal of the appeal and a direction that the appellants pay the respondent's costs, as agreed or taxed.
Orders
Orders of the court
1. The appeal be dismissed.
2. The appellant pay the respondents’ costs, as agreed or taxed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
These are appeals from the judgment of a judge of this Court dismissing applications to set aside bankruptcy notices issued in reliance on s 40(1)(g) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”) and served on each of the appellants on 24 June 2014.BACKGROUND On 27 April 2012, Bergin CJ in Equity published her Honour’s reasons for judgment in Denis Cassegrain & Ors v Gerard Cassegrain & Co Pty Ltd & Ors [2012] NSWSC 403. There were competing claims as to the orders to be made. Submissions were thereafter filed. On 24 July 2012, her Honour published further reasons “in respect of the final orders to be made consequent upon the delivery of my judgment in this matter on 27 April 2012” (emphasis added): Denis Cassegrain & Ors v Gerard Cassegrain & Co Pty Ltd & Ors (2012) 264 FLR 392 at [1]. The Declarations and Orders then made were entered on that date. Declaration 10 made on 24 July 2012 was as follows:10.Claude Cassegrain, Anthony Sarks and Felicity Cassegrain are jointly and severally liable to compensate Gerard Cassegrain & Co Pty Limited for any loss to Gerard Cassegrain & Co Pty Limited arising from the transfer of Gerard Cassegrain & Co Pty Limited’s shares in CaTTO and OAL to Felicity Cassegrain on 19 and 20 January 2005 respectively. Orders 16 to 19 inclusive made on 24 July 2012 were as follows:16.Claude Cassegrain, Anthony Sarks and Felicity Cassegrain pay the Plaintiffs’ costs of the statutory derivative and oppression proceedings concerning Gerard Cassegrain & Co Pty Limited on a party/party basis.17.An Inquiry be held as to the existence and quantum of any loss to Gerard Cassegrain & Co Pty Limited by reason of the transfer of Gerard Cassegrain & Co Pty Limited’s shares in CaTTO and OAL to Felicity Cassegrain for the purpose of making orders for equitable compensation to be paid to Gerard Cassegrain & Co Limited by Claude Cassegrain, Anthony Sarks and Felicity Cassegrain. That Inquiry is to include the assessment of any damage to Gerard Cassegrain & Co Pty Limited by reason of the contraventions of ss 180, 181(1) and 182(1) of the Corporations Act 2001 by Claude Cassegrain and Anthony Sarks (including any profits made by Claude Cassegrain and/or Anthony Sarks resulting from the contraventions) referred to in Declarations 5 and 6 and the determination of any amount of compensation to be ordered under s 1317H of the Corporations Act 2001 against Claude Cassegrain and Anthony Sarks.18.The parties are granted liberty to restore the matter to the List for the purposes of the management of the preparation for the Inquiry.19.These Declarations and Orders are to be entered forthwith. Pursuant to Order 16, costs were thereafter assessed and two judgments/orders for costs were made and entered, the first on 18 December 2013 in the sum of $1,399,870.71; the second on 16 May 2014 in the sum of $2,662.00. On 23 October 2012, Mr Claude Cassegrain and Mr Anthony Sarks filed a notice of appeal. The appeal was expressed to be “brought from the whole of the Judgment of Bergin CJ in Eq delivered on 27 April 2012 and the Orders made by her Honour on 24 July 2012”. Appeal Ground 14 stated that the “primary judge erred in making the consequential orders numbered 12–17 made by her on 30 July 2012”. That appeal was heard together with two other appeals also filed in respect of the decision of Bergin CJ in Eq on 20 December 2012. The Court of Appeal dismissed the appeal filed by Mr Claude Cassegrain and Mr Anthony Sarks: Gerard Cassegrain & Co Pty Ltd (in liq) v Cassegrain (2013) 305 ALR 687. An application for special leave to appeal to the High Court of Australia was filed on 17 January 2014 but discontinued on 14 February 2014.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
While the court was there concerned with an order made under this Court’s rules, there is no reason to distinguish the judgments/orders made on the certificate for costs in the present case.CONCLUSION The appeal must be dismissed with costs. I have had the advantage of reading the joint reasons for judgment of Edmonds and Gleeson JJ and respectfully agree with their Honours in all but one respect. I have a different view in relation to the second argument put by the appellants and, more particularly, about the concession made by senior counsel in argument. The issue engaged by the appellants’ second argument concerns the extent to which the finality of orders determine whether the proceedings are concluded for the purposes of r 42.7(2) of the Uniform Civil Procedure Rules 2005 (NSW). Rule 42.7 provides:42.7 Interlocutory applications and reserved costs (1)Unless the court orders otherwise, the costs of any application or other step in any proceedings, including:(a) costs that are reserved, and(b)costs in respect of any such application or step in respect of which no order as to costs is made, are to be paid and otherwise dealt with in the same way as the general costs of the proceedings.(2)Unless the court orders otherwise, costs referred to in subrule (1) do not become payable until the conclusion of the proceedings.Counsel for Cassegrain argued that the relevant inquiry for the purposes of the application of the rule was whether the proceedings in question had concluded. That was because r 47.2(2) provides that costs orders do not, unless otherwise ordered, become payable “until the conclusion of the proceedings”. Counsel for the appellant argued that the combined effect of orders 10 and 17 made by Bergin CJ on 24 July 2012, and in particular order 17, necessarily required something more to occur in the proceeding which meant that it had not concluded for the purposes of rule 42.7(2). It was in that context that counsel for the appellant was asked by the court during the hearing of the appeal whether it was accepted by the appellants that the proceedings had concluded if order 17 was found to be a final order. The essential part of the response made by senior counsel for the appellants is set out in the joint judgment but it may be desirable to set out more of the exchange between bench and bar from the transcript between T7 line 44 and T9 line 44:EDMONDS J: Do you accept that – or do you not accept that if the court was to find that the orders made by her Honour were – we were of the view that they were final orders, that the proceedings had concluded?MR EINFELD: Not – with a slight adjustment, if I may be permitted, to the question. The question is whether the proceeding – the question is whether the proceedings concluded and, therefore, the questions will be – well, there might be some final orders. The question is whether the substantive orders, that is, the orders addressing this question of the liability of our clients to pay our friend’s clients, are final. Yes.EDMONDS J: But if – well, I will rephrase it. Court were to find that the relevant orders which her Honour made – I will just get the date – 24 July .....MR EINFELD: ..... come. Yes.EDMONDS J: 24 July. The relevant orders with which we’re concerned I think were – in particular, the costs order was 16, I think.MR EINFELD: Yes.EDMONDS J: And it’s also relevant as to what her Honour had to say in order 17.MR EINFELD: Yes. Correct.EDMONDS J: But if the court was to find that they were final orders, do you say the proceedings are concluded for the purpose of 42.7?MR EINFELD: Not necessarily - - -EDMONDS J: Not necessarily. No doubt - - -MR EINFELD: - - - for this reason - - -EDMONDS J: Well, you can expand that. That’s something I – in your own time.MR EINFELD: No. No. I will do it now. I say not necessarily for this reason. A division has to be made. Let it be accepted for the moment that the order for costs was a final order. That – I will go the other way around. If it be accepted that the orders relating to the substantive liability of the appellants were final, then the answer to your Honour’s question is yes so that if the declaration relating to liability, order 16 and 17 – sorry – if the declaration as to liability, which I think is paragraph 10, and the order for the inquiry and what’s to happen after the date upon which those orders were pronounced are to be treated as final, as his Honour found they were, then the answer to your Honour’s question is yes. We would accept that the proceedings have concluded. The mere fact, however, that the costs order is a final order does not mean that the proceedings as a whole have concluded. Every time an order for costs is made in proceedings, even in an interlocutory application, that costs order ..... certainly, for example, there’s authority - - -EDMONDS J: Until it’s set aside.MR EINFELD: Until set aside is a final order.EDMONDS J: Yes.MR EINFELD: So in this case let it be accepted that order 16 is a final – has the stamp of - - -EDMONDS J: I suppose I - - -MR EINFELD: - - - finality on it - - -EDMONDS J: I suppose I - - -MR EINFELD: - - - and it doesn’t - - -EDMONDS J: I put it – I think I’ve got the concession I was looking for from you because I was more concerned about her Honour’s finding about liability and, as you rightly say, that was order 10. So - - -MR EINFELD: Yes. The declaration was - - -EDMONDS J: The declarations.MR EINFELD: - - - 10.EDMONDS J: So that if the court were to find that that was a final order - - -MR EINFELD: Yes.EDMONDS J: - - - then you would agree that the proceedings have concluded.MR EINFELD: If the combination of 10 and 17, that is, the declaration of liability- - -EDMONDS J: And the setting up of inquiry.MR EINFELD: And 17, what is happen – what is to happen with that declaration are to be treated by the court as final, we would have to accept the proceedings - - - EDMONDS J: You would have to accept the proceedings - - -MR EINFELD: - - - had concluded.EDMONDS J: - - - had concluded. Thank you very much, Mr Einfeld.The concession made by senior counsel for the appellant in this exchange is, in my view, heavily qualified. He did concede that the proceedings had concluded if the proper construction of the combination of orders 10 and 17, and in particular of order 17, was to be treated by the court as final, but the concession in those terms does not fully reveal the qualification of the concession. The argument which senior counsel for the appellants was making was that the orders could not be regarded as final because on their face they required something to be done which, in turn, when done, required the matter to come back to court and, therefore, that until then neither could the orders be regarded as final nor could the proceedings relevantly be concluded.
Ratio Decidendi
Legal Principle Established
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