Schmierer v SMITH (No 3)

[2004] FMCA 940

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SCHMIERER v SMITH (No 3) [2004] FMCA 940

BANKRUPTCY – Costs – calderbank letter.

Federal Court of Australia Act
Federal Court Rules

Applicant: TREVOR JOHN SCHMIERER

Respondent: BRIAN SMITH

File No: SYG1571 of 2004

Delivered on: 1 December 2004

Delivered at: Sydney

Hearing date: 1 December 2004

Judgment of: Raphael FM

REPRESENTATION

Solicitors for the Applicant: Thomson Playford

Solicitors for the Respondent: Corporate Business Lawyers QLD

ORDERS

In place of Order 2 in the Judgment dated 1 December 2004 the Court orders that:

1. The respondent pay the applicant 80% of his costs up until 11 October 2004 and thereafter the whole of the applicant's costs on an indemnity basis such costs to be taxed if not agreed pursuant to the Federal Court of Australia Act and Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG1571 of 2004

TREVOR JOHN SCHMIERER

Applicant

And

BRIAN SMITH

Respondent

REASONS FOR JUDGMENT

1. In a written judgment in this matter I made the following declarations and orders. 

   (1)The court declares that the grant of mortgage identified by dealing number 70668011 dated 16 July 2002 by Norman Diano in favour of Ross William Murphy in respect of Lot 4 on Strata Plan 117620 (Queensland) is void against Trevor Schmierer Trustee of the bankrupt estate of Norman Diano.  The Court orders that:

   (2)There be paid to the applicant the balance of the sum of $100,528.44 plus interest held in the joint names of the applicant and the respondent after payment of the sum of $20,000 to the respondent.

   (3)The respondent to pay the applicant 80% of his total costs to be taxed if not agreed pursuant to the Federal Court Act and Rules.

2. When this matter came on for delivery of judgment I was advised by Mr Farrar, who appears on behalf of the trustee, that a Calderbank letter had been sent to the respondent and that therefore my order as to costs should be reconsidered.  I agreed to hear the applicant in those circumstances.  I was advised that by a letter dated 11 October 2004 the applicant through his solicitors set out in detail the nature and strength of his case and proposed that the matter be settled on the basis that the respondent receive $20,000 from the moneys currently held in the joint account and that each party pay its own costs.  Mr Farrar tells me that this offer was rejected and I have heard nothing from Mr Zaghini to indicate that that was not correct.

3. In the circumstances the respondent has not done any better, and in respect of costs has done worse, in the judgment than he would have if he had accepted the offer on 11 October 2004.

4. I am of the view that the appropriate order for costs should still reflect the fact that the respondent has received $20,000 and that this was a matter in dispute but that the applicant should have the benefit of the Calderbank letter and therefore that indemnity costs in full should be paid from 12 October.  I vacate order number (2) and in its place order that:

   (2)The respondent pay the applicant 80% of his costs up until 11 October 2004 and thereafter the whole of the applicant's costs on an indemnity basis such costs to be taxed if not agreed pursuant to the Federal Court of Australia Act and Rules.

5. For the purpose of clarification the indemnity costs awarded shall not be limited by any sums contained in the schedule of costs in that Act and Rules.

I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 

Date: