FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Sharify v Kuek [2024] FedCFamC2G 1063
File number: MLG 106 of 2024 Judgment of: JUDGE SYMONS Date of judgment: 17 October 2024 Catchwords: PRACTICE AND PROCEDURE – bankruptcy – costs – application for review of Registrar’s costs order – de novo hearing – where creditor’s petition proceeding dismissed by consent in circumstances where judgment debt paid by respondent – where unreasonable conduct of respondent was catalyst for filing of creditor’s petition – where despite this the respondent sought his costs of the proceeding which necessitated a hearing on costs – costs order of Registrar set aside and in its place order made that respondent pay the applicant’s costs associated with costs hearing Legislation: Federal Circuit and Family Court of Australia Act 2021 (Cth), ss 68, 190, 191 Cases cited: Kempsey Local Aboriginal Land Council v Donnelly [2022] FedCFamC2G 149
Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6
Saville v Romer [2002] FCA 351
World Best Holdings Ltd v Sarker [2006] FMCA 1876Division: Division 2 General Federal Law Number of paragraphs: 48 Date of last submissions: 13 September 2024 Date of hearing: 13 September 2024 Place: Melbourne The Applicant: Mr Sharify appeared on his own behalf Representative for the Respondent: Mr D Perkins Solicitor for the Respondent: Rigby & Bear ORDERS
MLG 106 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MOHAMMAD SHAHED SHARIFY
Applicant
AND: GABRIEL KUEK
Respondent
ORDER MADE BY:
JUDGE SYMONS
DATE OF ORDER:
17 OCTOBER 2024
THE COURT ORDERS THAT:
1.Paragraph 2 of the orders made by Registrar Ellis on 21 March 2024 be set aside.
2.The respondent pay the applicant’s costs of the hearing on costs conducted on 21 March 2024 fixed in the amount of $2,915.
3.The application for review filed on 5 April 2024 be otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE SYMONS:
INTRODUCTION
On 21 March 2024 a Registrar of this Court made two orders. The first, that the proceeding be dismissed, reflected a consent position of the parties. The second, that there be no order as to costs, was made after hearing submissions by both parties directed at this question.
The “proceeding” was the creditor’s petition filed by Mr Sharify on 15 January 2024 which named Mr Kuek as the respondent. Mr Sharify is a barrister and member of the Victorian Bar and Mr Kuek is a legal practitioner. The underlying dispute relates to the payment of Mr Sharify’s fees…
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- Case
- [2024] FedCFamC2G 1063
- Decision Date
CaseChat Overview and Summary
The court examined the conduct of both parties and concluded that while neither party had acted exemplary, Mr Kuek's unreasonable conduct was a significant catalyst for Mr Sharify's decision to file the creditor’s petition. Specifically, Mr Kuek failed to respond to a critical email from Mr Sharify, which could have resolved the matter and prevented the filing of the petition. The court held that Mr Kuek's decision to resist Mr Sharify's offer to withdraw the proceeding with no order as to costs was unreasonable and reflected a technical approach to the costs issue. The court found that Mr Kuek's failure to respond to the email and his subsequent insistence on seeking his costs despite the dismissal of the petition were unreasonable actions.
In light of the above, the court set aside the Registrar's costs order and ordered that Mr Kuek pay Mr Sharify's costs associated with the costs hearing. This outcome was based on the court's finding that Mr Kuek's unreasonable conduct was a significant factor in the filing of the creditor’s petition, and his subsequent actions in seeking his costs were not justified. The court emphasised the importance of both parties acting reasonably and taking steps to resolve disputes in a manner that avoids unnecessary litigation and costs.
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
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Ratio Decidendi
Legal Principle Established
Mr Kuek submitted that the Mr Sharify’s reliance on s 191 of the FCFCOA Act was misplaced, in circumstances where the provision was only engaged when Mr Sharify’s creditor’s petition was issued; this being the point in time when there was a “civil proceeding before the [Court]”. Mr Kuek’s conduct from that point was reasonable because he took immediate steps to engage and instruct his solicitors to notify Mr Sharify that the monies the subject of the Costs Court order had been paid.CONSIDERATION Although much ink has been spilt by the parties on this matter, its resolution involves straightforward considerations. Neither party has conducted himself in exemplary fashion or is entirely blameless as far as they have contributed to the prolongation of this sorry saga. However, it is clear beyond doubt that there were at least two occasions or events that should have triggered a response from Mr Kuek and his largely unexplained failure to provide such a response, was the catalyst for the commencement of this proceeding. Although of course it was Mr Sharify who filed the creditor’s petition and took the antecedent step of making an application for the issue of a bankruptcy notice, it remained within the power of Mr Kuek to take steps that would inevitably have stopped this process in its tracks by firstly, responding to the email sent by Mr Sharify on 13 November 2023 to inform Mr Sharify that an amount corresponding to the Costs Court order had been paid into the account of Svenson Barristers (had this occurred, this would have provided a proper basis to criticise the failure of Mr Sharify to make inquiries of his former clerk) and/or by communicating an objection to the bankruptcy notice on the basis that the judgment debt had been extinguished. Mr Kuek offered no explanation for his failure to challenge the bankruptcy notice but sought to justify his failure to respond to the email of 13 November 2023 by referring to his contractual relationship with Mr Sharify’s (former) clerk. However, events had moved on considerably by this time, with the Costs Court order superseding the final invoice (issued by the clerk). More to the point, the email sent by Mr Sharify contained explicit instructions about how payment was to be made and plainly invited a response, however cursory, to indicate that performance had occurred. By the time that Mr Kuek communicated to Mr Sharify that the amount of $11,000 had been paid, the proceeding was in this Court. Very shortly after, Mr Sharify acknowledged that he could not continue to press the creditor’s petition and made an offer to withdraw or discontinue the proceeding with no order as to costs. At the point in time at which this offer was communicated there was a chance to salvage matters for both parties and to walk away from the proceeding with minimal cost incurred. I consider that the decision by Mr Kuek to resist this offer and to maintain an application for costs – which moved swiftly from an amount of $880 to a full indemnity costs order – was unreasonable and reflected a technical and intractable view that the question of costs should be approached solely on the basis that the jurisdictional pre-condition for the filing of the creditor’s petition no longer existed. Whether there was ever an extant relationship of debtor and creditor is a matter that it is unnecessary to resolve for the purpose of determining this review application whose focus, as I have indicated, is firmly on the conduct of the parties.