FEDERAL COURT OF AUSTRALIA
Sheikholeslami v Tolcher (No 2) [2012] FCA 199
Citation: Sheikholeslami v Tolcher (No 2) [2012] FCA 199 Parties: GITA SHEIKHOLESLAMI v RAYMOND TOLCHER AS TRUSTEE OF THE BANKRUPT ESTATE OF ROYA SHEIKHOLESLAMI File number(s): NSD 1164 of 2010 Judge: YATES J Date of judgment: 9 March 2012 Catchwords: COSTS – apportionment Legislation: Bankruptcy Act 1966 (Cth) s 32
Federal Court Rules 2011 r 40.05Cases cited: Citibank Limited v Parker (2000) 181 ALR 115
Ex parte Angerstein (1874) LR 9 Ch App 479
Sandor v Ramirez [1999] NSWCA 261
Sheikholeslami v Tolcher [2011] FCA 1050Date of hearing: 11 November 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 25 Counsel for the Applicant: Mr M Condon Counsel for the Respondent: Mr S Golledge Solicitor for the Respondent: Turnbull Hill Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1164 of 2010
BETWEEN: GITA SHEIKHOLESLAMI
ApplicantAND: RAYMOND TOLCHER AS TRUSTEE OF THE BANKRUPT ESTATE OF ROYA SHEIKHOLESLAMI
Respondent
JUDGE:
YATES J
DATE OF ORDER:
9 MARCH 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The respondent pay 50% of the applicant’s costs as taxed or agreed.
2.In the event of a taxation, the costs of the proceeding in the Supreme Court of New South Wales be taxed in accordance with Division 40.2 of the Federal Court Rules 2011.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1164 of 2010
BETWEEN: GITA SHEIKHOLESLAMI
ApplicantAND: RAYMOND TOLCHER AS TRUSTEE OF THE BANKRUPT ESTATE OF ROYA SHEIKHOLESLAMI
Respondent
JUDGE:
YATES J
DATE:
9 MARCH 2012
PLACE:
SYDNEY
REASONS FOR JUDGMENT
In Sheikholeslami v Tolcher [2011] FCA 1050 the Court found that, contrary to the position adopted by the respondent, who is the trustee of the bankrupt estate of Roya Sheikholeslami, the applicant, who is the bankrupt’s sister, was the beneficial owner of a home unit at 609/168 Kent Street, Sydney, New South Wales, which the respondent had claimed as part of the bankrupt’s estate.
The question of costs is the only matter that remains to be determined in the proceeding.
The parties’ submissions
The applicant’s position is that, in accordance with usual practice, costs should follow the event. She submits that, as she was successful in the proceeding, the respondent should pay her costs. Moreover, she submits that her costs should be paid on an indemnity basis from 19 January 2010. This last-mentioned submission is made in reliance on correspondence, to which I was taken in the course of oral submissions, in which the applicant made certain offers to compromise the proceeding, the first of which was made on 19 January 2010.
I should say at the outset that I am not persuaded that, if the applicant is entitled to an order for costs in her favour, those offers were such as to entitle the applicant…
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- Case
- [2012] FCA 199
- Decision Date
CaseChat Overview and Summary
In determining the appropriate order for costs, the court began by acknowledging that costs typically follow the event. Despite the applicant's complete success, the court found it appropriate to discount the respondent’s liability for costs. This decision was influenced by the unsatisfactory quality of the affidavit material and oral evidence provided by the applicant. The court emphasised that these deficiencies justified the respondent in defending the case cautiously, thereby warranting a reduction in the costs he should pay. The court rejected the argument that the respondent's personal liability for costs should be limited to the assets available in the bankrupt's estate, asserting that this was not a suitable case for such a limitation.
The court concluded that the respondent should pay 50% of the applicant’s costs as taxed or agreed. In the event of a taxation, the costs of the proceeding were to be taxed in accordance with Division 40.2 of the Federal Court Rules 2011. This decision underscores the court's discretion to adjust cost awards based on the conduct of the parties and the quality of the evidence presented. The final orders reflect a balanced approach, acknowledging the applicant's success while also considering the respondent's justified caution due to the deficiencies in the applicant’s case.
Orders
Orders of the court
1. The respondent pay 50% of the applicant’s costs as taxed or agreed.
2. In the event of a taxation, the costs of the proceeding in the Supreme Court of New South Wales be taxed in accordance with Division 40.2 of the Federal Court Rules 2011.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
I should also note at this point that it appears to be common ground that, in the present case, the respondent has obtained a limited indemnity for costs from the principal creditor in the bankrupt’s estate, the University of New South Wales. The applicant submits that, in that circumstance, there is no reason why a trustee in the position of the respondent should be afforded any immunity in relation to costs.Consideration I commence my consideration of the appropriate order for costs from the position that, in the normal course, costs follow the event, and that the applicant has been wholly successful in proving her beneficial ownership of the Kent Street property over the opposition of the respondent. In undertaking that opposition the respondent took the precaution of obtaining an indemnity (albeit a limited indemnity) from the major creditor of the bankrupt’s estate. I do not think that the adequacy of that indemnity is a matter which should bear upon the exercise of the discretion in awarding costs in the present case. The limits of that indemnity were no doubt accepted by the respondent exercising his own judgment in the protection of his personal liability for costs. For the same reason, I do not think that this is an appropriate case in which the Court should order that the respondent’s personal liability for costs should be limited to the extent of the assets in the bankrupt’s estate. In my view, however, this is a case where there should be a discount from the costs which the respondent, as the unsuccessful party, should pay. The matters warranting a discount are as follows. First, there were a number of unsatisfactory matters concerning the way in which the applicant’s case was presented for hearing. I should say immediately that these observations do not reflect upon counsel who appeared for the applicant at the hearing. Rather they concern the quality of the affidavit material that was prepared and served on the respondent. I made some remarks about this in the principal judgment: Sheikholeslami at [122]. While the applicant is correct in submitting that those affidavits were not wholly lacking in utility, they presented a far from coherent and complete account of the events as I have found them to be. The failure of the applicant to present a full and sufficiently detailed account in the affidavits filed on her behalf, standing as the proposed evidence in chief in her case, justified the respondent in adopting a very cautious, if not sceptical, view of the accuracy of the version of events that was then being propounded by the applicant. In short, the respondent was justified in defending a proceeding that was, on the applicant’s side of the record, unsatisfactory in a number of important respects, as brought forward for hearing. Secondly, the oral evidence of the applicant and the bankrupt was unsatisfactory in a number of respects, as revealed by the patient and careful testing of that evidence in cross-examination by counsel for the respondent. In the principal judgment I made specific reference to some aspects of this evidence: Sheikholeslami at [120]-[121] and [123]-[126].