Sommer v C Pty Ltd (No.4)

This matter came before Judge Manousaridis of the Federal Circuit Court of Australia concerning an application to set aside a bankruptcy notice. The dispute arose from a costs determination which the applicant alleged was affected by jurisdictional error. The respondent, C Pty Ltd, had initiated a separate application for a review of this costs determination without notifying the Court, which the applicant argued interfered with the ongoing proceedings and was vexatious and oppressive.

The Court was required to determine whether the respondent's continuation with its application for a review of the costs determination interfered with or had the tendency to interfere with the proceedings before the Court, and whether that application was vexatious and oppressive. Additionally, the Court considered whether to make an order restraining the respondent from taking any further steps in the costs review application, despite the respondent indicating an intention to withdraw it. The Court also had to decide whether a costs assessor should be joined as a party to the proceedings and whether certain paragraphs of the applicant's "Statement of Applicant's Claim" should be struck out for failing to provide fair notice or for being bound to fail.

Judge Manousaridis reasoned that the respondent's pursuit of the costs review application, particularly after indicating an intention to withdraw it, was vexatious and oppressive and interfered with the Court's proceedings. The Court applied principles relating to the interference with judicial processes and the need for applications to be conducted in good faith and without undue delay or harassment. The Court also considered the requirements for pleadings to provide fair notice and the circumstances under which paragraphs may be struck out.

The Court ordered that specific paragraphs of the applicant's "Statement of Applicant's Claim" be struck out, with leave to reformulate them. The respondent was restrained from taking any steps in its costs review application other than those necessary to withdraw or abandon it. The applicant was ordered to file an amended application joining the costs assessor as the second respondent and seeking a declaration that the costs determinations were affected by jurisdictional error. The Court also vacated previous hearing dates and relisted the matter for hearing, while extending the time for compliance with the bankruptcy notice.