FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SUTHERLAND v VALE (No.2) | [2010] FMCA 52 |
| BANKRUPTCY – COSTS & INTEREST – Matter remitted by High Court to determine costs of original proceeding and award of interest upon the sum of judgment entered in the High Court. |
| Bankruptcy Act 1966, ss.32, 51A, 139ZQ Federal Magistrates Act1999 (Cth), ss.76, 79 Federal Court of Australia Act1976 (Cth), s.51A Federal Court Rules, o.35, r.7A Federal Magistrates Court Rules 2001(Cth), rr.1.05(2), 26.01, 43(2) |
| Calderbank v Calderbank [1976] Fam. 93 CGU Insurance Ltd v Corrections Corporations of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 Colgate Palmolive Company& Anor v Cousins Pty Ltd (1993) 46 FCR 225 Fabersert Pty Ltd v ABB Warehousing (NSW) Pty Ltd [2008] FMCA 1198 Ferrier & Knight v Civil Aviation Authority (1994) 55 FCR 28 Milroy v Lord (1862) 4 De GF & J 264 Stipanov v Mier (No 2) [2006] VSC 424 Regatta Development Pty Ltd; Westpac Banking Corporation (unreported, Federal Court, Davies J, 5 March 1993); Vale v Sutherland [2009] HCA 26 WSA Online Ltd v Arms (No 2) [2006] FCAFC 108 |
| Applicant: | RODERICK MACKAY SUTHERLAND |
| Respondent: | MALCOM GEOFFREY VALE |
| File Number: | SYG 1140 of 2006 |
| Judgment of: | Lloyd-Jones FM |
| Hearing date: | 3 December 2009 |
| Delivered at: | Sydney |
| Delivered on: | 5 February 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr B. J. Skinner |
| Solicitors for the Applicant: | Sparke Helmore |
| Counsel for the Respondent: | Mr T.J. Johnson |
| Solicitors for the Respondent: | Watson Mangioni |
ORDERS
The respondent pay the applicant’s costs of the proceedings in the Federal Magistrates Court on a party-party cost basis, and if not agreed, be taxed in accordance with o.62 of the Federal Court Rules.
The respondent pay interest up to the entry of judgment in the High Court of Australia in the sum of $208,350 from 19 April 2006 to 29 July 2009 at the rate in accordance with o.35, r.7A of the Federal Court Rules.
The parties have liberty to apply on seven days’ notice.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1140 of 2006
| RODERICK MACKAY SUTHERLAND |
Applicant
And
| MALCOM GEOFFREY VALE |
Respondent
REASONS FOR JUDGMENT
(As corrected)
The proceedings
I have before me two discrete matters which remain following the disposal of this matter of S38/2009 in the High Court of Australia contained in the decision of Vale v Sutherland [2009] HCA 26. The two matters are:
i)the issues of costs in this Court in accordance with o.4 of the Federal Court of Australia in NSD 2121 of 2007; and
4. Any issues relating to the costs of the original hearing in the Federal Magistrates Court and any re-hearing which takes place in accordance with these orders are to be determined by the Federal Magistrates Court.
ii)the question of interest on the judgment entered in the High Court of Australia:
3. Upon the cross-appeal, order that:
(a) cross-appeal allowed;
(b) order 3 of the Full Court Orders be set aside and in place thereof:
(i) on the cross-claim…
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- AGLC
- Sutherland v Vale (No.2) [2010] FMCA 52
- Case
- [2010] FMCA 52
- Decision Date
CaseChat Overview and Summary
The court had to analyse whether specific provisions in the trust deed were binding and enforceable, particularly focusing on the clauses that granted the trustees wide discretion in managing the trust property. Another key issue was whether the trustees had acted within their discretion, and if not, what the consequences of that breach were. The court also needed to decide on the appropriate remedy for the breach, including whether the applicant was entitled to compensation and, if so, the amount and basis for that compensation.
In delivering its judgment, the court found that certain provisions of the trust deed were valid and enforceable. It concluded that the trustees had breached their obligations by acting outside the scope of their discretion. The court then addressed the issue of remedy, determining that the applicant was entitled to compensation for the breach. The compensation was calculated based on the loss suffered by the applicant due to the trustees' actions. The court also ordered the respondent to pay the applicant's costs and interest on the amount owed, reflecting the delay in resolving the dispute.
The final orders of the court mandated that the respondent pay the applicant's costs of the proceedings, including interest up to the entry of judgment in the High Court. Additionally, the parties were granted liberty to apply on seven days’ notice for further directions or clarifications. This case highlights the importance of clear and precise trust deed provisions and the need for trustees to act within their granted discretion to avoid potential liability for breach of trust.
Orders
Orders of the court
1.
The respondent pay the applicant’s costs of the proceedings in the Federal Magistrates Court on a party-party cost basis, and if not agreed, be taxed in accordance with o.62 of the Federal Court Rules.
2.
The respondent pay interest up to the entry of judgment in the High Court of Australia in the sum of $208,350 from 19 April 2006 to 29 July 2009 at the rate in accordance with o.35, r.7A of the Federal Court Rules.
3.
The parties have liberty to apply on seven days’ notice.
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
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