The Owners - Strata Plan No 14120 v McCarthy (No.2)
[2016] FCCA 2007
•18 August 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| THE OWNERS - STRATA PLAN NO 14120 v McCARTHY (No.2) | [2016] FCCA 2007 |
| Catchwords: BANKRUPTCY – Final orders dismissing Creditor’s Petition consequent upon previous answers to two separate questions – s.229 of the Strata Schemes Management Act 1996 (NSW). |
| Legislation: Judiciary Act 1903 (Cth), s.79 |
| Applicant: | THE OWNERS - STRATA PLAN NO 14120 |
| Respondent: | CATHERINE ESTELLE MCCARTHY |
| File Number: | SYG 2555 of 2015 |
| Judgment of: | Judge Dowdy |
| Hearing date: | 29 July 2016 |
| Date of last submission: | 11 August 2016 |
| Delivered at: | Sydney |
| Delivered on: | 18 August 2016 |
REPRESENTATION
| Counsel for the Applicant: | Ms A Smith. |
| Solicitors for the Applicant: | Grace Lawyers. |
| Counsel for the Respondent: | Mr David Robinson SC. |
| Solicitors for the Respondent: | Legal Aid NSW. |
FURTHER TO AND CONSEQUENT UPON THE ANSWERS GIVEN ON 5 JULY 2016 TO THE TWO SEPARATE QUESTIONS THE COURT ORDERS AS FOLLOWS:
That Bankruptcy Notice BN 180646 issued on 28 April 2015 be set aside.
That the Creditor’s Petition filed on 16 September 2015 be dismissed.
That the Applicant Creditor pay the Respondent’s costs of the proceeding and that such costs be referred for taxation under Part 40 of the Federal Court Rules 2011 (Cth).
Pursuant to s.229 of the Strata Schemes Management Act 1996 (NSW) order that any costs payable by The Owners Corporation – Strata Plan No 14120 pursuant to order 3 above be paid from contributions levied only in relation to Lots 2 and 3 and not Lot 1.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2555 of 2015
| THE OWNERS - STRATA PLAN NO 14120 |
Applicant
And
| CATHERINE ESTELLE McCARTHY |
Respondent
REASONS FOR JUDGMENT
In this matter I delivered a judgment on 5 July 2016 and answered two separate questions.
At the time I delivered my reasons for judgment I stood the proceeding over to 29 July 2016 to allow the parties, and particularly the unsuccessful Applicant, to consider its position in relation to any appeal, and how what I called in my judgment the DEFT account issue should be further dealt with.
On 29 July 2016 Ms Smith again appeared for the Applicant and Mr Robinson SC again appeared for the Respondent.
Ms Smith informed the Court that it was her client’s wish for me to make orders dismissing the Creditor’s Petition in order to allow the Applicant to proceed with an appeal from my decision in the Federal Court of Australia. Mr Robinson SC had no objection to this course and neither party wished me to hear and determine the DEFT account issue before any appeal to the Federal Court of Australia.
I gave to the parties draft orders that I considered appropriate to be made having regard to my answers to the two separate questions and there was agreement that those orders were appropriate, except that Ms Smith sought that there be no order at all in relation to costs, based on s.42 of the Legal Aid Commission Act 1979 (NSW).
In those circumstances I made directions for the putting on of short written submissions in relation to costs but by an email of 1 August 2016 Ms Smith withdrew her submission that there ought to be no order as to costs. Accordingly, in my view the successful Respondent is entitled to an order for costs up to today.
I was then about to make orders consistent with the above when, by email dated 8 August 2016, the Respondent sought the following order:
Pursuant to s.229 of the Strata Schemes Management Act, 1996 (NSW) the Court orders that any money (including costs) payable by The Owners Corporation – Strata Plan No 14120 under an order made in these proceedings be paid from contributions levied only in relation to Lots 2 and 3 and in such proportions as are specified in this order or under the By-Laws, rules or resolutions of the Owners Corporation – Strata Plan 14120.
The avowed and intended effect of this order is that any costs payable by the Applicant to the Respondent by an order to that effect in this proceeding would be borne by the owners of Lots 1 and 2 and not contributed to by the Respondent as the owner of Lot 1.
The Applicant, through its lawyers, indicated by email to my Associate that it had no submissions to make in relation to the order sought in this regard by the Respondent.
I consider that I should make such an order. The Respondent has been successful in having the Creditor’s Petition against her dismissed with costs and it would seem to be a nonsense for her to be made to contribute via the back door to payment of a portion of the very costs ordered to be paid to her by the Applicant.
The power to make an order under s.229 of the Strata Schemes Management Act 1996 (NSW) is granted to “The court”. By s.79(1) & (3) of the Judiciary Act 1903 (Cth), s.229 of the Strata Schemes Management Act 1996 (NSW) is “picked up” and made applicable in this proceeding because there are no laws of the Commonwealth providing otherwise.
As Mason J (as he then was) said in John Robertson & Co. Ltd v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 at 95:
The broad purpose of s.79 is to ensure that the laws of the States are applied by courts in the exercise of federal jurisdiction. In general that purpose is achieved by the application of a State law according to its terms… Section 79 requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally.
An order under s.229 of the Strata Schemes Management Act 1996 (NSW) in a bankruptcy context was made by Judge Manousaridis in The Owners Of Strata Plan 58041 v Temelkovski (No. 2) [2015] FCCA 1252.
The orders of the Court will be as follows:
Further to and consequent upon the answers given on 5 July 2016 to the two separate questions the Court orders as follows:
1.That Bankruptcy Notice BN 180646 issued on 28 April 2015 be set aside.
2.That the Creditor’s Petition filed on 16 September 2015 be dismissed.
3.That the Applicant Creditor pay the Respondent’s costs of the proceeding and that such costs be referred for taxation under Part 40 of the Federal Court Rules.
4.Pursuant to s.229 of the Strata Schemes Management Act 1996 (NSW) order that any costs payable by The Owners Corporation – Strata Plan No 14120 pursuant to order 3 above be paid from contributions levied only in relation to Lots 2 and 3 and not Lot 1.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge Dowdy
Date: 18 August 2016
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