The Registrar of Aboriginal Corporations v Murnkurni Women's Aboriginal Corporation
[1995] FCA 612
•11 AUGUST 1995
CATCHWORDS
PROCEDURE - costs - application to set aside order winding up Aboriginal Association made in absence of party - challenge to standing - factors relevant to exercise of discretion - liquidator's costs.
Fairclough v Strathmont Haulage Pty Ltd (1981) 28 SASR 456
Davies v Pagett (1986) 70 ALR 793
Scherer & anor v Counting Instruments Ltd & anor [1986] 1 WLR 615
THE REGISTRAR OF ABORIGINAL CORPORATIONS v MURNKURNI WOMEN'S ABORIGINAL CORPORATION
NO WAG 3035 OF 1994
MURNKURNI WOMEN'S ABORIGINAL CORPORATION (IN LIQ) v THE REGISTRAR OF ABORIGINAL CORPORATIONS
NO WAG 23 OF 1995
R D NICHOLSON J
PERTH
11 AUGUST 1995
IN THE FEDERAL COURT OF AUSTRALIA )
WESTERN AUSTRALIA DISTRICT REGISTRY )
GENERAL DIVISION ) NO WAG 3035 of 1994
B E T W E E N: THE REGISTRAR OF ABORIGINAL CORPORATIONS
Applicant
and
MURNKURNI WOMEN'S ABORIGINAL CORPORATION
Respondent
NO WAG 23 of 1995
B E T W E E N: MURNKURNI WOMEN'S ABORIGINAL CORPORATION (IN LIQ)
Appellant
and
THE REGISTRAR OF ABORIGINAL CORPORATIONS
Respondent
MINUTE OF ORDER
JUDGE MAKING ORDER: R D NICHOLSON J
DATE OF ORDER: 11 AUGUST 1995
WHERE MADE: PERTH
THE COURT ORDERS THAT:
NO WAG 3035 OF 1994:
Order 3 made by R D Nicholson J on 14 February 1995 be set aside.
The applicant pay the costs of the respondent on the challenge to retainer argued on 31 March 1995 together with the costs of the liquidator's solicitor thereon, to be taxed.
Each party bear its own costs of the directions hearing on 21 April 1995 and the hearing of the motion to set aside on 23 June 1995.
The applicant's costs on the winding up application be reserved pending the re‑hearing of the application.
The costs of the liquidator prior to 7 March 1995 thrown away, be paid by the respondent subject to the applicant contributing to those costs by way of set off against any costs order against the applicant in favour of the respondent.
The costs of the liquidator from and including 7 March 1995 (including those on the argument of the challenge to retainer on 31 March 1995) be paid by the applicant.
NO WAG 23 OF 1995:
The respondent pay the costs of the argument of the challenge to retainer argued on 31 March 1995, to be taxed.
Each party bear its own costs on the motion to stay the appeal.
The appellant pay the respondent's costs thrown away, to be taxed.
The costs of the liquidator prior to 7 March 1995 thrown away, be paid by the appellant subject to the respondent contributing to those costs by way of set off against any costs order against the respondent in favour of the appellant.
The costs of the liquidator from and including 7 March 1995 (including those on the argument of the challenge to retainer on 31 March 1995) be paid by the respondent.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
WESTERN AUSTRALIA DISTRICT REGISTRY )
GENERAL DIVISION ) NO WAG 3035 of 1994
B E T W E E N: THE REGISTRAR OF ABORIGINAL CORPORATIONS
Applicant
and
MURNKURNI WOMEN'S ABORIGINAL CORPORATION
Respondent
NO WAG 23 of 1995
B E T W E E N: MURNKURNI WOMEN'S ABORIGINAL CORPORATION (IN LIQ)
Appellant
and
THE REGISTRAR OF ABORIGINAL CORPORATIONS
Respondent
CORAM:R D NICHOLSON J
DATE:11 AUGUST 1995
PLACE:PERTH
REASONS FOR JUDGMENT
R D NICHOLSON J:
In WAG 3035 of 1994 ("the original proceeding") an order was made on 14 February 1995, in the absence of representation on behalf of Murnkurni Women's Aboriginal Corporation ("Murnkurni"), to the effect that Murnkurni be wound up under the provisions of the Corporations Law; a liquidator be appointed and the costs of the Registrar of Aboriginal Corporations ("the Registrar") be taxed and reimbursed out of the property of Murnkurni. On 28 July 1995 the order for winding up was set aside. At the same time a notice of motion in WAG 23 of 1995 ("the appellate proceeding") for stay was refused. These reasons address the issues of costs arising in both proceedings.
Costs order - 14 February 1995
It is not in dispute between the parties that, in light of the fact that the winding up order itself has been set aside, the concomitant costs order should also be set aside and the applicant's costs in relation to the winding up application be reserved pending the re-hearing of that application.
Motion in original proceeding
The first aspect concerns the challenge to retainer on 31 March 1995. On that occasion Murnkurni successfully resisted the challenge to its standing to bring both the motion to set aside the winding up order and to stay it. Costs should follow the event on these matters and the Registrar should pay Murnkurni's costs of that argument in both proceedings and the costs of attendance of the liquidator's solicitor.
The second aspect concerns the directions hearing on 21 April 1995. These costs should be dealt with in the same way as the costs of the substantive hearing of the motion to set aside.
At the hearing on 23 June 1995, which was the subject of the Reasons for Judgment delivered on 28 July 1995, Murnkurni was successful. On its behalf it is contended that costs should follow the event or that, at the very least, each party should be ordered to pay its own costs. On behalf of the Registrar it is contended that the Registrar should not be made to carry the costs of Murnkurni bringing a motion to remedy its own default in not appearing before the Court on 14 February 1995.
The submissions for the Registrar are supported by reference to authorities on setting aside default judgments. In Fairclough v Strathmont Haulage Pty Ltd (1981) 28 SASR 456 at 457 the Supreme Court of South Australia considered that an order to set aside a default judgment should only be made where any prejudice to the plaintiff could be "made good by an order for costs". In Davies v Pagett (1986) 70 ALR 793 at 798 the Full Court of the Federal Court said that, speaking generally, the cases show that a defendant who has an apparently good defence should not be refused the opportunity of defending, even though a lengthy interval of time has elapsed, "provided that no irreparable prejudice is thereby done to the plaintiff". In Davies (supra) the Court ordered that the defendant pay to the plaintiff the costs the plaintiff incurred in entering the default judgment and the costs incurred in relation to the application to set aside the default judgment. It is contended for the Registrar that Murnkurni should pay the Registrar's costs thrown away to be taxed, including the costs of the hearing of the winding up application, the costs incurred in entering the winding up order, the costs incurred in advertising the winding up order and the Registrar's costs in relation to the application to set aside the winding up order, to be taxed.
For Murnkurni it is firstly contended that the non-appearance by the respondent was in part caused by confusion as to which solicitors were dealing with the matter so that there was no intentional disregard of the Court's processes. I find that to be the case. Next it was said that from the filing of the notice of appeal on 7 March 1995, the Registrar knew the winding up order was under challenge. Further, it should be seen as oppressive that Murnkurni, as a party seeking an indulgence (to set aside a default judgment) will be ordered to pay the costs of the application and the costs thrown away. In the case of a default judgment it is contended the costs thrown away do not include the unsuccessful resistance of the motion to set aside. Oppression, it is further contended, is apparent in the attempt by the Registrar to "shut out" Murnkurni by challenging the retainer on 31 March 1995. The whole battlefield of the action and the conduct of the parties is relevant to the assessment of costs: Scherer & anor v Counting Instruments Ltd & anor [1986] 1 WLR 615 at 622.
Additionally it is contended for Murnkurni that the status of the parties is relevant to the question of oppression. The Registrar is a Government Department with a regulatory role, whereas Murnkurni is a small group of Aboriginal women operating as a community based service organisation in a small country town in an unsophisticated way. Consequently, it is contended that Murnkurni was entitled to expect a less adversarial approach by the Registrar as the regulator.
Finally, it is contended that it was also oppressive for the Registrar to seek to maintain the winding up order after the lengthy affidavit of merit sworn by Ms Schulz on 22 May 1995.
In my opinion it cannot be said that the Registrar has acted oppressively when, having the benefit of orders made on 14 February 1995, the Registrar sought to defend the position which the Registrar had thus attained.
I accept that the status of the parties is a relevant consideration, particularly where the financial viability of Murnkurni is at issue and liability for costs would add to its financial difficulties. I accept also that it is a significant factor to be weighed that the Registrar should not be made to carry the costs of the respondent bringing the notice of motion to remedy its own default.
Weighing all these considerations I conclude that each party should bear its own costs of the substantive hearing on 23 June 1995 and consequently of the directions hearing on 21 April 1995.
Costs of motion to stay appeal proceeding
So far as these costs relate to the challenge to standing argued on 31 March 1995, the Registrar should pay Murnkurni's costs.
No further costs order is warranted. Although the notice of motion was formally before the Court on each occasion, the real argument was in the original proceeding and no true extra costs where incurred.
Costs of appeal proceedings
Murnkurni should pay the Registrar's costs thrown away.
Liquidator's costs
In submissions filed on behalf of the liquidator it is submitted that Murnkurni should pay the liquidator's costs and expenses. This submission is supported by the Registrar.
The reasons given in support of the submission are firstly that the general rule is that a liquidator's costs should be paid out of the assets of the company - Corporations Law, ss555 and 556. Secondly, any prejudice occasioned by the application to set aside the winding up order should be cured by costs, which principle should extend to the liquidator's costs. Thirdly, service of the application was effected prior to the hearing on 14 February 1995 when the winding up order was made so that Murnkurni bears responsibility for not at least seeking an adjournment. Any culpability giving rise to the liquidator's costs is said to rest entirely with Murnkurni.
On behalf of Murnkurni it is accepted that the liquidator should be protected as to costs. There are two areas of costs involved namely, the professional costs of the liquidator himself and the costs of instructing his solicitor. So far as the latter is concerned the solicitor was excused from attendance at the hearing of the application to set aside the winding up order.
So far as the liquidator's ongoing costs of his administration are concerned, from 7 March 1995 (the lodgment of the appeal) or 29 March 1995 (the filing of the motion to set aside) or 22 May 1995 (the filing of Ms Schulz's affidavit of merit), it is contended on behalf of Murnkurni that the costs should be borne by the Registrar for the reasons contended for in relation to the substantive hearing. So far as the liquidator's costs arise prior to the above three mentioned dates, it is submitted for Murnkurni that if it is ordered to pay those costs as costs thrown away, the Registrar should be ordered to contribute to those costs as a set off against any costs order in favour of Murnkurni against the Registrar.
It is significant that from 7 March 1995 the Registrar was on notice that the orders made on 14 February 1995 would be contested so that costs incurred by a liquidator from that date could become the subject of dispute. In my opinion, notwithstanding the non-intentional character of Murnkurnni's failure to appear on 14 February 1995, the appropriate resolution is for Murnkurni to be ordered to pay the liquidator's costs prior to that date as costs thrown away subject to an order that the Registrar contribute to those costs as a set off against any costs order in favour of Murnkurni against the Registrar, and that the Registrar pay the liquidator's costs as and from 7 March 1995. Costs incurred in relation to the liquidator's solicitor at the hearing on 31 March 1995 should be paid by the Registrar.
I certify that this and the preceding 5 pages are a true copy of the Reasons for Judgment of his Honour Justice R D Nicholson.
Associate:
Date:
APPEARANCES
Counsel for the Applicant: Mr P Hannan
Solicitors for the Applicant: Mony de Kerloy
Counsel for the Respondent: Mr K Martin
Solicitors for the Respondent: Australian Government Solicitor
Date of Hearing: 23 June 1995
Date of Judgment: 11 August 1995
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