FEDERAL COURT OF AUSTRALIA
Thompson v Lane (Trustee) (No 4) [2022] FCA 616
File number: QUD 113 of 2021 Judgment of: LOGAN J Date of judgment: 24 May 2022 Catchwords: COSTS – application for annulment of bankruptcy – where applicant unsuccessful – where costs sought by creditor who took active role as contradictor – where creditor sought lump-sum costs order and for costs to be paid in the same priority as provided for in s 109(1)(a) of the Bankruptcy Act 1966 (Cth) – where role of creditor as contradictor preserved property of bankrupt estate for distribution amongst creditors generally – where evidence in support of lump-sum costs application did not conform with Costs Practice Note (GPN-COSTS) – where evidence was sufficient to form basis upon which lump-sum order could be made – where evidence raised interrogative note over reasonableness of costs claimed – where Registrar better placed to assess reasonableness of costs claimed – where trustee sought costs – where role of trustee was neutral – creditor and trustee entitled to costs paid out of bankrupt’s estate in accordance with the priority in s 109(1)(a) of the Bankruptcy Act 1966 (Cth) – costs of the creditor and trustee be fixed on a lump-sum basis by a Registrar Legislation: Bankruptcy Act 1966 (Cth) ss 32, 109
Federal Court of Australia Act 1976 (Cth) s 43
Federal Court (Bankruptcy) Rules 2016 (Cth) r 13.01(2)
Federal Court Rules 2011 (Cth) r 40.02(b), r 40.02(c)
Cases cited: Bayles v Nominal Defendant [2012] FMCA 184
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119
Kerr v Bechara (No 2) [2015] FCA 444
Lawman v Queensland Building Services Authority [2000] FCA 174
Oshlack v Richmond River Council (1998) 193 CLR 72
Seven Network Ltd v News Ltd [2007] FCA 2059
Thompson v Lane (Trustee) (No 3) [2022] FCA 128
Wide Bay Conservation Council Inc v Sunwater Pty Ltd (No 9) (2011) 194 FCR 250
Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 26 Date of last submissions filed by the Respondents: 3 March 2022 Date of last submissions filed by the Applicant: 17 March 2022 Date of hearing: Heard on the papers Counsel for the Applicant: The Applicant appeared in person Solicitor for the First Respondent: Shand Taylor Lawyers Counsel for the Second Respondent: Mr BP Strangman ORDERS
QUD 113 of 2021 BETWEEN: EMMA NARELLE CATHRYN THOMPSON
Applicant
AND: MORGAN LANE AS TRUSTEE OF THE BANKRUPT ESTATE OF EMMA NARELLE CATHRYN THOMPSON
First Respondent
BODY CORPORATE FOR ARILA LODGE CTS 14237
Second Respondent
MAHONEYS
Interested Person
ORDER MADE BY:
LOGAN J
DATE OF ORDER:
24 MAY 2022
THE COURT ORDERS THAT:
1.The first respondent’s costs be paid out of the bankrupt’s estate.
2.The second respondent’s costs be paid out of the bankrupt’s estate with the same priority accorded by s 109(1)(a) the Bankruptcy Act 1966 (Cth) to the trustee’s costs.
3.In each instance, the costs for which this order provides be fixed by…
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- Case
- [2022] FCA 616
- Decision Date
CaseChat Overview and Summary
The court examined the creditor's active role in the proceedings, noting that this had preserved the property of the bankrupt estate for distribution among creditors. However, it also highlighted that the evidence provided did not conform to the Costs Practice Note (GPN-COSTS). Although the evidence was sufficient to form the basis of a lump-sum costs order, it raised questions about the reasonableness of the costs claimed. The court found that the Registrar was better positioned to assess the reasonableness of the costs. With respect to the trustee, the court acknowledged their neutral role and, in accordance with section 109(1)(a) of the Bankruptcy Act 1966 (Cth), determined that both the creditor and the trustee were entitled to costs paid out of the bankrupt's estate with the specified priority. The court concluded that the costs for both parties should be fixed by a Registrar on a lump-sum basis.
In summary, the court ruled that the costs of the first respondent (the creditor) should be paid out of the bankrupt's estate, while the costs of the second respondent (the trustee) should also be paid out of the bankrupt's estate with the same priority as the trustee's costs under section 109(1)(a) of the Bankruptcy Act 1966 (Cth). The court ordered that these costs be fixed by a Registrar on a lump-sum basis. This decision underscored the importance of the creditor's role in the proceedings, the need for conforming evidence for costs applications, and the appropriate assessment of costs by a Registrar. The final orders were entered in accordance with Rule 39.32 of the Federal Court Rules 2011.
Orders
Orders of the court
1. The first respondent’s costs be paid out of the bankrupt’s estate.
2. The second respondent’s costs be paid out of the bankrupt’s estate with the same priority accorded by s 109(1)(a) the Bankruptcy Act 1966 (Cth) to the trustee’s costs.
3. In each instance, the costs for which this order provides be fixed by a Registrar on a lump-sum basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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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