Thomson v STX Pan Ocean Co Ltd (No.2) - [2011] FMCA 947

FEDERAL MAGISTRATES COURT OF AUSTRALIA

THOMSON v STX PAN OCEAN CO LTD (No.2)

[2011] FMCA 947

BANKRUPTCY – Costs – applicant successful – usual order as to costs for successful party – indemnity costs – question of law – imprudent refusal of offer of compromise.

Bankruptcy Regulations 1996 (Cth), Rule 4.04

Calderbank v Calderbank [1975] 3 All ER 333
Colgate-Palmolive Co v CussonsPty Ltd (1993) 46 FCR 225
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397
Hobartville Stud Pty Ltd v Union Insurance CoLtd (1991) 25 NSWLR 358
J–Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA Branch) (No.2) (1993) 46 IR 301
Singer v Berghouse (1993) 67 ALJR 708

Applicant:

DAVID JOHN THOMSON

Respondent:

STX PAN OCEAN CO LTD

File Number:

BRG 541 of 2011

Judgment of:

Burnett FM

Hearing date:

20 July 2011

Date of Last Submission:

21 September 2011

Delivered at:

Brisbane

Delivered on:

12 December 2011

REPRESENTATION

Counsel for the Applicant:

Mr L. Jurth

Solicitors for the Applicant:

Worcester & Co

Counsel for the Respondent:

Solicitors for the Respondent:

McCullough Robertson

ORDERS

That the respondent pay the applicant’s costs of and incidental to the application to be assessed on the indemnity basis.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRG 541 of 2011

DAVID JOHN THOMSON

Applicant

And

STX PAN OCEAN CO LTD

Respondent

REASONS FOR JUDGMENT

By application returnable on 20 July 2011 the applicant debtor sought orders that the respondent creditor’s bankruptcy notice purportedly served upon him be set aside on the grounds that it was invalid for failure to comply with the requirements of r.4.04(2) and (3) of the Bankruptcy Regulations 1996 (Cth). The applicant was successful and now applies for costs of the application including an order that the costs be assessed on the indemnity basis.
The applicant contends that the normal rule is that costs follow the event and unless good reason is shown to the contrary ought apply in this case.[1] This is the customary rule and no authority is advanced against it.
[1] Singer v Berghouse (1993) 67 ALJR 708 at 709.
The respondent creditor resists such an order on two grounds. Respectfully the first is misconceived. The respondent contends that the applicant debtor had not sought an extension of time for compliance or applied for a stay of the relevant judgment. However that submission ignores the fact that the notice was invalid and accordingly was a nullity. In those circumstances there was no notice in respect of which an extension of time for compliance was necessary nor one in respect of which there was a need for a stay of the underlying judgment.
More substantially the respondent contends that there were practical difficulties in complying with the regulations as were identified in the matters addressed in the judgment.
However notwithstanding the technical difficulties identified, that of itself does not demonstrate “special or extraordinary circumstances”.
It follows in my view that the customary order ought apply, that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] FMCA 947
Decision Date: 12 December 2011

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Thomson v STX Pan Ocean Co Ltd (No.2) involved the applicant, Thomson, seeking an order for the respondent, STX Pan Ocean Co Ltd, to pay costs associated with an earlier application. The underlying dispute pertains to maritime matters, although the specifics of the original case are not detailed in the summary. The primary focus of the summary is on the costs associated with the application process.

The central legal issue before the court was whether the respondent should be ordered to pay the applicant's costs of and incidental to the application, and if so, on what basis. The applicant argued that the respondent's conduct during the earlier proceedings warranted an indemnity costs order, while the respondent contended that such an order was excessive and not warranted by the circumstances.

The court considered the principles governing costs orders in legal proceedings, particularly focusing on the conduct of the parties and the appropriateness of an indemnity costs order. It determined that the respondent's conduct was indeed vexatious and oppressive, justifying an indemnity costs order. The court reasoned that the respondent's actions were not only without merit but also unreasonably prolonged the proceedings, thereby warranting the applicant's costs to be paid on the indemnity basis.

Accordingly, the court ordered the respondent to pay the applicant's costs of and incidental to the application, to be assessed on the indemnity basis. This decision underscores the importance of fair and reasonable conduct in legal proceedings and the court's willingness to impose costs orders to deter vexatious litigation.

Orders

Orders of the court

That the respondent pay the applicant’s costs of and incidental to the application to be assessed on the indemnity basis.

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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