University of Western Australia v Gray (No 27)
[2010] FCA 216
•11 March 2010
FEDERAL COURT OF AUSTRALIA
University of Western Australia v Gray (No 27) [2010] FCA 216
Citation: University of Western Australia v Gray (No 27) [2010] FCA 216 Parties: THE UNIVERSITY OF WESTERN AUSTRALIA v BRUCE NATHANIAL GRAY, SIRTEX MEDICAL LIMITED (FORMERLY KNOWN AS PARAGON MEDICAL PTY LTD) (ACN 078 166 122), CANCER RESEARCH INSTITUTE INCORPORATED (REGISTERED NUMBER 1001005);
BRUCE NATHANIAL GRAY v THE UNIVERSITY OF WESTERN AUSTRALIA and YAN CHEN
SIRTEX MEDICAL LIMITED (ACN 078 166 122) v BRUCE NATHANIAL GRAY and CANCER RESEARCH INSTITUTE INCORPORATEDFile number: WAD 292 of 2004 Judge: BARKER J Date of judgment: 11 March 2010 Catchwords: COSTS - court approval of receiver's decision to accept sum of money in full and final satisfaction of a claim for costs Date of hearing: Determined on the papers Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 15 Solicitor for the First Respondent: Goldsmiths Lawyers Solicitor for the Third Respondent: Tottle Partners
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 292 of 2004
BETWEEN: THE UNIVERSITY OF WESTERN AUSTRALIA
Applicant
AND: BRUCE NATHANIAL GRAY
First RespondentSIRTEX MEDICAL LIMITED (FORMERLY KNOWN AS PARAGON MEDICAL PTY LTD) (ACN 078 166 122)
Second RespondentCANCER RESEARCH INSTITUTE INCORPORATED (REGISTERED NUMBER 1001005)
Third RespondentBRUCE NATHANIAL GRAY
First Cross-ClaimantTHE UNIVERSITY OF WESTERN AUSTRALIA
First Cross-Respondent to First Cross‑ClaimYAN CHEN
Second Cross-RespondentSIRTEX MEDICAL LIMITED
Second Cross-ClaimantTHE UNIVERSITY OF WESTERN AUSTRALIA
Cross-Respondent to Second Cross‑ClaimBRUCE NATHANIAL GRAY
Second Cross-Respondent to Second Cross‑ClaimCANCER RESEARCH INSTITUTE INCORPORATED
Third Cross-Respondent to Second Cross‑Claim
JUDGE:
BARKER J
DATE OF ORDER:
11 MARCH 2010
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The Court approves the agreement made between the first respondent and the third respondent for the resolution of the first respondent’s application against the third respondent filed on 7 November 2007 in the terms of the minute of consent order executed by the first respondent and the third respondent dated 16 February 2010.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 292 of 2004
BETWEEN: THE UNIVERSITY OF WESTERN AUSTRALIA
Applicant
AND: BRUCE NATHANIAL GRAY
First RespondentSIRTEX MEDICAL LIMITED (FORMERLY KNOWN AS PARAGON MEDICAL PTY LTD) (ACN 078 166 122)
Second RespondentCANCER RESEARCH INSTITUTE INCORPORATED (REGISTERED NUMBER 1001005)
Third RespondentBRUCE NATHANIAL GRAY
First Cross-ClaimantTHE UNIVERSITY OF WESTERN AUSTRALIA
First Cross-Respondent to First Cross‑ClaimYAN CHEN
Second Cross-RespondentSIRTEX MEDICAL LIMITED
Second Cross-ClaimantTHE UNIVERSITY OF WESTERN AUSTRALIA
Cross-Respondent to Second Cross‑ClaimBRUCE NATHANIAL GRAY
Second Cross-Respondent to Second Cross‑ClaimCANCER RESEARCH INSTITUTE INCORPORATED
Third Cross-Respondent to Second Cross‑Claim
JUDGE:
BARKER J
DATE:
11 MARCH 2010
PLACE:
PERTH
REASONS FOR JUDGMENT
THE ISSUE
The issue the subject of this decision is whether the Court should approve an agreement made between the first respondent (Dr Gray) and the third respondent, Cancer Research Institute Incorporated (CRI), for the resolution of Dr Gray’s application against CRI, filed 7 November 2007, in the terms of the minute of consent orders executed by these parties dated 16 February 2010.
THE CONSENT ORDER EXECUTED 16 FEBRUARY 2010
By the consent order executed by Dr Gray and CRI dated 16 February 2010, these parties consented to the making of the following orders:
1.The first respondent’s application against the third respondent filed on 7 November 2007 be and is hereby discontinued.
2.Unless Court approval is granted in accordance with paragraph 3 of this order and payment is made in accordance with paragraph 4 of this order, the first respondent must pay the third respondent’s costs of the application, to be taxed and the parties to be at liberty to apply in relation to the award of any reserved costs.
3.Within 14 days of the date of this order, the third respondent must file an application seeking the approval of the Court to accept the sum of $40,000 in full and final satisfaction of the third respondent’s claim for costs against the first respondent in respect of the first respondent’s application referred to in paragraph 1 of this order.
4.Subject to approval of the Court being granted in accordance with the application referred to in paragraph 3 of this order, the first respondent must pay the third respondent the sum of $40,000 within 14 days of the date of approval being granted.
5.Payment of the sum of $40,000 in accordance with the terms of paragraphs 3 and 4 of this order will discharge the third respondent’s claim for costs against the first respondent in respect of the first respondent’s application referred to in paragraph 1 of this order.
It will be noted that [4] of the minute of consent orders conditions the payment of $40,000 by Dr Gray to CRI upon the approval of the Court being obtained pursuant to [3].
CONSIDERATION
The motion for approval is brought in order to comply with [3](d) of orders made by French J, on 22 December 2007. The motion is supported by an affidavit of Mark Anthony Conlan, chartered accountant and official liquidator.
In early February 2010, CRI’s solicitors informed Mr Conlan that Dr Gray intended to discontinue the application he brought in this matter seeking a review of Mr Conlan’s refusal to release funds of the third respondent to pay various legal expenses incurred by Dr Gray in his capacity as chairman of CRI at material times.
On 4 February 2010 an offer was made by Dr Gray to relevantly pay to CRI $40,000 in full and final satisfaction of CRI’s claim for costs against Dr Gray in relation to the application.
Mr Conlan took legal advice in relation to this offer. He does not wish to disclose that advice and asserts legal professional privilege in respect of it. He says that if he discloses that advice, the position of CRI may be prejudiced to the extent that it becomes necessary for CRI’s costs to be taxed. I consider that is an appropriate position for CRI and Mr Conlan to take in the circumstances.
Mr Conlan took into account the legal advice he received in assessing the merit of the offer.
As at February 2010, CRI has incurred approximately $86,000 inclusive of GST in costs and disbursements in relation to the application of Dr Gray. $16,358.50 of those costs comprises counsel fees and the balance of approximately $69,641.50 represents legal fees incurred with CRI’s solicitors.
CRI’s solicitors have informed Mr Conlan that if Dr Gray’s offer were not to be accepted they would need to prepare a bill of costs for taxation and possibly attend a taxation of costs. That process would take time to complete and further costs would be incurred.
Mr Conlan believes that the costs that would be incurred if the offer were not accepted, would include not only legal costs in relation to drafting a bill of costs and proceeding to taxation and fees associated with the filing of the bill of costs, but also the costs associated with the continuation of the Court appointed receivership of CRI.
On 14 May 2009, the Court made orders that Mr Conlan as receiver of CRI be empowered to take all such steps as are necessary to wind up CRI’s activities and to deregister it as an incorporated association. The finalisation of Dr Gray’s application is the last remaining substantive task to be attended before the receivership can be completed and the winding up and deregistration process in relation to CRI can be commenced. So long as the finalisation of the receivership and winding up is delayed, further costs will be incurred. Those costs primarily include preparing reports to court as to the status of the matter and applications for approval for remuneration. Mr Conlan estimates the monthly costs that are likely to be incurred in that regard to be at least $2,500 per month, plus GST.
Mr Conlan had considered the possibility that CRI might obtain an amount of more than $40,000 at the taxation of the bill of costs. However, he did not consider it to be in the commercial interests of CRI to attempt to seek a higher amount of taxation with no guarantee of an amount more than $40,000 would in fact be obtained at taxation, and to do so would result in only in additional costs being incurred and also delayed finalising the receivership and winding up of CRI.
In my view, having regard to these matters outlined by Mr Conlan, I am satisfied that the Court should accept Mr Conlan’s judgment in this matter and it is appropriate for approval to be granted in terms of the notice of motion currently before the Court.
CONCLUSION AND ORDER
For the reasons given above, the Court orders that:
1.The Court approves the agreement made between the first respondent and the third respondent for the resolution of the first respondent’s application against the third respondent filed on 7 November 2007 in the terms of the minute of consent order executed by the first respondent and the third respondent dated 16 February 2010.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate:
Dated: 11 March 2010
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