Vrkic v Commissioner of Taxation

[2006] NSWSC 105

CITATION:	Vrkic v Commissioner of Taxation [2006] NSWSC 105
HEARING DATE(S):	9 February 2006
JUDGMENT DATE :	9 February 2006
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	Fixture vacated on application of respondent. Respondent to pay plaintiff's and defendant's costs in the global sums of $10,000 and $5,000 respectively.
CATCHWORDS:	PROCEDURE [657] – Costs – Taxation – Assessment in lieu of taxation – Power to order gross sum – Circumstances in which gross sum ordered.
LEGISLATION CITED:	Civil Procedure Act 2005 s 98(4)(c) Uniform Civil Procedure Rules 2005 r 47.7(2)
PARTIES:	Danny Vrkic as Liquidator of AGI Refractory Services Pty Limited (In Liq) (P) Commissioner of Taxation (D) Ian Charles Wilson (R)
FILE NUMBER(S):	SC 1844/04
COUNSEL:	L R de Vere Tyndall (P) P D Rodionoff (D) Ms C L Perry, Solicitor (R)
SOLICITORS:	Access Business Lawyers (P) Australian Government Solicitor (D) Parry Carroll (R)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

THURSDAY, 9 FEBRUARY 2006

1844/04 DANNY VRKIC AS LIQUIDATOR OF AGI REFRACTORY SERVICES PTY LIMITED (IN LIQ) v COMMISSIONER OF TAXATION

JUDGMENT

1 HIS HONOUR: These are proceedings by a liquidator against the Commissioner of Taxation to recover a preference. The Commissioner does not in reality contest the liquidator’s claim but makes a claim over against a Mr Wilson, who was a director of the company at the relevant time. Ms Perry, solicitor, appears for Mr Wilson and applies for a vacation of the fixture. Her application is supported by a carefully prepared affidavit and a short but cogent written submission.

2 The facts deposed to in her affidavit are not contested by the other parties. In short, Mr Wilson’s previous solicitors ceased acting for him on 31 January 2006. Ms Perry commenced acting for him on 1 February 2006. She warned the other parties, certainly by 2 February 2006, of the likely necessity for her to apply for a vacation of the fixture. She did not apply earlier because negotiations continued during the intervening week in the hope that the proceedings could be settled, but that hope has to date not been realised.

3 Ms Perry is an experienced commercial and insolvency solicitor. Unfortunately she did not receive the previous solicitors’ file until 8 February, which was through an accident of communication and not through any fault of those solicitors. The file made plain, to any extent that it was not already plain to Ms Perry, that the evidence on which the Commissioner’s claim could be resisted by her client was not available. One would infer from the evidence of this experienced practitioner that, if the case were to proceed immediately, it must inevitably result in judgment in the Commissioner’s favour without Mr Wilson’s present adviser having had the opportunity to gather and present evidence on which he may be able to resist the claim.

4 The application for vacation has been consented to on behalf of the plaintiff on condition that the respondent pay the plaintiff within 42 days the sum of $10,000, representing the costs of this application and costs thrown away by it succeeding.

5 At the bar table Mr Rodionoff, of counsel for the defendant, properly conceded that his client’s costs would not be as great and would be met by a payment of $5,000. Ms Perry likewise sensibly concedes that, in her view, those costs assessed on the indemnity basis, which would be appropriate, would likely amount to about $5,000. In the short time available Mr Rodionoff and Ms Perry have not had instructions to come to any agreement similar to the agreement made by Mr Wilson with the plaintiff. Certainly the respondent must pay the defendant’s costs of the application and the costs thrown away, since the circumstances which have led to the application being made are within the respondent’s camp.

6 It may be that normally I should not order those costs to be assessed and paid at once under r 47.7(2) of the Uniform Civil Procedure Rules 2005 since this is an exceptional order. However, as the plaintiff’s costs in the agreed sum of $10,000 are to be paid by agreement at a stipulated time, in my view the fair and sensible solution in this case is for an order for the defendant’s costs to be paid at the same time. In view of the discussion concerning their quantum that has taken place at the bar table, I propose to exercise my power under s 98(4)(c) of the Civil Procedure Act 2005 to fix costs in a global sum and to order that that sum also be paid within 42 days. From what I have been told by the defendant’s and by the respondent’s counsel, the appropriate global sum is $5,000.

7 The orders of the Court on the respondent’s motion will therefore be:

(1) I order that the fixture of these proceedings for 9 and 10 February 2006 be vacated.

(2) I order that on or before 23 March 2006 the respondent pay the costs of the other parties of the application for vacation and in respect of the costs thrown away by the vacation as follows:
(a) to the plaintiff $10,000;
(b) to the defendant $5,000.

8 The orders will be as I have indicated, including an order that there be further orders in accordance with short minutes initialled by me and placed with the papers.

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