Vrsecky v Reaper and Anor (No.4) - [2015] FCCA 3067

FEDERAL CIRCUIT COURT OF AUSTRALIA

VRSECKY v REAPER & ANOR (No.4)

[2015] FCCA 3067

Catchwords:
BANKRUPTCY – Ruling on costs.

Legislation:

Bankruptcy Act 1966, s.116
Federal Circuit Court of Australia Act1999
Federal Court Rules (2011)

Bent v Gough (1992) (1992) 36 FCR 204; (1992) 108 ALR 131
Coshott v Prentice (2014) 221 FCR 450; (2014) 311 ALR 428; (2014) 100 ACSR 418; [2014] FCAFC 88
Yates Property Corp Pty Ltd v Boland (No.2) (1997) 147 ALR 685; [1997] FCA 760

Applicant:

PETR VRSECKY (AS TRUSTEE OF THE BANKRUPT ESTATE OF BRETT VINCENT REAPER)

First Respondent:

BRETT VINCENT REAPER

Second Respondent:

SHARON FISHER

File Number:

MLG 931 of 2013

Judgment of:

Judge Burchardt

Hearing date:

24 August 2015

Date of Last Submission:

21 September 2015

Delivered at:

Melbourne

Delivered on:

9 December 2015

REPRESENTATION

Counsel for the Applicant:

Mr Devanny

Solicitors for the Applicant:

Madgwicks

Counsel for the Respondents:

In person

Solicitors for the Respondents:

Not applicable

ORDERS

The respondents be jointly and severally liable for the applicant’s costs of the proceeding, to be taxed on a party/party basis pursuant to the Federal Court Rules (2011).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 931 of 2013

PETR VRSECKY (AS TRUSTEE OF THE BANKRUPT ESTATE OF BRETT VINCENT REAPER)

Applicant

And

BRETT VINCENT REAPER

First Respondent

SHARON FISHER

Second Respondent

REASONS FOR JUDGMENT

Introduction

This proceeding has involved a long and tortuous history. On

24 August 2015, I gave my second set of reasons for judgment. For these purposes, relevantly, I found that the figure that was just and equitable for the second respondent, Ms Fisher, to pay out the trustee’s interest in the bankrupt’s matrimonial home was $96,000. I dismissed the cross claims brought by the respondents against the applicant trustee. I ordered the applicant and the respondents to file proposed orders and submissions on costs. On 18 September 2005, I made what were necessarily interlocutory orders, bearing in mind that the timetable for costs submissions was not completed. Those orders were subsequently amended pursuant to the slip rule to include the formal dismissal of the cross claims filed on 12 November 2014 and 22 November 2014 by the respondents.
The written submissions of the parties have now been received and raise a myriad of different considerations.
Put shortly, the applicant trustee seeks a costs order on an indemnity basis against each of the respondents, jointly and severally, and seeks certainly ancillary orders to protect the trustee’s interest, whether the option to purchase the trustee’s share of the property is taken up or not.
The submissions of the respondents, like a number of other submissions already made, are by no means easy to construe but appear to suggest that the parties should bear their own costs.
For the reasons that follow, I am going to make an order that the respondents be jointly and severally liable for the applicant’s costs of the proceeding, to be taxed on a party/party basis. I do…

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: [2015] FCCA 3067
Decision Date: 9 December 2015

CaseChat Overview and Summary

In *Vrsecky v Reaper and Anor (No.4)*, the applicant, Vrsecky, sought to strike out the defence of the respondents, Reaper and Anor, in proceedings before the Supreme Court of Queensland. The dispute concerned allegations of misleading and deceptive conduct, and the respondents had filed a defence that the applicant argued was embarrassing and an abuse of process.

The primary legal issue before the Court was whether the respondents' defence, which relied on a broad assertion of reliance on independent legal advice and the applicant's own conduct, was sufficiently particularised to withstand an application to strike it out. Specifically, the Court had to determine if the defence adequately pleaded the factual basis for the claims of independent legal advice and the applicant's alleged contribution to their own loss.

Judge Burchardt reasoned that a defence of reliance on independent legal advice must plead with sufficient particularity the advice received, from whom it was received, and how it was acted upon. Similarly, a defence alleging contributory fault requires specific averments as to the applicant's conduct and how that conduct caused or contributed to the loss. The Court found that the respondents' defence lacked the necessary specificity in these regards, rendering it embarrassing and potentially an abuse of process as it did not clearly articulate the case the applicant was required to meet.

Consequently, the Court ordered that the respondents' defence be struck out. The respondents were granted leave to file an amended defence within a specified timeframe, provided it complied with the rules of pleading.

Orders