Warner v Mayfair Limited, in the matter of the Personal Insolvency Agreement of Gore (No 2)

[2015] FCA 572

FEDERAL COURT OF AUSTRALIA

Warner v Mayfair Limited, in the matter of the Personal Insolvency Agreement of Gore (No 2) [2015] FCA 572

Citation:	Warner v Mayfair Limited, in the matter of the Personal Insolvency Agreement of Gore (No 2) [2015] FCA 572
Parties:	ANTHONY JOHN WARNER IN HIS CAPACITY AS TRUSTEE OF THE PERSONAL INSOLVENCY AGREEMENT OF CRAIG KIRRIN GORE v MAYFAIR LIMITED, CHINTZ CONSULTING INC, GUILLIAM CONSULTING GROUP LIMITED, 21ST CENTURY INVESTMENTS LLC and GFC09 PTY LTD
File number:	NSD 525 of 2013
Judge:	FARRELL J
Date of judgment:	9 June 2015
Cases cited:	Warner v Mayfair Limited, in the matter of the Personal Insolvency Agreement of Gore [2015] FCA 441
Date of hearing:	On the papers
Place:	Sydney
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	8
Solicitor for the Applicant:	Breene & Breene, Solicitors
Solicitor for the First, Second, Third and Fourth Respondents:	Clayton Utz
Solicitor for the Fifth Respondent:	Clamenz Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 525 of 2013

IN THE MATTER OF THE PERSONAL INSOLVENCY AGREEMENT OF CRAIG KIRRIN GORE

BETWEEN:

ANTHONY JOHN WARNER IN HIS CAPACITY AS TRUSTEE OF THE PERSONAL INSOLVENCY AGREEMENT OF CRAIG KIRRIN GORE
Applicant

AND:

MAYFAIR LIMITED
First Respondent

CHINTZ CONSULTING INC
Second Respondent

GUILLIAM CONSULTING GROUP LIMITED
Third Respondent

21ST CENTURY INVESTMENTS LLC
Fourth Respondent

GFC09 PTY LTD
Fifth Respondent

JUDGE:	FARRELL J
DATE OF ORDER:	9 JUNE 2015
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The plaintiff is justified in making the following payments from the funds in his hands in relation to the Personal Insolvency Agreement of Mr Craig Kirrin Gore (“PIA”):

(a)Paying or reimbursing himself to an aggregate maximum amount of $76,000 (GST inclusive) for legal costs in relation to the account of Mr Breene dated 15 May 2012, the account of Mr Breene dated 1 May 2013, and for costs reasonably incurred of and incidental to this application;

(b)Paying or reimbursing himself to an aggregate maximum amount of $1,170.60 for disbursements of realisation charges of $134 and postage, searches and copying expenses of $1,036.60;

(c)Paying an aggregate maximum amount of $126,981.80 (GST inclusive) for legal costs of the 1^st, 2^nd, 3^rd and 4^th respondents for costs reasonably incurred of and incidental to this application;

(d)Paying an aggregate maximum amount of $48,592.27 (GST inclusive) for legal costs of the 5^th respondent for costs reasonably incurred of and incidental to this application; and

(e)Paying any residual funds in his hands in relation to the PIA to Mr Gore’s trustee in bankruptcy.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 525 OF 2013

IN THE MATTER OF THE PERSONAL INSOLVENCY AGREEMENT OF CRAIG KIRRIN GORE

BETWEEN:

ANTHONY JOHN WARNER IN HIS CAPACITY AS TRUSTEE OF THE PERSONAL INSOLVENCY AGREEMENT OF CRAIG KIRRIN GORE
Applicant

AND:

MAYFAIR LIMITED
First Respondent

CHINTZ CONSULTING INC
Second Respondent

GUILLIAM CONSULTING GROUP LIMITED
Third Respondent

21ST CENTURY INVESTMENTS LLC
Fourth Respondent

GFC09 PTY LTD
Fifth Respondent

JUDGE:	FARRELL J
DATE:	9 JUNE 2015
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 11 May 2015, I delivered reasons for judgment and made orders in relation to an application for directions by Mr Warner in relation to moneys in his hands as the trustee of the personal insolvency agreement of Mr Craig Kirrin Gore (“PIA”): see Warner v Mayfair Limited, in the matter of the Personal Insolvency Agreement of Gore [2015] FCA 441.

2. I ordered that the respondents provide to my Associate their claims for their reasonable costs of and incidental to the application and allowed a further opportunity for the parties to provide submissions in relation to the claims made.

3. The amount in the PIA account as at 29 May 2015 was $295,156.01.

4. GFC09 provided details of solicitors’ professional fees, counsel’s fees and disbursements in an aggregate amount of $60,359.31 (GST inclusive). Taking into account the comment that I made in my reasons for judgment at [126], Clamenz Lawyers reduced their claimed professional costs from $41,767.04 to $30,000 which meant that GFC09 claimed its reasonable costs to be $48,592.27 (GST inclusive). Given that GFC09 abandoned its claim to the funds in Mr Warner’s hands only immediately preceding the hearing, I consider that this reduction is appropriate. Having said that, I note that GFC09 performed a valuable role as a contradictor in relation to the ultimately successful argument that the balance of the funds in Mr Warner’s hands after payment of appropriate costs should be paid to Mr Gore’s trustee in bankruptcy in circumstances where Mr Gore’s trustee in bankruptcy did not have the funds necessary to prosecute that argument. I accept that the amount of $48,592.27 (GST inclusive) is reasonable.

5. The first to fourth respondents advised that their solicitors’ professional fees, senior counsel’s fees and disbursements were an aggregate amount of $146,369.77, but also taking into account my comment at [126], the first to fourth respondents would claim an amount of $126,981.80 comprising solicitors’ costs of $75,000 (GST exclusive, as the first to fourth respondents are foreign companies instructing from outside Australia) and senior counsel’s fees of $51,981.80 (GST inclusive). Although this substantially exceeded the amount which Mr Warner would be entitled to recover, the first to fourth respondents submitted that these costs were reasonable, among other reasons because:

   ·Mr Warner’s application gave rise to novel and controversial issues;

   ·Affidavit material filed by GFC09 foreshadowed that not only would it call into question whether a dividend of $201,086.76 was payable to Mayfair Group in priority but also whether proofs of debt in excess of $152 million had been released which would have consequences beyond the scope of the PIA. Mayfair Group submitted that it was necessary for senior counsel to address this material and senior counsel provided valuable assistance to the Court in the articulation and resolution of the issues in dispute;

   ·Mr Warner had no interest in or capacity to address some of the issues raised by GFC09; and

   ·Common representation by Clayton Utz and Mr O’Donnell QC of the first to fourth respondents in the proceedings minimised their costs.

6. Taking into account these issues, although the amount claimed by the first to fourth respondents substantially exceeds the amount of $76,000 (GST inclusive) and some minor disbursements which Mr Warner may claim, I accept that the amount of $126,981.80 claimed by the first to fourth respondents of and incidental to Mr Warner’s application is reasonable in all of the circumstances.

7. No submission objected to the amounts claimed by the other parties.

8. I will therefore make orders accordingly.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell.

Associate:

Dated:        9 June 2015