Westpoint Management Ltd v Kerslake - [2005] FMCA 141

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WESTPOINT MANAGEMENT LTD v KERSLAKE

[2005] FMCA 141

BANKRUPTCY – Costs of creditors – Application to review order allowing adjournment of creditors petition – subsequent application filed by debtor to set aside District Court judgment.

Applicant:

WESTPOINT MANAGEMENT LTD

Respondent:

SHANE HUNTLEY KERSLAKE

File No:

PEG 178 of 2004

Delivered on:

9 February 2005

Delivered at:

Perth

Hearing Date:

9 February 2005

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr R.C. Ioppolo

Solicitors for the Applicant:

Wojtowicz Kelly

Counsel for the Respondent:

Mr M. Curwood

Solicitors for the Respondent:

Price Sierakowski

ORDERS

The Application for Review filed 19 January 2005 be dismissed.
The Applicant Creditor’s costs in the Application for Review be paid by the Respondent Debtor fixed in the sum of $900.00 payable forthwith upon the expiration of seven days from the date of this order.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

PEG 178 of 2004

WESTPOINT MANAGEMENT LTD

Applicant

and

SHANE HUNTLEY KERSLAKE

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

This is a hearing of an application for review of a Registrar’s decision and order made on 10 January 2005 when the learned Registrar in considering a creditor’s petition filed on 29 November 2004 made orders that the petition be adjourned to 22 February 2005 at 9.30 am and the costs of the day be reserved.
The application for review returnable before this court was filed on 19 January 2005. It seems to be common ground that when the matter was before a Registrar on 10 January 2005 the creditor was then at least made aware that the debtor intended to make application in the District Court to set aside the judgment debt and had annexed to an affidavit sworn by the debtor on 10 January 2005 a draft affidavit in support of an application to set aside the judgment.
Unfortunately, however, the foreshadowed application, although made on 10 January 2005 was not served upon the creditor until 28 January 2005. It would appear, however, that the application had its first return date in the District Court on 21 January 2005 and perhaps not surprisingly the creditor did not attend.
On 19 January 2005 the creditor had filed in this court the application for review of the learned Registrar’s order. It seems to me unfortunate that the application to set aside had not been filed and served on the same day, that is, 10 January 2005. I am satisfied that had it been served on that date there would not have been the application for review filed in this court as the creditor now quite appropriately has indicated that this application should be dismissed though seeks costs.
The concession that it should be dismissed is made upon the basis that it is now evident that the application has indeed been made to set aside the judgment debt with the supporting material and that matter no doubt will be dealt with in due course. It is appropriate that the creditor does not now seek to pursue a sequestration order at this stage.
As I indicated it is unfortunate that the matter has progressed to this point where now the issue seems to be one of costs. The debtor has indicated, having regard to the chronology that there should indeed be no order as to costs and I take the submissions to be based upon a contention that having received a draft affidavit in support of an application to set aside the judgment debt and having been advised of the intention of the debtor to do so that it was inappropriate for the creditor to pursue in this court the application for review of the learned Registrar’s decision.
The creditor for his part seeks costs and seeks costs to be fixed in relation to the application for review. It has been submitted that the total of those costs including the disbursement of the filing fee would amount to a figure of approximately $1745 although a reasonable sum is said to be $1500 if I were to fix those costs. During the course of the exchange of submissions I had indicated that it might be more appropriate to fix a sum of $800 that was simply based upon my brief observation concerning the amount of material filed for and on behalf of the creditor which for reasons that are obvious would only include the application for review of the learned Registrar’s decision together with of course the filing fee and other attendances.
I do note, however, that the creditor has prepared and relied upon submissions in writing which set out relevant material which would have been relied upon in the event of the matter proceeding. In all the circumstances the issue of whether or not to award costs is a matter within the discretion of the court. That discretion must be exercised judicially. In the exercise of my discretion I take into account the chronology of events which I have just recited.
It seems to me that it cannot be argued that a creditor in this situation, albeit provided with a draft of an affidavit in support of an application to set aside judgment should then in the absence of any service of the application or otherwise notified of it be in a position where rights to pursue an application to review an order for adjournment would be extinguished. The creditor has those rights and the obligation on the debtor remains even though from a commonsense point of view, as suggested by counsel for the debtor, it may have been preferable for the creditor and/or those advising the creditor to at least alert the debtor to the prospect of the application for review being filed. Nevertheless, there is not a legal obligation to do that, but it is a practical matter that

I have regard to, not so much in the exercise of my discretion as to whether or not to award costs but rather in relation to the amount of costs that I fix. It seems to me that it is relevant to adopt a practical approach, particularly in this court, which endeavours to interpret matters in the most practical manner available.
Nevertheless, as a matter of principle in the exercise of my discretion it is my view that the creditor is entitled to an order for costs of and incidental to the application for review. It was the responsibility of the debtor to properly bring the matter of the application to set aside to the notice of the creditor and the debtor has failed to do so prior to the filing of the application to review on 19 January 2005.
In assessing the amount of costs, apart from taking into account the practical issue to which I referred earlier I take into account the nature and extent of the commitment and time devoted to this proceeding to date and although I note the solicitor client charges of those representing the creditor may exceed the amount of the costs that

I propose ordering it seems to me from a practical point of view that

I should order a reasonable amount and dispose of the matter in the interest of both parties.
In my view, having heard the submissions an appropriate amount of costs would be $900 and I propose to make that order. The formal orders of the court are:
(1)The Application for Review filed 19 January 2005 be dismissed.
(2)The Applicant Creditor’s costs in the Application for Review be paid by the Respondent Debtor fixed in the sum of $900.00 payable forthwith upon the expiration of seven days from the date of this order.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 9 February 2005