Wu v Li (No 2)

In the case of Wu v Li (No 2), the dispute involved the costs and remuneration incurred by trustees appointed under the Bankruptcy Act 1966 (Cth) after a sequestration order was made. The court was tasked with determining the appropriate orders for the costs of the appeal and the proceedings below, as well as the proportions in which the parties should bear the total costs claimed by the trustees. The creditor argued that the bankrupt should bear the entire burden of the trustees' costs and remuneration, while the bankrupt contended that the creditor should pay 75% of those costs and remuneration.

The court considered whether it should exercise its appellate power under the Federal Court of Australia Act 1976 (Cth) to order the creditor and the bankrupt to pay the trustees' costs and remuneration. The court found that the creditor was substantively responsible for all the costs and expenses incurred after the petition lapsed on 6 October 2016, including the trustees' costs and remuneration. The creditor's conduct of the proceedings caused the trial judge to make the orders on 4 November 2016, leading to the trustees' costs and remuneration being incurred.

The court ordered that the orders made by the Federal Circuit Court on 4 November 2016 be varied to reflect that the proceedings lapsed on 6 October 2016, and that the creditor pay the bankrupt's costs incurred after that date. Additionally, the court granted a certificate to each party under the Federal Proceedings (Costs) Act 1981 (Cth) for their costs up to 6 October 2016. The court also ordered that the creditor pay the fair and reasonable remuneration and expenses of the trustees in the administration of the bankrupt's estate, subject to certain conditions. Finally, the court ordered that the creditor pay the bankrupt's costs.