FEDERAL COURT OF AUSTRALIA
Coshott v Crouch [2017] FCAFC 135
ORDERS
First Appellant ROBERT COSHOTT Second Appellant | ||
AND: | First Respondent SHABNAM AMIRBEAGGI Second Respondent MAXWELL WILLIAM PRENTICE Third Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The appeal be dismissed with costs, such costs to be paid on an indemnity basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
(Revised from the transcript)
ALLSOP CJ:
1 This matter involves an appeal by Mrs Ljiljana and Mr Robert Coshott from a primary judge’s conduct of a de novo review of a determination of a Registrar of this Court under s 35A(5) of the Federal Court of Australia Act 1976 (Cth) which had determined the amounts to be paid to the first and second respondents, Mr Crouch and Ms Amirbeaggi, as trustees for sale appointed pursuant to orders made by a judge of the Court, Buchanan J, on 16 October 2015.
2 The background and procedural history is as follows. The trustees for sale had been appointed in respect of a Court ordered sale of a property in Bellevue Hill, Sydney, which was required to be sold in order to meet costs associated with the administration of the bankruptcy of the second appellant, Mr Robert Coshott. The property was originally owned by the appellants as joint tenants, but had been changed to a tenancy-in-common upon the bankruptcy of Mr Coshott, with the tenants in common being Mrs Coshott and Mr Coshott’s trustee in bankruptcy, Mr Prentice. Mr Prentice is the third respondent to this appeal and has filed a submitting appearance.
3 Buchanan J made orders appointing a trustee for sale of the property on 10 September 2013: see Coshott v Coshott [2013] FCA 907. His Honour originally appointed the trustee in bankruptcy, Mr Prentice, as the trustee for sale. The orders of Buchanan J made on 10 September 2013 were as follows:
In respect of the application in this Court in NSD 1412 of 2009
THE COURT ORDERS THAT:
1. The application filed in the Supreme Court of New South Wales on 24 June 2009, later transferred to this Court, is dismissed.
2. The applicants in this Court are to pay the costs of the second respondent, as taxed, on an indemnity basis.
In respect of the further amended cross-claim in this Court in NSD 1412 of 2009
THE COURT DECLARES THAT:
3. The property 1 Bunyula Road, Bellevue Hill being the whole of the land contained in Certificate of Title Folio Identifier 2/336490 (“the property”) was acquired by the second cross-respondent and the third cross-respondent beneficially as joint tenants.
4. Upon the date of bankruptcy of the third cross-respondent, the joint tenancy between the second cross-respondent and the third cross-respondent in the property was severed and the ownership became:
4.1 the second cross-respondent as to an undivided one half share;
4.2 the cross-claimant as to an undivided one half share
as tenants in common.
5. The half interest in the property registered to the third cross-respondent vested in the cross-claimant pursuant to sections 58, 115(1) and 116(1) of the Bankrupty Act 1966 (Cth) [sic], as and from the date of the commencement of the bankruptcy of the third cross-respondent.
THE COURT ORDERS THAT:
6. The property vest in the cross-claimant as trustee for sale.
7. The property be sold by the cross-claimant as trustee for sale, with all the obligations and privileges pertaining thereto (including signing for and on behalf of the second cross-respondent any contract for the sale of land and any transfer pursuant to the Real Property Act 1900 (NSW) and determining the price at which the property is to be sold) and the proceeds after payment of all expenses of and incidental to such sale to be divided equally between the cross-claimant and second cross-respondent, pursuant to order 11.
8. For the purposes of giving effect to order 7, the second cross-respondent, by herself her servants and agents do all such things, acts and deeds and sign all documents to list for sale and sell the property, and for that purpose, including but not limited to the following:
8.1 maintain the property in a clean and presentable manner as required for the proper and effective marketing of the property;
8.2 allow and permit for an inspection of the property on 24 hours notice of a request made by the cross-claimant or agent for sale.
9. Each cross-respondent deliver up vacant possession of the property 42 days from these orders.
10. Pending the sale of the property and to the extent to which she is able, the second cross-respondent shall continue to meet one half of the outgoings (including electricity, gas, telephone and council rates) in respect of the property.
11. Upon completion of the sale of the property, the proceeds thereof be distributed in the following manner and priority:
11.1 Firstly, in discharge of any valid encumbrance over the title to the Property;
11.2 Secondly, in payment of agent’s commission, auctioneers and auction fees associated with the sale of the property;
11.3 Thirdly, expenses and reasonable legal costs and disbursements incurred upon the sale of the property;
11.4 Fourthly, in adjustment of council rates, water rates and other statutory imposts;
11.5 Fifthly, in payment of the cross-claimant’s professional and legal costs of the proceedings;
11.6 Sixthly, and subject to orders above, the remains to be divided equally between the cross-claimant and the second cross-respondent subject to any charge or lien.
12. The cross-respondents are to pay the costs of the cross-claimant, as taxed, on an indemnity basis.
4 These orders were the subject of an appeal to the Full Court, which partially overturned the orders made: see Coshott v Prentice [2014] FCAFC 88; 221 FCR 450. The Full Court overturned the orders appointing Mr Prentice as the trustee for sale on the basis that the relevant statutory provision for the appointment of such a trustee in this case was s 66G of the Conveyancing Act 1919 (NSW) picked up by s 79 of the Judiciary Act 1903 (Cth) rather than s 30 of the Bankruptcy Act 1966 (Cth). Pursuant to s 66G, at least two individual trustees or a corporate trustee had to be appointed. It followed that Mr Prentice could not be appointed as the only trustee for sale. As a consequence, the Full Court made the following orders on 23 July 2014:
THE COURT ORDERS THAT:
1. The appeal is dismissed subject to orders 2, 3 and 4.
2. The appointment of the cross-claimant as the trustee for sale is set aside.
3. Order 11.5 of the orders below is set aside and substituted by the following order:
“Fifthly, and from the proceeds of the sale of the half interest in the property vested in the cross-claimant, in payment of the cross-claimant’s professional and legal costs of the proceedings;”
4. The matter be remitted to the primary judge to appoint a corporate trustee or individual trustees for sale under s 66G of the Conveyancing Act 1919 (NSW) as applied by s 79 of the Judiciary Act 1903 (Cth).
5. The question of costs be reserved.
6. The parties notify the Court within seven days as to whether they wish to be heard on the question of costs or are content for the Court to make orders to the effect of those foreshadowed in these reasons for judgment.
5 Pursuant to order 4 of the orders made by the Full Court, the matter was remitted to Buchanan J. On 19 September 2014, Buchanan J appointed the first and second respondents as the trustees for sale and made orders on that day as follows:
THE COURT ORDERS THAT:
1. Matters NSD 1412/2009, NSD 916/2014 and NSD 917/2014 be hereafter and subject to any further order of the Court heard together.
2. In substitution for order 6 made on 10 September 2013 and set aside by the Full Court of the Federal Court on 23 July 2014 the following order: -
“6. That Shabnam Amirbeaggi and Nicholas Crouch both of Crouch Amirbeaggi, Suite 403, 55 Lime Street, King Street Wharf, Sydney NSW 2000 and both registered Trustees in Bankruptcy be appointed Trustees for Sale (“Trustees for Sale”) and they be entitled to charge their remuneration at the rate set out in the rates attached to their Consent filed in these proceedings.”
3. Order 7 made on 10 September 2013 be amended by the deletion of the words “cross-claimant as trustee for sale” and insertion of the words “Trustees for Sale” in lieu thereof.
4. As ordered by the Full Court of the Federal Court on 23 July 2014 order 11.5 is duly amended to read: -
“11.5 Fifthly, and from the proceeds of the sale of the half interest in the property vested in the cross-claimant, in payment of the cross-claimant’s professional and legal costs of the proceedings.”
5. That, prior to the distribution in order 11.6 made 10 September 2013 the Trustees for Sale be entitled to deduct their remuneration, costs and expenses of acting as Trustees for Sale.
6. That the Trustees for Sale have liberty to apply for directions in relation to the performance of their duties on 3 days’ notice.
7. Costs are reserved.
8. Liberty to apply on 3 days’ notice.
6 Order 5 of the orders made by Buchanan J on 19 September 2014 entitled the first and second respondents to deduct their remuneration, costs and expenses of acting as trustees for sale. Buchanan J made several subsequent orders on 2 October 2015, 16 October and 26 October 2015 in relation to the appointment and remuneration payable to the trustees.
7 Order 5 of the orders of 19 September 2014, was later, as will be seen, vacated by Buchanan J. That was so, because, plainly, it was an order that was consequential upon order 11.6 that was made on 10 September 2013, and order 11.6 was, after the Full Court hearing, one that was convenient to vacate. I mention this because, as will be seen later in these reasons, the vacation of order 5 made on 19 September 2014 is important for some submissions put before the Court today.
8 On 2 October 2015, Buchanan J made the following orders:
THE COURT ORDERS THAT:
1. Order 11 made on 10 September 2013 be amended by the deletion of the word “Upon” and the insertion of the words “As soon as practicable following” in lieu thereof.
2. The matter be listed for further directions at 9.30 am on 16 October 2015.
9 On 16 October 2015, Buchanan J made the following orders:
THE COURT ORDERS THAT:
1. Ljiljana Coshott (and Robert Coshott if so advised) file and serve any further evidence and an outline of submissions in respect of the interlocutory application of Barry and Board on or before 27 October 2015.
2. Barry and Board (and Prentice if so advised) file and serve any evidence in reply and an outline of submissions in respect thereof on or before 3 November 2015.
3. The interlocutory application filed by Barry and Board be listed for hearing before Buchanan J at 10.15 am on 10 November 2015.
4. The application for the relief sought in paragraphs 6, 7 and 8 of the interlocutory application filed on 8 July 2015 on behalf of the Trustees for Sale be listed for directions at 10.15 am on 10 November 2015.
5. The Trustees for Sale would be justified in not taking any further steps to recover from Fewin Pty Ltd, their costs the subject of the orders of this Court made on 14 January 2015, being costs of and incidental to the interlocutory application filed by Fewin Pty Ltd on or about 17 December 2014 in these proceedings.
6. A Registrar be appointed to determine the amounts to be paid to the Trustees for Sale pursuant to the orders of the Court made on 10 September 2013 and 19 September 2014, including:
(a) in respect of the fees and disbursements (not including legal costs) payable to the Trustees for Sale pursuant to order 6 of the orders of the Court made on 10 September 2013 and substituted on 19 September 2014;
(b) in respect of the legal costs of the Trustees for Sale (on a solicitor and own client basis) including pursuant to order 11.3 of the orders of 10 September 2013 and order 5 of the orders of the Court made on 19 September 2014.
7. The proceedings be otherwise listed for directions at 10.15 am on 10 November 2015.
8. The parties have liberty to apply on 3 days’ notice.
10 On 26 October 2015, Buchanan J made the following orders:
THE COURT ORDERS THAT:
1. Order 11.5 (as amended on 19 September 2014), Order 11.6 as made on 10 September 2013 and Order 5 as made on 19 September 2014 all be vacated.
2. From the proceeds of sale of the property, the Trustees for Sale be entitled to deduct their remuneration, costs and expenses of acting as Trustees for Sale.
3. When reasonably practicable, the Trustees for Sale make interim and final distributions of the proceeds of sale to the cross-claimant and the second cross respondent, after taking account of any orders for the payment of money into Court, or the need to withhold money on account of any claim foreshadowed against the Trustees for Sale or on account of their further likely professional costs and disbursements.
4. The cross-claimants’ professional and legal costs of the proceedings (including the costs of the former Trustee in Bankruptcy) be paid from the proceeds of the sale of the half interest in the property vested in the cross-claimant.
11 Order 1 made on 26 October is the order in which his Honour vacated various orders. When examined, that was necessary and convenient for the further implementation of the orders of the Full Court. The final form of the recompense and appointment orders were helpfully summarised by the primary judge, Bromwich J, in [24] to [25] of the decision under appeal as follows:
[24] The final form of the orders made on the present topic of the recompense to which the Trustees for Sale were entitled was as follows, merging the relevant part of the original orders with the relevant amendments as demonstrated by the mark-up:
In respect of the application in this Court in NSD 1412 of 2009
THE COURT ORDERS THAT:
1. The application filed in the Supreme Court of New South Wales on 24 June 2009, later transferred to this Court, is dismissed.
2. The applicants in this Court are to pay the costs of the second respondent, as taxed, on an indemnity basis.
In respect of the further amended cross-claim in this Court in NSD 1412 of 2009
THE COURT DECLARES THAT:
3. The property 1 Bunyula Road, Bellevue Hill being the whole of the land contained in Certificate of Title Folio Identifier 2/336490 (“the property”) was acquired by the second cross-respondent and the third cross-respondent beneficially as joint tenants.
4. Upon the date of bankruptcy of the third cross-respondent, the joint tenancy between the second cross-respondent and the third cross-respondent in the property was severed and the ownership became:
4.1 the second cross-respondent as to an undivided one half share;
4.2 the cross-claimant as to an undivided one half share as tenants in common.
5. The half interest in the property registered to the third cross-respondent vested in the cross-claimant pursuant to sections 58, 115(1) and 116(1) of the Bankrupty Act 1966 (Cth), as and from the date of the commencement of the bankruptcy of the third cross-respondent.
THE COURT ORDERS THAT:
6. The property vest in the cross-claimant as trustee for sale. That Shabnam Amirbeaggi and Nicholas Crouch both of Crouch Amirbeaggi, Suite 403, 55 Lime Street, King Street Wharf, Sydney NSW 2000 and both registered Trustees in Bankruptcy be appointed Trustees for Sale (“Trustees for Sale”) and they be entitled to charge their remuneration at the rate set out in the rates attached to their Consent filed in these proceedings. [Substituted 19 September 2014]
7. The property be sold by the cross-claimant as trustee for sale Trustees for Sale [amended 19 September 2014], with all the obligations and privileges pertaining thereto (including signing for and on behalf of the second cross-respondent any contract for the sale of land and any transfer pursuant to the Real Property Act 1900 (NSW) and determining the price at which the property is to be sold) and the proceeds after payment of all expenses of and incidental to such sale to be divided equally between the cross-claimant and second cross-respondent, pursuant to order 11.
8. For the purposes of giving effect to order 7, the second cross-respondent, by herself her servants and agents do all such things, acts and deeds and sign all documents to list for sale and sell the property, and for that purpose, including but not limited to the following:
8.1 maintain the property in a clean and presentable manner as required for the proper and effective marketing of the property;
8.2 allow and permit for an inspection of the property on 24 hours notice of a request made by the cross-claimant or agent for sale.
9. Each cross-respondent deliver up vacant possession of the property 42 days from these orders.
10. Pending the sale of the property and to the extent to which she is able, the second cross-respondent shall continue to meet one half of the outgoings (including electricity, gas, telephone and council rates) in respect of the property.
11. Upon As soon as practicable following [amended 2 October 2015] completion of the sale of the property, the proceeds thereof be distributed in the following manner and priority:
11.1 Firstly, in discharge of any valid encumbrance over the title to the Property;
11.2 Secondly, in payment of agent’s commission, auctioneers and auction fees associated with the sale of the property;
11.3 Thirdly, expenses and reasonable legal costs and disbursements incurred upon the sale of the property;
11.4 Fourthly, in adjustment of council rates, water rates and other statutory imposts;
11.5 Fifthly, in payment of the cross-claimant’s professional and legal costs of the proceedings; [substituted to read as per the next paragraph 11.5 by orders 23 July 2014 and 19 September 2014]
11.5 Fifthly, and from the proceeds of the sale of the half interest in the property vested in the cross-claimant, in payment of the cross-claimant’s professional and legal costs of the proceedings; [Vacated 26 October 2015 and replaced by orders 2, 3 and 4 below]
11.6 Sixthly, and subject to orders above, the remains to be divided equally between the cross-claimant and the second cross-respondent subject to any charge or lien. [Vacated 26 October 2015 and replaced by orders 2, 3 and 4 below]
2. From the proceeds of sale of the property, the Trustees for Sale be entitled to deduct their remuneration, costs and expenses of acting as Trustees for Sale.
3. When reasonably practicable, the Trustees for Sale make interim and final distributions of the proceeds of sale to the cross-claimant and the second cross respondent, after taking account of any orders for the payment of money into Court, or the need to withhold money on account of any claim foreshadowed against the Trustees for Sale or on account of their further likely professional costs and disbursements.
4. The cross-claimants’ professional and legal costs of the proceedings (including the costs of the former Trustee in Bankruptcy) be paid from the proceeds of the sale of the half-interest in the property vested in the cross-claimant.
12. The cross-respondents are to pay the costs of the cross-claimant, as taxed, on an indemnity basis.
[25] The orders for recompense of the Trustees for Sale and for the appointment of the Registrar to determine the amounts they should be paid, as in force at the time that the Registrar came to make that determination, were as follows in aid of considering the arguments of the parties below (emphasis added):
Order 6 made 10 September 2013, after being set aside by the Full Court and substituted by Buchanan J on 19 September 2014:
6. That Shabnam Amirbeaggi and Nicholas Crouch both of Crouch Amirbeaggi, Suite 403, 55 Lime Street, King Street Wharf, Sydney NSW 2000 and both registered Trustees in Bankruptcy be appointed Trustees for Sale (“Trustees for Sale”) and they be entitled to charge their remuneration at the rate set out in the rates attached to their Consent filed in these proceedings.
Order 7 made 10 September 2013, after being varied on 19 September 2014:
7. The property be sold by the Trustees for Sale, with all the obligations and privileges pertaining thereto (including signing for and on behalf of the second cross-respondent any contract for the sale of land and any transfer pursuant to the Real Property Act 1900 (NSW) and determining the price at which the property is to be sold) and the proceeds after payment of all expenses of and incidental to such sale to be divided equally between the cross-claimant and second cross-respondent, pursuant to order 11.
Order 6 made on 16 October 2015
6. A Registrar be appointed to determine the amounts to be paid to the Trustees for Sale pursuant to the orders of the Court made on 10 September 2013 and 19 September 2014 [necessarily as varied since being made], including:
(a) in respect of the fees and disbursements (not including legal costs) payable to the Trustees for Sale pursuant to order 6 of the orders of the Court made on 10 September 2013 and substituted on 19 September 2014;
(b) in respect of the legal costs of the Trustees for Sale (on a solicitor and own client basis) including pursuant to order 11.3 of the orders of 10 September 2013 and order 5 of the orders of the Court made on 19 September 2014.
Orders 2, 3 and 4 made on 26 October 2015 in substitution for: order 11.5 originally made 10 September 2013 and varied on 23 July 2014 and 19 September 2014; and order 11.6 originally made on 10 September 2013
2. From the proceeds of sale of the property, the Trustees for Sale be entitled to deduct their remuneration, costs and expenses of acting as Trustees for Sale.
3. When reasonably practicable, the Trustees for Sale make interim and final distributions of the proceeds of sale to the cross-claimant and the second cross respondent, after taking account of any orders for the payment of money into Court, or the need to withhold money on account of any claim foreshadowed against the Trustees for Sale or on account of their further likely professional costs and disbursements.
4. The cross-claimants’ professional and legal costs of the proceedings (including the costs of the former Trustee in Bankruptcy) be paid from the proceeds of the sale of the half interest in the property vested in the cross-claimant.
12 So that the balance of these reasons are clear, it should be noted that the substituted order 6 made by Buchanan J on 19 September 2014 (against which there has been no appeal) only referred to the remuneration of the trustees for sale. That is because one part of that order was dealing with their entitlement to charge, in effect, their professional costs, being their remuneration at the rate set out in the document attached to their consent that had been filed.
13 The order appointing them did not expressly say that they were entitled to undertake costs and expenses necessary for their task. It did not need to do so. They were being appointed trustees for sale by the Court, plainly with power to undertake necessary costs and expenses, if need be, legal expenses, to perform their task. What they needed authority and entitlement for before they began was the rates of remuneration that they were to charge. Of course, if their costs and expenses, in due course, were otherwise than reasonable, this would be dealt with on a review of their remuneration, costs and expenses.
14 The argument to which I will come of the Coshotts before the primary judge and before us on appeal was and is that the referral of the matter to the Registrar for the determination of what the trustees were entitled to was limited to remuneration in relation to the selling of the property and, implicitly, does not extend to costs and expenses. I will come to that argument. As was appreciated by the primary judge in the judgment under appeal, no appeal was instituted against any of the orders made by Buchanan J except for the appeal previously dealt with by the Full Court as discussed above.
15 The form of order, still extant, dealing with the determination was order 6 made on 16 October 2015. The chapeau to that order stated that the Registrar be appointed to determine the amounts to be paid to the trustees for sale pursuant to the orders of the court on 19 September 2014, including fees and disbursements and including the legal costs of the trustee.
16 The order of 26 October 2015 entitled the trustees for sale to deduct their remuneration, costs and expenses of acting as trustees for sale. One aspect of the argument of the appellants is that, in some fashion, all the Registrar was entitled to determine was the remuneration of the trustees for sale (and not costs and expenses). This argument should be rejected. Plainly, the existing orders not vacated were wide enough to include remuneration, costs and expenses.
17 I will come to the second aspect of the construction of the order in due course, this latter argument being the argument that was put to the primary judge, Bromwich J.
18 The matter then came before the Registrar to determine the amounts payable to the trustees. A hearing was held before the Registrar at which the appellants did not participate. There was some explanation given to Bromwich J that the solicitor was hospitalised on this occasion. No application for an adjournment was made before the Registrar, and the Registrar was not given this information. The trustees made oral and written submissions and there was detailed material placed before the Registrar. Following that hearing on 16 May 2016, the Registrar made the following determination:
THE REGISTRAR DETERMINES THAT:
1. The amount to be paid to the Trustees for Sale pursuant to the orders of the Court made on 10 September 2013 and 19 September 2014 is $761,810.53 which is comprised as follows:
a. $322,355.44 inclusive of GST in respect of the Trustees’ remuneration;
b. $143,661.68 inclusive of GST in respect of disbursements (not including legal costs);
c. $260,138.45 for professional fees payable to the Trustees’ solicitors; and
d. $35,654.96 for disbursements incurred by the Trustees’ solicitors.
THE REGISTRAR NOTES:
2. The amounts referred to in paragraph 1 include amounts for the Trustees’ remuneration, disbursements (other than legal costs), and legal costs which will be incurred after the date of this determination and which have been estimated as follows:
a. $27,500.00 inclusive of GST in respect of the Trustees’ remuneration;
b. $ nil amount in respect of disbursements (not including legal costs);
c. $24,502.50 for professional fees payable to the Trustees’ solicitors; and
d. $22,000.00 for disbursements incurred by the Trustees’ solicitors.
3. The undertaking given to the Court by the Trustees for Sale that in the event the amounts actually incurred in respect of remuneration and disbursements, including legal costs, after the date of this determination is less than the amounts estimated in paragraph 2 above they will pay the difference between the amounts actually incurred and the amounts estimated in accordance with the orders of the Court of 10 September 2013.
19 The Registrar thus determined that the trustees were to be paid $761,810.53 out of the proceeds for sale of the property.
20 The appellants filed an interlocutory application seeking review of that determination ostensibly under s 35A of the Federal Court of Australia Act. That application was heard by the primary judge, Bromwich J, on 16 September 2016, and he delivered judgment on 21 December 2016, dismissing the application for review of the determination: see Coshott v Coshott [2016] FCA 966.
21 There were three issues raised by the appellants before the primary judge. The first related to the scope of the recompense orders made by Buchanan J and the nature and scope of what the trustees were entitled to be paid. The second related to the jurisdiction of the Federal Court to make orders for recompense for the trustees for sale. The third and final issue was the de novo review under s 35A of the Federal Court of Australia Act of the determination made by the Registrar on 16 May 2016. The primary judge considered at [15] that only the third issue was properly before him on an application for review under s 35A, however, he proceeded to address all three issues.
22 In respect of the first issue, Bromwich J rejected a submission that the recompense orders should be construed narrowly and concluded that the nature of the appointment, and so the recompense orders, should be read as encompassing the full, fair and reasonable remuneration, costs and expenses of acting as trustees for sale. The terms of Buchanan J’s orders did not limit the amounts payable to the trustees to those relating to the actual sale process, but extended to all activities which reasonably took place during the period of acting as trustees for sale. For the reasons I will express below, I agree with that approach to the orders. It is both practical, based on commonsense, and in accordance with a fair reading of the words used.
23 The primary judge rejected the appellant’s second round of complaint on the basis that s 23 of the Federal Court of Australia Act conferred the necessary incidental power to make the recompense orders where an appointment for trustees for sale had been made under s 66G of the Conveyancing Act, as picked up by s 79 of the Judiciary Act . He also noted this argument was an attempt to collaterally attack the orders of Buchanan J without appealing from them. This ground is not propounded on appeal and plainly correctly, if I may respectfully say so.
24 In any event, the primary judge conducted a de novo review of the Registrar’s determination, which was the proper issue before his Honour on the application. He undertook a detailed examination of that determination. His Honour noted that the appellants had not participated in the proceedings before the Registrar, and had not provided much before him beyond global and general objections. The primary judge considered and distilled a number of the different authorities relating to the nature and scope of a review under s 35A. His Honour concluded from the authorities that there is a reluctance on a review of a Registrar’s determination to engage in a process of, or akin to, full taxation. Instead, the role of a judge on review is to ensure the delegation is carried out properly. This was said to particularly be the case where nothing concrete is put forward by a well-represented party that suggests error. Although acknowledging that the absence of objection did not mean the judge is not to employ a careful eye, the primary judge noted that the absence of objection other than at a high level of generality is relevant to a conclusion that there was nothing inherently wrong with any of the tasks carried out by the trustees.
25 The primary judge noted that the appellants had sought before him a second referral to the Registrar so that a line-by-line consideration of the trustee’s expenditure could occur. The appellants before Bromwich J did not submit as their primary argument that he should carry out the line-by-line review of expenditure and, as his Honour said, did not point to particular matters that raised doubt about the evidence put before the Registrar and the conclusions of the Registrar. Rather, they said that a line-by-line consideration should be undertaken by an expert costs assessor because of the global and general objections that they took; so, in effect, that the parties should undergo the cost and expense, time and trouble of a second detailed review by someone in the position, in effect, of a taxing officer.
26 This submission was rejected by the primary judge, along with an alternative submission that the primary judge himself conduct a line-by-line examination. His Honour rejected both submissions and his Honour was correct to do so. Bromwich J considered that the appropriate approach for him was to adopt what had been said in Australian Securities and Investments Commission v Letten (No 25) [2016] FCA 1127 at [15], which involved the Court taking a broad approach in determining more generally whether the trustees had justified the reasonableness and prudence of the tasks that they had undertaken.
27 Before embarking on his task, his Honour set out at [61] his interpretation of the recompense order made by Buchanan J as follows:
[61] … To put the matter beyond any doubt, I am treating the orders for recompense of the Trustees for Sale made by Buchanan J on 19 September 2014, as amended on 26 October 2015, as extending to all of the payments and liabilities for payment incurred by the Trustees for Sale properly and reasonably paid or incurred in the course of the execution of the statutory trust to which they were appointed, subject only to the process of determination of the proper quantum of that recompense. That is, I read the words used by his Honour literally to mean what they say, namely, that the Trustees for Sale are entitled to “their remuneration, costs and expenses of acting as Trustees for Sale”. Those words are easily wide enough to encompass all reasonable steps taken while acting as Trustees for Sale in furtherance of the trust to give effect to the orders for the sale of the property, including dealing with all of the hurdles that so clearly were placed in their way, as indicated in the scope of work required to be carried out in Annexure “A” to Mr Mullette’s affidavit of 26 April 2016. That approach ensures that the objective of the statutory trust, the sale and realisation of the proceeds of sale of the property was given “practical effect”: Pantzer v Wenkart [2006] FCAFC 140; (2006) 153 FCR 466 at 477 [44].
(emphasis in original)
28 The primary judge then proceeded to review the quantum of recompense determined by the Registrar. It is appropriate to set out the full terms, at this point, of [62] and [63] of his Honour’s reasons:
[62] As to quantum, I have carefully read each of the affidavits relied upon by the Trustees for Sale. I have perused the time costing records and examined more closely a substantial sample of those entries. I have compared the time costing records with Annexure “A” referred to above and satisfied myself that the various types of work referred to have indeed been carried out. I have also read the transcript of the proceedings before the Registrar and been able to satisfy myself that he did go through a process of analysis and careful consideration, although not line-by-line and not informed by any objections as to any particular items of expenditure or work done. Following my examination, I am satisfied that it cannot be said that the discretion reposed in the Registrar by his appointment has not been exercised, or that any error in the approach taken is apparent. There is nothing to indicate that, given the scope of the orders made for recompense, including the collateral orders approving the rates of remuneration, the approach taken by the Registrar was wrong, let alone manifestly so. In my view, considering all of the evidence as a whole and having regard to the quality of the record-keeping, the Trustees for Sale have properly discharged their onus of justifying the reasonableness and prudence of the tasks they have undertaken, with apparent due regard to the seniority of the person performing the work. There is nothing that I can see that indicates any signs of inefficiency or impropriety.
[63] The distribution statement reveals that in November 2015 (I was informed from the bar table, 2 November 2015) a first distribution of $1,238,000 took place, made up of $619,000 to each of the Coshotts. I was informed from the bar table that a second distribution took place on 30 March 2016 of $639,992. The combination of the two distributions was therefore $1,877,992 out of gross sale proceeds of $3,775,000, of which the amount that came to the Trustees for Sale was $3,382,619. The gross amount in the Registrar’s determination of $761,810.53 is, on any view, a substantial proportion of the sums received by the Trustees for Sale (some 22.5%), but not inherently disproportionate when regard is had to the many fronts upon which the Trustees for Sale have needed to apply their energies. I am unable to see that the amount alone, in the context of what was done, and in the context of the clear and detailed records kept, gave rise to any sound basis for proportionality concerns. That is especially so when no submission was made on behalf of the Coshotts which demonstrated that any of the steps taken were inappropriate or unreasonable or conducted in an inappropriate or unreasonable fashion.
29 Those paragraphs in their terms make plain that his Honour conducted a de novo review, recognising that he was being guided by the authorities to which he referred. There can be no doubt that his Honour paid attention to the evidence before him in a careful way, examined it and took account of such submissions as placed before him by the party objecting to the determination. The primary judge, for those reasons, said the following at [64] and [65]:
[64] In those circumstances, I do not consider that it is necessary or appropriate to carry out a more detailed review of the records before me that I have already described. The approach approved in Templeton has been sufficient for me to form the requisite state of mind in conducting a de novo review of the Registrar’s determination.
[65] In all circumstances, I am unable to see any proper basis for disturbing the determination made by the Registrar.
The appeal
30 On their appeal, the appellants first relied on the following six grounds of appeal as set out in the notice of appeal:
1. His Honour erred in holding that $761,810.53 was a fair and reasonable sum to remunerate the trustees for sale for the sale of the property for the following reasons:
(i) His Honour failed to conduct any proportionality analysis
(ii) His Honour erroneously treated the review de novo as an appeal from the registrar
(iii) His Honour erred in shifting the onus of proof from the trustees for sale to the Appellants
(iv) His Honour misdirected himself as to which remuneration order was actually on foot
(v) His Honour misconstrued the scope of the remuneration order
(vi) His Honour erred in not admitting the evidence of Gordon Salier
31 In the further written submissions filed yesterday afternoon, the appellants abandoned grounds (i), (ii) and (vi).
32 At [15] to [17] of their written submissions filed 11 August 2017, the appellants draw attention to the circumstances that order 11.3 of 10 September 2013, referred to in order 6(b) of Buchanan J’s orders of 16 October 2015, gives priority in the distribution of the sale of the property to “expenses and reasonable legal costs and disbursements incurred upon the sale of the property” and that order 5 made on 19 September 2014, which had provided that, prior to the distribution, the trustees for sale “be entitled to deduct their remuneration, costs and expenses”, had been vacated by his Honour on 26 October 2015.
33 This was the argument to which I have already referred. The appellants, in their written submissions dated 17 August 2017, yesterday, submitted that, because Buchanan J vacated some of those orders, the referral to the Registrar made on 16 October 2015 was impacted and narrowed, such that the Registrar could not make a determination other than on remuneration. For the reasons I have already given, I reject this submission.
34 Relevant to grounds (iv) and (v) of the appeal, the appellants submitted that his Honour misconstrued the scope of the remuneration order. They submitted, as they submitted before Bromwich J, that his Honour erred by not limiting the entitlement of the trustees for sale to their remuneration and costs directly and exclusively related to the sale of the property. In respect of like submissions made before him, the primary judge reasoned in [27] to [31] as follows:
[27] The first point of interpretation taken by the Coshotts is that the orders made by Buchanan J on 16 October 2015 in relation to the appointment of the Registrar to determine the amounts to be paid to the Trustees for Sale pursuant to the orders made on 10 September 2013 and 19 September 2014 [as varied] needed to be read narrowly. Senior counsel for the Coshotts contended that the appointment did not include any referral to the Registrar in relation to any recompense for work done by the Trustees for Sale or on their behalf outside the ambit of executing the particular trust to which they had been appointed. It was submitted on behalf of the Coshotts that the referral was confined to determining the amounts to be paid to the Trustees for Sale in relation to selling the property, and not in respect of any other work or proceedings generally, nor for the taxation or assessment of any legal costs or disbursements of any applications or proceedings brought before this Court.
[28] Counsel for the Trustees for Sale submitted that such a limited interpretation was not the correct way to read the orders made by Buchanan J on 16 October 2015 in relation to the appointment of the Registrar to determine the amounts to be paid to the Trustees for Sale pursuant to the orders made on 10 September 2013 and 19 September 2014 [as varied], particularly when regard is had to the chapeau of order 6 made on 16 October 2015, which refers to determination of the amounts to be paid and uses the non-exhaustive word “including” prior to the specific reference to fees, disbursements and legal costs. Counsel for the Trustees for Sale submitted that this interpretation is emphasised by the terms of the recompense order made on 19 September 2014 and varied on 26 October 2015, both of which refer to “remuneration, costs and expenses of acting as Trustees for Sale” (emphasis added). It was submitted that the words used in the orders as to recompense and as to the appointment of the Registrar are wide enough to encompass all ancillary matters and addressing all obstacles to carrying out the sale, and in fact extended to all aspects of work done in their capacity in acting as Trustees for Sale.
[29] Secondly and alternatively, counsel for the Trustees for Sale argued that even if the appointment of the Registrar should be interpreted as constituting a referral limited in the way the Coshotts suggested, a judge of this Court is not so limited in the conduct of the de novo review.
[30] Both of the arguments advanced by counsel for the Trustees for Sale were supported by a third public policy argument he advanced to the effect that not allowing for full and proper (and implicitly, reasonable) recompense for acting as a trustee would seriously undermine the efficacious exercise of the accepted jurisdiction to appoint trustees for sale in the first place, regularly exercised by judges of the Supreme Court of New South Wales and also to a more limited extent by judges of this Court in circumstances akin to the present. Such a finding at the level of either power, or of interpretation of the orders made, would make it difficult to find persons willing to act in such a role if they were at risk of not being paid properly and not being fully reimbursed as to the reasonable costs of doing so. This argument directly addresses both the reading down of the power exercised by Buchanan J to limit the scope of recompense that could be ordered to be paid as part of a statutory trust (discussed further below), and to limiting the effect of the orders that were in fact made.
[31] I agree with all three arguments advanced on behalf of the Trustees for Sale (leaving the question of power for determination below in response to the second issue). As to interpretation of the orders that were made, informed by the policy arguments with which I agree, due weight must be given to the terms for recompense set out in the 19 September 2014 orders, and maintained in the 26 October 2015 variation, which are obviously and deliberately wider than the original orders made on 10 September 2013. Those orders should be read as encompassing the full, fair and reasonable “remuneration, costs and expenses of acting as trustees for sale”, not confined as urged by senior counsel for the Coshotts, which entails effectively reading into those orders words of limitation and restriction that were not in fact used so as to confine consideration of recompense to the act of sale itself. I therefore do not accept that the scope of the orders made by Buchanan J on 16 October 2015, as amended on 26 October 2015, should be read in the limited and impracticable way contended for on behalf of the Coshotts. That strained and illogical interpretation does not do justice to the breadth of the language used by Buchanan J, nor to his Honour’s obvious purpose and intent.
35 In my opinion, it is unnecessary to address some of the arguments then advanced on behalf of the trustees for sale as to the asserted wider powers of the court or the submissions advanced on public policy grounds to reject grounds (iv) and (v) of the appeal. The primary submission of the trustees for sale that such a limited interpretation was not the correct way to read the orders made by Buchanan J on 16 October 2015, when regard is had to the chapeau of order 6 made on 16 October 2015, which refers to determination of the amounts to be paid and uses the non-exhaustive words “including” prior to the specific reference to fees and disbursements and legal costs, was sound and correctly accepted by his Honour. I would also add that, for the reasons I have already given, a practical, sensible and robust way of reading orders of the court dealing with these matters would similarly lead to that conclusion.
36 That that interpretation was correct was emphasised by the terms of Buchanan J’s orders made on 19 September 2014, as varied on 26 October 2015, which referred to “remuneration, costs and expenses of acting as trustees for sale”. Those words were wide enough to encompass all ancillary matters and address all obstacles to carrying out the sale and, in effect, extended to all aspects of the work done in their capacity as acting as trustees for sale.
37 The label “trustee for sale” should not blind one to the scope of the duties placed upon persons taking up the office of trustees for sale under an order under s 66G. Those matters can be seen and gleaned from an appreciation of the totality of the obligations that may fall upon such trustees found in Division 6 of Part 4 of the Conveyancing Act, s 66F through to s 66I. I will come to the evidence in a moment.
38 There was no basis to read into the orders made by Buchanan J some limitation and restriction that were not, in fact, used that would confine consideration of the recompense to the acts of sale. Bromwich J was correct to reject the submission that those orders should be read in a limited and impractical way as contended for on behalf of the Coshotts. His Honour was correct to hold that the construction advanced by the appellants would fail to do justice to the breadth of the language used by Buchanan J and be contrary to the manifest purpose and intent of the orders.
39 As Bromwich J noted, no appeal had been made in relation to any of these orders, and it was not available to the appellants to use a review from the Registrar on the question of quantum as a vehicle for the collateral attack on the substance of the underlying orders. Accordingly, grounds (iv) and (v) should be rejected.
40 The appellants’ written submissions dated 17 August 2017 abandoned ground (ii), as I have already said. Nevertheless, in order to appreciate properly ground (iii), it is appropriate to give some consideration to the nature of the review before the primary judge.
41 The circumstances in which his Honour was placed by the appellants was that they did not participate in the proceedings before the Registrar. Nevertheless, the proceeding before the primary judge was a de novo review of the Registrar’s determination, as his Honour, on a number of occasions, made clear he understood. A de novo review is conducted on the record that was before the earlier decision-maker, supplemented by any further materials propounded legitimately by the parties and admitted by the court conducting the review. In conducting a de novo review, the Court undertakes the decision-making process afresh, but in the context and understanding of the matters to which I have already referred.
42 The appellants chose not to descend to any particularity in advancing their case on review before Bromwich J. Instead, their primary position was that, because it would be unusual for a judge to undertake a line-by-line assessment of a bill of costs, his Honour should refer the matter to an expert costs assessor. His Honour rightly declined that invitation, to which I have already referred, and himself said, at [43] to [46], the following:
[43] Nor is there any unfairness in proceeding to conclude the review process initiated by the Coshotts. They have had ample time to bring this review and to put such submissions and evidence as they wished in support. In addition to the timetable for evidence and submissions ordered by the Registrar that the Coshotts did not avail themselves of, a timetable was ordered in this Court on 1 June 2016 for evidence and submissions by 8 July 2016. On 26 July 2016, almost two months later, that timetable was extended until 9 August 2016 for evidence and 16 August 2016 for submissions, giving an aggregate of almost 11 weeks from the Coshotts’ filing of this application to furnish evidence, almost 12 weeks for submissions and more than one quarter of a year from the initial submissions timetable to the date of hearing.
[44] In the result almost nothing of substance by way of evidence and only very limited submissions were advanced on behalf of the Coshotts in support of the substance of the review process they had sought. As a practical matter this left the process of de novo review to the onus falling on the Trustees for Sale to make good their claims upon the basis of the evidence that was before the Registrar and also placed before this Court.
[45] Senior counsel for the Coshotts submitted that the Registrar failed to distinguish between work done in the execution of the particular trust for the sale of real property and other work, and failed to indicate whether or not any other moneys were more properly said to be the legal costs and disbursements of and incidental to collateral legal proceedings. In a factual sense that characterisation of what the Registrar did is accurate, in that the distinctions identified are not reflected in the determination that issued by the Registrar on 16 May 2016 which refer only to the final sums of money arrived at, broken down by broad category.
[46] As noted above, the Coshotts did not appear on the date fixed well in advance for the hearing of the determination before the Registrar, and did not, as provided for, furnish any submissions or evidence. Nor was any attempt made before me to do much more. Instead global and general objections were taken, including as to an asserted shortfall in particulars as to what was claimed, essentially making it a matter of onus for the Trustees for Sale to prove their entitlement to payment. This was, on any view, a very high risk strategy. The Coshotts were ultimately well represented and must be taken to have considered this was the best approach to advance their interests in all the circumstances.
43 In rejecting the appellants’ submission that they were entitled to a further line-by-line primary costs assessment, there was no unfairness, and, as his Honour noted at [58] to [59]:
[58] The submissions made by senior counsel for the Coshotts rejected the proposition that the opportunity for a line-by-line consideration by the Registrar had been missed by reason of his clients’ non-participation at that stage. It was effectively submitted that it was legitimate now to insist upon a second referral so that the Coshotts would have an opportunity to participate a second time around, if they chose to do so. It was suggested that because it was not feasible for a judge to carry out a line-by-line examination of the moneys expended, there was no practical alternative but to make a second referral. The suggestion was made that someone with greater expertise than a Registrar was required because of the complexity of matters apart from the sale that had taken place.
[59] Nothing was said to indicate what more the Coshotts might contribute to this process a second time around beyond general references of an opportunity to be heard in some way, without any evidence from them as to why they did not participate in the first place, which could and most likely would have been tested. There was nothing in evidence to indicate what precisely or even generally the Coshotts would do in the way of further objections or contribution. If the end result was simply going to be to make the Trustees for Sale go through substantially the same process again, but with the dominant impact being delay, then that is not a process of any value or merit. To approach the problem created by their prior non-participation in this way is effectively to sanction, or worse encourage, that non-participation at the appropriate stage, being before the Registrar, and effectively to sanction the further delay caused by nothing other than that non-participation. I therefore reject the submissions seeking a second referral.
44 Having reached that conclusion, his Honour was correct to apply the long-established principle that, notwithstanding a de novo review requires a judge to hear the matter afresh, it is not inconsistent with that duty, in conducting a review from a determination of a Registrar on a matter of costs and remuneration, to proceed on the basis that there will be limited circumstances in which a court will interfere with a taxing officer’s decision. His Honour adequately cited the relevant authorities, to which I am not intending in extempore reasons to comment upon other than by recitation, and I set out [53] to [55] of Bromwich J’s decision:
[53] In Australian Coal & Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621, referred to by Branson J above in Wenkart v Pantzer, Kitto J at 628 approved what had been said by Jordan CJ in Schweppes’ Ltd v Archer (1934) 34 SR (NSW) 178 at 183-184 in an appeal from a review of a decision of a taxing officer (omitting citations):
In appeals as to costs, the principles to be applied are these. The Court will always review a decision of a Taxing Officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the Court is reluctant to interfere. It has undoubted jurisdiction to review the Taxing Officer’s decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances … but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case.
[54] In Australian Securities and Investments Commission v Letten (No 25) [2016] FCA 1127 (the decision on the de novo review process delivered in response to the successful appeal from Letten (No 23) in Templeton), the receivers’ claim for remuneration was not further reduced below a voluntary discount of 10%. It was observed at [15]:
The Full Court stated that the onus was on the Receivers to justify the reasonableness and prudence of the tasks undertaken. The Court is not obliged to make specific positive findings about the work necessary and appropriate to be done, the appropriate level of seniority and whether the work was done efficiently. The Court is entitled to take the practical course of looking at the matter more generally in assessing reasonableness and then applying, if thought necessary, any appropriate discounts. The Court observed at [60] that it is neither sensible nor cost effective for the Court, on reviewing the remuneration claimed, to proceed by some line by line analysis using some building blocks or bottom up approach to build up an amount which the Court then determines to be reasonable remuneration based upon detailed findings concerning those matters. The Full Court held at [60] that it was appropriate to take a broad approach and appropriately discount, without making any specific findings. The Full Court was critical of the primary judge for applying an overall discount without identifying the effect that specific issues had on the overall outcome.
[55] The appeal passage referred to from Templeton at 559 [60] was as follows:
The onus was on the receivers to justify the reasonableness and prudence of the tasks undertaken: see Ide v Ide (2004) 50 ACSR 324; [2004] NSWSC 751 at [42] per Young CJ in Equity, Onefone Australia Pty Ltd v One.Tel Ltd (2010) 80 ACSR 11; [2010] NSWSC 1120 at [24] and [28] per Barrett J and Venetian Nominees Pty Ltd v Conlan (1998) 20 WAR 96 at 102 and 103 per Kennedy and Ipp JJ. If there was a lack of detail in the material provided by the receivers, that would not have enabled her Honour to make such findings. In those circumstances, it was an appropriate approach to take the broader claim and appropriately discount, without making specific findings. But even assuming that there was sufficiently detailed material before her Honour, we do not agree that her Honour in any event needed to drill down and make detailed findings on such matters. Her Honour was entitled to take the practical course of looking at the matter more generally in assessing reasonableness and then applying, if thought necessary, any appropriate discounts. Where we differ with respect from her Honour is in the assessment and justification of the appropriate discounts, not in her overall approach to start with the receivers’ claims and then to apply appropriate and justified discounts. It is neither sensible nor cost effective for the court, on reviewing the remuneration claimed, to proceed by some line by line analysis using some building blocks or bottom up approach to build up an amount which the court then determines to be reasonable remuneration based upon detailed findings concerning the matters set out in (a)–(c) of the preceding paragraph.
45 There was no error in his methodology. Partly, it was the appellant’s failure to have participated in the proceedings before the Registrar, but that can be put to one side perhaps, and I do so. The decision not to articulate particulars of error that stood in the way of his Honour adopting a course more favourable to them might have been forensic. Alternatively, it might have been based on a realistic and sensible assessment of the legitimacy of the costs.
46 That was not the subject of evidence before Bromwich J, and the appellants conducted their review before Bromwich J with legal assistance in the manner to which they no doubt were advised. To recognise the consequence of, in particular, the latter choice is not to shift the onus of proof. There was no error in his Honour’s observations at [57] as follows:
[57] While the absence of objection does not absolve a judge from carrying out the review process with a careful eye, the absence of objection even to the type of work done must be relevant in concluding that there was nothing inherently wrong with any of those tasks being carried out as part of the trust work. It is not helpful for a party challenging the quantum awarded by a Registrar to do no more than complain at a high level of generality about the amounts involved being too much, and to complain about the asserted shortage of detail when steps that could have been taken have not. That is especially so when it is very clear from the evidence referred to below that the Trustees for Sale faced many hurdles in finally selling the property, all of which appeared to be directly and relevantly connected to executing the trust.
47 It would be entirely inconsistent with the statutory obligations imposed by s 37N of the Federal Court of Australia Act and the overarching purpose of the procedural provisions articulated in s 37M of the Act for a party to be able to treat a hearing conducted by a Registrar pursuant to the orders of this Court as, effectively, without consequence.
48 Although demonstration of error is not a precondition in a de novo hearing, if no plausible reason of principle or error of calculation has been articulated and there is material which enables a Registrar and a Judge on review to assess it (as Bromwich J did here), both the interests of justice as between the parties and the efficient utilisation of the resources of a Court require rejection of any submission that it is the duty of a Judge conducting a review of a Registrar’s determination either to refer the determination to an expert assessor for a second opinion or himself go through the determination line-by-line as if the Registrar had not undertaken that primary task, unless there is material placed before him that leads to the view that those courses should be undertaken
49 It was therefore entirely appropriate for his Honour to have rejected the appellants’ submissions to that effect and instead to have applied principles established in Templeton v Australian Securities and Investments Commission [2015] FCAFC 137; 108 ACSR 545 and Letten (No 25) [2016] FCA 1127. The conclusions to which I have referred in [62] to [65] were not only open to the primary judge, but were the product of the primary judge’s examination of the evidence with the care and attention he identified. No error has been established with respect to ground (iii) or, if it were still pressed, ground (ii). As I said earlier, grounds (i) and (vi) are no longer pressed.
50 Finally, I should address some matters that were referred to directly and indirectly in submissions filed yesterday, and a further aspect directly the subject of oral submissions today. One of the affidavits before the Registrar and before Bromwich J was that of Stephen Keith Mullette. He was the solicitor for the two trustees, and, in an affidavit of 26 April 2016, he sought to create some coherent order out of the working documents supporting the trustees’ claim for remuneration and legal costs. In doing so, he broke up the various remuneration and costs into 13 categories.
51 In written submissions filed yesterday and oral submissions delivered today, focus was brought to bear on the amount of $39,538.20 for trustees’ remuneration dealing with “review of remuneration and disbursements of trustees for sale”. There were also legal costs of over $46,000 for this. These matters were identified by counsel for the appellants as ex facie showing exorbitance that anyone should have seen as inappropriate. It first needs to be noted that this was not the subject of any submission before Bromwich J. Therefore, if it had been ex facie, it is a matter for evidence. But, secondly, as identified by counsel for the respondent, those matters must be understood in the full context of what Mr Mullette was attempting to do in relation to further costs to be incurred and in [32] of his affidavit, Mr Mullette said:
In respect of category L in the Issues Schedule (annexed and marked “A” to this affidavit) I am informed by Mr Crouch that this sum is made up of:
(a) Time in the table in SKM2 of $16,587.70; plus
(b) An estimate of the time which will be spent by the Trustees for Sale and members of their staff in respect of work relating to their appointment up until the hearing of this matter on 16 May 2016, totalling $22,950.50.
52 Thus, not only is the matter, if it were to be further pressed, one that should have been dealt with by evidence at the trial below, it was dealt with by evidence, which does not make what might otherwise seem a point perhaps to have some ex facie merit acceptable, and it does not undermine in any way reliance on what the primary judge said at [62] to [65] of his judgment and, paying close attention to the evidence, he no doubt had regard to those very matters to which counsel for the respondent has drawn our attention.
53 Further submissions were made indirectly in the written submissions yesterday by references to pages of the appeal book, and elaborated on today when pressed. There are five line entries in the very large number of pages and line entries of the substantiating time records that, on appeal, the appellants point to as ex facie revealing something inappropriate. The submission was put that these five entries reveal that the Coshotts have been required through the determination to pay sums of money relating to the bankruptcy of Mr Coshott and outside any aspect of the carrying-on of business of the trustees for sale.
54 Again, first, this point was not raised before the primary judge, and, if it had been, evidence would plainly have been available to deal with it. Therefore, like the last submission, Coulton v Holcombe [1986] HCA 33; 162 CLR 1, would, in the ordinary course, be the first port of call in dealing with it. However, something more needs to be said. First, these five entries total around $1,000. Second, none of the entries, on its face, reveals anything inappropriate or unnecessary to the carrying-on of the duties of the trustees for sale pursuant to the provisions of the Conveyancing Act.
55 There are communications with the trustee in bankruptcy. That is hardly surprising. He was a co-owner. There is reference to the bankrupt. Mr Coshott was the bankrupt. None of these matters, from the two trustees, who had no participation in the history of Mr and Mrs Coshott’s litigation, who had no place other than as trustees for sale, shows, on its face, anything beyond the proper conduct of the trust for sale.
56 For completeness, I will set them out:
…
123. 17/12/2014 Perusal of email from Alan Ma, from Trustee in Bankruptcy’s office and reviewing report to creditors in preparation for hearing in respect of Federal Court application
SKM 11.00 544.50
…
37. 15/07/2015 Time spent perusal of court portal for address details of James Coshott and the Bankrupt
ANN 5.00 175.00
…
39. 15/07/2015 Phone attendance with Shabnam email address for James Coshott and Bankrupt; email from Shabnam re email addresses (1 folio)
ANN 3.00 105.00
….
263. 10/09/2015 Drafting letter to Sally Nash requesting details of professional costs of Mr Prentice and Mr Burke (4 folios)
ANN 4.00 140.00
…
2.39 15/07/2015 Phone attendance with Shabnam email address for James Coshott and Bankrupt; email from Shabnam re email addresses (1 folio)
H ANN 3 105.00
…
57 For these reasons, I would dismiss the appeal. None of the grounds of appeal, in my view, had merit. I would dismiss the appeal, and order the appellants to pay the respondents’ costs.
Discussion about costs
58 In my view, these matters were sufficiently meritless to warrant, on accepted authority, the view that these costs should be paid on an indemnity basis. Counsel who recently came into the case abandoned points that were, with the utmost respect, plainly hopeless. He persisted with three grounds, which he put efficiently and put as highly as they could be put. Nevertheless, in my respectful view, they were of sufficient character to warrant the view that, if advice had been taken properly in relation to these, then it would have been given that the grounds were almost certain to fail.
59 In those circumstances, and considering the submissions of Mr Golledge as to the disadvantage to the co-owners and considering the matters in ss 37M and N of the Federal Court of Australia Act and the overarching purpose of litigation that now should be understood, after so many years, by not only counsel and solicitors but litigants also, this, in my view, is a plain case for the awarding of indemnity costs, and I would so order.
REASONS FOR JUDGMENT
(Revised from the transcript)
KERR J:
60 I concur with the reasons of the Chief Justice and only add that the forensic choices that were undertaken in the course of these proceedings are not those which are consistent with the statutory provisions that his Honour has referred to.
I certify that paragraph [60] is a true copy of the Reasons for Judgment herein of the Honourable Justice Kerr. |
Associate:
Dated: 28 August 2017
REASONS FOR JUDGMENT
(Revised from the transcript)
FARRELL J:
61 I concur with the Chief Justice’s reasons.
I certify that paragraph [61] is a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell. |
Associate:
Dated: 28 August 2017
ALLSOP CJ:
62 The orders of the court are appeal dismissed with costs, such costs to be paid on an indemnity basis.
I certify that paragraphs [1]-[59] and [62] are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop. |
