FEDERAL COURT OF AUSTRALIA

Mearns v Australian Litigation Fund Pty Ltd & Anor [2006] FCAFC 168

BANKRUPTCY – Indemnity costs – Bankruptcy Act 1966 (Cth)

Bankruptcy Act 1966 (Cth) s 109

Guss v Johnstone [2000] FCA 1584

Stankiewicz v Plata [2000] FCA 1185

Rasevi Pty Ltd v Udowenko [2004] FCA 541

ROBYN HAYDN MEARNS v AUSTRALIAN LITIGATION FUND PTY LTD & ANOR

NSD 2303 of 2005 &

NSD 2601 of 2005

NICHOLSON, CONTI and DOWNES JJ

24 NOVEMBER 2006

SYDNEY

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.                  The respondents costs of the appeal, including reserved costs, be taxed and paid out of the appellant’s estate in accordance with para 109(1)(a) of the Bankruptcy Act 1966 (Cth).

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

REASONS FOR JUDGMENT

THE COURT

1                     When the appeals in these matters were dismissed with costs liberty was reserved to the respondents to apply for an order that the costs be taxed on an indemnity basis. Application was duly made. Thereafter, the court ruled that the application should be determined on written submissions and gave directions for the filing of submissions.

2                     The respondents have filed written submissions. The appellant’s representatives, having seen the respondents’ submissions, have informed the Court that they do not propose to file any submissions. The respondents now seek, in addition to an order for indemnity costs, an order that the costs of the appeals, including any reserved costs, be paid and taxed out of the appellant's estate in accordance with the priority provided for and otherwise in accordance with the provisions of para 109(1)(a) of the Bankruptcy Act 1966 (Cth).

3                     We do not think that there are sufficient special or unusual features in this case to warrant the making of an indemnity costs order. Although a number of grounds of appeal were abandoned and although we said that we did not think the appellant's argument had substance those are not infrequent characteristics of appeals. Our finding that the appeal did not have substance was not a finding that it should never have been brought.

4                     So far as the application for an order that the costs be paid under s 109 is concerned that is a usual order (see Guss v Johnstone [2000] FCA 1584, Stankiewicz v Plata [2000] FCA 1185 and Rasevi Pty Ltd v Udowenko [2004] FCA 541). We are prepared to make it.

Associate:        

Dated:              24 November 2006