Federal Court of Australia

Bertram v Naudi (No 2) [2026] FCAFC 56

ORDERS

THE COURT ORDERS THAT:

1.    The appellant pay the respondent’s costs of the appeal on a party/party basis.

2.    The amount of those costs be fixed as a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth) in an amount to be assessed by a Registrar of the Court unless otherwise agreed.

3.    The respondent file and serve a costs summary in accordance with paragraphs 4.10 to 4.12 of the Costs Practice Note (GPN-COSTS) within 21 days.

4.    The appellant, if so advised, file and serve any costs response in accordance with paragraphs 4.13 to 4.14 of the Costs Practice Note (GPN-COSTS) within 21 days of receipt of a costs summary pursuant to order 3.

5.    The lump sum assessment, including the determination of any further or different procedural steps, be referred to a Registrar of the Court for determination pursuant to s 35A(1)(f) of the Federal Court of Australia Act 1976 (Cth).

6.    The amount standing to the credit of this action as security for the respondent’s costs of appeal pursuant to orders 1 and 2 made on 15 April 2025 by Registrar Parkyn is to be released to the respondent towards the satisfaction of any lump sum assessment as may be ordered pursuant to order 5 of these orders.

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

REASONS FOR JUDGMENT

THE COURT:

1    On 19 March 2026, we heard an appeal from an order made by a single judge of this court dismissing an application made by the appellant, a discharged bankrupt, pursuant to s 90-15 of sch 2, Insolvency Practice Schedule (Bankruptcy) of the Bankruptcy Act 1966 (Cth) (s 90-15), seeking an order that certain income contribution assessments made by the respondent, the trustee of his bankrupt estate, be set aside because they were “invalid, void and of no effect”.

2    The primary judge rejected a contention advanced by the trustee that this court had no jurisdiction to hear such an application. We concluded after the hearing of the appeal that the learned primary judge erred in doing so and made an order dismissing the appeal. We gave reasons a little later. See Bertram v Naudi [2026] FCAFC 40.

3    We held, as the trustee submitted, that there is a comprehensive and detailed regime in Subdiv G of Div 4B of the Bankruptcy Act for review of the trustee’s decision to make an assessment of the income derived by the bankrupt during a contribution assessment period, which evinces a legislative intention to cover the field; and that the general power in s 90-15 does not extend to the regulation of those matters that are addressed by way of the specific provisions in Subdiv G of Div 4B of the Act. See [2026] FCAFC 40 at [53]-[67].

4    The primary judge found that the trustee was entitled, on his cross-claim, to judgment for the sum of $162,968.34, together with pre-judgment interest, and he made an order to that effect (the debt order). We rejected the appellant’s submission that the order was invalid, and held that it remained in effect, because it was an order for payment of a debt, unaffected by the jurisdictional issue, and, contrary to submissions advanced by the appellant, was otherwise unimpeachable.

5    We directed counsel to confer on the issue of costs, and said that if they were unable to agree, they had leave to file written submissions. We also directed that any outstanding issue of costs be dealt with on the papers.

6    Counsel conferred. But they did not reach any agreed position. And written submissions were duly filed.

7    The respondent trustee says that costs should follow the event and that he should have his costs of the appeal on a party/party basis. (Puzzlingly, the trustee’s written submission refers to a “cross-appeal”, but there was none).

8    The appellant says that (i) there should be no order as to costs; or (ii) that the respondent should have only 10% of his costs in respect of his success in maintaining the debt order.

9    As to (i), the appellant submitted that the determinative jurisdictional point was raised by the court, and not raised by any party, and that there should thus be no order as to costs, citing Rose v Tunstall [2018] NSWCA 241 at [36]-[37] (“Although the respondents have ultimately been successful, the point that has been determinative in those applications for leave was not raised by either party until it was raised by the Court. In those circumstances, the proper order is that there should be no order as to costs in this Court”).

10    But it is simply not correct to say that the determinative point was raised by the court and not raised by any party.

11    It is true that jurisdiction was not put at the front and centre of the trustee’s case. And it is true that we caused an email to be sent to the parties on 13 March 2026 asking counsel at the hearing of the appeal to address the issue of jurisdiction first, but the trustee:

(a)    pleaded the jurisdictional argument in his defence at [41.2]-[41.3] (see Appeal Book Part A at page 41);

(b)    maintained the point at trial (see the primary judge’s reasons at [46] (see Appeal Book Part A at page 79); and

(c)    advanced it on appeal (see respondent’s outline of argument at [33] (see Appeal Book Part C tab 2).

12    As to (c), the trustee’s outline of argument said in terms at [33], “[t]he right of review in s 139ZA, coupled with the specificity of the accompanying regime in Subdivision G of Division 4B of the Act, should not be outflanked by the use of the general remedial provisions in s 90-15 as a purported separate (and inconsistent) source of power to grant the relief sought by the appellant”, citing, among other cases, Re Ellis, ex parte Jefferson and Stevenson [1995] FCA 81. That is the very point on which the appellant’s appeal failed.

13    It is also the case, as the appellant submitted, that the bulk of the written submissions were concerned with issues other than jurisdiction or the debt order, but that is neither here nor there.

14    In such circumstances, the appellant’s submission that the ordinary order in favour of a successful party should not be made falls away.

15    In our view, costs should follow the event, and the trustee should have his costs of the appeal.

16    The trustee also seeks a lump sum costs order. The appellant contended otherwise, for reasons that were not adequately explained. In our view, in a case that has been as protracted as this one – it was commenced in May 2021, was heard in June 2022, and again in May and June of 2023, and judgment was delivered by the primary judge in October 2024 – this is an obvious case for the making of a lump sum costs order. Compare Paciocco v Australia and New Zealand Banking Group Ltd (No 2) (2017) 253 FCR 403 at 407 [20] (“Particular circumstances that may make a lump sum order especially appropriate include … where a taxation would require the parties to consume additional time and incur additional expenditure prolonging already protracted litigation; and generally to avoid an ongoing, counter-productive dispute as to costs, in the interests of achieving finality”).

17    The trustee also submitted that after the amount is agreed or assessed, he be permitted to have recourse to the funds paid into court as security for costs of the appeal. We agree, and will make such an order.

Associate:

Dated:    5 May 2026