THE COURT ORDERS THAT:

1.         There be no order as to costs against Custom Credit Corporation Ltd.

2.         The applicant pay two-thirds of the costs of the respondent, including reserved costs, to be taxed if not agreed.

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

REASONS FOR JUDGMENT

On 29 April 1998 I dismissed an application by Madgwicks and Custom Credit Corporation Ltd to have a composition set aside.  Custom Credit Corporation Ltd was joined as a second applicant on the second day of the hearing in order to meet a challenge to the standing of Madgwicks as a creditor to bring the application.  On 29 April, I indicated my provisional view that having regard to a number of matters, particularly the failure by Mr Jorgensen on the question of standing, I proposed to order Madgwicks pay half of Mr Jorgensen’s costs.  I invited written submissions on the question of costs, which have been received.

I have had regard to those submissions.  I do not accept that had Madgwicks been aware earlier of affidavit material from a number of creditors, they might not have persisted in their application.

The ordinary rule is that costs follow the event, although the court has a discretion to make an alternative order.  I think that the question of the debtor/creditor relationship between the respondent and Madgwicks was a significant part of the application, and Mr Jorgensen’s failure in that regard ought to be recognised by making other than the ordinary order.  On reflection, however, my initial view of a 50 percent reduction is too generous to the applicant Madgwicks.  I make no order as to costs against Custom Credit, and order that Madgwicks pay two-thirds of the costs of the respondent, including reserved costs, those costs to be taxed if not agreed.

Associate:

Dated:              10 June 1998