FEDERAL COURT OF AUSTRALIA

Guss v Johnstone [2000] FCA 1584

JOSEPH GUSS v RAYMOND JOHNSTONE & GEELONG BUILDING SOCIETY (IN LIQUIDATION)

V 1 of 1999

DRUMMOND, SACKVILLE & DOWSETT JJ

8 NOVEMBER 2000

SYDNEY (HEARD IN MELBOURNE)

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

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

2.         The sum of $5,000 (and any interest thereon) paid by the appellant as security for the costs of the appeal be paid to the second respondent in part satisfaction of the second respondent’s taxed costs of the appeal.

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

REASONS FOR JUDGMENT

the court

1                     Judgment in this appeal was delivered on 18 October 2000.  The Court dismissed the appeal.  No order for costs was made at that time.  The second respondent sought an order that its costs of the appeal, including reserved costs, be taxed and paid out of the appellant’s estate in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”). 

2                     The appellant, who appeared in person on delivery of the judgment, wished to have the opportunity to consider his position in relation to costs.

3                     Directions were made for the filing of submissions on the appropriate costs order.  The second respondent has filed submissions supporting the order it seeks.  The second respondent also sought an order that the sum of $5,000 paid by the appellant as security for the costs of the appeal, in accordance with an order of the Court made on 7 May 1999, be paid to the second respondent in part satisfaction of its taxed costs of the appeal.

4                     The appellant also filed written submissions.  Those submissions did not dispute that, independently of any question of a stay, the orders sought by the second respondent were appropriate.  The appellant argued, however, that any costs order should be stayed pending the outcome of any application for special leave to the High Court.

5                     The question of the appropriate costs order should be considered independently of any application for a stay of the orders.

6                     The appeal was against a number of orders made by the primary Judge, Kenny J, including a sequestration order in respect of the appellant’s estate.  In accordance with the usual practice, her Honour ordered that the costs of the original petitioning creditor and of the substituted creditor, including reserved costs, be taxed and paid in accordance with the Bankruptcy Act.

7                     It is appropriate that the costs of the second respondent (the substituted creditor) on the appeal should be dealt with in the same way as its costs in the proceedings determined at first instance, that is, the second respondent’s costs of the appeal including reserved costs, should be taxed and paid out of the appellant’s estate in accordance with s 109(1)(a) of the Bankruptcy Act. As the second respondent pointed out, this course has been taken in a number of other appeals in bankruptcy matters: Wharton v Household Financial Services (unreported, Jenkinson, Ryan and Lee JJ, 3 November 1995), Bryant v Commonwealth of Australia (unreported, Beaumont, Whitlam and Moore JJ, 24 November 1995) and Stankiewicz v Plata [2000] FCA 1185 (Drummond, Sackville and Dowsett JJ, 22 August 2000).  In addition, an order should be made that the sum of $5,000 (and any interest thereon) paid by the appellant as security for the costs of the appeal be paid to the second respondent in part satisfaction of the second respondent’s taxed costs of the appeal.

Associate:

Dated:              8 November 2000