FEDERAL COURT OF AUSTRALIA

Maher v Commonwealth Bank of Australia [2006] FCA 892

COSTS – appeal from judgment of a Federal Magistrate ordering costs against appellant arising out of adjournments –scope of the Federal Magistrates Court’s power to award costs – whether discretion to order costs exercised judicially

Held: No basis to suggest the learned Federal Magistrate failed to exercise his discretion judicially. The appeal is dismissed with costs.

Federal Magistrates Act 1999 (Cth) s79

DENNIS MAHER v COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)

GREG FIRTH AND GRAY & JOHNSON (A FIRM)

VID 965 OF 2005

MARSHALL J

11 JULY 2006

MELBOURNE

ON APPEAL FROM THE FEDERAL MAGISTRATES’ COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.                  The appeal is dismissed.

2. The appellant pay the costs of the respondents.

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

1                     The appellant, Mr Maher, has appealed from a judgment of Federal Magistrate McInnis in which his Honour ordered that Mr Maher pay costs in the sum of $2,000.

2                     The substantive proceeding before the Federal Magistrate was an application by Mr Maher to set aside a bankruptcy notice. His Honour, by consent, made an order on 28 July 2005 to set aside the bankruptcy notice the subject of the proceeding.

3                     His Honour then dealt with an application by the respondents for what he described as “an order for costs arising out of a number of adjournments”. The respondents succeeded in part in seeking their costs of those adjournments. Mr Maher contends that his Honour erred in making a costs order in favour of the respondents. The issue for determination in this appeal is whether the Court below erred in the exercise of its discretion to award costs to the respondents in respect of two occasions on which the proceeding was adjourned.

4                     The respondents sought the costs arising from adjournments occurring on:

·                    11 April 2005;

·                    30 May 2005;

·                    18 July 2005; and

·                    20 July 2005.

On each occasion the Court below reserved the costs of the adjournment.

The course of the proceeding below

5                     The matter came on before his Honour on 11 April 2005. On that day Mr Maher sought an adjournment to enable him to obtain legal representation. McInnis FM did not consider it appropriate to award costs in respect of the 11 April 2005 adjournment, in his 28 July 2005 reasons for judgment.

6                     The matter was next before the Court below on 30 May 2005. Pro bono counsel for Mr Maher, recently appointed, sought an adjournment. His Honour described that request as:

“… at least in part to … assist [Mr Maher] to better understand the application and the issues and to otherwise take steps which ultimately appeared fruitful in another place.”

It appears that counsel sought the adjournment to apply to set aside the order which founded the bankruptcy notice.

7                     His Honour said that he was satisfied that at least part of those costs should be borne by Mr Maher. He assessed those costs at $600.

8                     On 18 July the matter was again listed for hearing and again adjourned. The respondents’ application for costs of this day was rejected by the Federal Magistrate at [3] of the 28 July 2005 reasons for judgment, on the basis that:

“… it was clear that the matter, having been referred from the Registrar’s Court to my Court, that the matter could not have been heard and determined, and hence that date, in my view, is not a date where costs would be ordered in favour of the respondents.”

9                     The matter next came on on 20 July 2005. Counsel for Mr Maher appeared on a limited basis to inform the Court that he would not be further appearing for Mr Maher and to inform the Court that Mr Maher was seeking urgent medical attention in Sydney. Counsel also told his Honour that Mr Maher had filed an application in this Court to set aside the order which founded the bankruptcy notice.

10                  At [7], McInnis FM said:

“Ultimately the adjournment of 20 July 2005 was an adjournment granted in circumstances which were really peculiar to [Mr Maher’s] position, and then ultimately as a result of the Federal Court proceedings which occurred thereafter, the applicant’s position was somewhat strengthened on grounds not previously raised formally in the material before this Court.”

11                  His Honour awarded the respondents $1,400 in respect of the costs of the adjournment on 20 July 2005.

Mr Maher’s contentions

12                  Mr Maher contends that as the bankruptcy notice should never have been issued he should not have to pay any costs in respect of his application to set it aside. He also submits that as the successful party, in that the notice was set aside by Court, he should not have costs awarded against him. He further contends that the conduct of the respondents disentitles them to costs.

Consideration

13                  His Honour reserved the costs of the application for the adjournments on 30 May 2005 and 20 July 2005. That Mr Maher ultimately succeeded in having the bankruptcy notice set aside is not a decisive factor in the determination of who should bear the costs of those adjournments. A party may have an excellent case and may achieve the relief sought in an application but the party’s conduct may result in the proceeding not being dealt with as quickly as it may have been. In such circumstances it may not be fair and just that the appellant, although ultimately successful, be immune from paying the costs of an adjournment which he sought.

14                  His Honour had a wide discretion to exercise on the question of costs; see s 79 Federal Magistrates Act 1999 (Cth). That discretion must be exercised judicially. No basis has been disclosed to show that his Honour failed to do so. His Honour was mindful that the steps taken in the Federal Court to set aside the bankruptcy notice did not occur until after the adjournment on 20 July 2005.

15                  Mr Maher contended that the costs order should not have been made because of the conduct of the respondents. There was no evidence before his Honour of any conduct of the respondents which would have disentitled them to costs.

Order

16                  Having regard to the foregoing it is appropriate to order that the appeal is dismissed with costs.

Associate:

Dated: 11 July 2006