FEDERAL COURT OF AUSTRALIA

Forensic Document Examiners Pty Ltd v Cristavao [2011] FCA 843

THE COURT ORDERS THAT:

1.    The respondent’s application for an extension of time within which to file his motion dated 26 May 2011 is dismissed.

2.    The respondent pay the applicant’s costs in or in connection with the directions hearing before the Court on 28 June 2011 and the preparation of written submissions filed in accordance with the Court’s orders of 28 June 2011, such costs to be taxed in default of agreement.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    The respondent, Mr Cristavao, applies for an extension of time within which to apply for a review of a costs order made by Registrar Scott on 17 March 2011. That order required Mr Cristavao to pay the costs of the applicant, Forensic Document Examiners Pty Ltd (“Forensic”) as taxed.

background

2    On 24 December 2010, Forensic applied to the Court under ss 459G and 459J of the Corporations Act 2001 (Cth) (“the Act”) to set aside a statutory demand made on it by Mr Cristavao on 23 November 2010.

3    The statutory demand arose from a judgment obtained by Mr Cristavao against Forensic in the Western Australian Magistrates Court. Forensic contends that it was not served with the claim made against it in the Magistrates Court and therefore did not file a defence. Forensic was unaware that judgment had been obtained against it by Mr Cristavao in the absence of the filing of a defence.

4    The application to set aside the statutory demand came before Registrar Scott on 27 January 2011. The Registrar made orders on that day for the hearing of the application on 17 February 2011 and the filing of affidavits by Mr Cristavao.

5    On 17 February 2011 Registrar Scott ordered as follows, by consent:

1.    The statutory demand dated 23 November 2010 is set aside.

2.    The applicant’s application for costs is adjourned to 17 March 2011 at 11.00 am.

3.    The parties are to file and serve an outline of argument by 10 March 2011.

4.    The applicant’s costs are reserved.

the order sought to be reviewed

6    On 17 March 2011, after taking into account written submissions filed by the parties, Registrar Scott ordered that Mr Cristavao pay Forensics costs, “including reserved costs as taxed” (“the 17 March order”).

the application for an extension of time to seek a review

7    By a motion dated 26 May 2011, filed the following day, Mr Cristavao sought an extension of time within which to apply to a judge of the Court to review the 17 March order and for a review of that order should such an extension be granted.

8    The review is sought pursuant to s 35A(5) of the Federal Court of Australia Act 1976 (Cth), which provides:

A party to proceedings in which a Registrar has exercised any powers of the Court under sub-section (1) may, within the time presented by the Rules of Court, or within any further time allowed in accordance with the Rules of Court, apply to the Court to review that exercise of power.

9    The current extension of time is sought because Order 46 rule 7B of the rules of Court, at all material times, provided that a review application should be made within 21 days after the day on which the power is exercised. That time expired on 7 April 2011. The review application was made about 7 weeks out of time.

the motion

10    The motion seeing a review of the 17 March order and an extension of time within which to seek that review came before the Court on 28 June 2011. The Court made directions for the filing and serving of written submissions in addition to those made before Registrar Scott, upon which the parties continued to rely. The parties were content for the hearing to proceed on the papers and for the extension of time and the review itself to be considered together.

consideration

11    The Court, if it extends the time to do so, would review afresh the question of what costs order should be made as a consequence of the setting aside, by consent, of the statutory demand made by Mr Cristavao. By that consent order, Forensic achieved the relief it sought in the substantive proceeding before the Registrar. The review cannot affect the making of the consent order of 17 February 2011. Having succeeded in obtaining the relief it sought by filing its application, albeit by consent, Forensic’s position in the litigation before the Court has been vindicated. For costs purposes, it is entitled to be considered as a wholly successful party.

12    Three principles relevant to the proposed review can be discussed from the joint judgment of Black CJ and French J in Ruddock v Vadalis (No 2) (2001) 115 FCR 229. They are:

    the Court has an unfettered power to award costs, which power must be exercised judicially; see Ruddock at [9];

    in the ordinary course, costs follow the event unless there are special circumstances justifying a different order; see Ruddock at [10]; and

    the primary factor in deciding on the award of costs is the outcome of the litigation; see Ruddock at [18].

13    There is nothing before the court to displace the centrality of the primary factor that Forensic, having had a wholly successful outcome in its proceeding, should have a costs order in its favour. Mr Cristavao has advanced no material which satisfies the Court that there are any special circumstances which justify a different order.

order

14    Given that there is no basis upon which the court would exercise its discretion judicially, other than by making a costs order to the same effect as that made by the Registrar, there is no utility in granting Mr Cristavao an extension of time within which to file his motion for a review of the Registrar’s costs order. Accordingly, the order of the Court is:

1.    The respondent’s application for an extension of time within which to file his motion dated 26 May 2011 is dismissed.

2.    The respondent pay the applicant’s costs in or in connection with the directions hearing before the Court on 28 June 2011 and the preparation of written submissions filed in accordance with the Court’s orders of 28 June 2011, such costs to be taxed in default of agreement.

Associate:

Dated:    28 July 2011