FEDERAL COURT OF AUSTRALIA

Winn v Leigh [2014] FCA 518

THE COURT ORDERS THAT:

1.    The application for leave to appeal is dismissed.

2.    The applicant pay the respondent's costs of and incidental to the application, including reserved costs, to be taxed if not agreed.

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

REASONS FOR JUDGMENT

1    The applicant has applied for leave to appeal against two orders made by a judge of the Federal Circuit Court on 14 February 2014. The orders were:

(5)    That the Application be adjourned to 9:30am on 24 March 2014 for final hearing (with an estimated hearing time of 1 day) in the Federal Circuit Court of Australia sitting at Brisbane.

(6)    That the Applicant pay the Respondent’s cost of and incidental to these proceedings on an indemnity basis fixed in the sum of $7982.00 by no later than 4.00pm on 14 March 2014.

2    The applicant’s principal proceeding in the Federal Circuit Court was for orders under the Bankruptcy Act 1966 (Cth) that the trustee prove and quantify any debt, for annulment of the bankruptcy and for an inquiry into the trustee’s conduct.

3    The hearing of the application was set down for 14 February 2014, but the applicant apparently sought an adjournment (although she disputes that she, in fact, sought that adjournment). His Honour granted the adjournment but decided to order the applicant to pay the respondent’s costs thrown away. His Honour’s reasons state:

7.    Despite my view that she puts forward a fairly flimsy excuse for non-compliance with trial directions, I am prepared to grant an adjournment. It is on this basis that costs thrown away be paid within 28 days. If costs thrown away are not paid, then I will give consideration to any application by the respondent which then comes before the Court.

8.    The schedule of this Court’s rules are for party-and-party costs. Item 6 is for preparation for final hearing of a one-day matter in general federal proceedings, and that is in the amount of $5988. Item 13(c) is the daily hearing fee for a full day’s hearing, which is what this matter was set down for, of $1994. Those two amounts are ordered to be paid by the applicant within 28 days.

4    The orders of the Federal Circuit Court were plainly interlocutory. They did not finally determine the rights of the parties in the proceeding: see Kyriackou v Australian Securities and Investments Commission [2010] FCA 253 at [13]. Section 24(1A) of the Federal Court of Australia Act 1976 (Cth) provides that an appeal shall not be brought from an interlocutory judgment unless the Court or a Judge gives leave to appeal.

5    The Court has a broad discretion as to whether to grant leave to appeal from an interlocutory judgment, but generally leave will not be granted unless the decision in question is attended with sufficient doubt to justify the grant of leave and substantial injustice would refuse from a refusal of leave: DÉcor Corporation Proprietary Limited v Dart Industries Inc (1991) 33 FCR 397 at 398 to 399; Minogue v Williams [2000] FCA 125 at [19]. Leave will more readily be granted where the interlocutory decision effectively determines a substantive right: DÉcor Corporation at 400; Minogue at [19]. Leave is not readily granted where the proposed appeal is against the exercise of a discretion on a point of practice or procedure: Adam P. Brown Male Fashions Proprietary Limited v Philip Morris Inc (1981) 148 CLR 170 at 177. Leave to appeal against a costs order is rarely given: Merit Protection Commissioner v Nonnenmacher (1999) 86 FCR 112 at [22]; Rickus v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2010] FCAFC 16 at [113].

6    The applicant’s proposed notice of appeal contains ten grounds. Two grounds challenge the order granting the adjournment. Six grounds deal with the costs order. One ground alleges that his Honour should have made other directions about the conduct of the final hearing. The last ground alleges apprehend bias against the primary judge. During the hearing, the applicant indicated that she only pursued the grounds dealing with costs and apprehended bias.

7    There is some substance in the proposed appeal against the costs order. His Honour’s reasons for judgment make it plain that he intended that the applicant should only pay the respondent’s costs thrown away by the adjournment. His Honour fixed those costs on a party and party basis by reference to the scale of costs in Sch 1 of the Federal Circuit Court Rules 2011 (Cth). The costs awarded were confined to an amount for preparation for the hearing and the daily hearing fee for a full day’s hearing. Those costs were fixed at $5998 and $1994 respectively, a total of $7982.

8    However, the costs order as formally issued by the primary judge required the applicant to pay “the respondent’s costs of and incidental to those proceedings.” Further, such costs were to be paid “on an indemnity basis.” It is unclear why his Honour’s order departed from the orders that he indicated in his reasons he would make. However, the order still provided for the costs to be fixed at $7982.

9    There would have been no basis for ordering that the applicant pay the “Respondent’s costs of and incidental to the proceedings” if by the term “proceedings” his Honour was referring to the primary application brought by the applicant for orders under the Bankruptcy Act. There was no apparent basis for ordering costs on an indemnity basis, particularly when the respondent had not asked for such an order.

10    However, despite the addition of additional words to the order in its final form, those words do not seem to have any substantive effect. The costs were fixed at $7982 in accordance with the Federal Circuit Court’s scale of costs: that is, they were confined to costs on a party and party basis and were not awarded on an indemnity basis. In addition, the costs were not awarded for the whole of the proceedings, but were confined to costs that his Honour considered were thrown away by the adjournment. Accordingly, any errors in the way his Honour worded the order that was formally issued had no practical effect. No injustice could result from the refusal of leave to appeal against the costs order on the basis of the discrepancies between the order that his Honour indicated he would make and the order that he in fact made.

11    The applicant argued that no costs ought to have been awarded against her because the number of cases listed before his Honour meant that the final hearing could not have taken place on that day. The applicant argued that no costs were thrown away as a result of any application by her for an adjournment because the hearing would have had to have been adjourned in any event. The applicant relied upon a hearing list which shows that several other matters were listed before his Honour on that day.

12    However, the fact that his Honour had other matters listed before him does not indicate that he could not have heard the substantive matter if there had not been an application for an adjournment. It is not uncommon for a busy court to have a number of matters listed before it on any given day. The evidence does not suggest any inability of his Honour to hear the final hearing on the day it had been set down for.

13    The applicant raised a number of other arguments about why costs should not have been ordered against her or should have been awarded in a lower amount. She argued that it was the fault of both parties that resulted in the adjournment. She also argued that the whole of the costs of preparation of the hearing should not have been awarded against her as not all were wasted. I am not satisfied that the applicant has any prospect of demonstrating a miscarriage of the discretion to award costs in any of the ways described in House v The King (1936) 55 CLR 499 at 504-505.

14    The applicant argued that the decision to award costs was affected by apprehended bias on the part of the primary judge. She argued that his Honour had formed a preconceived idea that she intended to apply for an adjournment, whereas she did not, in fact, apply for an adjournment and was ready to proceed on the date of the hearing.

15    The evidence discloses that the applicant wrote twice to his Honour’s associate prior to 14 February 2014 indicating that she intended to seek an adjournment of the final hearing. In those letters, she indicated that she was unable to respond to the respondent’s material because she was having trouble preparing documents due to a medical problem. She attached a medical certificate to one of those letters which indicated that she had suffered from a number of medical problems for many years and was requesting an adjournment. In that circumstance, it is unsurprising that his Honour had a preconceived idea that the applicant intended to apply for an adjournment.

16    Further, the transcript indicates plainly that the applicant did in fact apply for an adjournment. The transcript shows that the respondent indicated that it was ready to proceed with the hearing, but that the applicant was not and sought an adjournment. His Honour acceded to her application and granted the adjournment.

17    The applicant suggests that the transcript omitted a question when the judge asked her whether she sought an adjournment and she said, “No.” However, even if she is correct about the omission from the transcript, other parts of the transcript clearly show that she did seek an adjournment. It is impossible to see how apprehended bias could play any role in an appeal when it is plain that the applicant applied for an adjournment and her application was granted.

18    In my opinion, the decision to award costs against the applicant is not attended with sufficient doubt to warrant the grant of leave to appeal. To the extent that the terms of the order actually made by his Honour departed from the terms of the order he indicated in his reasons that he intended to make suggests error, no substantial injustice would result from the refusal of leave to appeal.

19    The respondent sought an order that the applicant pay its costs on an indemnity basis. I am not prepared to make such an order given that at least part of the applicant’s proposed grounds of appeal was not without substance.

20    I refuse the applicant’s application for leave to appeal. I will order that the applicant pay the respondent's costs, including reserved costs, to be taxed if not agreed.

Associate:

Dated:    30 May 2014