FEDERAL COURT OF AUSTRALIA

Anne v Ask Funding Ltd (No 2) [2015] FCA 1351

THE COURT ORDERS THAT:

1.    The first respondent pay half the appellant’s out-of-pocket expenses actually, necessarily and reasonably incurred in connection with the appeal.

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

REASONS FOR JUDGMENT

1    On 23 October 2015, I allowed the appellant’s appeal and set aside a sequestration order made against her estate by the Federal Circuit Court of Australia: Anne v Ask Funding Ltd [2015] FCA 1111.

2    The basis of my judgment was that the bankruptcy notice was invalid because it was founded upon two costs orders but the Australian Financial Security Authority (“AFSA”) had attached only one of the orders when it electronically issued the bankruptcy notice.

3    In addition, the first respondent’s solicitors attached the missing order before serving the bankruptcy notice, or at least served the bankruptcy notice with the second order such that it gave the appearance that the bankruptcy notice had been issued with both orders electronically attached. That this had occurred was not revealed by the first respondent to the appellant or to the Federal Circuit Court. It only became apparent in the course of the appeal.

4    The appellant and the first respondent have provided written submissions as to costs. The appellant submits that the first respondent should pay her costs of the appeal. The first respondent submits that there should be no order as to costs. The second respondent had asked to be heard as to costs, but did not take up the opportunity to provide submissions.

5    The appellant submits that the first respondent should pay her costs of the appeal because she has succeeded and costs should follow the event.

6    The first respondent submits that there should be no order as to costs because the appellant is not legally represented, because the outcome of the appeal resulted from deficiencies in AFSA’s system for electronically issuing bankruptcy notices and because the appellant failed upon a number of her grounds of appeal.

7    As to the first submission, the first respondent contends that Cachia v Hanes (1994) 179 CLR 403 at 410 is authority for the proposition that a litigant who is not legally represented cannot be awarded compensation for his or her work done or expenses incurred in the proceeding. While it is true that such a litigant cannot be compensated for work done, in Von Reisner v Commonwealth (2009) 262 ALR 430, a Full Court of the Federal Court held at [23] that a litigant in person who succeeds in a proceeding is normally entitled to out-of-pocket expenses actually, necessarily and reasonably incurred. As the appellant has succeeded in her appeal, the usual order would require the first respondent to pay the appellant’s out-of-pocket expenses actually, necessarily and reasonably incurred.

8    As to the first respondent’s second submission, it is true that AFSA’s system for electronically issuing bankruptcy notices is deficient and the deficiency has affected the outcome of the appeal. However, the first respondent’s solicitors, knowing that the bankruptcy notice issued by AFSA attached only one of the two costs orders, resorted to self-help, rather than asking AFSA to issue a fresh bankruptcy notice. They should have known better than to alter an official document. Their conduct contributed significantly to the outcome.

9    The first respondent’s third submission has more force. The original notice of appeal contained some 66 grounds of appeal, and I have described most of those grounds as being untenable and some as nonsensical. The appellant made no attempt to refine the grounds until shortly before the final hearing. Even then, there was some repetition, overlapping and obscurity in the grounds. I summarised the amended notice of appeal as effectively containing seven grounds. The appellant succeeded on only two of those grounds. Having regard to the appellant’s limited success and the wastage of resources in dealing with the grounds on which the appellant failed or which the appellant did not ultimately pursue, it is not appropriate that the appellant should be awarded the full amount of her out-of-pocket expenses.

10    The first respondent’s submissions in reply argue that the costs order made in favour of the first respondent in the Federal Circuit Court should not be disturbed. I have already set aside that order in my judgment given on 23 October 2015. It was appropriate to set it aside because the creditor’s petition would have been dismissed if the primary judge was presented with the evidence available to this Court; and that evidence should have been disclosed by the solicitors for the first respondent.

11    I propose to order that the first respondent pay to the appellant half of her out-of-pocket expenses actually, necessarily and reasonably incurred in connection with the appeal.

Associate:

Dated:    2 December 2015