Federal Court of Australia
Garner v Central Innovation Pty Limited  FCA 711
Central Innovation Pty Ltd v Garner (No 4)  FCA 1796
NSD 69 of 2021
Date of judgment:
17 June 2022
Federal Court Act 1976 (Cth) s 25
Commercial Banking Corporation of Sydney Limited v Colonial Financiers of Australia Pty Ltd  VR 702
Garner v Central Innovation Pty Ltd  FCAFC 64
New South Wales
National Practice Area:
Commercial and Corporations
Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs:
The orders were determined on the papers.
Solicitor for the Respondents:
SD Commercial Lawyers
INTERCAD PTY LTD (ACN 072 666 016)
DATE OF ORDER:
17 June 2022
THE COURT ORDERS THAT:
1. The costs of the respondents of the appeal be fixed in the sum of $117,000.00.
2. The appellant’s funds in the aggregate sum of $100,000.00 which are currently held by the Federal Court of Australia and which were paid into the Federal Court of Australia to provide for the first respondent’s and second respondent’s security for costs of this proceeding, be paid to the first respondent and the second respondent by depositing them into their solicitor’s trust account, details of which are as follows:
Bank: Commonwealth Bank of Australia Ltd
Name: SD Commercial Lawyers’ law practice trust account
BSB: 062 018
Account number: 1049 8710
1 On 21 April 2022, the Full Court made an order dismissing the appeal with costs from the decision of the primary judge in Central Innovation Pty Ltd v Garner (No 4)  FCA 1796 and published its reasons: Garner v Central Innovation Pty Ltd  FCAFC 64.
2 The appellant had provided security for costs in the sum of $100,000 for the appeal and that sum had been paid into Court pursuant to orders made by Justice Rares on 24 May 2021 requiring the sum to be paid into Court in three tranches between 7 June 2021 and 2 August 2021.
3 The respondents now seek an order that their costs of the appeal be fixed in sum of $117,000 and that the funds paid into Court by the appellant should be released to them by a payment into their solicitors’ trust account. The respondents rely on an affidavit of Stephen D’Emilio sworn 7 June 2022.
4 On 18 May 2022, the appellant became bankrupt upon acceptance of a debtor’s petition by the Official Receiver on that day and Ms Robyn-Lee Erskine (Trustee) was appointed as the trustee of the bankrupt estate of the appellant.
5 The Trustee has confirmed that if the Court makes an order fixing the respondents’ costs of the appeal, she consents to the release of the funds paid into Court up to the amount to which the costs are fixed and to the extent of those funds.
6 As the funds were paid into Court by the appellant as security more than six months prior to the bankruptcy of the appellant, the question of whether the claim by the respondents to the funds held in Court might be voidable under s 122 of the Bankruptcy Act 1966 (Cth) does not arise: cf Commercial Banking Corporation of Sydney Limited v Colonial Financiers of Australia Pty Ltd  VR 702.
7 Mr D’Emilio gives evidence in his affidavit that the respondents’ invoiced costs and disbursements of the appeal, including GST, total $260,109.47 and annexes a hard copy print out of an electronic ledger recording each of the respondents’ invoiced costs and disbursements in the appeal comprising that amount.
8 Mr D’Emilio also gives evidence that Allaway JR made a lump sum costs assessment, at the conclusion of the proceedings before the primary judge, in which he considered that a reduction of 50% on party and party costs was appropriate. Mr D’Emilio states that, in his opinion, a reduction of 50% for party and party costs is excessive but it nevertheless appears to him that a reduction of 50% should be utilised in the present context and applied to the respondents’ costs on the appeal for the purposes of making a fixed costs order on a party and party basis.
9 The respondents submit that after excluding GST, the amount of their invoiced costs and disbursements of the appeal total approximately $234,000 and that after applying a 50% reduction this would give a figure of $117,000, which they submit would be an appropriate figure for a fixed costs order in their favour.
10 Pursuant to s 25(2B)(ab) of the Federal Court Act 1976 (Cth) a single Judge, sitting in Chambers or in open court, may make an interlocutory order after the determination of an appeal to the Court.
11 I am satisfied that a fixed costs order in the sum of $117,000 should be made in favour of the respondents and that an order should be made that the funds currently held by the Court by way of security for the respondents’ costs of the appeal should be paid to the respondents by making a payment to the trust account of the respondents’ solicitors.