Federal Court of Australia

Amirbeaggi as trustee of the bankrupt estate of Hanna v Hanna (No 5) [2025] FCA 586

ORDERS

THE COURT ORDERS THAT:

1.    Judgment for the cross-claimant against the second cross-respondent in the sum of $315,000.00, together with interest on that sum from 3 April 2019.

2.    The second cross-respondent pay the cross-claimant’s costs, as agreed or taxed.

3.    The cross-claimant’s interlocutory application filed on 11 November 2024 be dismissed.

4.    The cross-claimant pay the costs of Ms Eman Kamel Shonoda of that interlocutory application, as agreed or taxed.

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

REASONS FOR JUDGMENT

GOODMAN J:

1    On 11 October 2024, I published my reasons for judgment in this proceeding and in proceeding NSD 1285 of 2020: Amirbeaggi as trustee of the bankrupt estate of Hanna v Hanna (No 3) [2024] FCA 1171 (Amirbeaggi (No 3)). Some familiarity with those reasons for judgment is assumed in what follows.

2    In Amirbeaggi (No 3), the cross-claimant (Mr Abdalla) succeeded in his cross-claim against the second cross-respondent, Jarvis J Pty Limited. In essence, Mr Abdalla succeeded because Jarvis was aware, at the time that it transferred a property known as unit 16 to Mr Anthony Hanna on 3 April 2019, that it had acquired title to unit 16 from Mr Abdalla and Mr Hanna Snr, by dint of a forgery of Mr Abdalla’s signature. Jarvis had such knowledge because Ms Eman Shonoda was on notice of the forgery and the knowledge of Ms Shonoda, who directed that Jarvis make the transfer to Anthony Hanna, was attributed to Jarvis: see Amirbeaggi (No 3) at [76] to [80] and [87] to [110].

3    I made orders requiring the parties to confer and to provide to the Court orders to give effect to Amirbeaggi (No 3). Mr Abdalla sought the following orders:

1.    Judgment for the Cross-claimant, Hedra Fayez Nashed Abdalla (“Abdalla”), against the Second Cross-respondent, Jarvis J Pty Ltd, in the sum of $315,000.

2.    Judgment for Abdalla against Jarvis J Pty Ltd, for interest from 9 February 2018, in the sum of $118,559.35.

3.    Jarvis J Pty Ltd to pay Abdalla’s costs as agreed or assessed.

4.    Eman Kamel Shonoda is to pay Abdalla’s costs as agreed or assessed.

4    Jarvis did not proffer any proposed orders and has not otherwise participated in the contest concerning the form of orders to be made.

5    As Mr Abdalla sought an order that Ms Shonoda – a non-party to this proceeding – pay his costs, directions were made for the filing of: an interlocutory application by Mr Abdalla; and evidence and submissions by both Mr Abdalla and Ms Shonoda with respect to that proposed order.

6    Mr Abdalla filed an interlocutory application and relied upon an affidavit that he swore on 8 November 2024 and an affidavit of his solicitor, Ms Sherine Metry, sworn on 10 December 2024, together with written submissions. Ms Shonoda relied upon written submissions. It was common ground that the application be determined on the papers.

7    I am satisfied that proposed order 1 is appropriate, as it reflects the finding in Amirbeaggi (No 3) at [110] that the appropriate remedy is payment of compensation reflecting the value of Mr Abdalla’s interest in unit 16 as at 3 April 2019 (the date of its transfer from Jarvis to Anthony Hanna), namely $315,000. I am also satisfied that an order for the payment of interest from 3 April 2019 (not 9 February 2018) is appropriate, and that costs should follow the event.

8    Proposed order 4 is more controversial.

9    Section 43 of the Federal Court of Australia Act 1976 (Cth) provides the Court with a broad discretion as to costs. It is well settled that this discretion extends, in appropriate cases, to orders that persons who are not parties to the proceeding pay the costs of a party or parties to the proceeding.

10    The principles relevant when considering whether to make an order that a non-party pay costs are well-established: see Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCA 50; 200 FCR 154 at 167 to 171 ([71] to [91]) (Keane CJ, Lander and Foster JJ). See also Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 10) [2009] FCA 498 at [20] to [21] (Collier J).

11    Counsel for Mr Abdalla submitted, in essence, that:

(1)    Jarvis was found to be liable because Ms Shonoda’s knowledge concerning the transfer of unit 16 was attributed to Jarvis;

(2)    that finding provided a sufficient connection between Ms Shonoda and Jarvis to enliven the Court’s discretion to require Ms Shonoda to pay Mr Abdalla’s costs, relying upon Dunghutti at 170 to 171 [89]; and

(3)    the discretion should be exercised so as to require Ms Shonoda to pay such costs in circumstances where Jarvis is impecunious and the judgment and any costs order against it will be unsatisfied.

12    I do not accept this submission. The present circumstances fall well short of those in which a non-party costs order ought be made. As the Full Court explained in Dunghutti at 170 to 171 [89], the connection between the non-party (here, Ms Shonoda) and the unsuccessful party (here, Jarvis) must be material to the question of costs. There is no such materiality in the present case. The fact that Ms Shonoda’s knowledge was attributed to Jarvis was plainly relevant to questions of liability but is immaterial on the question of costs.

13    Further, Ms Shonoda was not put on notice of any potential exposure to a costs order, whether by joining her as a party to this proceeding or otherwise. Had she been afforded such procedural fairness, she would have had the opportunity to take steps to protect herself from a costs liability.

14    Finally, there is no other basis on which it is (or could be) contended that Ms Shonoda ought be held liable to pay Mr Abdalla’s costs of the proceeding.

15    For the foregoing reasons there should be judgment in favour of Mr Abdalla in the sum of $315,000.00, together with interest from 3 April 2019. However, Mr Abdalla’s application for an order that Ms Shonoda pay his costs should be dismissed with costs. I will make orders accordingly.

Associate:

Dated:    5 June 2025