Heyer v Burke

[2007] FMCA 1627

FEDERAL MAGISTRATES COURT OF AUSTRALIA

HEYER v BURKE [2007] FMCA 1627

BANKRUPTCY – Taxation of costs following notice of discontinuance.

Bankruptcy Act 1966, s.104
Federal Magistrates Court Rules 2001
Federal Court Rules

Applicant: VIRGINIA DENISE HEYER

Respondent: JOHN CHRISTOPHER BURKE

File number: SYG2326 of 2006

Judgment of: Raphael FM

Hearing date: 18 September 2007

Date of last submission: 18 September 2007

Delivered at: Sydney

Delivered on: 18 September 2007

REPRESENTATION

For the Applicant: No appearance

Counsel for the Respondent: Mr J Johnson

Solicitors for the Respondent: Sally Nash & Co

ORDERS

1. The Applicant pay the Respondent’s costs of her discontinuance of these proceedings, including reserved costs.

2. A Certificate of Taxation issue in these proceedings unless within 14 days the applicant provides the Registrar with her objections to the draft bill, in which case the taxation shall proceed in accordance with the Federal Court Rules.

3. There be no order as to the costs of this motion.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2326 of 2006

VIRGINIA DENISE HEYER

Applicant

And

JOHN CHRISTOPHER BURKE

Respondent

REASONS FOR JUDGMENT

1. In this matter a third party to the bankruptcy lodged a proof of debt with the respondent trustee. That proof of debt was rejected and the applicant issued an application in this court on 22 August 2006 seeking a review pursuant to s.104 of the Bankruptcy Act 1966 (the “Act”). On 22 November 2006 the applicant discontinued that proceeding. The procedures regarding notices of discontinuance are contained in Part 13 Rule 13.01 and 13.02 of the Federal Magistrates Court Rules 2001 (the “Rules”). The major difference between the Rules of this court and those of the Federal Court is that under r.13.02 if a party discontinues an application the other party may apply for costs and such application must be made within 28 days after service of the notice of discontinuance unless the Court or a Registrar otherwise directs. The procedure in the Federal Court is that costs automatically follow a notice of discontinuance.

2. Possibly because most orders for costs in bankruptcy matters are orders that costs should be taxed “in accordance with the Federal Court Rules” (at least until the introduction of the common bankruptcy rules in 2006), this interesting difference between the practices of this Court and those of the Federal Court may not have been entirely familiar to persons practising almost exclusively in the bankruptcy jurisdiction.  The solicitor for the respondent trustee was unaware of the existence of r.13.02(2) and she proceeded to prepare a bill of costs for taxation and served a copy of the bill upon the applicant’s solicitors as well as sending it in to a Registrar of this court.  It was the Registrar who pointed out to the solicitor that no application for costs had been made to the court.  The solicitor then communicated with the solicitors for the applicant to see whether or not agreement could be reached in relation to the matter but no response was received to her letters other than an advice that the solicitor concerned was not in the office at the time and would respond later although he has not done so.

3. The trustee has now issued a notice of motion, a copy of which was served upon the solicitors for the applicant, seeking orders which would effectively allow the bill to be taxed.  I have read the affidavit of Sally Susan Nash sworn on 4 September 2007 and I have noted that there is no appearance on the part of the applicant. 

4. In the circumstances I am satisfied that I should make an order which would allow the costs of these proceedings to be taxed and I propose to do this by way of amendment to the orders sought in the notice of motion.  The orders I will make are therefore that the applicant pay the respondent’s costs of her discontinuance of these proceedings including reserved costs and that a certificate of taxation issue in these proceedings unless within 14 days the applicant provides the Registrar with her objections to the draft bill in which case the taxation shall proceed in accordance with the Federal Court Rules.  I note that the applicant to the notice of motion does not seek costs.

I certify that the preceding four (4) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 

Date: