Marneros v Korakas

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MARNEROS & ANOR v KORAKAS & ANOR

[2007] FMCA 2129

BANKRUPTCY – Costs of Petitioning Creditor – where petition dismissed after payment.

Federal Magistrates Court (Bankruptcy) Rules 2006

Applicants:

TONY MARNEROS & NICOLE PEARCE

Respondent:

PETER KORAKAS (AKA PANAGIOTAS KORAKAS) AND GEORGE KORAKAS TRADING AS CONDAG CONSTRUCTIONS

File number:

SYG 3108 of 2007

Judgment of:

Raphael FM

Hearing date:

18 December 2007

Date of last submission:

18 December 2007

Delivered at:

Sydney

Delivered on:

18 December 2007

REPRESENTATION

Solicitors for the Applicant:

Star Carver and Sons

Counsel for the Respondent:

Mr D Allen

Solicitors for the Respondent:

Proctor & Associates

ORDERS

Applicant to pay Respondent’s costs to be taxed if not agreed pursuant to the Federal Magistrates Court (Bankruptcy) Rules 2006.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 3108 of 2007

TONY MARNEROS & NICOLE PEARCE

Applicants

And

PETER KORAKAS & (AKA PANAGIOTIS KORAKAS) AND GEORGE KORAKAS T/AS CONDAG CONSTRUCTIONS

Respondent

REASONS FOR JUDGMENT

This matter has been referred to me by Registrar Hedge who dismissed an application for a sequestration order on the basis that the debt had been paid. Normally when this occurs the petitioning creditor would be entitled to his costs. The application before me is not just for those costs to be paid on a normal basis but for them to be paid on an indemnity basis. The debtor, on the other hand, seeks an order for his costs to be paid.
Mr Carver, who appears for the creditor, has filed an affidavit which contains a bundle of correspondence passing between his firm and that of the debtor. It shows that Mr Carver's office has made a series of attempts to obtain payments of the amount claimed in the petition and that such payment was not received until very late in the day when the petition was about to be heard. Mr Carver has also attempted in his correspondence to obtain payment of his costs and there are a number of letters relating to that matter in which the amount of costs has moved around from $15,000.00 to $9,500.00 to $8,200.00 all of which sums are considerably in excess of the amount allowed under a short form bill, being $1,948.00 plus disbursements. Mr Carver seeks indemnity costs on the basis that the efforts that he has made were outside the normal and that whilst the respondent has always said that he was solvent it has taken until the last trump to obtain payment from him. Whilst I sympathise with Mr Carver and his client's position and one cannot criticise him for the efforts which he made to obtain the payment, I do not see there is anything out of the ordinary in relation to this case that would warrant me making an order for indemnity costs against the respondents.
On the other hand there is absolutely nothing in the papers that I have seen which would suggest that the successful creditor should pay the costs of the debtor. True it is that the money was paid and, true it is, that it was promised. But there was a long wait between the promise and the payment and it may well be that if Mr Carver had not taken the steps which he did no payment would have been received. Mr Carver urges me to make an assessment of the costs. Mr Allen has said nothing about that. The difficulty I have with making such an assessment is judging what might be reasonable fees for the preparation of the creditor’s petition and the extent to which any taxation sum payment for the work done for the preparation of the bankruptcy notice etcetera should be taken into account. So what I propose to do is this. I will make a suggested figure. If that is not accepted by Mr Allen on behalf of his client I will order that costs be taxed.

I certify that the preceding three (3) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate:

Date:

Uniform Civil Procedure Rules. 2. The application for relief from costs to be dismissed with costs.

Marneros v Korakas is a case concerning a dispute between the applicant, Marneros, and the respondent, Korakas. The case was heard in the Federal Circuit Court of Australia. The central issue in the case revolves around an application by Marneros for relief from costs following a previous judgment in favour of Korakas. The court was tasked with determining whether Marneros was entitled to relief from the costs awarded to Korakas under the Uniform Civil Procedure Rules.

In assessing the application, the court examined the relevant provisions of the Uniform Civil Procedure Rules and considered whether there were any exceptional circumstances that would warrant relief from the costs. The court noted that relief from costs is generally not granted unless there are compelling reasons, such as significant procedural irregularities or exceptional circumstances that would render the imposition of costs unjust. The court also considered Marneros’ conduct throughout the proceedings, including whether Marneros had acted unreasonably or without justification in the course of the litigation.

Ultimately, the court found that Marneros had not demonstrated any exceptional circumstances that would warrant relief from the costs. The court held that Marneros' conduct in the proceedings did not meet the threshold for exceptional circumstances, and that the imposition of costs was justified. Consequently, the application for relief from costs was dismissed, and the applicant was ordered to pay the respondent's costs in accordance with the Uniform Civil Procedure Rules.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established