Spiliotopoulos v Jackson (No 2)

[2021] FCCA 1903

FEDERAL CIRCUIT COURT OF AUSTRALIA

SPILIOTOPOULOS v JACKSON (No 2) [2021] FCCA 1903

Catchwords:
BANKRUPTCY – Costs – proceeding under the Bankruptcy Act 1966 (Cth) – applicable costs scale for a bankruptcy proceeding in the Federal Circuit Court.

Legislation:

Bankruptcy Act 1966 (Cth)

Federal Circuit Court of Australia Act 1999 (Cth), s.79

Federal Circuit Court (Bankruptcy) Rules 2016 (Cth), r.13.01

Federal Court Rules 2011 (Cth), r.40.12

Cases cited:

Spiliotopoulos v Jackson [2020] FCCA 870

Applicant: ARTHUR SPILIOTOPOULOS

Respondent: LORRAINE JACKSON

File Number: SYG 14 of 2019

Judgment of: Judge Cameron

Hearing date: On the papers

Date of Last Submission: 16 July 2020

Delivered at: Sydney

Delivered on: 18 August 2021

REPRESENTATION

Solicitor for the Applicant: Mr T. Hall of Hall Partners

Solicitor for the Respondent: Mr M. Isaac of Willis & Bowring

ORDERS

1. The applicant pay the respondent’s costs fixed in the amount of $17,000.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 14 of 2019

ARTHUR SPILIOTOPOULOS

Applicant

And

LORRAINE JACKSON

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. On 4 January 2019 the applicant, Mr Spiliotopoulos, filed an application to set aside bankruptcy notice BN232143 which had been issued at the request of the respondent, Ms Jackson, and served on him on 18 December 2019. On 20 April 2020 the Court dismissed Mr Spiliotopoulos’s application with costs, ordering that if the parties could not agree on the quantum of costs the Court would determine them.  The parties agreed that, if that were to happen, it would be on the papers.

2. The parties did not agree and have filed written submissions on the costs question.

RELEVANT LEGISLATION

1. Section 79 of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCC Act”) empowers this Court to award costs in proceedings under, relevantly, the Bankruptcy Act 1966 (Cth). Section 79(2) of the FCC Act provides that:

   …

   (2)The Federal Circuit Court of Australia or a Judge has jurisdiction to award costs in all proceedings before the Federal Circuit Court of Australia (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.

   …

2. Rule 13.01 of the Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) (“FCC Bankruptcy Rules”) relevantly provides:

   13.01    Basis for costs

   (1)Subject to Division 13.2, a person who is entitled to costs in a proceeding to which the Bankruptcy Act applies is entitled to costs in accordance with Part 40 of the Federal Court Rules 2011 unless the Court otherwise orders.

   (2)In making an order for costs, the Court may fix the amount of the costs.

   (3)If the Court fixes the amount of the costs, Part 40 of the Federal Court Rules 2011 does not apply to a bill of costs submitted for the costs, except for the issue of a certificate of taxation.

   Division 13.2 of the FCC Bankruptcy Rules is not relevant to this proceeding.

3. Rule 40.12 of the Federal Court Rules 2011 (Cth), (“FCA Rules”) relevantly provides that:

   40.12  Application of Division 40.2 and 40.3

   If an order is made in favour of a party for payment of the party’s costs, the costs must be taxed in accordance with this Part, unless the amount of costs is agreed between the parties to the order.

SUBMISSIONS

1. Ms Jackson seeks an award of $21,934.23 for her costs, comprising professional costs and counsel’s fees. She submitted that the combined effect of the FCC Bankruptcy Rules and the FCA Rules is that she is entitled to have her costs taxed in accordance with the FCA Rules. She attached a bill of costs to her written submissions.

2. Mr Spiliotopoulos submitted that the appropriate method to quantify the costs payable was to apply this Court’s event-based costs scale which appears in the Federal Circuit Court Rules 2001 (Cth). He quantified the costs payable on that basis as $14,445.

CONSIDERATION

1. Contrary to Mr Spiliotopoulos’s submissions, unless the Court orders otherwise, costs in proceedings in this Court under the Bankruptcy Act are to be determined in accordance with the FCC Bankruptcy Rules which, in turn, engage the FCA Rules. The FCA Rules provide for the taxation of costs in accordance the scale of costs found in sch.3 to those rules.

2. As it turns out, each party’s submission in relation to the appropriate amount to be awarded in relation to professional costs is close to the other’s figure, Mr Spiliotopoulos’s figure being the higher. Their figures in relation to counsel’s fees are a long way apart but Mr Spiliotopoulos does not explain why he proposes the figure he does although it seems to be based on one element of the Federal Court’s “National Guide to Counsel Fees”, to which regard should be had when taxing a bill of costs under the FCA Rules. It is apparent from Ms Jackson’s submissions that her counsel spent a considerable amount of time engaged in this matter but Mr Spiliotopoulos’s suggestion seems arbitrarily low and ignoring of the preparation that was plainly involved.

3. Overall, the approach taken by Ms Jackson is the preferable one and the one which I will adopt. Nevertheless, the extent of some of the costs that have been claimed are, to my mind, greater than the amounts which Mr Spiliotopoulos should be expected to bear, specifically the solicitors’ claims for conferring and counsel’s claims for reading and for lengthy preparation for the hearing in addition to the preparation of written submissions.

4. In all the circumstances and having regard to the bill of costs and to the Federal Court scale, pursuant to r.13.01(2) of the FCC Bankruptcy Rules I fix the amount of costs that Mr Spiliotopoulos is to pay Ms Jackson at $17,000.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Judge Cameron

Associate: 

Date:     18 August 2021