Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd

REASONS FOR JUDGMENT 1 This is an application pursuant to O 62 r 4(2)(c) of the Federal Court Rules that certain costs ordered to be payable by the respondents in this matter be assessed as a gross sum. The orders were made on 27 February 2006 (Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (in liq) [2006] ATPR 42-103, [2006] FCA 146; Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (in liq) (No 2) [2006] ATPR 42-104, [2006] FCA 157). Order 42 provided that the third, fourth, fifth, sixth and seventh respondents pay the applicant's costs of the proceedings including all reserved costs, except those costs provided by order 43. Order 43 provided that the third and fourth respondents pay the applicant's costs of the hearing on 10, 25 and 26 May 2005. 2 There were some formalities to be proved in relation to service. I have read the affidavits provided in relation to service and I am satisfied that each of the relevant respondents, that is, the third, fourth, fifth and sixth respondents, have, in the relevant sense, received notice. The seventh respondent is not proceeded against and the first two respondents are companies in liquidation. There is a complication in that the third and fourth respondents are each bankrupt. I am satisfied that service has been effected upon the relevant trustee in bankruptcy in each case. 3 In the events which have happened, none of the respondents have appeared to oppose the orders. The trustee in bankruptcy of the fourth respondent has appeared and indicated that there is no opposition to the orders, neither is there any consent to the orders. I will come back to the question of bankruptcy in due course. 4 The substance of the evidence in relation to the application for lump sum costs is the affidavit of Ms Deborah Susan Vine-Hall, a well-experienced expert in the preparation of bills of costs, taxation of bills of costs and the assessment of costs generally. I have read the report that she prepared in this matter and I am satisfied that it reveals, first, a sound methodology for assessing the costs which would be taxable against the respondents and, second, that the methodology has been applied to the particular circumstances in an appropriate fashion. The report is very detailed and is self-explanatory. Ms Vine-Hall's affidavit, exhibiting that report, needs no summary on my part. I note that it includes a method of arriving at what might be called a discount from the costs which may be payable to reflect the exigencies of the rules as to what is recoverable for party and party costs. That is a difficult topic and, in the absence of any opposition, I am satisfied that the methodology that she proposes is acceptable. 5 The principles which govern the application and the circumstances under which this rule is to be applied were dealt with by Lehane J in Hadid v Lenfest Communications Inc [2000] FCA 628 particularly at [22]-[27]; and by Sackville J in Seven Network Ltd v News Ltd [2007] FCA 2059, particularly at [16] and [25]-[34]. I need not repeat those principles here. I am satisfied that Ms Vine-Hall's assessment is in accordance with the principles reflected in those passages from those judgments. I am therefore satisfied as to the merits of the application. 6 There is the complication of intervening bankruptcies. It is submitted that this situation falls within the category discussed by the majority of the High Court in Foots v Southern Cross Mine Management Pty Ltd (2007) 241 ALR 32, (2007) 5 ABC(NS) 419 at [35], [36] and [67]. As here, the order was made before bankruptcy ensued and, therefore, even though not quantified, the debt is provable in bankruptcy. However, that means that, generally speaking, one cannot pursue a matter in court against the debtor once bankruptcy ensues. The appropriate thing to do is to file a proof of debt. Recognising that this is likely to be the position, the applicant seeks leave to proceed against both of the trustees. I am satisfied that both trustees have knowledge of this application. One, as I have said, has appeared and does not oppose leave; the other, having been given notice of the application, responded that he did not propose to appear in the matter. Those trustees have not formally been made parties to the proceeding. Counsel submits that leave should be granted and the matter proceed today for a number of reasons. I should note that the lump sum order which I propose to make will be made in relation to the fifth and sixth respondents in any event and, thus, I have had to consider the merits of the matter. 7 To lodge a proof of debt in each of the bankrupt estates would, first of all, require a proof of debt to be prepared. Secondly, it would require the trustee to consider that proof of debt and that would require some investigation. All of that seems to me to be time and money which should not be spent. It is unlikely to be recovered from anybody and, as the Court has had to do the work, it seems pointless to have it repeated. None of the relevant parties appear to oppose the orders. It seems to me that there will be unnecessary duplication if leave is not granted. Furthermore, the quantification of costs, the question that arises here, is very much a matter for the Court and Court officials and those with the knowledge of the way these things are done. The trustees in bankruptcy would have no particular qualifications to assess the situation. So as a matter of substance, I am satisfied that the orders should be made as sought. 8 I have raised with counsel the question of the trustees not being parties to the litigation. The grant of leave to proceed against the named individual respondents is probably sufficient for the technicalities to be observed. It is then for the trustees to deal with the result which ensues. If this occasions any difficulty, or if there is any need for any further order, I will grant special liberty to apply to the trustees of the bankrupt estates of the third and fourth respondents. 9 For those reasons, I make orders (1) to (3) in the proposed orders which I have initialled and there will be a further order (4): (4) Special liberty is reserved to the trustees in bankruptcy of the third and fourth respondents respectively to apply. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.