Australian Securities and Investments Commission v Piggott Wood & Baker

REASONS FOR JUDGMENT 1 In Australian Securities and Investments Commission v Piggott Wood & Baker (a firm) (No 3) [2008] FCA 1547 I upheld the argument of the Solicitors' Trust that the remuneration and costs of the Liquidator of the Piggott Wood & Baker unregistered managed investment scheme were no longer liable to be paid from the Solicitors' Guarantee Fund. This followed as a consequence of the coming into force of s 657 of the Legal Profession Act 2007 (Tas), an enactment which, as I held, was not invalid by reason of any inconsistency with s 601EE of the Corporations Act 2001 (Cth). I directed the parties to file and serve submissions as to costs, which they have now done. 2 The Attorney-General for Tasmania, who intervened and was represented by counsel, makes no application for costs. No order is sought against him. The Trust says the Liquidator should pay its costs. The Liquidator's submission is that there should be no order as to costs. 3 The Trust has been wholly successful on this application, which the Liquidator opposed. I do not see that there is any circumstance sufficient to avoid the usual consequence that costs follow the event: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234. 4 The critical argument which led to the Trust's success was that its obligation to pay the Liquidator's costs and remuneration out of the Fund, as appearing in the Order of 13 December 2001 as later varied, came not from the Corporations Actbut from the earlier Tasmanian legislation the Legal Profession Act 1993 (Tas), s 108(2)(a)(iii). Thus no question of inconsistency under s 109 of the Constitution arose. Whether or not that point was more fully argued by counsel on behalf of the Attorney-General is, in the circumstances of this case, irrelevant. The hearing did not proceed beyond a day. The point was certainly made by counsel for the Trust. If more than one party has an interest in advancing a particular argument, there is obvious sense in counsel for one party carrying the burden of fully developing the argument rather than have repetition and duplication. 5 Likewise, given the length of the hearing, there is no reason to penalise the Trust insofar as its counsel advanced arguments which did not find favour or proved unnecessary to decide. 6 Moreover, the Liquidator, in reports to investors dated 28 August 2007 and 28 March 2008 appeared to accept that the 2007 legislation (against which he unsuccessfully lobbied) "would remove the requirement of the Solicitors' Trust to pay my accounts". Nevertheless he put the Trust to the expense of the present application. It is not reasonable for the Liquidator now to adopt, as was put in his submissions, the neutral and "clarify(ing)" role of a contradictor. If the Liquidator had succeeded, there would have been a tangible benefit for the investors whose interests he represented. 7 Turning to the form of the orders, in my earlier judgement I overlooked the order made on 1 April 2008, which further amended the 2001 Order. The April 2008 Order, which was made shortly before the 2007 legislation came into force on 7 April 2008, had the effect that if, and to the extent that, after that date payment of the Liquidator's costs and expenses was not made from the Guarantee Fund, the Liquidator should be paid from "the proceeds of the winding up order and/or such sources as may be available". The parties agree that my order should be varied so as to remove the reference to the Guarantee Fund. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.