Crisp v ACN 069 859 585 Pty Ltd

REASONS FOR JUDGMENT 1 The usual costs order is that they follow the event. Here, however, the unsuccessful party, Insurance Australia Ltd (IAL), seeks to displace this rule. It says that it should have its costs of a failed attempt to have the Court decline jurisdiction to hear the applicant's case, although it (IAL) knew that the Court had jurisdiction and was obliged to hear the case. To put the matter quite squarely, IAL wants its costs of its failed attempt to convince the Court to make an erroneous ruling. 2 If lawyers were under a duty to ensure that a court arrived at the correct result, not only would this costs application be thrown out, IAL's lawyers might be paying the costs. Our system of justice, however, imposes no such obligation on practitioners. Practitioners are free (and, perhaps, even under a duty) to take any point they think might succeed, provided that, along the way, they do not mislead the judge. 3 Here, Mr Crisp, who is the applicant, was the former liquidator of Waterman Collections Pty Ltd (Waterman). He has brought this application to have assessed, and then recover, what he claims is due to him as unpaid remuneration for acting as liquidator. IAL, a major creditor of Waterman, says that Mr Crisp is not entitled to anything and has been joined to oppose his application for remuneration. 4 One basis upon which Mr Crisp founds his application for remuneration is s 511 of the Corporations Act 2001 (Cth). That section permits a liquidator, contributory or creditor to apply to the court for the determination of any question arising in the winding up of a company. Mr Crisp claimed to have standing under this section because he was the former liquidator of the company. In reasons delivered on 8 December 2010 ([2010] FCA 1370) I held, as had been argued by IAL, that former liquidators have no standing to make an application under s 511. I went on to say that Mr Crisp was nevertheless entitled to rely on the fact that he claimed to be a creditor to bring himself within the section. 5 IAL's lawyers were aware that Mr Crisp had standing to make the application. They also knew that Mr Crisp had wrongly identified the limb of s 511 which founded that standing. Still, they pressed ahead with an application to have his claim dismissed, basing that application on Mr Crisp's mistake. 6 It could hardly have come as a surprise to the practitioners involved that I found there was jurisdiction to entertain Mr Crisp's application notwithstanding that Mr Crisp had incorrectly identified the basis of that jurisdiction. Some costs were incurred by the parties along the way. It is those costs IAL now seeks to have paid by Mr Crisp. 7 It would, to my mind, be contrary to common sense to go along with this. Not only that, it would set a dangerous precedent were I to do so. It would encourage lawyers to put submissions which they know will, if accepted, lead the judge into error in part because the other side has not undertaken the correct analysis. I apprehend that lawyers may see this approach as an encroachment into the adversarial system which our courts have, with some relish, adopted. On the other hand, I believe the general public is likely to see things differently. And it seems to me that, in this application, the view of the public has more merit. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.