[2025] FCA 509
General information, not legal advice.
Federal Court of Australia
2025-05-20
Perry J
Original judgment source is linked above.
ALEXANDER CLARK & ANDREW ARAVANIS JOINT & SEVERAL TRUSTEES OF FOLIO:110/SP48216 THE ESTATE OF JANELLE MARY KIMBER
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
The applicant, Ms Janelle Kimber, became a bankrupt on 22 August 2019 upon her debtor's petition being accepted by the Official Receiver. She was discharged from bankruptcy three years later, on 23 August 2022. The title in the home unit at Lot 110 in Strata Plan SP48216, Unit 110, 450 Pacific Highway, Lane Cove North that she purchased in 2004 was vested in the respondents, then her trustees in bankruptcy. This was subject to the proportion of its value she would retain upon its sale, pursuant to s 116(2)(g) of the Bankruptcy Act 1966 (Cth). On 7 September 2021, that proportion was determined to be 25% by Judge Driver: Clark and Aravanis in their capacity as joint and several trustees of the property of Kimber v Owners Corporation SP48216 (No 2) [2021] FedCFamC2G 62.
Also on 7 September 2021, Judge Driver made orders:
(a) that Ms Kimber vacate the home unit within 21 days of the service of those orders, and, if that order was not complied with, granted leave to the trustees to issue a writ of possession;
(b) for the distribution of the net proceeds of sale;
(c) that Ms Kimber remove a caveat over the home unit within 7 days, and be restrained from lodging or causing to be lodged any further caveat, and if she failed to remove the caveat, authorising the registrar to sign a form of withdrawal of the caveat.
An appeal by leave from Judge Driver's orders was dismissed by the Full Court (of which I was a member), subject only to some relatively minor changes to those orders: Kimber v Clark in his capacity as trustee of the property of Kimber [2022] FCAFC 198. By that time, by reason of Ms Kimber no longer being a bankrupt, the trusteeship was confined to that of being trustees of Ms Kimber's property, relevantly the home unit, which is the capacity in which the trustees are respondents to this proceeding. It follows that Ms Kimber has exhausted her avenues for challenging directly the order to vacate or the issue of the writ of possession.
The orders made by Judge Driver were successively stayed pending the hearing and determination of the appeal and after that until 31 January 2023. As at that date, there was no impediment to the trustees taking steps to sell the home unit. A writ of possession was obtained that day, and a notice to vacate was issued on 6 February 2023, and posted to Ms Kimber, seeking to have her vacate the home unit by 17 March 2023, being the date when the writ was due to be executed.
On 7 March 2023, Ms Kimber filed an originating application commencing this proceeding, seeking an order under s 153B of the Bankruptcy Act that her bankruptcy be annulled upon the basis that her debtor's petition ought not to have been presented or ought not to have been accepted by the Official Receiver. She also sought interim relief of a stay of the writ of possession and a stay of the notice to vacate, and also that until her application for annulment was determined, the trustees cease to act as trustees of the home unit. That is, she sought to have the writ and the notice that she could not now challenge, instead be stayed.
On 15 March 2023, the respondent filed an interlocutory application, with a supporting affidavit, seeking an order to strike out the application for annulment of the applicant's bankruptcy, an order to disallow the applicant from making further applications relating to the administration of her estate under the Bankruptcy Act without leave, and an order that the applicant pay the respondents' costs by way of a lump sum costs order. The supporting affidavit was apparently served on Ms Kimber by email before it was formally accepted for filing.
Ms Kimber's interim application came before Perry J as duty judge on 16 March 2023. Her Honour stayed the execution of the writ of possession pending further order of the Court, and listed the hearing of the interim application for the two stays at 10.15 am on 28 March 2023. Thus the stay granted by her Honour was intended to be temporary in its effect until a final hearing of the application for the two stays could take place, as is made clear from a perusal of the transcript for that day. Her Honour at the same time also made orders for submissions by the trustees to be filed and served by 5.00 pm the next day, 17 March 2023 (which were complied with), and for Ms Kimber to file and serve submissions and any further evidence in reply by midday on 24 March 2023. Ms Kimber's submissions were filed late on 24 March 2023, and replacement or further submissions were lodged for filing just before midnight that night, so under the rules of the Court, were filed the following Monday, 27 March 2023.
On Sunday, 26 March 2023, Ms Kimber lodged for filing a form of affidavit to supplement the affidavit filed with her originating application and in response to the affidavit filed by the trustees, with that affidavit and some of the annexures to that affidavit being provided on the morning of the hearing on 28 March 2023, and the balance of the annexures the night after that hearing. Those additional annexures, as with the prior annexures, were a mix of evidence and submissions in the form of annotations, both typewritten and handwritten.
The hearing of the application on 28 March 2023 ran all day until just before 6.00 pm, with only a half hour break. Nearly all of that time on that day was taken up by Ms Kimber, including cross-examining one of the Trustees, Mr Alexander Clark, for an hour and a half, and making oral submissions for over two hours. The trustees made oral submissions on aspects of the evidence and nature of the case during the day, and final oral submissions on the stays sought over about half an hour.
(1) The Costs Summary was prepared in accordance with the Federal Court Costs Practice Note and sets out the lump sum costs claimed by the trustees. The Costs Practice Note does not define precise categories of work which a Costs Summary must include. It only requires "a summary of the categories of the work fairly and reasonably incurred in the conduct of the litigation, including, an estimate (in percentage terms) of the proportion that each category of work constitutes of the total costs claimed".
(2) The Costs Summary also claims an uplift of 25% for the professional fees incurred in NSD207/2023.
(3) The amounts for work completed by the trustees' legal representatives appear to fall within the Federal Court Scale, National Guide to Counsel's Fees and the Guide to Discretionary Items in Bills of Costs.
(4) A bundle was tendered on 10 July 2023 including invoice schedules for professional fees in NSD207/2023 and in relation to implementing the stays ordered by me on 16 March 2023 of the execution of the writ of possession and notice to vacate issued by the Federal Circuit and Family Court of Australia (Div 2) in proceedings SYG723/2021. Those schedules relevantly colour-coded each time entry to reflect the category of work completed but were not otherwise altered. At the hearing, Ms Castle (as counsel for the trustees) noted that the amounts being claimed are less than the amounts actually incurred in both schedules. While the schedules totalled actual amounts of $28,547.64 (including the proposed 25% uplift) and $789.89, the amounts claimed by the trustees are less, being:
(a) $26,331.65 (including the proposed 25% uplift) for NSD207/2023; and
(b) $531.50 with respect to implementation of the stays relating to the writ and notice to vacate issued in SYG723/2021.
(5) Ms Castle explained that the reason for the reductions in the amounts claimed is because the trustees had exercised discretion "in reducing and taking amounts out that aren't considered fairly to fall within the scope of the order".
(6) The total figure for professional fees stated in the Costs Summary for both matters was $29,337.53 (including GST). At the hearing, however, Ms Castle clarified that the total should have been $26,863.15 (including GST). Ms Castle explained that this was because of an error in adding up the total amount claimed. As a result, the overall lump sum claimed is $41,553.87 (including GST and an uplift fee of 25%), and not $44,028.25 as initially claimed in the Costs Summary.
It is neither fitting by law or conscience, for persons to have withheld from me all this time, monies protected by Bankruptcy Act 1966 s116 (2)(g) from me all this time, to pursue costs unreasonably, unfairly and unnecessarily incurred, reliant on false information about levies when none were owed and misleading presentations enabling conduct abusive of me personally and of NSW strata laws as to legal costs lacking due process assisted by procedural unfairness and incidents of apparent administrative and judicial bias.
must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary 'fail safe' discount on the cost estimates submitted to the Court.
There must be an appropriate basis for the Court to be able to make a judicial decision rather than a guess. Faux calculations that provide no real basis upon which to conclude that it is reasonable to assess a particular lump-sum as an appropriate amount to be paid pursuant to the Court's cost order do not suffice. The process requires that there be a proper foundation for the lump-sum assessment, taking account that there is a trade-off between the risk of injustice in forming a conclusion as to a lump-sum on limited information and the likely injustice that flows from the costs and delay involved in undertaking a detailed assessment.
(1) steps taken from 10 March 2023 in response to Ms Kimber's application for stays of the writ of possession and the notice to vacate, being the date on which the trustees first had notice of Ms Kimber's application for the stays (such as advising the Sheriff of the application); and
(2) costs incurred in consequence of the decision by Bromwich J to lift the stays on 31 March 2023 until 17 April 2023 including updating the Sheriff and Senior Sergeant about the notice to vacate and re-arranging execution of the writ of possession and notice to vacate.
The authorities establish that a discount should be applied to actual costs incurred by the party seeking a gross sum order. The discount is intended to take account, not only of the inevitable reduction in the amount awarded as a result of a taxation on a party/party basis, but also to recognise that no such taxation has occurred and that any estimate of its outcome is just that and that a further allowance may be necessary in order to ensure fairness to the party against whom the order is made. Both underestimation and overestimation are, to the extent possible, to be avoided.
The decided cases reveal considerable variation in the discount applied. Formulating the discount requires the court to bring to account factors in the circumstances of the particular case that may have affected the extent to which the costs incurred exceed that which is provided for by the nature of the costs order made. However, care must be taken with this approach because it is anchored in the actual costs incurred and the task in most instances is to assess a reasonable amount of costs on a party and party basis. There may be a concern that a party who has chosen to incur substantial costs in excess of those that might be incurred by a reasonable party in the same position acting prudently in its interests may recover an excessive costs award by a top down approach to assessment. This exposes the importance of the broad categories of costs as described in the costs summary which must be provided in support of the application (see below). By dividing the costs claimed into relevant categories the Court is able to check the quantum for particular kinds of work against amounts generally claimed under lump sum assessments and to apply principles of proportionality in a logical way.
(a) the complexity of the matter;
(b) the difficulty or novelty of the questions involved in the matter;
(c) the skill, specialised knowledge and responsibility involved and the time and labour expended by the lawyer;
(d) the number and importance of the documents prepared and read, regardless of their length;
(e) the amount or value of money or property involved;
(f) research and consideration of questions of law and fact;
(g) the general care and conduct of the lawyer, having regard to the lawyer's instructions and all relevant circumstances;
(h) the time within which the work was required to be done;
(i) allowances otherwise made in accordance with this scale (including any allowances for attendances in accordance with item 1.1); and
(j) any other relevant matter.
(1) Ms Kimber's interim application came before me as duty judge on 16 March 2023 and I made an order for the trustees' submissions to be filed and served by 5:00pm the next day, on 17 March 2023, which was complied with.
(2) It was necessary to consider extensive documentation from Ms Kimber, including an affidavit of over 300 pages filed by Ms Kimber on Sunday 26 March 2023 before the interlocutory hearing on 28 March 2023 and "further supporting evidence" which was not in proper form, as well as additional material on which Ms Kimber sought to rely produced by her only during the course of the hearing on 28 March 2023.
(3) The hearing of the application on 28 March 2023 ran all day until just before 6:00pm with only a half-hour break.
(1) due to its urgency;
(2) her experience in bankruptcy law;
(3) her background in the many proceedings involving Ms Kimber; and
(4) the fact that the "extensive" materials filed by Ms Kimber on short notice "could not be considered in a timely fashion in any meaningful way by other staff members", including because that material was "prolix, confusing and contained scandalous allegations".
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perry.
Kimber
Clark in his capacity as trustee of the property of Kimber
(1995) 57 FCR 119
(2002) 54 NSWLR 738
(2011) 194 FCR 250
(2000) 205 CLR 337
(2011) 197 FCR 113
(2023) 279 CLR 148