Pitman v Pantzer

Federal Court of Australia|2002-02-21|Before: Beaumont J

BEAUMONT J: 1 Having previously indicated, on a provisional basis, some proposed orders, I have now heard further argument on the form of the orders to be made in the proceedings at this stage. 2 The orders provisionally proposed, subject to any further submissions, were: "1. Note the agreement of the parties referred to in par 2 of my reasons for judgment dated 21 December 2001. 2. Application stood over generally, with liberty to restore on 7 days' notice. 3. Declare that the applicant (the first cross-respondent) has been effectively released from any liability to the third cross-respondent. 4. Reserve liberty to the bankrupt to apply to the Court, on such notice as a Judge of the Court may allow, for an order that the first respondent (the second cross-respondent) call a meeting of creditors pursuant to s 73(2) of the Bankruptcy Act 1966. 5. Order that the second respondents (the cross-applicants) pay the costs of the proceedings of the applicant (the first cross-respondent) up to and including 12 October 2001. 6. Order that the second respondents (the cross-applicants) pay the costs of the proceedings of the first respondent (the second cross-respondent) on a submitting basis only. Reserve liberty to the first respondent (the second cross-respondent) to apply, on such notice as a Judge of the Court may allow, for any further order for his costs. 7. Suspend the operation of these orders up to and including 14 February 2002." 3 It will be convenient to deal with the Application first.

ORDERS TO BE MADE ON THE CROSS-APPLICATION 7 Plainly there should be a declaration in terms of par 3. (Given the grant of leave to Throvena to substitute its proof referred to in [54] of my reasons dated 21 December 2001, no formal order to this effect is now required.) 8 Throvena also seeks an order directing the Trustee to call a fresh meeting under s 73(2). The Trustee will be bound to do so within a reasonable time. At the moment, I am not persuaded that the Trustee will refuse to do so. However, I will reserve liberty to apply, if necessary, as par 4 states.

COSTS 9 In my opinion, the question of costs ought to be approached, on a by and large basis, by considering the application and cross-application together. 10 So viewed, it is apparent that whilst the Trustee and the bankrupt are to be regarded as submitting parties, the real disputants (i.e. contradictors in the application and cross-application) were Throvena and Mr Pitman. 11 It is further to be borne in mind that whilst, to the above extent, this was adversarial litigation, the character of the contest, as one arising in the complex administration of a fund or estate, is significant. This was not merely a private dispute and, as mentioned the general body of creditors is interested in the outcome. 12 It appears that, until the Settlement Deed became operative on 8 October 2001, Mr Pitman had not been effectively discharged from liability. This, in my view, justified his claim for interim relief enjoining the original s 73 meeting. Although that injunction was later discharged, this occurred because there was then no live threat to proceed with the original proposal. Until 12 October 2001, Mr Pitman was not aware that he had been effectively released. Up to that point (i.e. the Settlement Deed), Throvena had failed to establish that Mr Pitman had been effectively released. Broadly speaking then, Mr Pitman had been successful in the litigation as a whole. This, in my view, justifies an order in terms of par 5. He should not, however, receive costs beyond that time. Nor, in my view, should Throvena, given its failure to seek leave to substitute its proof until very late in the proceedings. 13 The Trustee should receive costs upon a submitting basis only. If the Trustee seeks more costs, he will need, as par 6 provides, to apply.

GENERAL 14 It follows that, upon further consideration, I do not propose to vary the orders provisionally made on 8 February 2002, and they will now come into effect. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont.

Counsel for the Applicant: Mr A Ogborne

Solicitor for the Cross-Applicants (Intervening Creditors): Hunt & Hunt

Date of Hearing: 14 February 2002

Date of Judgment: 21 February 2002

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