Toben v Jones

The background to the order 3 The applicant filed a notice of appeal and an application for leave to appeal in relation to orders made by a judge of this Court in contempt proceedings. On 13 August 2009 the Full Court of this Court made orders dismissing the applicant's appeal and ordering the applicant to pay the respondent's costs (Toben v Jones [2009] FCAFC 104). On 25 June 2010 the respondent filed a bill of costs claiming costs and disbursements of $104,411.97 and on 30 June 2010 a decision was made to apply the provisions of O 62 r 46(1) of the Federal Court Rules and decline to give an appointment to tax the bill. A direction was made that an assessment be made in accordance with O 62 r 46(3) and a direction was made that an estimate be made by a taxing officer on 30 June 2010. That was done by a taxing officer whose estimate in relation to the bill of costs was $56,435.72. 4 The Deputy District Registrar advised the parties of the estimate by letter dated 4 August 2010. As far as the applicant was concerned the letter was sent to his solicitor who had given his address as the address for service for the applicant in both the notice of appeal and the application for leave to appeal. 5 Neither party filed a notice of objection to the estimate under O 62 r 46(3)(c) and on 15 September 2010 a certificate of taxation was issued in the following terms: I hereby certify that, pursuant to Order 62 rule 46(3)(ca) of the Federal Court Rules, the respondent's costs, as between party and party, are deemed to be $56,435.72. 6 On 10 December 2010 the respondent filed an affidavit sworn by his solicitor on 18 November 2010 deposing to service of the certificate of taxation on the applicant by sending it under cover of a letter to the applicant at a residential address in South Australia. 7 The Deputy District Registrar considered that the requirements of O 62 r 45(3) had been met and that in turn led to the order which is referred to in the applicant's notice of motion.

Proceedings under the Bankruptcy Act 1966 (Cth) against the applicant 8 It seems that in October 2010 a bankruptcy notice was issued against the applicant at the request of the respondent. That bankruptcy notice was subsequently set aside without any contest and it is not necessary to refer to it further. 9 On 12 January 2011 a second bankruptcy notice against the applicant was issued at the request of the respondent. The debt forming the basis of that notice was the judgment for $56,435.72 entered on 23 December 2010. 10 The second bankruptcy notice was served on the applicant on 22 March 2011. The applicant took no action in relation to the notice until, on 15 April 2011, he issued the notice of motion now before me. In other words, he did not take any action within the 21 day period specified in the bankruptcy notice. 11 After the 21 day period specified in the bankruptcy notice had expired the respondent issued a creditor's petition in the Sydney Registry of the Federal Magistrates Court. Although I do not have all of the precise details the creditor's petition came on for mention or argument before that Court on a number of occasions. The most recent hearing was before a Registrar of that Court on 28 June 2011. At that hearing the Court made the following orders: 1. The Creditor's Petition be dismissed. 2. The Respondent pay the Applicant Creditor's costs (including reserved costs) of the petition fixed in the amount of $4,227.74. 3. A copy of this order be provided to the Official Receiver in Sydney within 2 days. 12 It is clear that those orders followed the payment of the sum of $56,435.72 by the applicant to the respondent on or about 21 June 2011.

The hearings before this Court 13 There have been five hearings before me in relation to the notice of motion. Those hearings took place on 30 May 2011, 2 June 2011, 15 June 2011, 20 June 2011 and 4 July 2011. 14 At the first three hearings the applicant's principal focus was on obtaining an order that the time for compliance with the second bankruptcy notice be extended. He advanced evidence designed to show that he had not responded to the notice within the 21 day period because he had placed the matter in the hands of solicitors in Melbourne and through oversight on their part no action had been taken within the 21 day period. I raised with the applicant and then with Dr J Walsh, who appeared on the applicant's behalf on 15 June 2011, the question of whether the Court had the power to extend the time for compliance with the notice. Dr Walsh's argument in relation to that question appears in the transcript of the hearing on 15 June 2011 and I will not set it out. It is sufficient for me to say that nothing Dr Walsh said causes me to doubt that as a matter of well-established principle, where the time for compliance with the bankruptcy notice has passed and where no steps have been taken to set aside the order in respect of which the bankruptcy notice was issued or application made to set aside the bankruptcy notice, this Court does not have the power to extend the time for compliance with the notice (ss 41(6A) and 33(1)(c) of the Bankruptcy Act 1966 (Cth), James v Abrahams (1981) 34 ALR 657). 15 Before delivering my ruling on the applicant's notice of motion I raised at the hearing on 20 June 2011 certain questions about the notification of the estimate and service of the certificate of taxation and I invited the parties to make further submissions on the matters I raised. The applicant did not make any further submissions before paying the money to the respondent the following day. 16 On 4 July 2011 the applicant made a request that I hear submissions by Dr Walsh on his behalf by telephone from Melbourne. I refused that request. However, I did give the applicant leave to file further written submissions by 4.00 pm on 5 July 2011. The applicant filed two further documents which I have read. They do not cause me to alter any of the conclusions expressed in these reasons. 17 The payment of the sum referred to in the order entered on 23 December 2010 means that the notice of motion must be dismissed. The amount paid by the applicant is the full amount of the judgment and there is no reason why costs should not follow the event. That means that the applicant should pay the respondent's costs of the notice of motion. 18 For completeness I would add that the notice of motion fails on the merits. In so far as it is an application for an extension of time for compliance with the second bankruptcy notice it fails for the reasons already given. I would add that even if there were other reasons for not ordering the applicant to pay the respondent's costs of the notice of motion (which there are not) he would have had to pay the costs of the first three hearings because he pursued an argument which was plainly untenable. 19 In so far as it is an attack on the order entered on 23 December 2010, no grounds for disturbing the order (assuming for present purposes that there is a power to set aside an order entered pursuant to O 62 r 45(3)) have been identified. Notice of the estimate was given appropriately having regard to the address for service on the files of the Court. The applicant asserted that he sent to the Court a copy of his letter to the respondent's solicitor advising that his solicitor was no longer acting for him. He did not do that. He did send a letter to the Court dated 28 August 2009 but that was a different letter and in no way did it constitute notice of a change in the applicant's address for service. Service of the certificate of taxation was sufficient bearing in mind that the applicant had advised the respondent that the solicitor was no longer acting for him. Even if there was a difficulty any challenge to the order must fail. There can be no challenge to the Full Court's order for costs before this Court and nothing was said either by the applicant or Dr Walsh, when he appeared on the applicant's behalf, which even remotely suggested a proper basis for challenging the estimate. That the notice of motion fails on the merits is a conclusion I reach irrespective of the fact that payment has now been made.

Conclusion 20 The applicant's notice of motion dated 15 April 2011 is dismissed and the applicant must pay the respondent his costs of and incidental to the notice of motion. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.