Weeden v Rambaldi

1. The first respondent pay the second respondent's costs of and incidental to the proceeding, other than those costs incurred in the making of submissions as to the effect and operation of s 306 of the Bankruptcy Act 1996 (Cth).

2. The first respondent pay the third respondent's costs of and incidental to the proceeding.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 744 of 2011

ANDREW REGINALD YEO (AS JOINT TRUSTEES OF THE PROPERTY OF PHILIP CHARLES WEEDEN, A BANKRUPT)

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 859 of 2011

GESS MICHELE RAMBALDI (AS TRUSTEES OF THE PROPERTIES OF PHILIP CHARLES WEEDEN, A BANKRUPT)

JUDGE: BROMBERG J DATE: 21 JUNE 2012 PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 On 29 May 2012, I handed down judgment in these two proceedings which were related and heard concurrently. My reasons are published as Weeden v Rambaldi [2012] FCA 552. The orders I made in each proceeding reserved the question of costs, should the parties be unable to agree on that issue. Agreement has been reached between Philip Charles Weeden ("Weeden") and Andrew Yeo ("Yeo") and Gess Rambaldi ("Rambaldi"). Agreement has not been reached between Weeden and the Inspector-General in Bankruptcy ("the Inspector-General") and Weeden and the Official Receiver in Bankruptcy ("the Official Receiver"). 2 Weeden contends that there should be no order as to costs as between himself and the Inspector-General and the Official Receiver in either proceedings. Without distinguishing between the two proceedings, Weeden contends that the Inspector-General and the Official Receiver should not have incurred costs and instead should have simply indicated that they would abide by the Court's decision. Weeden argues that there was no need for them to have formed a view on the merits of the proceeding and become actively involved in assisting one side or the other. Secondly, Weeden contends that having decided to advance submissions, the Inspector-General and the Official Receiver were unsuccessful because the submissions made by them on the operation of s 306 of the Bankruptcy Act 1996 (Cth) ("the Bankruptcy Act") were unsuccessful. 3 The Inspector-General and the Official Receiver contend that Weeden should pay their costs in each of the proceedings. They contend that ordinarily costs should follow the event and that Weeden has not demonstrated any ground for a departure from that ordinary course. 4 Section 43 of the Federal Court of Australia Act 1976 (Cth) confers a wide and unfettered discretion upon the Court to award costs. That discretion is to be exercised judicially and not against a successful party, except for some reason in connection with the case: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [9] (Black CJ and French J). The discretion enables the Court to respond to a wide range of circumstances: Ruddock at [16] (Black CJ and French J). 5 In proceeding VID 859 of 2011, Yeo and Rambaldi sought an order that the Inspector-General and the Official Receiver correct the National Personal Insolvency Index ("NPII") in a manner consequential upon the grant of other relief sought by them. Yeo and Rambaldi succeeded in their application and the Court directed that the NPII be amended consistently with a declaration made in favour of Yeo and Rambaldi. 6 In proceeding VID 744 of 2011, Weeden also sought relief against the Inspector-General and the Official Receiver. He sought a direction that the Inspector-General and Official Receiver correct the NPII consequentially upon the grant of the relief which he sought. Weeden failed in that application and it was dismissed. 7 Given the relief sought against them, each of the Inspector-General and the Official Receiver were necessary parties to the proceeding brought by Yeo and Rambaldi (VID 859 of 2011). Weeden was the losing party in that proceeding and ordinarily would be required to pay the costs of other parties, including the costs of a respondent not claiming any relief but brought along as a necessary party in relation to relief sought by, and ultimately obtained by, the successful party. 8 There is no reason why the costs incurred by the Official Receiver ought not be paid by Weeden. There can be no allegation that the Official Receiver unreasonably incurred costs. The Official-Receiver agreed to abide by any order or declaration made by the Court and (contrary to Weeden's submission) otherwise did not participate. The costs incurred in arriving at the conclusion that the Official Receiver would simply abide by the order of the Court may not be significant but, insofar as the Official-Receiver incurred costs, those costs should be paid by Weeden. 9 As the outline of submissions filed by the Inspector-General and the Official Receiver state at [4] and [5], the Inspector-General took a different position to that of the Official Receiver. The Inspector-General also agreed to abide by any order or declaration made by the Court but sought to make submissions as to the effect and operation of s 306 of the Bankruptcy Act. 10 The Inspector-General is given responsibility for the "general administration" of the Bankruptcy Act by s 11(2)(a) of that Act. In that context, the Inspector-General has an interest in the effective operation of the Bankruptcy Act and also has the capacity to assist the Court as to the effect and operation of a provision like s 306. 11 Rather than taking sides, as Weeden alleges the Inspector-General did, I regard the Inspector-General's participation, for the purpose of making submissions as to s 306, as non-partisan and in furtherance of the Inspector-General's responsibilities under the Bankruptcy Act. I do not think it appropriate, however, that Weeden should be made to pay the costs involved in a public official making submissions to a court, which transcend the litigation and are made in furtherance of the official's responsibilities. The public benefit involved in conduct of that kind ought to be met out of public funds. 12 As to the proceeding brought by Weeden (VID 744 of 2011), Weeden joined the Inspector-General and the Official Receiver as respondents. Weeden failed in his application and there is no reason why he should not pay the costs of both the Inspector-General and the Official Receiver. Both those parties agreed to abide by any order or declaration made by the Court in that proceeding. Insofar as costs were incurred by them in that proceeding, those costs should be paid by Weeden. 13 For those reasons, I will make an order in proceeding VID 744 of 2011 that Weeden pay the costs of the Inspector-General and the Official Receiver. In proceeding VID 859 of 2011, I will make an order that Weeden pay the costs of the Official Receiver and the costs of the Inspector-General, other than the costs incurred by the Inspector-General in making submissions as to the effect and operation of s 306 of the Bankruptcy Act. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.