Lowbeer v De Varda [2018] FCAFC 115

FEDERAL COURT OF AUSTRALIA

Lowbeer v De Varda [2018] FCAFC 115 Appeal from: Lowbeer v De Varda and Lowbeer v Tov-Lev [2017] FCCA 1658

File number(s): NSD 1359 of 2017 NSD 1360 of 2017

Judge(s): REEVES, FARRELL AND COLVIN JJ

Date of judgment: 24 July 2018

Catchwords: BANKRUPTCY AND INSOLVENCY - appeal from Federal Circuit Court dismissing creditor's petitions based on certificates of taxation and costs order made in favour of petitioning creditor against the respondents - where primary judge found in truth and reality no debt due and payable because costs had been incurred by third party - principles to be applied when court invited to go behind a judgment to determine whether in truth and reality there was a debt behind the judgment relied upon as basis for petition - whether a costs agreement existed between petitioning creditor and solicitor acting in proceedings where costs order obtained - no factual error in finding by primary judge - appeals dismissed EQUITY - where primary judge rejected claim that third party paid costs in recognition of an obligation to indemnify petitioning creditor - consideration of matters required to establish a right of subrogation - whether payment by third party of costs discharged obligation to indemnify petitioning creditors - no error by primary judge

Legislation: Bankruptcy Act 1966 (Cth) ss 43(1), 52 Federal Circuit Court (Bankruptcy) Rules 2016 (Cth) r 4.06(2)

Cases cited: Abigroup Ltd v Abignano (1992) 39 FCR 74 Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495 AFG Insurance Ltd v City of Brighton (1972) 126 CLR 655 Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93 Banque Financiere de la Cite v Parc (Battersea) Ltd [1999] 1 AC 221 Bofinger v Kingsway Group Ltd (2009) 239 CLR 269; [2009] HCA 44 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 Buckeridge v Mercantile Credits Ltd (1981) 147 CLR 654 Cheung v Burness (Trustee) [2016] FCA 1381 Corney v Brien (1951) 84 CLR 343 Coshott v Woollahra Municipal Council [2008] NSWCA 176 DiMella v Rudaks (2008) 102 SASR 582; [2008] SASC 345 Ernst & Young (Reg) v Tynski Pty Limited (2003) 47 ACSR 433; [2003] FCAFC 233 Esso Petroleum Co Ltd v Hall Russell & Co Ltd [1989] AC 643 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCACF 18 Gerrard Cassegrain & Co Pty Ltd v Cassegrain (2013) 87 NSWLR 284; [2013] NSWCA 453 Halliday v High Performance Personnel Pty Ltd (in liq) (formerly Sacs Group Pty Ltd) (1993) 113 ALR 637 In re a Debtor [1929] 1 Ch 125 Linsley v Petrie [1998] 1 VR 427 Lowbeer v Tov-Lev [2013] FCCA 1813 Marsh v Baxter [No 2] [2016] WASCA 51 Midland Banking Co v Chambers (1869) LR 4 Ch App 398 Noye v Robbins [2010] WASCA 83 O'Day v Commercial Bank of Australia Ltd (1933) 50 CLR 200 Orakpo v Manson Investments Ltd [1978] AC 95 Petrie v Redmond [1943] St R Qd 71 Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28 Re Goldring; Ex parte Harper (1888) 22 QBD 87 Re Vassis; Ex parte Leung (1986) 9 FCR 518 Robinson Helicopter Company Inc v McDermott [2016] HCA 22 Saraceni v Mentha [No 2] (2012) 269 FLR 12; [2012] WASC 336 Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pte Ltd (2009) 226 FLR 306; [2009] WASCA 31 Starkey on behalf of the Kokatha People v State of South Australia [2018] FCAFC 36 State Government Insurance Office (Qld) v Brisbane Stevedoring Pty Ltd (1969) 123 CLR 228 Stewart v Atco Controls Pty Ltd (in liq) (2014) 252 CLR 307; [2014] HCA 15 Tov-Lev v Lowbeer (No 2) [2014] FCA 379 Workcover Queensland v Seltsam Pty Ltd (2001) 53 NSWLR 518; [2001] NSWCA 457 Wren v Mahony (1972) 126 CLR 212 Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pte Ltd (2009) 240 CLR 391; [2009] HCA 50