Schofield, Anthony James & Anor v Rangott, William Balfour & Anor [1997] FCA 896

IN THE FEDERAL COURT OF AUSTRALIA ) ) AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY ) AX13 of 1992

) ) GENERAL DIVISION )

RE: ANTHONY JAMES SCHOFIELD and CECILIA ANNE SCHOFIELD

Debtors

EX PARTE: WILLIAM BALFOUR RANGOTT

Applicant

P&B BARRON PTY LTD

ACN 000 607 143

Respondent

JUDGE: FINN J PLACE: CANBERRA DATED: 3 SEPTEMBER 1997

MINUTES OF ORDER

THE COURT ORDERS THAT: (1) no order be made as to the costs of and incidental to the hearing and ruling on the admissibility of the s81 transcripts of evidence; (2) the respondent otherwise pay the applicant's costs on the basis that such costs are to include all costs except in so far as they are of an unreasonable amount or were unreasonably incurred so that, subject to such exceptions, the applicant will be completely indemnified by the respondent for his costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA ) ) AUSTRALIAN CAPITAL TERRITORY ) AX13 of 1992

DISTRICT REGISTRY ) ) GENERAL DIVISION )

RE: ANTHONY JAMES SCHOFIELD and CECILIA ANNE SCHOFIELD

Debtors

EX PARTE: WILLIAM BALFOUR RANGOTT

Applicant

P&B BARRON PTY LTD

ACN 000 607 143

Respondent

JUDGE: FINN J PLACE: CANBERRA DATED: 3 SEPTEMBER 1997

REASONS FOR JUDGMENT The one outstanding matter in this proceeding is costs. Accepting the usual rule that costs follow the event, two issues have, nonetheless, been raised. First, the respondent has contended that, as it successfully opposed at a preliminary hearing the attempt of the applicant, the trustee in bankruptcy of the Schofields, to have transcripts of evidence given at an examination under s81 of the Bankruptcy Act, 1966 (Cth), admitted in evidence in the principal proceedings, it should be awarded the costs of that hearing. Second, not only does the applicant submit to the contrary on that issue, he also seeks to have the costs of the principal application awarded on an indemnity basis. Because of their interrelationship it is appropriate to deal with both of these matters together. The Setting The principal application was one in which I found that a mortgage given by the debtors to the respondent was both a voidable settlement under s120 of the Bankruptcy Act and a fraudulent disposition under s121. It was clear from the outset that a significant practical difficulty facing the trustee in his prosecution of that application would be that one of the debtors, Mr Schofield, had died and hence could not give evidence relating to the circumstances of the transaction in question. It was apparent that, on their side of the transaction, Mr Schofield alone was the active party in the matter with the consequence that his wife, the other debtor, likewise could not be expected to provide illumination of it. The trustee, then, was confronted with an obvious evidentiary problem. Proceedings by the trustee to impugn the mortgage were not initiated until 15 December 1995, he having previously taken steps against the respondent under Division 4B of Part IV of the Bankruptcy Act. The relevant s139 ZQ notice was set aside by this Court on 19 October 1995. Prior to this occurring, the firm of solicitors apparently then (but no longer) acting for the respondent wrote to the solicitors for the trustee on 22 September 1995. While contesting the efficacy of the particular s139 ZQ notice that had been served, they indicated their client was prepared to comply with a proper notice and that: "we are preparing a Discharge of the Mortgage and arranging for it to be executed under seal and will send this to you in due course."