FEDERAL COURT OF AUSTRALIA Nilant v Macchia [2001] FCA 340 PRACTICE AND PROCEDURE – costs – application for costs certificate – Full Court allowed appeal on a question of law – whether costs certificate should be granted in respect of appeal – whether respondent could or should be required to give undertaking to apply any funds received pursuant to such certificate to pay the appellant's costs. Federal Proceedings (Costs) Act 1981, s 6 CHARLES PHILLIPPE LOUIS NILANT v MARIO SILVERIO MACCHIA W 62 of 2000 HILL, CARR & WEINBERG JJ 30 MARCH 2001 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 62 OF 2000 BETWEEN: CHARLES PHILIPPE LOUIS NILANT as trustee of the bankrupt estate of Mario Silverio Macchia Appellant AND: MARIO SILVERIO MACCHIA Respondent JUDGES: HILL, CARR & WEINBERG JJ DATE OF ORDER: 30 MARCH 2001 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. Pursuant to s 6(1) of the Federal Proceedings (Costs) Act 1981, the Full Court of the Federal Court grants to the respondent to appeal W 62 of 2000 a costs certificate in respect of that appeal, stating that in the opinion of the Full Court it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of: (a) the costs incurred by the respondent in relation to that appeal; and (b) any costs incurred by the appellant in relation to that appeal that have been, or are required to be, paid by the respondent to the appellant in that appeal pursuant to an order of the Full Court. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 62 OF 2000 BETWEEN: CHARLES PHILIPPE LOUIS NILANT as trustee of the bankrupt estate of Mario Silverio Macchia Appellant AND: MARIO SILVERIO MACCHIA Respondent JUDGES: HILL, CARR & WEINBERG JJ DATE: 30 MARCH 2001 PLACE: PERTH REASONS FOR JUDGMENT the court: 1 On 27 October 2000 we published our reasons for allowing the appeal in this matter. In summary, we held that the learned primary judge had erred in law in holding that the reference to "Proceedings" in s 306 of the Bankruptcy Act 1966 (Cth) extended to the making out and filing of a statement of affairs and that a failure to comply with s 54 of that Act was a "formal defect" or "irregularity" capable of rectification by s 306. The parties were ordered to file and serve minutes of orders and submissions in relation to any other further orders. 2 On 6 December 2000, for short reasons then delivered, we ordered that his Honour's costs order, made on 27 April 2000, be set aside and that the respondent pay the appellant's costs of the proceedings at first instance and of the appeal. The respondent, by notice of motion, now seeks a costs certificate in respect of the appeal to the effect that it would in our opinion be appropriate for the Attorney-General to authorise a payment of his costs and any costs of the appeal which he is obliged to pay to the appellant. Section 6 of the Federal Proceedings (Costs) Act 1981 ("the Act") relevantly provides: "6(1) Subject to this Act, where a Federal appeal succeeds on a question of law, the court that heard the appeal may, on the application of a respondent to the appeal, grant to the respondent a costs certificate in respect of the appeal. . . . 6(3) The certificate that may be granted under sub-section (1) … by a court to a respondent to a Federal appeal is a certificate stating that, in the opinion of the court, it would be appropriate for the Attorney-General to authorize a payment under this Act to the respondent in respect of – (a) the costs incurred by the respondent in relation to the appeal; and (b) any costs incurred by an appellant in relation to the appeal that have been, or are required to be, paid by the respondent to the appellant in pursuance of an order of the court, not being costs to which a costs certificate granted under section 7 relates." 3 Both parties have filed short written submissions in relation to the motion. 4 The appellant does not oppose the grant of a costs certificate, but has drawn our attention to the fact that the respondent, who had previously received such a certificate in earlier proceedings between the parties from a differently-constituted Full Court, had raised an alleged counterclaim against the appellant when the appellant had proceeded with a bankruptcy notice in respect of the order for costs made in his favour against the respondent in those earlier proceedings. The appellant submits that steps should be taken to ensure that the respondent "does not profit" by obtaining the benefit of a costs certificate and then failing or refusing to make payment to the appellant under the costs order made by us on 6 December 2000. The appellant says that the respondent should be required to give an undertaking that any funds received pursuant to a certificate (if one is granted) will be used for the purpose of paying the appellant his costs. 5 There is no doubt, in our view, that the appellant's appeal succeeded on a question of law and that we should grant him a costs certificate. However, in our opinion, our power under s 6 of the Act does not extend to imposing a condition of the type sought by the appellant. In s 6(3) of the Act Parliament has stipulated what are to be the contents of a certificate. 6 Even if we are wrong in our view, we would not impose the condition sought by the appellant. 7 Section 16(2) relevantly authorises the Attorney-General, upon application being made to him, to pay the amount to which the certificate relates to the person who has been granted a costs certificate. 8 The appellant's entitlement to costs as against the respondent constitutes a debt to be quantified upon assessment or taxation of costs. The effect of the order sought by the appellant would be to impose an obligation in the nature of a trust upon the respondent and, quite possibly, to give the appellant priority over any other creditors. We do not think that this Court should, in the circumstances of this matter, interfere by so rearranging the rights of the parties and others not being parties to these proceedings. 9 The order that we make on the notice of motion is: 1. Pursuant to s 6(1) of the Federal Proceedings (Costs) Act 1981, the Full Court of the Federal Court grants to the respondent to appeal W 62 of 2000 a costs certificate in respect of that appeal, stating that in the opinion of the Full Court it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of: (a) the costs incurred by the respondent in relation to that appeal; and (b) any costs incurred by the appellant in relation to that appeal that have been, or are required to be, paid by the respondent to the appellant in that appeal pursuant to an order of the Full Court. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Hill, Carr & Weinberg. A/g Associate: Dated: 30 March 2001 The notice of motion was heard on the papers. Solicitor for the Appellant: Carles Solicitors Solicitor for the Respondent: Messrs Kott Gunning Date of Judgment: 30 March 2001