Brady v Official Trustee in Bankruptcy [2002] FCA 363

FEDERAL COURT OF AUSTRALIA

Brady v Official Trustee in Bankruptcy [2002] FCA 363

BANKRUPTCY – appeal from Federal Magistrates Court of Australia – appellant claimed to be secured creditor with security over a gold mining lease and certain plant and equipment ("the Property") – respondent trustee, on legal advice, denied appellant held such security – trustee sold some of the Property – appellant sued trustee for conversion and, in the alternative, for breach of certain duties under the Bankruptcy Act, should appellant be found to be an unsecured creditor – Federal Magistrate held appellant's security to be valid and awarded damages to appellant for conversion – whether Federal Magistrate erred in not awarding damages against respondent for failing to take possession of the Property and protect the interests of creditors – whether damages award was inadequate. PRACTICE AND PROCEDURE – costs – offer made by respondent to compromise – appellant did not accept offer, but made counter-offer to settle for over ten times amount of eventual judgment – whether Federal Magistrate erred in finding that respondent's offer of compromise exceeded the amount of the judgment and interest recovered – whether Federal Magistrate erred in finding that appellant's refusal to accept respondent's offer was sufficiently unreasonable to justify ordering appellant to pay respondent's costs on an indemnity basis for part of the relevant period – no discretionary error demonstrated – whether appellant should be permitted to adduce further evidence not tendered to Federal Magistrate – tender refused.

Bankruptcy Act 1966 (Cth), ss 58, 90, 116, 129(1), 176 Wollongong Corporation v Cowan (1955) 93 CLR 435 applied Calderbank v Calderbank [1975] 3 WLR 586 referred to Bates v Omareef Pty Ltd (unreported, Emmett J, Federal Court of Australia, 28 October 1997) referred to Alpine Hardwood (Aust) Pty Ltd v Hardys Pty Ltd (No 2) [2002] FCA 224 referred to