FEDERAL COURT OF AUSTRALIA In the matter of Rose, a bankrupt; Godfrey v Whitton (No 2) [2007] FCA 494 IN THE MATTER OF JOHN EMMANUEL ROSE, A BANKRUPT; MURRAY GODFREY AS ADMINISTRATOR OF REGIS TOWERS REAL ESTATE PTY LIMITED (IN ADMINISTRATION) ACN 087 088 202 AND REGIS TOWERS REAL ESTATE PTY LIMITED (IN ADMINISTRATION) ACN 087 088 202 v ROBERT WILLIAM WHITTON AS TRUSTEE OF THE ESTATE OF JOHN EMMANUEL ROSE, A BANKRUPT AND OFFICIAL RECEIVER NSD 641 OF 2006 GRAHAM J 12 MARCH 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 641 OF 2006 IN THE MATTER OF JOHN EMMANUEL ROSE, A BANKRUPT BETWEEN: MURRAY GODFREY AS ADMINISTRATOR OF REGIS TOWERS REAL ESTATE PTY LIMITED (IN ADMINISTRATION) ACN 087 088 202 First Applicant REGIS TOWERS REAL ESTATE PTY LIMITED (IN ADMINISTRATION) ACN 087 088 202 Second Applicant AND: ROBERT WILLIAM WHITTON AS TRUSTEE OF THE ESTATE OF JOHN EMMANUEL ROSE, A BANKRUPT First Respondent OFFICIAL RECEIVER Second Respondent JUDGE: GRAHAM J DATE OF ORDER: 12 MARCH 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Amended Notice of Motion filed in Court on 12 March 2007 be dismissed. 2. The applicant in the motion (the first respondent in the proceedings) pay the costs of the respondents to the motion (Murray Godfrey as administrator of Regis Towers Real Estate Pty Limited (in administration) ACN 087 088 202 and Regis Towers Real Estate Pty Limited (in administration) ACN 087 088 202). Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 641 OF 2006 IN THE MATTER OF JOHN EMMANUEL ROSE, A BANKRUPT BETWEEN: MURRAY GODFREY AS ADMINISTRATOR OF REGIS TOWERS REAL ESTATE PTY LIMITED (IN ADMINISTRATION) ACN 087 088 202 First Applicant REGIS TOWERS REAL ESTATE PTY LIMITED (IN ADMINISTRATION) ACN 087 088 202 Second Applicant AND: ROBERT WILLIAM WHITTON AS TRUSTEE OF THE ESTATE OF JOHN EMMANUEL ROSE, A BANKRUPT First Respondent OFFICIAL RECEIVER Second Respondent JUDGE: GRAHAM J DATE: 12 MARCH 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 What is presently before the Court is a Notice of Motion styled 'Amended Notice of Motion' filed in Court on 12 March 2007 in which a stay of execution is sought in respect of an order for costs imposed on the first respondent in NSD 641 of 2006 (Mr Whitton as the trustee of the estate of John Emmanuel Rose, a bankrupt ('the Trustee')) and a further order for costs made on the same date insofar as it required the first respondent to pay two-thirds of the costs of the applicants (Mr Godfrey as administrator of Regis Towers Real Estate Pty Limited (in administration) ACN 087 088 202 ('the Administrator') and Regis Towers Real Estate Pty Limited (in administration) ACN 087 088 202 ('Regis Towers')) in respect of an amended application. 2 The Trustee and the Administrator have been locked in battle for some period of time. Subsequent to the disposition of the Application in NSD 641 of 2006, a Cross-application in that matter came before the Court on 10, 11, 12, 13, 16, 17, 18 and 19 October 2006. The Cross-application in NSD 641 of 2006 was heard together with an Application for Review under s 104 of the Bankruptcy Act 1966 (Cth) ('the Act') in NSD 1657 of 2006. 3 In the Cross-application the Trustee was seeking relief against Regis Towers and in the separate proceedings, NSD 1657 of 2006, Regis Towers was seeking relief against the Trustee. 4 It is unnecessary for present purposes to make reference to the Court's reasons for judgment of 22 June 2006, of 17 November 2006 and 23 November 2006. Suffice it to say that the Cross-application failed and no order as to costs was made in relation to that Cross-application. The Application for Review under s 104 of the Act failed and no order as to costs was made in relation to that matter. 5 The original Application concerned a notice issued by the Official Receiver under s 139ZQ of the Act and a demand made by the Trustee under s 129 of the Act. On 22 June 2006 a number of declarations and orders were made by consent disposing of the claims made in the Application as amended in respect of the s 139ZQ notice and the s 129 demand. 6 In paragraph 7 of my reasons for judgment of 22 June 2006 I referred to the fact that the trustee's Cross-application sought relief under s 121 of the Act in respect of certain payments said to have been made by the bankrupt in late April 1999, 6 August 1999 and 2 December 1999. I observed: 'Those amounts bear no relationship to the amounts sought to be recovered under the s 139ZQ notice or the s 129 demand.' 7 In relation to the disposition of the Application as amended in NSD 641 of 2006, costs were sought by the applicants against both the Trustee and the Official Receiver. In paragraph 12 of my reasons for judgment of 22 June 2006 I said: 'The Trustee does not oppose an order for costs being made against him but opposes the making of such an order on an indemnity basis. The Official Receiver opposes the making of any order for costs against her.' 8 In the result, no order for the payment of indemnity costs was made. However, costs orders were made against both the Trustee and the Official Receiver in the following terms: '1. The applicants' costs thrown away by the vacation of the hearing dates fixed for 23 June 2006 and 26 June 2006 be paid by the first respondent. 2. The costs of the applicants of the amended application be paid as to two thirds (2/3) by the first respondent and as to one third (1/3) by the second respondent.' 9 The costs of the applicants referred to in order 2 have now been assessed in the sum of $47,400. 10 The amount of $47,400 is said to be the total amount of the costs entitlement of the applicants under order 2 of 22 June 2006. It is said that the costs covered by order 1 have yet to be determined. 11 Under Order 37 rule 10 of the Federal Court Rules the Court has power to stay execution of a judgment or order. In the instant case no appeal has been filed or is contemplated in respect of the costs orders made on 22 June 2006. All that the applicant in the Motion presently before the Court, the Trustee, has to say is this: if two-thirds of the $47,400, which is approximately $31,600, and in due course the costs covered by order 1 of 22 June 2006 are paid to the Administrator and Regis Towers, it may not be possible at a later stage to recover the amounts so paid, to the extent to which they end up in the hands of the company rather than the Administrator, even if the other proceedings, which were decided on 17 November 2006 and 23 November 2006, to which the Administrator is not a party, are ultimately resolved in such a way that moneys become payable by Regis Towers to the Trustee. 12 I can see no proper basis for a stay of execution in respect of the orders as to costs made on 22 June 2006. As indicated earlier, an order for costs against the Trustee was not opposed. Furthermore, it was acknowledged that the amounts sought to be recovered by the Trustee in the Cross-application bore no relationship to the amounts sought to be recovered under the Notices which were set aside. It will be readily apparent that the identity of the parties to the proceedings which were the subject of the costs order in relation to which relief is now sought are different from the parties to the later proceedings which are the subject of appeals on both sides. 13 The Amended Notice of Motion was filed in court today. The original Motion was apparently filed in the appeal brought by the Trustee in matter number NSD 2392 of 2006. I am informed that Branson J ordered that the Motion be treated as having been filed in matter number NSD 641 of 2006 rather than in the appeal. The Motion originally came before her Honour on 22 February 2007. It came before me for directions on 23 February 2007 and again before me today for determination. I must say that I am surprised that the applicant has pressed on with the Motion given the observations which I made on 23 February 2007 when the matter was before the Court for directions. 14 I order that the Amended Notice of Motion filed in Court on 12 March 2007 be dismissed. 15 I order that the applicant in the Motion (the first respondent in the proceedings) pay the costs of the respondents to the Motion (the Administrator and Regis Towers). I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 4 April 2007 Counsel for the Applicants: Mr A P Spencer Solicitor for the Applicants: Sally Nash & Co Counsel for the First Respondent: Mr J A N Hogan-Doran Solicitor for the First Respondent: Piper Alderman The Second Respondent did not appear. Date of Hearing: 12 March 2007 Date of Judgment: 12 March 2007