Kitay, in the matter of Frigger (No 2) [2018] FCA 1032

FEDERAL COURT OF AUSTRALIA

Kitay, in the matter of Frigger (No 2) [2018] FCA 1032 File number: WAD 616 of 2017

Judge: COLVIN J

Date of judgment: 20 July 2018

Catchwords: BANKRUPTCY AND INSOLVENCY - petition for sequestration orders on the basis of unpaid costs order - principles to be applied where debtors seek to go behind costs order and decision on assessment on taxation - costs assessment deemed to take effect as a judgment - whether claim that costs order should not have been made to be evaluated as a claim that in truth and reality there was no debt BANKRUPTCY AND INSOLVENCY - whether petition for sequestration orders should be refused on basis that debtors can pay their debts - debtors with entitlement to distributions from superannuation fund - whether those funds should be brought to account in determining whether debtors are able to pay their debts - refusal by debtors to call on superannuation fund for monies to pay costs order - unsuccessful attempt to levy execution - by reason of access to superannuation fund, debtors able to pay their debts - discretion exercised against refusing petition in circumstances where debtors can pay their debts BANKRUPTCY AND INSOLVENCY - alleged claim by debtors against petitioning creditors - proceedings commenced in Supreme Court for damages - alleged claim in those proceedings for amount held in bank account - consideration of circumstances in which claims in other proceedings may be a sufficient cause to dismiss or adjourn petition BANKRUPTCY AND INSOLVENCY - alleged fraud in assessment of costs pursuant to costs order - debtors given notice of incorrect hearing room for assessment - hearing proceeding in absence of debtors - subsequent opportunity to raise written objections - no written objections filed until more than a year later - no error demonstrated in assessment by Registrar - no fraud or miscarriage of justice CORPORATIONS - costs agreement entered into by liquidator in respect of conduct of proceedings involving liquidator and company in liquidation - whether approval required under s 477(2B) of the Corporations Act 2001 (Cth) - approval not required COSTS - indemnity principle - costs agreement by which solicitors can render account but will only require payment if costs order obtained -indemnity principle satisfied COSTS - award of indemnity costs - whether award should have been made without first requiring production of costs agreement - proper approach to assessment of costs where a costs agreement allows for charging above scale