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Surpion Pty Ltd v M. R. Works Pty Ltd (Receivers and Managers Appointed) [2010] FCA 1262

by Martha.Ware 3. February 2011 09:43

Facts

 

Mr Furnari, who had control of Main Roads Group (the Company) prior to it entering into liquidation, applied for a review of the decision of a Registrar with respect to a costs order made against him in favour of the liquidator pursuant to s 35A of the Federal Court of Australia Act 1976 (Cth).

 

Mr Furnari claimed legal professional privilege over documents produced by Mr Simmonds, an examinee summoned by the liquidator under s 596B of the Corporations Act 2001 (Cth). He was successful only to a limited extent and only after significant delay on his part in complying with procedural steps.

 

At first instance, a costs order was made against Mr Furnari such that he was to pay 60% of the liquidator’s costs of the privilege dispute.

 

Outcome

 

On review, it was found that Mr Furnari’s intervention in the examination of Mr Simmonds was, in effect, litigation between Mr Furnari and the liquidator before a judicial officer with power to resolve the dispute: [18]. On that basis, the ordinary costs rules should apply: [19].

 

His Honour relied upon the one decision that he could find on point, being Re Lutscher; Ex parte Waddell (1877) LR 6 Ch D 32 in which the Court of Appeal in dicta found that during the examination of a bankrupt, litigation could arise between the trustee and the examinee and the usual costs orders would apply: [20].

 

The review was made on the facts of this particular case: Mr Furnari had caused delay and costs to be incurred ([22]), the hearing took longer because Mr Furnari did not provide a detailed outline of his claim for privilege ([23]), and the liquidator had been substantially successful ([24]).

 

The decision may also be of limited use in relation to His Honour’s review of case law regarding awarding costs to examinees ([11], [15]-[16]) and costs for liquidators where examinees fail to attend ([13]-[14]), although these were not relevant to the decision made in this case.

 

Relevant paragraphs of Ford

[3.330], [27.170.1]

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Ford's Principles of Corporations Law



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