Sammut v Leroy (Trustee) [2016] FCA 1294

Sammut v Leroy (Trustee) [2016] FCA 1294

The appeal against the first respondent failed because the primary judge applied the correct prospective test, was entitled to find from the evidence available when the offer was made that the appellant's s 178 case was very weak, and did not err in treating the offer as a genuine compromise whose rejection was unreasonable. The appeal against the second respondent succeeded because the second respondent was a necessary party affected by the relief sought, the case against him was not hopeless merely because no separate cause of action was pleaded, and the primary judge failed to take into account the absence of any settlement offer or timely warning that indemnity costs would be sought.

Jurisdiction
Australia
Judgment Date
03 November 2016
Procedural Posture
Appeal From Federal Circuit Court Costs Orders in Bankruptcy Proceedings / Application for Leave to Appeal and Appeal Heard Together; Judgment on Appeal
Outcome
Leave to appeal granted to the extent necessary; appeal dismissed against the first respondent and allowed against the second respondent.
Legal Topics
['indemnity Costs' 'offer of Compromise' 'calderbank Principles' 'exercise of Discretion on Costs' 'review of Trustee Decision Under S 178 of the Bankruptcy Act 1966 (cth)' 'leave to Appeal']
['costs' 'bankruptcy' 'appellate Procedure'] ['indemnity Costs' 'offer of Compromise' 'calderbank Principles' 'exercise of Discretion on Costs' 'review of Trustee Decision Under S 178 of the Bankruptcy Act 1966 (cth)' 'leave to Appeal']

Case Brief

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Procedural Posture

Appeal From Federal Circuit Court Costs Orders in Bankruptcy Proceedings / Application for Leave to Appeal and Appeal Heard Together; Judgment on Appeal

Legal Issues

  1. 1 ["Whether the first respondent's 26 June 2014 offer constituted a genuine offer of compromise." "Whether the appellant's rejection of the first respondent's offer was unreasonable so as to support indemnity costs." 'Whether the primary judge erred in awarding indemnity costs to the second respondent where the second respondent made no settlement offer and was a necessary party.' 'Whether leave to appeal was required and, if so, should be granted.']

Ratio Decidendi

The appeal against the first respondent failed because the primary judge applied the correct prospective test, was entitled to find from the evidence available when the offer was made that the appellant's s 178 case was very weak, and did not err in treating the offer as a genuine compromise whose rejection was unreasonable. The appeal against the second respondent succeeded because the second respondent was a necessary party affected by the relief sought, the case against him was not hopeless merely because no separate cause of action was pleaded, and the primary judge failed to take into account the absence of any settlement offer or timely warning that indemnity costs would be sought.

Court Disposition

Leave to appeal granted to the extent necessary; appeal dismissed against the first respondent and allowed against the second respondent.

Orders

  • ['To the extent necessary grant leave to appeal from the Federal Circuit Court judgment of Judge Manousaridis given on 24 March 2016.' 'Dismiss the appeal against the first respondent.' 'Allow the appeal against the second respondent.' 'Order 2 and order 3, insofar as it relates to the costs of the second...