FEDERAL MAGISTRATES COURT OF AUSTRALIA
CANT v PIVA & ANOR (No.2)	[2009] FMCA 1265	

BANKRUPTCY – Ruling as to form of final orders.  	

McKellar v Container Terminal Management Services Ltd [1999] FCA 1639
Vasyli v AOL International Pty Ltd & Anor (unreported, 2 September 1996)	

Applicant:	ANTHONY ROBERT CANT	

First Respondent:	SANDRA PIVA	

Second Respondent:	REGISTRAR OF TITLES	

File Number:	MLG 149 of 2007	

Judgment of:	Burchardt FM	

Hearing date:	3 December 2009	

Date of Last Submission:	3 December 2009	

Delivered at:	Melbourne	

Delivered on:	3 December 2009	

REPRESENTATION
Counsel for the Applicant:	Mr C. Moller	

Solicitors for the Applicant:	Lennon Mazzeo	

Counsel for the Respondent:	Mr M. Galvin	

Solicitors for the Respondent:	O’Donnell Salzano Lawyers	

ORDERS
THE COURT DECLARES THAT:
(1)	The transfer, made on or about 15 August 2005 and registered on 
3 November 2005, by Romano Anthony Piva to the First Respondent of land situate at 18 Bent Street, Brighton in the State of Victoria, being the land described in Certificate of Title Volume 4798 Folio 522 (“Property”), is void as against the Applicant.
THE COURT ORDERS THAT:
(2)	By no later than seven days from the date of this Order, the First Respondent do all acts and things and sign all documents necessary to transfer to the Applicant (in his capacity as the trustee of the bankrupt estate of Romano Anthony Piva) a half interest in the Property as tenant in common.  
(3)	The applicant have leave to register the transfer referred to in Order 2.  
(4)	Save for the dealings described in paragraphs 2 and 3 hereof, neither party deal with or encumber the property in any way without leave of the Court.
(5)	The First Respondent pay the Applicant’s costs of the proceeding, save for reserved costs but not including such of the Applicant’s costs as come within paragraph 6 below, to be taxed in default of agreement.
(6)	The costs relating to the matters pleaded in paragraphs 14 and 15 of the First Respondent’s amended response dated 31 March 2008 be reserved.
(7)	All reserved costs be paid by the party previously ordered to do so, such costs (unless fixed already) to be taxed in default of agreement.
(8)	There be a stay of 90 days with respect to payment of the costs referred to in Orders 5 and 7.  
(9)	The matter be adjourned to a date to be fixed following the determination of any appeal arising from these Orders.  
(1)	
FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE	
MLG 149 of 2007
ANTHONY ROBERT CANT	
Applicant

And

sandra piva	
First Respondent

registrar of titles	
Second Respondent

REASONS FOR JUDGMENT
(Revised from transcript)
1.	This is a dispute about the form of orders that should be made following my reasons for judgment given on 20 November 2009.  The issues which were then before the Court were refined from those set out in the original application and response and I recorded at paragraphs 1 and 5 both what I took the issues to be and what I thought the answer should be.  
2.	At paragraph 1 of my Reasons for Judgment I said “the applicant, Mr Cant, is the trustee in bankruptcy of Romano Anthony Piva.  The relief he now seeks is a declaration that a transfer of land registered on 15 August 2005 from Mr Piva to his wife, the first respondent, is void as against the trustee.  He further seeks a declaration that he is entitled to be vested as proprietor of a half share of the property described in the Certificate of Title” and I go on to give the details.  
3.	At paragraph 4 I said "For the reasons that follow, I think the property was not held on trust for Mrs Piva and that Mr Piva was indeed insolvent at the time of the transfer”.  
4.	At paragraph 5 I said "It follows that the trustee, the applicant, should have the relief that he seeks."  I went on to note, however, that there were a number of other matters still extant, most particularly the first respondent's claim to relief under the equity of exoneration.  
5.	The order prepared by the trustee seeks a declaration that the transfer was void.  He also seeks an order that there be a transfer to him of the half interest formerly possessed by Mr Piva, who is now bankrupt.  There is a concession that has been made throughout the proceeding that Mrs Piva owns the other half.  
6.	The first respondent says that the order should reflect the failure of the transfer of beneficial interest by Mr Piva and points to the fact that the equity of exoneration may lead to a conclusion that the whole or a larger majority of the property was Mrs Piva's at all events and at all times.  The first respondent therefore opposes an order for transfer or at the very least the registration of any such transfer.  It should be noted that both sides concede that if I order that there be no dealings with the property by either party other than those perhaps ordered by me then these sub-issues give rise to no material prejudice although, of course, there will be perceptions in the minds of the parties as to their success or failure.  
7.	I will say straightaway I am minded to order that no-one deal with or encumber the property without leave of the Court.  Having made that clear, I will order the declaration and orders sought by the trustee for the simple reason that they reflect, as I perceive the matter, the outcome indicated in my Reasons for Judgment.  
8.	But it is clear that the controversy as a whole is not concluded.  If Mrs Piva is ultimately successful, the trustee's interest may disappear or be greatly reduced.  The Pivas live in the property and Mrs Piva owns half of it.  In my view and subject to material coming forward which is not in any way presently indicated, it would be grossly inappropriate to contemplate the trustee selling the property on an interim basis in circumstances where it is conceded that Mrs Piva owns half the property and is actively asserting ownership of the rest in a proceeding which would not on any conceivable basis be described as an abuse of process or scurrilous or self-evidently lacking in merit.
9.	If either the trustee or Mrs Piva wish, for good reason, to deal with or encumber the property, they can always apply to do so.  There is already liberty to apply in this proceeding.  
Orders Delivered
10.	That brings us to the second matter of controversy, which is the question of costs.  The trustee seeks an order that outstanding costs be taxed to the extent that they are not taxed and be made payable forthwith.  The first respondent opposes that application and in any event submits that were an order to be made, it should also encompass any orders made in favour of the first respondent.  That latter point is not in dispute.  
11.	It is true that this proceeding was split in the way that it has been on the application of the trustee, but that was not opposed.  It is, after all, a discrete issue.  The fact is, however, that the splitting of the trial into these two issues really only had the capacity ever to benefit Mr and Mrs Piva.  If I had found for them at this stage, that would be the end of all the controversy and they would not be put to the cost of litigating the equity of exoneration issues.  I have found against them, but that does not in any way trammel their capacity to prosecute those aspects of the controversy.  So in a sense, the splitting of the case was really only ever likely to benefit Mr and Mrs Piva.  
12.	Costs orders have already been made and from those that I have seen, it is clear from their terms that they arose because of default by the first respondent.  I note that the order said to be in their favour is not before me.  
13.	It is clear that if the Pivas are successful in the long run, in the ultimate the costs that may follow that conclusion may be such as to produce an overall total in their favour.  There is no evidence before me as to the capacity of Mr or Mrs Piva to continue their conduct of the litigation being dependent upon the outcome of the interlocutory orders, if I make them.  
14.	In a decision of Weinberg J, which has been helpfully provided by Mr Galvin - McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 at [15] his Honour quoted Branson J in another case and I note the following: 
	“the discretion should be exercised in favour of a party who establishes that the demands of justice require that there be a departure from what appears to be the general practice envisaged by the rule, namely that an order for costs of an interlocutory proceeding shall not entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded.”
That is the end of the quote.  
15.	The Rule, of course, is Order 62, Rule 3 of the Federal Court Rules (“the Rules”), and I quite accept, with respect, that the general approach is as there described.  
16.	There are, however, a number of qualifications to that Rule in these terms.  First, as is apparent from paragraph [15] of McKellar, one consideration may be where the final determination of the proceeding is, and I quote, far away.  Secondly, there is a question of whether the interlocutory disposition of the matter involved the final conclusion of a discrete issue and thirdly, there is the issue as to whether or not the interlocutory proceeding has been attended by less than a complete handling on the part of the unsuccessful party.  Reference is made to multiple pleadings in McKellar as one such instance.  
17.	I note that in the commentary in the Butterworths' Service, which I have also been helpfully provided, paragraph 50 20510 refers to those matters as all being relevant to a consideration of the Court's determination of the matter.  
18.	It is a matter of balancing the competing interests bearing in mind, as Weinberg J said at [38] in McKellar, the discretion which is vested in the Court to order that a party's costs be taxed and paid forthwith should be exercised only where the interests of justice in the particular case require that there be a departure from the general practice.  It may be, as Lehane J observed in Vasyli v AOL International Pty Ltd & Anor (unreported, 2 September 1996), that such orders will only rarely be made.  Each case must, however, be considered on its own facts and I note that in that case, his Honour did provide for an interlocutory taxation of costs.  
19.	Here the following matters are, in my view, relevant:
a)	first, this was unquestionably a discrete area of controversy, which has now been removed.  It would be easier to tax the costs of that aspect of the matter now.  If it is delayed until the end of the final trial, doubtless there will be ongoing conduct of files which will make the isolation of these matters, in all probability, at least somewhat more complex than it now is;
b)	secondly, the trustee has been successful and, leaving aside the fact that there has been an appeal and I think it is common cause that the matter should not proceed further in this Court until that appeal is determined, on any view the issues arising out of the matter of the equity of exoneration will take, as I am informed, a considerable period of time such that the trustee will have to wait a long time for those costs that have been ordered;
c)	third, cost orders in the trustee's favour that I have seen all seem to me clearly to arise out of default by the Pivas;  
d)	fourth, the Pivas may well win either on appeal or, more particularly, in the equity of exoneration matter which is still before this Court.  But equally clearly they may not; and
e)	fifth, the Pivas will suffer some measure of prejudice if they are ultimately successful but they will only, in a sense, be unable to set off those costs that they ultimately obtain if the stress of the costs of the orders I am minded to make prevents them from litigating the rest of the proceeding.  They seem to have been well able to litigate at least thus far.  I am not in a position to say whether or not the orders I make will have the very undesirable effect of preventing them from conducting the entirety of the litigation but there is certainly no material before me to that effect at present.  
Orders Delivered
I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Associate:  Ms B. Evans

Date:  3 December 2009