Sage v Korogiannis, in the matter of Sage

• Jurisdiction: Australia Federal only
• Judgment Date: 24 December 2025
• Neutral Citation: [2025] FCA 1596
• Date: 24 December 2025
• Court: Federal Court

Federal Court of Australia

Sage v Korogiannis, in the matter of Sage [2025] FCA 1596

ORDERS

QUD 10 of 2025
IN THE MATTER OF JOHN GERARD SAGE
BETWEEN:	JOHN GERARD SAGE Applicant
AND:	MICHAEL KOROGIANNIS Respondent

order made by:	LONGBOTTOM J
DATE OF ORDER:	24 December 2025

THE COURT ORDERS THAT:

1. The Respondent pay to the Applicant 70 per cent of his party and party costs of the proceeding, to be assessed if not agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

LONGBOTTOM J:

overview

1 The Applicant (Mr Sage) seeks an order for the costs of an originating application filed 10 January 2025, by which he sought an order that a bankruptcy notice issued on 21 December 2024, be set aside. The Respondent (Mr Korogiannis) served the bankruptcy notice on Mr Sage on 23 December 2024.

2 On 14 July 2025, the bankruptcy notice was set aside by reason of Mr Sage complying with order 1 of the following orders that were made by a Judicial Registrar in the proceeding on 2 July 2025:

1. The Applicant is to pay the sum of $15,850.53 into Court within 28 days of this Order.

2. Upon the Applicant paying the sum ordered in paragraph 1, Bankruptcy Notice BN275555 issued on 21 December 2024 is set aside.

3. The time for compliance with Bankruptcy Notice No BN275555 be extended up to and including 30 July 2025.

4. By 16 July 2025, the parties are to file and serve an affidavit advising the outcome of the QCAT hearing on 9 July 2025, and any further evidence they wish to rely upon in respect to the appropriate order for the costs of the Application.

5. The appropriate order as to the costs of the Application, including the costs of today’s appearance, will be determined on the papers.

6. Liberty to apply.

3 Although the bankruptcy notice was set aside on 14 July 2025, on 21 July 2025 Mr Sage filed an application seeking a review of the orders made by the Judicial Registrar on 2 July 2025 (review application). By the review application, Mr Sage sought orders that the order made 2 July 2025 be set aside, the bankruptcy notice be set aside and Mr Korogiannis pay his costs of the proceeding.

4 On 26 September 2025, Mr Sage lodged an amended review application. The amended review application no longer pressed an order that the bankruptcy notice be set aside. Mr Sage, instead, sought an order for release of the moneys paid into Court pursuant to the orders made by the Judicial Registrar, and that Mr Korogiannis pay his costs of the originating application fixed in the sum of $19,014.53 and the costs of the amended review application to be agreed or assessed.

5 The amended review application was listed for 30 October 2025. The hearing did not proceed on that day because Mr Sage’s solicitor (Mr Loel) experienced a medical event connected with a recent surgery that rendered him unable to appear.

6 At the adjourned hearing on 15 December 2025, Mr Korogiannis indicated his consent to an order that the moneys be released from Court. I made that consent order on 18 December 2025, after Mr Sage provided evidence that the moneys had been paid into Court in accordance with order 1 made 2 July 2025. The only issue that remains to be determined is the costs of the proceeding.

qcat proceedings

7 The debt founding the bankruptcy notice was a default judgment in the amount of $15,850.53 delivered by the Queensland Civil and Administrative Tribunal (QCAT) on 5 December 2024. As appears from what follows, the circumstances surrounding the default judgment are somewhat unusual.

Application to QCAT to set aside the default judgment

8 On 18 December 2024, Mr Sage filed an application in QCAT to set aside the default judgment on the basis, in effect, that Mr Sage had a defence and was unaware that Mr Korogiannis could obtain judgment without a hearing. The application to set aside the default judgment was served on Mr Korogiannis shortly thereafter. On 23 December 2024, Mr Korogiannis served the bankruptcy notice on Mr Sage. In January 2025, Mr Sage commenced these proceedings.

9 On 3 February 2025, QCAT dismissed the application to set aside the default judgment. Mr Sage requested reasons for that decision, which were not delivered by QCAT until 26 May 2025. Those reasons record:

[7] On reviewing the file to provide these reasons, it was discovered that an error was made in the final decision for the set-aside application on 3 February 2025. The error arose from a technical problem with my use of the QCase portal which resulted in an order intended for another matter being accidentally applied to this one.

[8] The first three orders made on 3 February 2025 in this matter should have read:

1. The application to set aside the default decision in this matter, filed by the Respondent on 18 December 2024, is granted.

2. Pursuant to Rule 41 of the QCAT Rules the originating application is deemed to have been given to the Respondent on or before 5 December 2024.

3. The matter is to be listed for mediation on the first available date on notice to the parties.

10 QCAT made orders pursuant to the slip rule in accordance with those extracted in its reasons above (QCAT decision).

Application for leave to appeal and stay the QCAT decision

11 On 21 June 2025, Mr Korogiannis filed an application for leave to appeal the QCAT decision. Mr Korogiannis also applied for a stay of the QCAT decision until the application for leave to appeal was decided.

12 On 7 July 2025, QCAT directed that the application for a stay of the QCAT decision would be determined on the papers after 30 July 2025. QCAT further ordered that a “preliminary issue” as to whether leave to appeal the QCAT decision should be granted would be determined on the papers, unless either party filed an application for an oral hearing by 6 August 2025. Neither Mr Sage nor Mr Korogiannis sought an oral hearing with respect to the application for leave to appeal.

13 On 4 September 2025, I made orders progressing the review application to a hearing on 30 October 2025. On the previous day, 3 September 2025, QCAT refused leave to appeal the QCAT decision and dismissed both the appeal and the application for leave to stay the QCAT decision (QCAT appeal decision). Mr Sage tendered the QCAT appeal decision at the hearing before me on 15 December 2025.

costs

14 An award of costs is in the discretion of the Court: Bankruptcy Act 1966 (Cth), s 32; see also, Federal Court of Australia Act 1975 (Cth). That discretion is “very wide” but must, of course, be exercised judicially: Principal Strategic Options Ltd [2001] FCA 664 at [17] to [18] (Branson J).

15 The general rule in bankruptcy proceedings (as in other proceedings before the Court) is that costs follow the event: Re Skase; Ex parte Donnelly (1992) 37 FCR 509 at 522 (Drummond J); see also, Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [35] (Gaudron and Gummow JJ), [66] to [67] (McHugh J) and [134] (Kirby J). The purpose of an order for costs is to indemnify or compensate the successful party, not to punish the unsuccessful party: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543 (Mason J); see also, Ohn v Walton (1995) 36 NSWLR 77 at 79 (Gleeson CJ).

16 A successful party may be deprived of a proportion of its costs, or even required to pay costs to the other party, if the successful party has succeeded only upon a portion of its claim, or failed on issues that were not reasonably pursued, or where the result of the litigation might be described as mixed: Ezy-Fit Engineering Group Pty Limited v Microm Nominees Pty Limited (No. 4) [2025] FCA 411 at [28] (Banks-Smith J), citing Impiombato v BHP Group Limited (No 2) [2025] FCAFC 28 at [13] (Beach and O’Bryan JJ).

17 The Court may also consider the conduct of the litigation by the successful party: Skase at 522. The Court will also have regard to the furtherance of the overarching purpose set out in s...