KANG v Goldsmith (No.2)

[2017] FCCA 846

FEDERAL CIRCUIT COURT OF AUSTRALIA

KANG v GOLDSMITH (No.2) [2017] FCCA 846

Catchwords:
BANKRUPTCY – Costs – important to ensure that finality is brought to bear between the dispute between the parties that arises out of costs – appropriate matter in which to fix costs – interests of the administration of justice require the Court to fix costs – costs ordered against the applicant.

Applicant: EDWARD KANG

Respondent: BARRIE GOLDSMITH

File Number: SYG 2860 of 2016

Judgment of: Judge Street

Hearing date: 27 April 2017

Date of Last Submission: 27 April 2017

Delivered at: Sydney

Delivered on: 27 April 2017

REPRESENTATION

Counsel for the Applicant: Mr N Allan

Solicitors for the Applicant: Ziman Lawyers

The Respondent appeared in person.

ORDERS

1. The Applicant pay the Respondent’s costs fixed in the amount of $25,000.00.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2860 of 2016

EDWARD KANG

Applicant

And

BARRIE GOLDSMITH

Respondent

REASONS FOR JUDGMEN

1. The respondent has succeeded in having the application to set aside the bankruptcy notice dismissed. Counsel for the applicant has argued that the costs relating to the Registrar in some way were not due to his client’s action. It was his client’s action that filed the application.

2. These proceedings arise out of a dispute between solicitor and client, being the applicant as the client and the respondent as the solicitor of long duration. The solicitor had to take proceedings in a Local Court to try and recover his costs. It is apparent that an endeavour was made to try and resolve the matter. It resolved in a deed of assignment and a potential compromise entered into by the solicitor providing further time to his former client to try and resolve the matter.

3. Counsel for the applicant has argued that no fixed costs order should be made but rather there should be a general order for assessment.

4. In these proceedings it is even more important to ensure that finality is brought to bear between the dispute between the parties that arises out of costs. It is in those circumstances, where the Court is satisfied that this is an appropriate matter in which to fix costs.

5. The respondent, Mr Goldsmith gave an estimate of his costs in relation to the proceedings being in the order of $35,000.00. The steps that have been taken in the proceedings are obvious on the Court record and involved substantial work on behalf of the respondent which included both affidavit evidence, attendance before the court, and the raising of submissions.

6. The Court is familiar with the ordinary costs incurred in bankruptcy matters and the estimate by Mr Goldsmith of $35,000.00 was on its face reasonable. Mr Goldsmith suggested that he should be entitled to indemnity costs. Whilst the Court does not accept that the circumstances justify an indemnity costs order, it is appropriate to take into account that costs identified by Mr Goldsmith are estimates and that there would be a necessary reduction in relation to the non-party/party component of those costs.

7. Mr Allan, of counsel submitted that because there was not an identified basis in terms of the number of hours for the hourly rate of $600.00 by Mr Goldsmith that this was a matter in which that amount was excessive and further, that the type of order should take into account the ordinary opportunity for taxation. The hourly rate is identifiable from the Activity Slips annexed to Mr Goldsmith’s affidavit dated 12 December 2016.

8. For reasons I have already given, I am satisfied that the interests of the administration of justice and finality require the Court to fix costs. I am also satisfied in the circumstances of this case and the seniority of the solicitor involved that the hourly rate that the solicitor has identified was reasonable and appropriate. Moreover, it was reasonable for Mr Goldsmith to undertake the work for recovery of his fees in these proceedings. I find that the estimate was reasonable and appropriate. Based on that hourly rate, I find that the respondent has incurred costs in the amount of $25,000.00.

9. As a result of the proceedings brought by the respondent, it is appropriate that the respondent be ordered to pay those costs fixed in the amount of $25,000. 

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 11 May 2017