Kaszyckyj v Australian Taxation Office (No.2)

[2019] FCCA 3382

FEDERAL CIRCUIT COURT OF AUSTRALIA

KASZYCKYJ v AUSTRALIAN TAXATION OFFICE (No.2) [2019] FCCA 3382

Catchwords:
PRACTICE & PROCEDURE – Costs – no matter of principle.

Legislation:

Age Discrimination Act 2004

Federal Circuit Court Rules 2001, rr.15.03, 21.04, 21.10

Applicant: PAUL KASZYCKYJ

Respondent: AUSTRALIAN TAXATION OFFICE

File Number: SYG 1079 of 2019

Judgment of: Judge Cameron

Hearing date: On the papers

Date of Last Submission: 17 October 2019

Delivered at: Sydney

Delivered on: 22 November 2019

REPRESENTATION

Counsel for the Applicant: Mr E White

Solicitors for the Applicant: Adams Wilson

Counsel for the Respondent: Mr Y Shariff

Solicitors for the Respondent: Sparke Helmore

ORDERS

1. The applicant pay the respondent’s costs assessed in the amount of $8269. 

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1079 of 2019

PAUL KASZYCKYJ

Applicant

And

AUSTRALIAN TAXATION OFFICE

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. On 8 October 2019 the applicant’s application for an extension of time to bring proceedings alleging breach by the respondent (“ATO”) of the Age Discrimination Act 2004 was dismissed. The ATO seeks its costs of the application and the parties have filed written submissions on the issue. They agreed that a decision would be made without an oral hearing: r.15.03 of the Federal Circuit Court Rules 2001 (”Rules”).

FACTUAL BACKGROUND

1. In the reasons for judgment of 8 October 2019 I found that the applicant, Mr Kaszyckyj, had not provided a satisfactory explanation for his delay in commencing the proceeding.  He appears to have treated the limitation period as irrelevant and to have prepared for this case without regard to it.  He adduced no evidence of awareness of or respect for the applicable limitation period. 

2. Mr Kaszyckyj’s claim had three elements, two of which did not have reasonable prospects of success.  The third was, despite the work which he had done over a number of years to research the matters associated with his separation from the ATO and in the knowledge that an extension of time was required in order to prosecute the claim, no more than a skeleton of a case which was sparingly pleaded and lacking in proper particularisation.

SUBMISSIONS

1. The ATO submitted that Mr Kaszyckyj’s preparations, including freedom of information requests, were such that he should have been aware that his application lacked reasonable prospects of success and that his persistence in pursuing it caused it to incur costs unnecessarily.  It also submitted that Mr Kaszyckyj’s unheralded amendment of his points of claim, without leave, shortly after filing the original pleading had caused it additional expense in having the timetable amended so it could revise the drafting of its defence.  The ATO also argued that Mr Kaszyckyj’s failure to comply with the timetable for the filing of evidence and submissions caused it to again seek and obtain an amendment to the timetable as it applied to it.

2. The ATO submitted that it should be awarded slightly more than $32,000 on the basis that this figure represented 60% of its costs on a solicitor and client basis and that such a sum would be fair compensation for the costs it had “unnecessarily incurred in defending these proceedings”.  Alternatively, the ATO sought an order referring the matter to the parties to attempt agreement or in the ultimate alternative, an order for costs in accordance with the Court’s event-based scale which it calculated at $12,202.68.

3. Mr Kaszyckyj opposed the application for costs on the basis of the ATO’s pre-litigation conduct, saying that it had “effectively invited the litigation because it had refused to provide an explanation for its actions when it was reasonable to do so”. Reference was also made to the ATO’s obligations as a model litigant and to the different financial resources available to the parties.

4. Mr Kaszyckyj submitted that if costs were to be awarded they should be awarded in accordance with the Court’s scale and he calculated the relevant amount to be $6,284.

CONSIDERATION

1. Rule 21.04 of the Rules provides, and the general rule is, that in the ordinary course costs follow the event and nothing Mr Kaszyckyj said in his written submissions persuades me that a different outcome is appropriate in this case. Mr Kaszyckyj’s unattractive contention was that the ATO’s conduct prior to the litigation, which was not ultimately impugned with any success in this case, rather than his own failure to bring a claim which had reasonable prospects of success and whose lateness was satisfactorily explained, should determine the ATO’s costs entitlement. I do not agree. In my view that argument does not disclose any reason to depart from the general rule.

2. As to the determination of the amount of costs to be paid I consider it best to resolve the matter now rather than let the dispute continue and become a sterile and costly quarrel between the parties about the value of various items of work without any objective point of reference such as is found in a traditional scale of costs. As to the claim for a percentage of solicitor and client costs, the ATO must first rebut the presumption that the Court’s event-based scale it to apply. That presumption is found in r.21.10 of the Rules, which provides:

   21.10 Costs and disbursements

   Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:

   (a)     costs in accordance with Parts 1 and 2 of Schedule 1; and

   (b)     disbursements properly incurred.

3. Although I accept that the ATO did do work in preparing its defence to this case, the matter never relevantly got beyond the filing of the defence.  The issue which resolved it was the application’s unsatisfactorily explained lateness and the case’s lack of reasonable prospects of success, albeit that the latter issue was illuminated to a degree by the ATO’s affidavits.  As to what work had actually been done on its behalf, the ATO introduced into evidence copies of its solicitors’ itemised tax invoices but the items of work have been blacked out and so their appropriateness cannot be judged.  There is no compelling reason, particularly having regard to the point at which this proceeding came to an end, why the Court’s scale should not apply.  I find that it should.

4. That being so, I find that the following scale items apply in this case:

   
   

   1, 3, 9, 13(a) and 13(b).  Certifying for counsel and allowing an advocacy loading in respect of counsel’s appearance on 8 October 2019, together with an amount for the attendance of counsel’s instructing solicitor on that day, I find that professional costs should be assessed to be $8269.  Annexed to the affidavit of Elyse Maree Galvin affirmed 11 October 2019 was a disbursement tax invoice in relation to reproduction of documents.  However, the relevance of those documents was not clear and that amount is not allowed.

CONCLUSION

1. The applicant is to pay the respondent’s costs assessed in the amount of $8269.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Judge Cameron

Associate: 

Date: 22 November 2019