Owners Corporation RP001579 v State Trustees Limited

[2018] FCCA 3868

FEDERAL CIRCUIT COURT OF AUSTRALIA

OWNERS CORPORATION RP001579 v STATE TRUSTEES LIMITED [2018] FCCA 3868

Catchwords:
BANKRUPTCY – Costs – applicant seeking costs from the bankrupt estate – an interested party, who was originally a respondent, seeking costs from three entities that are not parties to the proceeding – no order as to costs.

Applicant: OWNERS CORPORATION RP001579

Respondent: STATE TRUSTEES LIMITED (AS THE ADMINISTRATOR OF THE ESTATE OF IRMA LOCHER DECEASED)

Interested Party: ERMANNO GIURINA

File number: MLG 409 of 2018

Judgment of: Judge Riley

Hearing date: 20 December 2018

Date of last submission: 20 December 2018

Delivered at: Melbourne

Delivered on: 20 December 2018

REPRESENTATION

Advocate for the applicant: Christopher Oster

Solicitors for the applicant: LFS Legal

Counsel for the respondent: Thomas Mah

Solicitors for the respondent: State Trustees Limited – Legal Branch

Advocate for the interested party: In person

ORDERS

1. There be no order for costs.

NOTATIONS

In the court’s view, LFS Legal should not charge Owners Corporation RP001579 any legal fees for proceeding MLG409/2018.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 409 of 2018

OWNERS CORPORATION RP001579

Applicant

And

STATE TRUSTEES LIMITED (AS THE ADMINISTRATOR OF THE ESTATE OF IRMA LOCHER DECEASED)

Respondent

ERMANNO GIURINA

Interested Party

REASONS FOR JUDGMENT

(Revised from the Transcript)[1]

Introduction

[1]     Reasons for judgment were given orally on 20 December 2018. The interested party requested written reasons to be provided on 20 December 2018. Chambers ordered a transcript of the reasons for judgment on 20 December 2018. Auscript provided the transcript of the reasons for judgment on 21 December 2018. The reasons for judgment were settled and sent to the parties and the interested party by email and post on 21 December 2018.

1. There is before the court competing applications for costs in a bankruptcy matter. The original application was a creditor’s petition brought by Owners Corporation RP001579 against Mr Ermanno Giurina and Ms Licia Giurina, who were then the executors of the estate of Irma Locher (deceased).

2. Ms Giurina is in a nursing home. She has only participated in one of the hearings in this matter, through an interpreter and by telephone. She essentially indicated that she did not have a very clear understanding of the nature of the application and indicated that she was following the advice of her son, Mr Giurina. Mr Giurina, from the outset, opposed the substantive application on the basis that the Owners Corporation, through its managers, was not properly authorised to bring the proceeding.

3. Mr and Ms Giurina ceased to be the executors of the estate of Irma Locher (deceased) by virtue of orders of the Supreme Court of Victoria. Subsequently, State Trustees Limited became the administrator of the estate of Irma Locher (deceased). State Trustees and the Owners Corporation then entered into an agreement whereby the creditor’s petition was dismissed. It is understood that State Trustees accept that the estate of Irma Locher has the debt alleged by the Owners Corporation and that State Trustees will arrange for the debt to be paid from the estate.

4. Notwithstanding that the creditor’s petition was dismissed by consent, Mr Giurina has made a costs application arising from the time when he was the second respondent to the proceeding. The matter has been adjourned numerous times to allow the Owners Corporation to mend its hand and obtain appropriate resolutions to authorise the filing of the creditor’s petition.

5. The matter has come to court yet again today. Again, there is a gap in the material provided by the Owners Corporation. Rather than adjourning the matter once more to allow the Owners Corporation to mend its hand, it seems to me that it is now high time that this matter be brought to an end.

6. The Owners Corporation seeks an order that its costs be paid from the deceased estate on the usual basis.  I do not consider that it is appropriate to make such an order.  The solicitors for the Owners Corporation have had ample opportunity to ensure that the proceeding was properly brought, but they have been unable to do so, notwithstanding numerous court hearings and numerous opportunities to provide the appropriate material.  In these circumstances, it does not seem to me that there should be any costs order in favour of the Owners Corporation.

7. Mr Giurina also seeks costs arising from the period when he was the second respondent to the proceeding.  He seeks a costs order against Strata Connect, which is the manager of the Owners Corporation,  against Maria Deak, who is a director of Strata Connect, and who seems to have had the conduct of this matter, and against LFS Legal, which is the solicitor for the Owners Corporation.  Mr Giurina variously claims costs of about $20,000 on scale and about $23,000 on an indemnity basis.

8. Mr Giurina is a qualified lawyer but does not currently have a practising certificate.  Mr Giurina has conducted the litigation exactly as a lawyer would.  He has provided written submissions and referred to various cases and legislative provisions. All of his submissions were rational and reasonably arguable. 

9. Mr Giurina has also provided to the court authority that unrepresented litigants who are lawyers can recover legal costs in appropriate cases, notwithstanding that they were not running a legal practice or would not otherwise have been spending their time earning fees.  I accept those authorities and accept that, in an appropriate case, Mr Giurina could be entitled to legal costs. 

10. However, in all the circumstances of this case, I do not consider that it is appropriate to make any award for Mr Giurina to receive legal costs.  It seems to me that, although Mr Giurina has won, in a sense, the fundamental problem is that the estate, as far as this court can tell on the evidence presently available, does, in fact, owe money to the Owners Corporation.  It may be that the Owners Corporation did not go about pursuing those costs in a technically correct manner.  However, it does appear that there is a genuine debt.  For that reason, although there may have been technical deficiencies in the proceeding brought by the Owners Corporation, it does not seem to me that the justice of the case requires that Mr Giurina be given an award for costs. 

11. The order will be that there be no order for costs.  I will also make a notation that, in the court’s view, LFS Legal should not charge Owners Corporation RP001579 any legal costs for proceeding MLG 409 of 2018.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Judge Riley

Associate: 

Date:  21 December 2018