Pekar v Holden (No 2)

[2021] FCA 343

FEDERAL COURT OF AUSTRALIA

Pekar v Holden (No 2) [2021] FCA 343  

File number:

VID 614 of 2020

Judgment of:

SNADEN J

Date of judgment:

14 April 2021

Catchwords:

COSTS – application for indemnity costs – whether substantive application lacked reasonable prospects of success or otherwise amounted to an abuse of process – relevant principles regarding order for costs – whether court should exercise its discretion to order indemnity costs – indemnity costs awarded  

Legislation:

Federal Court of Australia Act 1976 (Cth) – s 37AO

Cases cited:

Australian Competition and Consumer Commission v PZ Cussons Australia Pty Ltd [2021] FCA 246

Pekar v Holden [2021] FCA 141

Wu v Avin Operations Pty Ltd (No 2) [2006] FCA 792

Division:

General Division

Registry:

Victoria

National Practice Area:

Commercial and corporations

Sub Area:

General and personal insolvency

Number of paragraphs:

8

Date of last submissions:

1 March 2021 (respondent)

Date of hearing:

Determined on the papers

Solicitor for the Applicant:

The applicant did not provide any submissions

Solicitor for the Respondent:

Rothwell Lawyers Pty Ltd

ORDERS

VID 614 of 2020

BETWEEN:

FIMA PEKAR

Applicant

AND:

TIMOTHY MARK SHUTTLEWORTH HOLDEN

Respondent

ORDER MADE BY:	SNADEN J
DATE OF ORDER:	14 APRIL 2021

THE COURT ORDERS THAT:

1.The applicant pay the respondent’s costs of the proceeding (including those pertaining to the respondent’s interlocutory application dated 10 February 2021), such costs to be assessed (if not agreed) on an indemnity basis and paid out of the applicant’s bankrupt estate.

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

REASONS FOR JUDGMENT

SNADEN J:

1. On 26 February 2021, the court made orders herein against the applicant, Mr Pekar, under s 37AO(2) of the Federal Court of Australia Act 1976 (Cth) (hereafter, the “FCA Act”):  Pekar v Holden [2021] FCA 141 (hereafter, “Pekar”; Snaden J).  The effect of those orders was to summarily dismiss the matter that Mr Pekar had sought to prosecute and to prevent him (save for limited exceptions) from instituting further proceedings in the court.  Those orders were made on the application of the respondent, Mr Holden, who now seeks orders that his costs in the proceeding be paid on an indemnity basis out of Mr Pekar’s bankrupt estate.

2. At the court’s invitation (Pekar, [36]), Mr Holden filed short and helpful submissions in support of his costs application. Mr Pekar did not take up the court’s invitation to respond to them. I proceed, nonetheless, upon the obvious basis that the costs application is opposed.

3. In summary, Mr Holden’s contention in support of an indemnity costs order is that Mr Pekar’s substantive application lacked any reasonable prospect of succeeding and, thus, amounted to an abuse of the court’s process.

4. Recently in Australian Competition and Consumer Commission v PZ Cussons Australia Pty Ltd [2021] FCA 246, Wigney J had occasion to summarise (at [6]-[10]) as follows the principles relevant to an application for an indemnity costs order:

   The Court’s discretionary power…