Pekar v Jess (Trustee) (No 3)

Case [2021] FCA 466

FEDERAL COURT OF AUSTRALIA

Pekar v Jess (Trustee) (No 3) [2021] FCA 466  

File number: VID 81 of 2017
Judgment of: KERR J
Date of judgment: 6 May 2021
Catchwords:

COSTS – application for review of taxation – where Respondent erroneously filed a combined bill of costs for two proceedings, one in the Federal Court of Australia and one in the Federal Circuit Court of Australia – where Respondent subsequently filed two separate bills of costs, which were taxed – where there was an alleged duplication of costs – where the Registrar rejected a number of items and reduced the amount awarded in others – where the application should be upheld and further amounts be taxed off the award of the taxing officer – where costs of this Application for review are awarded

PRACTICE AND PROCEDURE – review of Registrar’s decision as taxing officer to be conducted de novo  
Legislation: Federal Court Rules 2011
Cases cited:

Australian Coal and Shale Employees Federation v Commonwealth (1953) 94 CLR 621

Bechara v Bates [2011] FCAFC 34

Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 267

Coshott v Crouch [2017] FCAFC 135
Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of Paragraphs: 88
Date of hearing: 21 April 2021
Date of last submissions: 22 April 2021
Counsel for the Applicant: Mr Pekar appeared on behalf of the Applicant
Counsel for the Respondent: Mr Lapirow
Solicitor for the Respondent: Rothwell Lawyers
Table of Corrections
12 May 2021 In paragraph 86, “$18,453.38” has been replaced with “$14,377.16”.
12 May 2021 In paragraph 86, “$15,769.27” has been replaced with “$11,693.05”.
12 May 2021 In Order 1, “$15,769.27” has been replaced with “$11,693.05”.

ORDERS

VID 81 of 2017
BETWEEN:

IDA PEKAR

Applicant
AND:

TIMOTHY MARK SHUTTLEWORTH HOLDEN AS TRUSTEE FOR THE BANKRUPT ESTATE OF FIMA PEKAR

Respondent

ORDER MADE BY:

KERR J

DATE OF ORDER:

6 MAY 2021

THE COURT ORDERS THAT:

1.The Certificate of Taxation issued in VID81/2017 be set aside and in lieu thereof the Respondent be awarded his costs in the sum of $11,693.05.

2.Subject to Order 3 the Respondent pay the Applicant’s costs of this application in the sum of $2,000.00.

3.If either party seeks an order in the alternative to that provided for in Order 2 they must file and serve submissions in support limited to no more than 2 pages no later than 4:00pm on 12 May 2021. A party wishing to file any responsive submissions limited to no more than 2 pages must do so no later than 4:00pm on 19 May 2021. The Court will determine that question on the papers.

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


REASONS FOR JUDGMENT

KERR J:

  1. These reasons concern an application for review of a taxation of costs by a Registrar of this Court brought by the Applicant, Ms Pekar. This matter has required the Court not only to give…

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AGLC
Pekar v Jess (Trustee) (No 3) [2021] FCA 466
Case
[2021] FCA 466
Decision Date

CaseChat Overview and Summary

In the case of Pekar v Jess (Trustee) (No 3), the Applicant, Ms Pekar, sought a review of a taxation order in relation to costs incurred in two separate proceedings. The first proceeding, MLG932/2015, was in the Federal Circuit Court of Australia, and the second proceeding, VID81/2017, was an appeal in the Federal Court of Australia. The primary dispute centered on the Respondent’s alleged erroneous filing of a combined bill of costs for both proceedings, which was rejected by the Registry. Subsequently, separate bills were filed but were found to contain duplicated charges for the same legal services. This led to objections from Ms Pekar, who argued that the bills of costs did not comply with the requirement to be confined to the costs incurred in each proceeding.

The central legal issue before the court was whether the Respondent’s costs should be adjusted to correct the alleged duplication and whether the taxation process was conducted properly. The court had to determine if the taxation of costs was conducted de novo and whether the objections raised by Ms Pekar should have been considered by the taxing officer. Additionally, the court needed to assess whether the Respondent’s conduct warranted any penalty for not complying with procedural requirements.

The court ruled that Ms Pekar’s application for review should be upheld to a limited extent. The court found that the taxation process should have been conducted de novo, and the objections raised by Ms Pekar should have been considered. The court identified instances of duplicated charges in the bills of costs and directed that the original certificate of taxation be set aside. Instead, the Respondent was awarded costs in the sum of $11,693.05. The court also ordered that the Respondent pay Ms Pekar’s costs for this application in the sum of $2,000.00. The court set a deadline for any party wishing to seek an alternative order to file and serve submissions within a specified timeframe.

Orders

Orders of the court

1. The Certificate of Taxation issued in VID81/2017 be set aside and in lieu thereof the Respondent be awarded his costs in the sum of $11,693.05.

2. Subject to Order 3 the Respondent pay the Applicant’s costs of this application in the sum of $2,000.00.

3. If either party seeks an order in the alternative to that provided for in Order 2 they must file and serve submissions in support limited to no more than 2 pages no later than 4:00pm on 12 May 2021. A party wishing to file any responsive submissions limited to no more than 2 pages must do so no later than 4:00pm on 19 May 2021. The Court will determine that question on the papers.

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

Background

Background to the litigation

I have concluded that Ms Pekar’s application must succeed but only to a limited extent. BACKGROUND Ms Pekar’s application arises in the aftermath of two proceedings: proceeding MLG932/2015 in the Federal Circuit Court of Australia, and proceeding VID81/2017 in the Federal Court of Australia. The latter proceeding was an appeal brought by Mrs Pekar from the decision of Judge Burchardt in MLG932/2015. No costs orders had been made in proceeding MLG932/2015. However, on 30 May 2017, Justice Tracey in proceeding VID81/2017 dismissed Ms Pekar’s appeal. His Honour made orders requiring Mrs Pekar to pay the Respondent’s costs both in the appeal and in proceeding MLG932/2015. On 31 January 2018, the Respondent’s solicitors (Rothwell Lawyers) lodged for filing a single bill of costs applying to both matters. The Registry did not permit the filing of that bill of costs, on the basis that it impermissibly had combined the Respondent’s costs in proceedings VID81/2017 and MLG932/2015. The relevant correspondence is exhibited (as TPR-1) to the affidavit of Ms Tracey Rothwell dated 17 October 2020 as read in these proceedings. In that correspondence the Respondent was informed that their bill in the form it had been lodged could not be assessed or taxed. It had been “laid aside”. The Respondent was advised as follows: A separate bill will need to be filed in each proceeding confined to the costs incurred in that proceeding only. On 22 October 2018, in purported or intended compliance with that direction the Respondent’s solicitors filed separate bills of costs in each proceeding. Unfortunately although separate bills were filed no or insufficient attention had been given to the need to separate out and confine the charges to be costed against the two proceedings. Each of those bills included a not insignificant number of duplicated charges for the same legal services that had been rendered. By way of correspondence dated 13 January 2019 and 12 March 2019, a taxing officer gave notice (in accordance with r 40.20(3) of the Federal Court Rules 2011 (Cth)) to the parties of estimates of the approximate totals for which certificates of taxation would be likely to issue in each proceeding. In those circumstances, Mrs Pekar raised various objections in relation to the Respondent’s bills of costs. Relevantly, the principal basis on which she objected was that there had been duplications across the two bills such that they were not each “confined to the costs incurred in that proceeding only”. Orders were made in the taxation for a timetable for objections and responses in proper form. It is uncontentious that those orders were not complied with. The Applicant filed further correspondence alleging fraud. The Respondent for its part indicated that it was content to rely on the estimates and did not seek to make responsive submissions. With the consent of the parties (Ms Pekar earlier having made an express request that the taxation be determined on the papers) and having regard to the then COVID-19 restrictions on attendances in person, Registrar Allaway dispensed with compliance with the rules not only as they prescribed the form in which objections were to be made and responded to but also as they prescribed the manner (in person) in which such a taxation was to be conducted.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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