Pekar v Rickards Legal (No 2) - [2016] FCCA 670

FEDERAL CIRCUIT COURT OF AUSTRALIA

PEKAR v RICKARDS LEGAL (No 2)

[2016] FCCA 670

Catchwords:

BANKRUPTCY – Application for indemnity costs consequent upon dismissal of application for annulment of bankruptcy pursuant to s.153B(1) of the Bankruptcy Act 1966 (Cth) – indemnity costs ordered.

Legislation:

Bankruptcy Act 1966 (Cth), s.109
Federal Circuit Court (Bankruptcy) Rules 2006 (Cth), r.13.01
Federal Court Rules 2011 (Cth), r.40.02

Ogawa v University of Melbourne (No. 2) [2004] FCA 1275
Emanuel Management Proprietary Limited (in liquidation) & Ors v Foster’s Brewing Group Ltd & Ors and Coopers & Lybrand & Ors [2003] QSC 299

Applicant:

FIMA PEKAR

Respondent:

RICKARDS LEGAL

File Number:

MLG 1636 of 2015

Judgment of:

Judge Hartnett

Hearing date:

25 February 2016

Delivered at:

Melbourne

Delivered on:

31 March 2016

REPRESENTATION

The Applicant:

In Person

Counsel for the Respondent:

Mr Rickards

Solicitors for the Respondent:

Rickards Legal

ORDER

The Applicant pay the Respondent’s costs of the proceeding commenced by Application dated 17 July 2015 on an indemnity basis and as a priority payment pursuant to s.109 of the Bankruptcy Act 1966 (Cth). Such costs to be taxed in default of agreement from the commencement of the proceeding.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1636 of 2015

FIMA PEKAR

Applicant

And

RICKARDS LEGAL

Respondent

REASONS FOR JUDGMENT

By an Application dated 17 July 2015 the Applicant sought orders that:-
“1. The sequestration order made on 2 October 2014 against the estate of Fima Pekar be annulled pursuant to s.153B of the Bankruptcy Act 1966 (Cth).
2. The Respondent pay the Applicant’s costs.
3. Such further orders or other orders as this Honourable Court deems appropriate.”
By Orders made on 28 October 2015 the Court dismissed the application dated 17 July 2015 and said in paragraphs 52 and 53 of the published reasons delivered on 28 October 2015 the following:-
“52. There is no evidence before this Court that would satisfy it that the Sequestration Order ought not to have been made. Indeed, there is significant evidence to the contrary.
53. This application is entirely without merit and shall be dismissed.”
The Court refers to and relies upon the published reasons delivered on 28 October 2015 and in particular as to the relevant prior history set out therein commencing at paragraph 18 onward.
That history is of extensive litigation commenced by the Applicant against the Respondent and over a number of years. The Application determined on 28 October 2015 was not the end of the litigation. On 3 February 2016, the Applicant filed a further complaint in the Magistrates Court of Victoria at Moorabbin in respect of a tax invoice (the tax invoice) for $6,302.73, dated 29 July 2011, rendered to the Applicant for work carried out on his behalf by Rickards Legal in relation to the Applicant’s involvement in numerous legal proceedings against the owners corporation, Gough Partners Proprietary Limited, in the unit where he resides. As set out in the published reasons of 28 October 2015, the Applicant has taken numerous proceedings…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] FCCA 670
Decision Date: 31 March 2016

CaseChat Overview and Summary

In *Pekar v Rickards Legal (No 2)*, Hartnett J of the Federal Court of Australia considered an application for indemnity costs brought by Rickards Legal following the dismissal of an application by Mr. Pekar for the annulment of his bankruptcy. The underlying dispute concerned Mr. Pekar's bankruptcy and his subsequent attempt to have it annulled.

The primary legal issue before the Court was whether Rickards Legal, as the respondent to the annulment application, was entitled to an order for indemnity costs. This required the Court to assess the conduct of Mr. Pekar in bringing and pursuing the annulment application, and whether that conduct warranted departing from the usual order for costs fixed by the court.

Hartnett J determined that indemnity costs were appropriate in this instance. The Court found that Mr. Pekar's application for annulment was devoid of merit and that he had pursued it in a manner that was unreasonable and vexatious. His Honour noted that Mr. Pekar had been made aware of the deficiencies in his case but had nevertheless persisted with the application, thereby causing unnecessary expense and inconvenience to Rickards Legal. The Court applied the principles governing the award of indemnity costs, which require a higher threshold of unreasonableness or vexation than that required for ordinary costs.

Consequently, Hartnett J ordered that Mr. Pekar pay Rickards Legal's costs of the annulment application on an indemnity basis.

Orders