Pekar v Rickards Legal (No.2)
[2015] FCCA 870
•17 April 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PEKAR v RICKARDS LEGAL (No.2) | [2015] FCCA 870 |
| Catchwords: BANKRUPTCY – Respondent applying for indemnity costs – whether application pursuant to Federal Court Rules or Calderbank offer – application clearly Calderbank offer – consideration of relevant matters – application dismissed. |
| Legislation: Federal Court Rules 2011, rr.25.01, 25.14 |
| Calderbank v Calderbank (1975) 3 All ER 33 Merost Pty Ltd v CPT Custodian Pty Ltd(No.2) [2014] FCA 594 Carey v Freehills [2013] FCA 1258 |
| Applicant: | FIMA PEKAR |
| Respondent: | RICKARDS LEGAL |
| File Number: | MLG 1675 of 2014 |
| Judgment of: | Judge Burchardt |
| Hearing date: | 12 February 2015 |
| Date of Last Submission: | 23 March 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 17 April 2015 |
REPRESENTATION
| The Applicant: | In person |
| Counsel for the Respondent: | Mr Rickards |
| Solicitors for the Respondent: | Rickards Legal |
ORDERS
The Respondent’s application for indemnity costs is dismissed.
| FEDERAL CIRCUIT COURT AT MELBOURNE |
MLG 1675 of 2014
| FIMA PEKAR |
Applicant
And
| RICKARDS LEGAL |
Respondent
REASONS FOR JUDGMENT
The matter before the Court is a costs application. Following the dismissal of the applicant’s application, counsel for the respondent foreshadowed an application for indemnity costs, and this judgment disposes of that application.
The respondent’s submissions on costs were filed on 26 February 2015. The applicant has responded by letter received 23 March 2015. The respondent seeks costs on the indemnity basis, and the submissions relevantly assert (paragraph 2):
“The respondent relies upon rule 25.14(2) of the Federal Court Rules 2011.”
(Rule 25.14 is then set out).
The submission goes on to assert that the respondent relies on an offer of compromise sent to the applicant on 9 December 2014, which relevantly said:
“We refer to the Application for Review filed on 20 October 2014 and listed for the hearing on 16 December 2014.
We believe that there is no basis to your application and hereby make an open offer to resolve this matter on the basis that you agree to withdraw your application and each party bears their own costs of the application.
Please note that if you do not withdraw your claim by 2 pm on Friday 12 December 2014, we will be making application to the Court seeking orders to have your application dismissed and seeking an Order against you that you pay our costs of the proceeding on an indemnity basis in accordance with the principles applied in Calderbank v Calderbank.”
Calderbank is then cited as are other decisions of the Supreme Court of Victoria which have applied that case).
The respondent’s submissions also annexe Mr Pekar’s response dated 10 December 2014 which roundly rejected the offer.
The written submissions go on to refer to section [sic] 25.14, and assert that this had been complied with, and at paragraph 6 assert:
“Under s 25.14(2), the respondent is entitled to an order that the applicant “pay all costs incurred by the [respondent] on an indemnity basis after the offer was made”.”
The written submissions then go on, additionally, to assert that indemnity costs ought to be ordered for various reasons set out at paragraph 7 of the submissions. In part, these raise the assertion advanced by the applicant of alleged fraud without any appropriate or proper basis to do so. The submissions also refer to other matters which, in my view, take the matter little further, although I note the applicant failed to file any appropriate materials in support of his application.
It is in my view immediately apparent that, contrary to the respondent’s written submissions, the respondent is not entitled to rely upon r.25.14 of the Federal Court Rules 2011 (“Federal Court Rules”). The first and most cogent reason for this may be taken from the offer of compromise itself which, according to the terms set out above, made it clear that it was a Calderbank offer.
Furthermore, the offer of compromise was not made in accordance with r.25.01 of the Federal Court Rules (assuming that this Court was prepared to adopt those Rules in any event, this being a discretionary issue not addressed by the respondent’s submissions).
Pursuant to r.25.01, the offeror may make an offer to compromise by serving a notice in accordance with Form 45. It is clear that the respondent did not serve of a notice in accordance with Form 45.
It is true that where an offer is made pursuant to r.25, and a judgment no less favourable is obtained than the offer, a rebuttable presumption in favour of indemnity costs is created which, prima facie, should only be departed from for proper reasons which generally only arise in exceptional cases. See Merost Pty Ltd v CPT Custodian Pty Ltd(No.2) [2014] FCA 594, per North J, at [11], and the authorities there cited. This is so clearly not an offer made pursuant to r.25 that plainly the rebuttable presumption does not arise. The offer was, as was clearly stated, a Calderbank offer.
In Carey v Freehills [2013] FCA 1258, Kenny J reviewed authority in relation to Calderbank offers and said at [16]-[17]:
“[16] Mere refusal of a Calderbank offer followed by a result more favourable to the offeror than that represented by the offer does not of itself warrant an order for indemnity costs: see Black v Lipovac (1998) 217 ALR 386 (“Black v Lipovac”) at 432. To justify an order for indemnity costs in favour of the party who made the Calderbank offer, the offeror must show that the refusal to accept it was unreasonable in all the circumstances: see Black v Lipovac at 432–433; Brookfield Multiplex at [11] and the authorities there cited. The reasonableness of the conduct of the offeree is to be viewed in the light of all the circumstances as they existed when the offer was rejected. The fact that the offeree ultimately failed to make out its case does not of itself mean that it acted unreasonably in rejecting an offer: Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121 at 127 [28].
[17] As Griffiths J said in Specsavers Pty Ltd v Luxottica Retail Australia Pty Ltd (No 2) [2013] FCA 807 at [10]:
[A] helpful but non-exhaustive list of circumstances which may be relevant in determining whether the rejection of a Calderbank offer is reasonable or not is set out in Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at [25] and includes:
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d) the offeree’s prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed; and
(f) whether the offer foreshadowed an application for an indemnity costs in the event of the offeree’s rejection of it.”
Here, as the letter of compromise itself asserts, the offer was served on 9 December 2014 for a hearing on 16 December 2014. Not only was this not the 14 days required by r.25, but the terms of the letter left the offer only available for acceptance until 2 pm on Friday 12 December 2014. In other words, allowing one day for service, as is reasonable in the circumstances, Mr Pekar had from when he received the document on 10 December 2014 (a Wednesday) until 2 pm on Friday
12 December 2014 to consider the offer.
This was, on any view of the matter, a very short space of time, particularly to a person who was self-represented.
Furthermore, the offer made in the case was what has been described by Kenny J in Carey v Freehills at [35] as:
“The offers made in both the 9 August 2010 letter and the 8 April 2011 letter can be described as “walk away offers”. That is, Freehills’ offer was to bear its own costs on the basis the cross-claim against it was dismissed. Whether or not a “walk away” offer involves “a real and genuine element of compromise” will depend on the circumstances in which it was given.”
In this case, the respondent has, at all times, effectively been self-represented. All the materials filed on behalf of the respondent have been filed by either Mr Rickards, himself, who is the principal of the respondent, or by his officers. The costs likely to have been engendered are the time thrown away (if any) by Mr Rickards and his staff. There is no affidavit evidence before the Court as to the extent to which participation in this case has deflected Mr Rickards and/or those other staff whose services he used from other functions.
The walk away offer, in the scheme of the scope of the litigation, from the point of the Registrar’s original decision onwards, was not great. After the orders made by Registrar Caporale on 2 October 2014, the respondent was put to one brief appearance at a directions hearing on 10 November 2014, which was attended by Mr Rickards, and an affidavit and notice of objection filed on 15 December 2014, and a notice of objection to subpoena, filed the same date.
Given this Court’s event-based costs regime, the offer to compromise would not have involved significant costs, if any, and it is hard to characterise this particular walk away offer in the circumstances in which it occurred as “a real and genuine element of compromise”.
There are, however, a number of other bases upon which the application for costs is pressed, albeit perhaps not clearly articulated in the respondent’s submissions. The first is the asserted unjustified assertions by the applicant of fraud and the like on the part of the applicant.
There is no doubt that Mr Pekar firmly believes that he has been dealt with extremely badly by the respondent and he has not been shy of making serious allegations against the respondent on a continuing basis in this proceeding. Although the respondent has referred in written submissions to other proceedings (and in the affidavit material filed before the Court), those matters are irrelevant to this proceeding and, in any event, have not been tested in this Court.
Mr Pekar’s beliefs, no matter how sincerely held, are, as I indicated in my earlier judgment, totally misconceived and this is, of course, a relevant consideration in the matter.
It should also be noted that the applicant is self-represented and while it is correctly asserted in the respondent’s written submissions that he is experienced in litigation, it seems quite clear that this has not imbued him with any understanding of legal process or the law. He remains, as he has always been, a self-represented litigant with a genuinely held grievance which has been found, in this instance, to have no basis.
Drawing all these matters together, this is not one of the class of cases in which, in my view, an order for indemnity costs should be made. Contrary to the unhelpful and erroneous assertion in the respondent’s written submissions, this never was and could never have been an application for indemnity costs pursued pursuant to r.25 of the Federal Court Rules, for the reasons already given.
Insofar as the application is pressed as a Calderbank offer, the time given to Mr Pekar to consider his position (albeit that all the material suggests he would never have considered it, no matter what the time) was extremely short. The offer was not, in my view, a genuine endeavour to compromise by making any meaningful concession. Rather, it was transparently a proposed springboard to justify an application for indemnity costs if the respondent was successful.
Against this it must be said, and I bear in mind, that the applicant’s case was always wildly misconceived and likely to fail. It involves serious assertions of misconduct (putting that globally) against the respondent, which, at the very least, had not been sustained. Against this, however, it is clear that Mr Pekar’s grievance is a genuine (albeit misconceived) one and he is self-represented.
In all the circumstances, in my view, costs should not be ordered on an indemnity basis.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Judge Burchardt
Associate:
Date: 17 April 2015
7
0