Pekar v Rickards Legal (No 2)

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.