Re Horesh, D. Ex parte Edgewater Service Summary

JUDGMENT No. "... 3%?d 2%-

IN THE FEDERAL COURT OF AUSTRALIA )
GENERAL DIVISION ) No. VP 808 of 1991
BANKRUPTCY DISTRICT OF THE STATE )
OF VICTORIA )

RE:

- DAN HORESH
Judgment Debtor

EX PARTE: EDGEWATER SERVICE LTD
Petitioning creditor

C O W : Jenkinson J.
PLACE : Melbourne
DATE: 2 June, 1994

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. Each appeal be dismissed.
2. The petitioning creditor's costs including reserved costs of each appeal be taxed and paid by the judgment debtor.

NOTE:

Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules. m RECEIVED .

IN THE FEDERAL COURT OF AUSTRALIA )
GENERAL DIVISION

) No. VP 808 of 1991
BANKRUPTCY DISTRICT OF THE STATE 1
OF VICTORIA )

RE:

- DAN HORESH
Judgment Debtor

EX PARTE: EDGEWATER SERVICE LTD
Petitioning Creditor

M A = : Jenkinson J.

PLACE : Melbourne
U: 2 June, 1994

REASONS FOR JUDGMENT

Appeals from each decision of a taxing officer in allowing three bills of costs ordered to be paid by the judgment debtor to the petitioning creditor.

The judgment creditor's solicitors are Messieurs

Irlicht & Broberg, although several documents filed on behalf

of the petitioning creditor bore the name and address of another firm of solicitors, Messieurs Chrapot Bock & Co., and

had no reference to Irlicht & Broberg. Chrapot Bock & Co. had acted for the petitioning creditor in the proceeding in which the judgment was obtained which founded the bankruptcy notice upon which in turn the bankruptcy petition was based. Chrapot Bock & Co. instructed Irlicht & Broberg on behalf of the judgment creditor to act as the latter's solicitors in the bankruptcy proceedings. Some of the work for which charges

were entered in the bills of costs was, however, done by Chrapot Bock & Co. After the three bills had been taxed and certificates had been served the judgment debtor discovered that the name of none of the members of the firm Chrapot Bock
& Co. appeared in the Register of Practitioners kept at the

Registry of the High Court in compliance with s.55C of the Judiciarv Act 1903 and accordingly none of them was entitled to practise as a barrister or solicitor in a federal court.

On the hearing of the appeal the judgment debtor sought a direction, which Rule 173(3) of the Bankru~tcv Rules authorises the Court to give, that evidence of the lack of entitlement to practise be received. Mr. Irlicht, who appeared for the petitioning creditor, opposed the giving of that direction by reference to the judgment of the Court of Common Pleas in Fullalove v. Parker (1862) 31 L.J.C.P. (N.S.) 239 at 240 that, because "there is no reason why the discovery might not just as well have been made by [the appellant] before as after taxation", the lack of entitlement could not

general power to receive further evidence on appeal. Partles be considered by that Court. However, Rule 173(3) confers a

to litigation in a federal court should in my opinion suffer no prejudice by reason of having assumed that lawyers practising in the Court have the required entitlement. I give the direction sought.

The judgment debtor and Mr. Irlicht canvassed a number of submissions and authorities and statutory provisions in their debate as to whether the lack of entitlement to practise in this Court precluded allowance of costs on
taxation. But the appeal can in my opinion be determined by

reference to one consideration. The costs taxed had all been paid by the petitioning creditor to one or other of the two firms of solicitors before those costs were taxed. If, as the judgment debtor contends, no costs were recoverable by action at the suit of either of those two firms in respect of the legal representation of the petitionmg creditor in the proceeding, yet those costs are allowable to the petitioning creditor on taxation after the petitioning creditor has paid them : Fullalove v . Parker, supra; Guss v. Veenhulzen (No.

2)(1976) 136 C.L.R. 47 at 53-56; TNT Bulkshi~s Ltd. v . Ho~kins

(1989) 65 N.T.R. 1 at 5-6. The judgment debtor relied on English authorities which denied the correctness of the proposition I have stated, because of a statutory prohibition (37 & 38 Vict.c.68, s.12) of recovery of costs, in relation to work done by an unqualified solicitor, "by any person or persons whomsoever" : see, for example, Fowler v . The

Monmouthshire Railway and Canal Com~any

(1879) 4 Q.B.D. 334.

But no similarly worded statutory provision applicable here was cited. My attention was drawn to ss. 90(4) and 111 of the Leual Profession Practice Act 1958 (Vic. ) . I express no opinion as to whether either provision has any application in relation to proceedings in a federal court. If either did have application, each is so expressed as not to attract the reasoning of the English authorities on which the judgment debtor sought to rely.

There were other grounds of appeal in respect of particular items. None was sustained. Reasons for rejecting those grounds were stated durlng the hearing of the appeals.

Each appeal must be dismissed with costs.
I certify that this and the 3
preceding pages are a true copy of
the Reasons for Judgment of the
Honourable Mr. Justice Jenkinson.
Dated: 2 June, 1994

Applicant debtor in person.

Mr. T. Irlicht of the firm Irllcht & Broberg Solicitors for the respondent creditor.

Date of hearing: 2 December, 1993

In the Federal Court of Australia, General Division, a case was brought under the Bankruptcy Act 1966, concerning the bankruptcy of Dan Horesh. Edgewater Service Ltd, the petitioning creditor, sought to have the costs of the bankruptcy proceedings taxed and paid by the judgment debtor, Horesh. The case involved appeals against decisions of a taxing officer that allowed certain bills of costs to be paid by Horesh to Edgewater Service Ltd. These appeals were brought by Horesh, who contested the costs and sought to have them disallowed on the basis that the solicitors representing Edgewater Service Ltd were not properly authorised to practice in federal courts.

The primary legal issue before the court was whether the lack of authorisation of the solicitors to practice in federal courts precluded the allowance of costs that had already been paid by the petitioning creditor to the solicitors. The court considered whether the solicitors' lack of entitlement to practice could be taken into account when taxing the costs, despite the fact that the petitioning creditor had already paid those costs. The court also had to determine whether the Federal Court Rules or any other applicable legislation provided for the disallowance of costs in such circumstances.

The court held that the lack of authorisation of the solicitors to practice in federal courts did not preclude the allowance of costs that had already been paid by the petitioning creditor. The court found that the petitioning creditor was entitled to recover the costs from the judgment debtor as the costs had already been paid. The court noted that if the solicitors were not entitled to practice, the petitioning creditor would have no recourse to recover the costs from them, but this did not affect the petitioning creditor's right to recover the costs from the judgment debtor. The court also noted that the Federal Court Rules and applicable Victorian legislation did not provide a basis for disallowing the costs in these circumstances.

As a result, the court dismissed the appeals and ordered that the petitioning creditor's costs, including reserved costs of each appeal, be taxed and paid by the judgment debtor. The court certified that the reasons for judgment were a true copy and that the hearing of the appeals took place on 2 December 1993.

Re Horesh, D. Ex parte Edgewater Service

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	) No. VP 808 of 1991
BANKRUPTCY DISTRICT OF THE STATE	)
OF VICTORIA	)