FEDERAL COURT OF AUSTRALIA

Potier v Minister for Immigration & Multicultural Affairs

[2004] FCA 520

PROCEDURE – costs – O 62 r 46 of the Federal Court Rules – estimated total for which certificate of taxation would likely issue if bill of costs taxed – attempt to file notice of objection to estimate without payment of security for costs of taxation – whether discretion to waive payment should be exercised – relevance of impecuniosity to exercise of discretion

Federal Court Rules O 1 r 8, O 6 r 9, O 62 rr 46(3)(a), 46(3)(d)

Federal Court of Australia Act 1976 (Cth) s 35A(1)(g)

Dudzinski v Kellow [2000] FCA 740  followed

MALCOLM HUNTLEY POTIER v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

N 266 OF 2000

MALCOLM HUNTLEY POTIER v REFUGEE REVIEW TRIBUNAL AND ANOR

N421 OF 2000

MALCOLM HUNTLEY POTIER v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

N619 OF 2000

MALCOLM HUNTLEY POTIER v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

N1357 OF 2000

MALCOLM HUNTLEY POTIER AND ANOR v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

N243 OF 2001

STONE J

4 MAY 2004

SYDNEY

THE COURT ORDERS THAT:

1.                  The relief sought in the notice of motion filed on 12 March 2004 be refused.

2.                  The applicant pay the respondent’s costs on the motion, to be taxed if not agreed.

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

REASONS FOR JUDGMENT

1                     By notice of motion filed on 12 March 2004 the applicant, Malcolm Huntley Potier, challenges the refusal of Deputy District Registrar Segal (‘DDR Segal’) to waive the requirement under O 62 r 46(3)(d) that a party lodging a notice of objection to a bill of costs pay into the Litigants’ Fund security for costs of any taxation of the bill.  In this case, security for costs of taxation relates to bills of costs filed by the respondent in five separate proceedings in this Court. 

2                     As originally filed, the notice of motion listed Mr Potier and his daughter, Sarah Flora Oswald Potier, as applicants.  Although Miss Potier is named as co-applicant in one of the proceedings (N243 of 2001) no costs order was made against her.  For this reason, at the commencement of the hearing of the notice of motion I ordered that she be removed as a party; O 6 r 9. 

3                     Pursuant to O 62 r 46(3)(a), DDR Segal, in his capacity as taxing officer, made an estimate of the amount for which a certificate of taxation would be likely to issue if the bills were taxed.  In March 2003, both parties were notified of the estimates that had been made in respect of each bill of costs.  The total amount claimed in the respondent’s bills of costs was $27,536.42; the taxing officer’s total estimate of allowed costs was $25,526. 

4                     Mr Potier attempted to file notices of objection in respect of those estimates. The notices of objection were not accepted for filing because Mr Potier did not tender security for costs as required under O 62 r 46(3)(d) which provides:

‘The Registrar must not accept a notice of objection for filing unless the party filing the notice pays into the Litigants’ Fund an amount of $1250 as security for the costs of any taxation of [a bill of costs]’.

5                     Order 1 r 8 gives the Court a general discretion to dispense with the requirements of the Rules.  In accordance with s 35A(1)(g) of the Federal Court of Australia Act 1976 (Cth) this discretion was delegated to DDR Segal, among others, by direction of Wilcox J made on 19 June 2003.  Mr Potier requested that DDR Segal exercise this discretion in his favour.  He provided extensive written submissions in support of his request.  Those submissions included general submissions (set out in 10 separate paragraphs) that applied to all of the matters as well as submissions that were specific to each separate bill of costs.  In addition Mr Potier also submitted that financially it was not possible for him to provide security for costs.

6                     On 26 November 2003 DDR Segal wrote to Mr Potier and the respondent setting out the reasons why he declined to waive the requirement for security for costs and confirming that in the absence of such security being paid the notices of objection to the costs estimate would not be accepted for filing.

7                     Broadly speaking the objections made by Mr Potier to the bills of costs alleged:

1.      lack of details in the bills;

2.      lack of uniformity in the rate applied to the perusal of documents or the filing of letters;

3.      duplication of items in the bills;

4.      lack of entitlement of the Minister to claim for certain items.

8                     In relation to the alleged lack of detail DDR Segal said

‘The provision of further particulars may or may not assist the party making the claim, or may or may not assist the other party to successfully oppose the claim either in principle or as to quantum.  However, in the present context, it is for Mr Potier to demonstrate that it is in the interests of justice for him to be let in to oppose the bills without the sanction of financial consequences should that opposition be unsuccessful.  In my view, the description of work in these bills complies with Order 62, rule 40 and the usual form of bill of costs accepted by the Court.  The fact that further information is sought does not constitute a compelling reason for waiver of security.’

9                     This ‘general objection’ as DDR Segal termed it, was made in a number of other ways including that ‘no scale of charges’ has been identified, the bills did not particularise the persons involved in conversations or the length of the conversations, there was no evidence to prove work such as phone calls and letters and the times claimed for hearings in Court were different from the actual times.  In relation to all of these objections the Deputy District Registrar expressed the same opinion as is quoted at [8] above.

10                  In relation to the claim that the charge rate quoted for the perusal of documents and for the costs of filing letters is not uniform the Deputy District Registrar observed that this is probably true but noted that ‘this lack of uniformity can legitimately arise because the scale … permits a discretionary allowance for the perusal of larger documents.’ 

11                  DDR Segal accepted that it was possible that on taxation some of the Minister’s claims may not be allowed or allowed in full but held that this did not constitute ‘a compelling reason for waiver of security.’  This comment also applied to allegations of duplication of certain costs and claims that the work had not yet been done.

12                  The Deputy District Registrar also held, clearly correctly, that a taxing officer is not entitled to ignore or overturn a costs order.  He further held that lack of funds was not in itself a reason for waiving security.

13                  At the hearing before me Mr Potier pressed the claims listed in [7] above with the exception of the fourth claim which he conceded could not be sustained.  In addition to those claims Mr Potier also sought to attack the costs orders pursuant to which the bills of costs were filed.

14                  There are few decisions analysing the issue before me today, however it was considered by Spender J in Dudzinski v Kellow [2000] FCA 740.  In considering whether the obligation to pay security for costs should be waived his Honour, at [26], identified the purpose of O 62 r 46:

‘[T]he obvious intent of the requirement for payment of security for costs is to provide a fund against which a party who has been unsuccessfully challenged in relation to an estimate … might apply their costs of attending the resultant taxation of the bill.’

15                  I agree with his Honour’s comment and this purpose is relevant to consideration of Mr Potier’s submission that natural justice requires that a party who does not have the financial means to pay security for costs should not be prevented by his impecuniosity from pursuing his objections to an estimate.  This submission fails to take account of the purpose of the provision as explained by Spender J and ignores the fact that the provision is designed to strike a balance between the party liable to pay costs and the party who has obtained a favourable costs order.  As his Honour said, at [36],

‘[I]t is a rule for the protection of the party whose bill of costs is challenged.  It is, in my opinion, the price which ordinarily has to be hazarded for the exercise of the right to challenge.  It is not as if a person should, as a matter either of fairness or justice, have a “free hit” devoid of any financial consequences even if the challenge to a bill of costs is unsuccessful, or substantially unsuccessfully.’

16                  His Honour concluded that, having regard to the purpose of the rule, the obligation to provide security for costs when filing a notice of objection should only be waived for very compelling reasons.  I respectfully agree with Spender J.

17                  For the reasons articulated by DDR Segal I do not find that there are compelling reasons in this case to waive the obligation imposed by O 62 r 46(3)(d), much less is there reason to interfere with DDR Segal’s exercise of discretion.  The relief sought in the applicant’s notice of motion is refused.  The applicant must pay the respondent’s costs on the motion, to be taxed if not agreed.

Associate:

Dated:              4 May 2004