FEDERAL COURT OF AUSTRALIA

Davey v Dessco Pty Ltd [2019] FCA 1735

File number:

VID 321 of 2019

Judge:

SNADEN J

Date of judgment:

18 October 2019

Date of publication of reasons:

21 October 2019

Catchwords:

PRACTICE AND PROCEDURE – costs – interim application by the respondent to review a costs order made by a registrar of the court – application of Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 (“Bell”) – abolition of the “Chorley exception” – where a costs order is made in favour of a self-represented litigant who is also a lawyer whether phrasing of costs order ought to be confined to out of pocket expenses – interim application dismissed

Legislation:

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

Federal Court Rules 2011 (Cth) rr 3.11, 35.13(b)

Cases cited:

Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29

Date of hearing:

18 October 2019

Registry:

Victoria

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Category:

Catchwords

Number of paragraphs:

10

Counsel for the Applicant:

The Applicant appeared in person

Solicitor for the Respondent:

Mr R D Silverstein

ORDERS

VID 321 of 2019

BETWEEN:

JOHN PATRICK DAVEY

Applicant

AND:

DESSCO PTY LTD ACN 072 755 590

Respondent

JUDGE:

SNADEN J

DATE OF ORDER:

18 OCTOBER 2019

THE COURT ORDERS THAT:

1.    The respondent’s interim application filed 9 October 2019 is dismissed.

2.    The respondent pay the applicant’s costs of and incidental to the interim application as agreed or assessed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

VID 321 of 2019

BETWEEN:

JOHN PATRICK DAVEY

Applicant

AND:

DESSCO PTY LTD ACN 072 755 590

Respondent

JUDGE:

SNADEN J

DATE OF ORDER:

21 October 2019

THE COURT ORDERS THAT:

1.    The deadline by which the respondent must file an application for leave to appeal the orders made herein on Friday, 18 October 2019 is Monday, 4 November 2019.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

SNADEN J:

1    On 3 October 2019, a registrar of the court heard two applications by the applicant to have two bankruptcy notices set aside. Both applications succeeded. The registrar concluded that the bankruptcy notices constituted an abuse of process (in that they were issued for an improper purpose, namely to bring pressure to bear upon the applicant to hinder his prosecution of other litigation) and set them aside on that basis. The respondent was ordered to pay the applicant’s costs.

2    The respondent then applied under 35A(5) of the Federal Court of Australia Act 1976 (Cth) for a review of that decision to award costs. The more substantive orders (by which the bankruptcy notices were set aside) was not challenged.

3    The respondent’s application came before me for case management on Friday, 18 October 2019. With the consent of the parties, I proceeded to hear the application there and then, following which I dismissed it with costs. Mr Silverstein, who appeared for the unsuccessful respondent, indicated that his client intended to seek “special leave” in respect of my decision and requested written reasons for it, which I agreed to provide. These are those reasons.

4    The applicant is a solicitor. He appeared on his own behalf before the registrar to prosecute what were ultimately successful applications to have the respondent’s bankruptcy notices set aside. The respondent contends that, despite that success, the registrar ought not to have made an order in the usual terms that it should pay the applicant’s costs. That was said to follow from the High Court’s recent decision in Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 (“Bell”), which abolished in Australia the so-called “Chorley exception”. The respondent contends that the registrar should not have made any order that conferred upon the applicant any entitlement to costs other than by way of reimbursement of out-of-pocket expenses.

5    There is no merit in the respondent’s contention. Bell involved an appeal from a costs assessment, not from an order awarding costs. It does not stand for any proposition that limits the terms in which a court should award costs to a successful, self-represented litigant who is a lawyer. It merely limits what such a litigant can recover pursuant to such an order.

6    Under the Chorley exception, a self-represented solicitor-litigant could recover some recompense for their own time spent prosecuting or defending the litigation within which they were awarded costs. That is no longer so. The applicant accepts that limitation, as did the registrar who made the order that the respondent now seeks to challenge. The registrar identified that his order did not necessarily require that the respondent pay the applicant’s “professional costs”. Rather, it required only that the respondent pay to the applicant whatever costs are properly recoverable (or, perhaps more accurately, that the respondent do so upon an assessment conducted in default of agreement between the parties about what the applicant’s recoverable costs actually are).

7    The costs order that was made was unremarkable and does not represent any deviation from what the High Court concluded in Bell. Given that the parties are as one on what the applicant can and cannot recover pursuant to it, it is not immediately apparent why the respondent requires the relief for which it applied.

8    On that score, the applicant suggests that the respondent’s application represents a continuation of the abuse of process that warranted the registrar’s decision to set aside the bankruptcy notices. He foreshadowed—at least at the level of possibility—an application for orders to have the respondent “…declared a vexatious litigant”.

9    There may or may not be something in the applicant’s contention. It is not a proposition that I need to explore in light of my conclusions above (and, perhaps more fundamentally, in the absence of an application for orders of the kind that the applicant has foreshadowed). Whether the court (or any other court) might have occasion to do so at some later point in time will remain to be seen.

10    As outlined above, these reasons post-date the orders that I made dismissing the respondent’s application. Given Mr Silverstein’s indication that his client might seek to appeal those orders, I consider it appropriate to make an order pursuant to r 35.13(b) of the Federal Court Rules 2011 (Cth) to extend the deadline by which an application for leave to appeal should be filed (assuming that leave to appeal is required). That deadline will be extended to Monday, 4 November 2019.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Snaden.

Associate:

Dated:    21 October 2019