Case: Levick v Commissioner of Taxation [2000] FCA 674 ; (2000) 102 FCR 155
Outcome: considered
Section 43 does not expressly state that a power to award costs against solicitors is given to the Court. However, the authorities are clear that s 43 does encompass this power. See Levick v Commissioner of Taxation [2000] FCA 674 ; (2000) 102 FCR 155 (" Levick ") in which the relevant principles are discussed by the Full Court. 6 The principles under which an order for costs should be made against a legal practitioner for unreasonably instituting or maintaining a proceeding or defence, at least in relation to s 43, suggest that this power should be used sparingly. Indeed, in Levick , the Full Court suggested that in order to invoke the power, there must be something akin to an abuse of process, that is, using the proceeding for an ulterior purpose or without any, or any proper, consideration of the prospects of success. The Full Court referred to White Industries (Qld) Pty Ltd v Flower &amp; Hart (1998) 156 ALR 169 at 236 per Goldberg J to the same effect. See also Re Bendeich (No 2) (1994) 53 FCR 422 at 426-7 per Drummond J. 10 A somewhat different approach was taken by the Queensland Court of Appeal in Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683 (" Steindl "), where Davies JA (with whom Williams JA and Philippides J agreed) rejected the proposition that it was not improper for a legal representative to present a case which that legal representative knew, or ought to know, was hopeless. Mansfield J regarded himself as bound to follow the approach in Levick , in preference to that adopted in Steindl . He therefore declined to make the order sought. 14 It is unnecessary for me to say anything further about s 43. It may be arguable that the principles stated in Levick require some further consideration in the light of the later reasoning of the Queensland Court of Appeal in Steindl . However, any such reconsideration will have to await the attention of a Full Court. 24 In due course, s 78 B notices issued. They were all but incoherent. At the hearing, the applicant's solicitor pursued what purported to be a constitutional argument, of sorts, for some minutes, and then acknowledged, in effect, that he was unable to argue the point. He was no better able to identify any constitutional issue in the costs hearing before me. It is interesting to note that in Levick , a bankruptcy case, a similar inability to articulate in any sensible manner a purported constitutional challenge to the validity of a series of Commonwealth Acts (including the Taxation Administration Act 1953 (Cth), the Income Tax Assessment Act 1936 (Cth), and the Corporations Law) was properly visited with an order for costs against the debtor's solicitor. 25 In the circumstances of this case, I consider that it would be unfair to require the applicant to pay the additional costs incurred by reason of the introduction of an entirely hopeless legal point, and one that would have been beyond the applicant's comprehension. It was her legal representative who pursued this point, even when he knew that he was in no position to say anything sensible in support of it. 26 I propose therefore to make an order pursuant to O 62 r 9(1)(c) to the effect that the applicant's solicitor repay the client the costs thrown away by reason of the pursuit of the constitutional challenge. I am told that the applicant is impecunious. It is likely that the respondents will pursue her for costs. The best course, in these circumstances, is to order that the method by which the applicant's solicitor repay her for these costs is to make a payment directly to the respondents, which sum will of course, be deducted from any amount owing by the applicant by way of costs. I will fix the amount to be paid by the applicant's solicitor in the sum of $1000, which seems to me to be a very modest figure in the circumstances. 27 The applicant's solicitor asked for time to pay. I will order the applicant's solicitor to pay to the respondents the sum of $1000, that amount to be paid on or before 9 May 2006. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. Associate: Dated: 10 March 2006 Solicitor for the Applicant: Mr D Cheung There was no appearance for the respondent Date of Hearing: 10 March 2006 Date of Judgment: 10 March 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/199.html