Lawrence v Sammut

1. These proceedings were originally commenced in 2021 following the issue of a bankruptcy notice against Mr Lawrence, the applicant. The reasons which follow relate to an interlocutory application made by Ms Sammut and Mr Ciantar, the respondents[1] in the 2021 proceedings. The respondents have asked the Court to dismiss an application by Mr Lawrence lodged on 8 November 2024. In that application, Mr Lawrence sought review of a Certificate of Taxation issued by a registrar of this Court. The Certificate of Taxation was used as the basis for issuing the latest in a series of bankruptcy notices that have been issued to Mr Lawrence. That notice was issued to Mr Lawrence on 21 October 2024.
2. The respondents say Mr Lawrence's application of 8 November 2024 should be summarily dismissed pursuant to r 13.13 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth). They argue the application as framed has no reasonable prospects of success, and they say the Court should not allow any amendment.

1. These proceedings have a long history. They can be traced back to a commercial dispute between Mr Lawrence and the respondents in relation to a property subdivision. The arrangement ended in acrimony, and Mr Lawrence commenced proceedings against Ms Sammut and Mr Ciantar in the New South Wales courts. Mr Lawrence was unsuccessful in those proceedings: see Lawrence v Ciantar [2019] NSWSC 464. Mr Lawrence was left with a hefty costs bill. Following taxation, the costs award was certified and registered as a judgment of the Supreme Court of New South Wales.
2. Ms Sammut and Mr Ciantar arranged for the issue of a bankruptcy notice against Mr Lawrence in 2021. That notice demanded payment of $262,275.71 which was the amount owed under the judgment of the Supreme Court which registered the earlier costs' orders. Mr Lawrence then commenced proceedings in this Court seeking to set aside that bankruptcy notice.
3. Mr Lawrence argued the bankruptcy notice should be set aside because he had a counter-claim, set-off or cross demand that was equal to or in excess of the amount of the judgment debt within the meaning of s 40(1)(g) of the Bankruptcy Act 1966 (Cth). That application was dismissed in August 2021: see Lawrence v Sammut [2021] FCCA 1929 per Judge Manousaridis. His Honour ordered the applicant to pay the respondents' costs of those proceedings.
4. On 11 March 2022, Ms Sammut and Mr Ciantar filed and served a bill of costs in respect of the proceedings in this Court. The Federal Court issued an estimate letter in due course and Mr Lawrence objected by filing a Notice of Objection to Estimate of Costs on 15 June 2022. After Mr Lawrence withdrew his objection during the objection proceedings before a registrar, Ms Sammut and Mr Ciantar asked the registrar to make an award of costs in their favour. The registrar initially declined to make such an order but that decision was set aside by Judge Manousaridis following an application for review of the registrar's decision. His Honour's decision of 23 November 2023 directed that the costs of the review application be included in the taxation process.
5. The taxation proceeded and the amount which was determined was greater than the amount indicated in the estimate letter. The registrar also taxed the costs of the taxation process. There was a further taxation hearing on 27 September 2024 to deal with the costs of the review application to Judge Manousaridis that had been decided on 23 November 2023. Following an adjournment of that taxation hearing and discussions between the parties, the respondents' lawyers wrote to the registrar to inform her the parties had reached agreement about the costs of the review application. The respondents' lawyers provided a draft Certificate of Taxation that related to all three components of the costs awarded against Mr Lawrence, namely:
   • the costs associated with the unsuccessful application to set aside the bankruptcy notice;
   • the costs associated with the review application; and
   • the costs of the taxation process.
6. Shortly after the registrar issued the Certificate of Taxation in the amount of $122,814.20, Mr Lawrence disputed that he had given his consent. On 8 November 2024, he lodged an interlocutory application seeking review of the Certificate of Taxation.
7. In the meantime, Mr Lawrence has paid the amount demanded in the initial bankruptcy notice which included the costs of the New South Wales court proceedings. The dispute that remains before me relates only to the costs incurred in these proceedings.

Mr Lawrence's application to review the Certificate of Taxation issued by the registrar on 11 October 2024

1. Mr Lawrence is not represented in these proceedings. He has asked the Court to review the exercise of power by the registrar. Although he does not expressly say so, his application apparently relies on the power in s 256 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOA Act) to review the exercise of power by a delegate under s 254. He seeks orders staying the Certificate of Taxation, and he wants a complete review of the taxation because he says the costs have not been taxed correctly. He also seeks orders recovering his own costs. In support of this application, he has offered written submissions and an affidavit filed 5 May 2025. In these documents, it appears he is seeking to reagitate aspects of his long-running dispute with the respondents. I note the fate of most of those arguments now lies with the Federal Court in separate proceedings (including proceedings that were commenced to have Mr Lawrence declared a vexatious litigant).

The respondents' application seeking summary dismissal

1. While the Federal Court is grappling with other aspects of the wider dispute, I must focus for present purposes on the summary dismissal application by Ms Sammut and Mr Ciantar that is currently before me.
2. The respondents say Mr Lawrence's application should be summarily dismissed pursuant to r 13.13 of the Court's rules because his application is misconceived and has limited prospects of success in its current form. They oppose granting leave to amend the application given the history of the matter and the amount of monies in dispute at this point.

1. Most decisions made by a registrar are reviewable by the Court pursuant to s 256 of the FCFCOA Act. Where a valid application for review is lodged, the Court would ordinarily proceed to review the decision de novo - that is, the Court would conduct the review itself having regard to the material before it at the time of the review and make such orders as it saw fit. But the power of review under s 256 is only available in relation to the exercise of a power that was delegated pursuant to s 254. Mr Spencer, Counsel for the respondents, pointed out in written submissions that the power to tax is not delegated to a registrar under s 254. That means the review process in s 256 is not available in relation to the issue of a Certificate of Taxation.
2. If s 256 is not available, one must look to some other basis for the review. Mr Spencer pointed out Division 13.01 of the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) incorporates the relevant provisions of the Federal Court Rules 2011 (Cth) (FCR) insofar as they apply to bankruptcy matters. Rule 40.34 of the FCR permits a party attending a taxation to seek review of the taxation and any consequential orders, but the scope of that review is confined. To begin with, r 40.34(2) says the application for review must use the correct form (Form 133) and:

...state, briefly but specifically:

(a) the items in the bill that are subject to challenge; and

(b) whether the party wants the item included, deleted or varied and, if varied, the amount of the variation.

1. There are strict limits on the ability of a party to raise fresh or different grounds of objection or responses to objection: r 40.34(3). Rule 40.34(6) says "[n]o further evidence will be received on the review".
2. Edelman J discussed the Court's power to review a taxation of costs in Cassimatis v Australian Securities and Investments Commission [2016] FCA 131; (2016) 334 ALR 350. His Honour reviewed the authorities and adopted (at [14]) the analysis of Jordan CJ in Schweppes Ltd v Archer [1934] NSWStRp 17; (1934) 34 SR (NSW) 178 where it was said (at 183-184):

In appeals as to costs, the principles to be applied are these. The Court will always review a decision of a Taxing Officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the Court is reluctant to interfere. It has undoubted jurisdiction to review the Taxing Officer's decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances ... but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case.

1. Edelman J pointed out in Cassimatis the High Court had effectively endorsed the Schweppes approach in Australian Coal & Shale Employees Federation v The Commonwealth [1953] HCA 25; (1953) 94 CLR 621. His Honour also cited (at [16]) the observations of Rich J in Clark, Tait & Company v Federal Commissioner of Taxation [1931] HCA 26; (1931) 47 CLR 142 at 145-146 to the effect that "although the court may control any decision of a taxing officer, he was 'at all times loath to interfere with the decisions of experienced taxing officers'". Edelman J said in Cassimatis that deference was appropriate because taxing officers were experts in the art of assessing costs, whereas judges were not: at [16].

The shortcomings in Mr Lawrence's application as drafted

1. In this case, Mr Spencer says Mr Lawrence's application does not satisfy the requirements in r 40.34(2) of the FCR. He argues the application:
   • is not commenced using the correct form; and
   • does not specify with particularity the items in the bill that are subject to challenge, nor does it specify whether Mr Lawrence wants those items included, deleted or varied.
2. Mr Spencer adds that to the extent Mr Lawrence now wishes to file what appears to be hundreds of pages of material, that material must be excluded pursuant to r 40.34(6) which says no new evidence will be received on the review.
3. A perusal of Mr Lawrence's application for review confirms he does not specify with any particularity the items he wishes to challenge. It follows he has not complied with the requirements in r 40.34(2) of the FCR. The question is whether he can cure that defect at this stage by providing the particulars he should have provided before.
4. Mr Lawrence tried to explain his criticisms of the taxation in his oral submissions. It is plain he is critical of the process as well as the outcome: he complained in particular that he had been denied the opportunity to put on submissions in relation to an issue before the registrar. Yet he did not refer to specific items he wished to challenge at the time of his application. The closest he got to satisfying the requirements in r 40.34(2) was when he said he disputed a total of $56,782.
5. Mr Lawrence clearly believes he could make good on his criticisms and provide the detail required by the rules if given the opportunity to do so. He explained he had not gone into detail when he filed the application because he worried doing so would create extra work and generate still more costs when he just wanted the proceedings to end.
6. The respondents say Mr Lawrence's application is bound to fail if it proceeds as drafted. I agree. Mr Lawrence has not complied with the requirements in r 40.34(2) as to the form and content of the application. In that application as drafted, Mr Lawrence failed to clearly identify any questions of principle that arise out of the registrar's decision, and he did not point to errors in particular items that would warrant the Court's intervention given the traditional deference the Court shows to those making taxing decisions.

An application to amend Mr Lawrence's application for review?

1. Could those shortcomings be addressed following an amendment to the application at this point?
2. It is possible Mr Lawrence could supply the information required and focus submissions on those matters, although it is difficult to be confident he would confine himself to the issues given his insistence at the hearing on reagitating aspects of the larger dispute. The fact an applicant may be able to supply particulars does not inevitably mean the Court should exercise the discretion to allow such an amendment were an application made to that effect.
3. In written and oral submissions, Mr Spencer discussed the possibility of an application to amend. The respondents made clear they would oppose leave to amend being granted if an application were brought because dealing with the amended application would impose an unreasonable additional burden on them. Mr Lawrence was on notice of these arguments, and he had ample opportunity to respond to them at the hearing if he wished to make an application to amend.
4. Mr Spencer pointed out Mr Lawrence had already attempted to file hundreds of pages of material in support of the application as drafted. A good deal of that material appears to be directed to issues that are not relevant to the question at hand. Mr Spencer also said some of the material may have been obtained in other proceedings; tendering that material might amount to a breach of the implied undertaking. Mr Spencer said his clients would incur significant additional costs wading through that material and trying to respond if forced to do so.
5. Whatever the provenance of Mr Lawrence's material, Mr Spencer said it would be inappropriate and unfairly burdensome now to allow an amendment that would prolong the agony of the parties. He added the amount genuinely in dispute was low - perhaps as low as $7,000 - and that permitting an amendment in those circumstances would cause the respondents, who are legally represented, to incur additional costs that were out of all proportion to the amount in dispute. Those costs would be incurred where Mr Lawrence has proved reluctant to meet the respondents' costs to date when he has been unsuccessful. Mr Spencer added the applicant had in fact agreed to the bulk of the cost items before the registrar. Mr Spencer argued it would be an abuse of process to permit the applicant to relitigate those and other issues that had already been resolved.
6. Mr Spencer says allowing an amendment would be inconsistent with the Court's overarching objective in s 190(1) of the FCFCOA Act, which is "to facilitate the just resolution of disputes: (a) according to law; and (b) as quickly, inexpensively, and efficiently as possible". Sub-sections 190(2) and (3) go on to provide:

(2) Without limiting subsection (1), the overarching purpose includes the following objectives:

(a) the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 2);

(b) the efficient use of the judicial and administrative resources available for the purposes of the Court;

(c) the efficient disposal of the Court's overall caseload;

(d) the disposal of all proceedings in a timely manner;

(e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

(3) The civil practice and procedure provisions, in relation to the Federal Circuit and Family Court of Australia (Division 2), must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.

1. Section 191 says the parties to a dispute before the Court are each under an individual duty to conduct the proceedings "in a way that is consistent with the overarching purpose" identified in s 190(1).
2. There is a good argument that the terms of r 40.34 of the FCR impose a requirement to 'front-load' the material precisely because approaching the review in that way is generally the most fair and efficient course in circumstances where the substantive proceedings have already concluded and the taxing officers are given latitude to exercise their expertise. That being so, the Court might be slow to give leave to extend and perhaps complicate what Cassimatis explained was a relatively limited process of review.
3. Mr Lawrence did not ask for leave to amend the application and he did not respond to any of the respondents' arguments against giving leave if it were sought. The burden of making such an application and explaining why it is appropriate to exercise the discretion lies on the applicant seeking those orders: see Dye v Commonwealth Securities Limited [2010] FCA 720 at [25] per Katzmann J. In the absence of an application to amend, I do not need to express a concluded view on whether it would be appropriate to make such an order. I need only respond to the application I have before me - and I am satisfied that application has little prospect of success as drafted.

1. The respondents should succeed in their application for summary dismissal pursuant of Mr Lawrence's application for review of the registrar's Certificate of Taxation. I am satisfied Mr Lawrence has no reasonable prospect of prosecuting the proceeding given the absence of required detail in his application and the comparatively narrow scope of the review contemplated under r 40.34(2) of the FCR.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of Judge McCabe.

[1] Ms Sammut and Mr Ciantar, the respondents in the substantive proceedings, are technically the applicants in this interlocutory application. For the sake of convenience and to avoid confusion, I will refer to them in these reasons by name, or describe them as 'the respondents'.