Active Skin Pty Ltd v Yey Pty Ltd
[2021] FCCA 329
•24 February 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Active Skin Pty Ltd v Yey Pty Ltd [2021] FCCA 329
File number(s): SYG 1636 of 2019 Judgment of: JUDGE BAIRD Date of judgment: 24 February 2021 Catchwords: PRACTICE AND PROCEDURE – security for costs – where applicant accepts obligation to give security - quantum of security – relevant principles - whether court must order costs be referred to taxation under Federal Court Rules 2011 – whether security must be ordered at Schedule 1 scale – security ordered other than at Schedule 1 scale Legislation: Federal Circuit Court of Australia Act 1999 (Cth), s 80
Federal Circuit Court Rules 2001 (Cth), Part 21, rr 21.01, 21.02, 21.09, 21.10, Schedule 1
Federal Court of Australia Act 1976 (Cth), s 56
Federal Court Rules 2011 (Cth), Part 40
Trade Marks Act 1995 (Cth), ss 42(b), 56, 60
Cases cited: A2B Australia Limited & Anor v OZ Power Group Pty Ltd & Anor [2020] FCCA 2623
Bauer Consumer Media Ltd v Evergreen Television Pty Ltd [2019] FCAFC 71; (2019) 142 IPR 1; (2019) 367 ALR 393
Chris and Dora Di Lorenzo Partnership v Denversian Pty Ltd [2020] FCCA 1718
Flujo Holdings Pty Ltd v Merisant Company & Ors [2019] FCA 594
Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58; (2010) 185 FCR 9; (2010) 86 IPR 437
Gill v Karan Grewal Pty Ltd [2020] FCCA 1202
Henley Arch v Del Monaco (No 2) [2020] FCCA 1911
Number of paragraphs: 51 Date of last submission/s: 7 September 2020 Date of hearing: On the papers Place: Sydney Counsel for the Applicant: S Crysanthou SC and M Hazan Solicitor for the Applicant: Peter Whitehead, Hazan Hollander Counsel for the Respondent: A Fox and A Spies Solicitor for the Respondent: Cameron Lang, Actuate IP ORDERS
SYG 1636 of 2019 BETWEEN: ACTIVE SKIN PTY LTD (ACN 121 217 892)
ApplicantAND: YEY PTY LTD (ACN 088 605 181)
Respondent
ORDER MADE BY:
JUDGE BAIRD
DATE OF ORDER:
24 FEBRUARY 2021
THE COURT:
1.ORDERS pursuant to section 80 of the Federal Circuit Court of Australia Act 1999, that the applicant give security for the respondent’s costs of and incidental to the proceeding for the period 10 June 2020 to the conclusion of the proceeding in the amount of $45,000.
2.ORDERS that the security to be given by the applicant pursuant to Order 1 be by payment into Court within 14 days of the date of these Orders.
3.ORDERS that this proceeding be stayed pursuant to section 80(5) of the Federal Circuit Court of Australia Act 1999 in the event that the security for costs pursuant to Order 1 is not provided by the applicant in the manner or within the time period specified in Order 2.
4.ORDERS the Respondent’s costs be its costs in the cause.
REASONS FOR JUDGMENT
JUDGE BAIRD
BACKGROUND
On 11 June 2019 a delegate of the Registrar of Trade Marks refused to register two trade mark applications filed by Active Skin Pty Ltd, the applicant in this proceeding. The two trade mark application are application no. 1682979 for ‘ActiveSkin’ (fancy mark) and no. 1688858 for ‘activeskin’, each seeking registration in respect of specified goods in class 3 and services in class 35 of the Register of Trade Marks. Registration of the trade mark applications was opposed before the Registrar by Yey Pty Ltd, the respondent in this proceeding, under grounds including s.60 of the Trade Marks Act 1995 (Cth). The Registrar by her delegate found that the ground of opposition under s.60 of the Act was made out, and refused to register the trade mark applications.
Active Skin appeals the decision, commencing the proceeding in this Court by notice of appeal filed 1 July 2019. By a notice of contention filed on 26 July 2019, Yey contends that the trade mark applications were correctly refused by the Registrar pursuant to s.60, and that the decision should also be affirmed on the ground that each of the trade mark applications should be rejected under s.42(b) of the Act.
Although styled an “appeal”, this proceeding arises as a de novo appeal under s.56 of the Act from the Registrar’s decision, engaging the original jurisdiction of the Court: Bauer Consumer Media Ltd v Evergreen Television Pty Ltd [2019] FCAFC 71; (2019) 142 IPR 1; (2019) 367 ALR 393 per Greenwood J at [2]; in this Court, see Chris and Dora Di Lorenzo Partnership v Denversian Pty Ltd [2020] FCCA 1718, at [21]. It follows that Active Skin is properly styled as the “applicant” in this proceeding, as well as being the applicant for registration of the trade mark applications.
When a party appeals under s.56 of the Act, as here, the statutory jurisdiction conferred on the Court is an exercise of judicial power in the Court’s original jurisdiction to hear and determine questions of fact and law in controversy according to all of the evidence put in support of, or in answer to, the relevant case, hearing all of the questions and issues afresh on the merits: Bauer at [37]. The Court decides whether or not the trade mark applications should proceed to registration having regard to the extent, if any, to which any ground of opposition raised in this proceeding is established by the opponent, Yey. That is, each party may choose to file in the proceeding, and rely on, evidence other than, or in addition to, that placed before the delegate. Yey, as the opponent to registration of the trade mark applications bears the onus of establishing a ground of opposition, notwithstanding that in this proceeding it is the respondent: Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58; (2010) 185 FCR 9; (2010) 86 IPR 437, at [32], [48].
THE APPLICATION FOR SECURITY FOR COSTS
Before me for determination is an application by Yey for orders for the giving of security by Active Skin for Yey’s costs from 10 June 2020 until conclusion of the final hearing and disposition of the proceeding. Yey seeks an amount of $65,000. As I explain below, it has arrived at this sum for its anticipated recoverable costs under the costs rules applicable in the Federal Court of Australia (FCRules).
The issue of security for costs was first raised before the Court by Yey’s lead counsel, Mr Fox, at a case management hearing before me on 10 June 2020, after a number of interlocutory steps in the proceeding had occurred, including the filing and service of evidence by both parties. I then indicated that the Court was not inclined to entertain an application for past costs, and remained undecided as to the provision of security limited to present and future costs to trial. Mr Fox informed the Court of Active Skin’s corporate size (modest), and the status of financial inquiries his client had made of Active Skin (non-responsive), and submitted that given the circumstances then pertaining, his client sought some comfort that its costs, at least with respect to the upcoming trial, are secured. I invited counsel to notify my Chambers if the parties were unable to reach agreement on the matter of security.
Obviously, the parties have not reached agreement on the matter of security. On 10 August 2020, I made orders by consent that Yey’s application for security for costs be decided without an oral hearing, and on the papers.
When the issue of the provision of security was first raised before me, Active Skin opposed any order for security for costs. I am assured by both parties, however, that Active Skin has agreed to Yey’s request for security for its future costs in the proceeding from 10 June 2020.
In substance, the principal issues concerning security remaining for determination are the basis on which security should be ordered (in accordance with the FCRules, or Part 21 and Schedule 1 of the Federal Circuit Court Rules 2001 (Cth), and specifically, the events based scale set out in Schedule 1), whether the Court should at this stage make an order that any costs ordered in the proceeding be referred to taxation under the FCRules, and further to these issues, the quantum of such security. The parties are agreed that security be given by payment into Court within 14 days of being ordered to be provided.
Each party has filed and relies on an affidavit affirmed by their legal representative, variously deposing as to correspondence between the parties (which inter alia sets out and explains the appropriateness of the competing bases on which that party calculates the quantum of security it propounds), and setting out their competing estimates of anticipated recoverable costs.
The parties have filed and served outlines of submissions, respectively, in support of orders for security for costs, in response, and in reply.
Due to circumstances it is unnecessary to recount, Yey’s application was not determined before the hearing of the appeal this month. On 8 February 2021, the first day of the final hearing, I raised the matter with Ms Chrysanthou SC, senior counsel for Active Skin, and Mr Fox. Counsel assured the Court that although the ambit of dispute concerning security had narrowed, the parties still sought determination of the issue.
THE PARTIES COMPETING ORDERS
Yey seeks the following orders (definition added, characterisation of applicant’s status as being an appellant corrected):
[1]ORDERS pursuant to section 80 of the Federal Circuit Court of Australia Act 1999 (FCCA Act), that the applicant give security for the respondent’s costs of and incidental to the conclusion of the proceeding in the amount of $65,000.
[2]ORDERS that the security to be given by the applicant pursuant to Order 1 be by payment into Court within 14 days of the date of these Orders.
[3]ORDERS that this proceeding be stayed pursuant to section 80(5) of the [FCCA Act] in the event that the security for costs pursuant to Order 1 is not provided by the applicant in the manner or within the time period specified in Order 2.
Active Skin seeks the following overarching taxation order:
ORDERS, pursuant to Rule 21.02 of the Federal Circuit Court Rules 2001, that any order for costs made in this proceeding be referred to taxation under Part 40 of the Federal Court Rules.
In correspondence, and in its submissions, Active Skin says that unless this overarching taxation order is made, the appropriate amount of security ordered should be specified as being under the Rules, and in accordance with Schedule 1, the amount of security for costs ordered should be $22,322.50, being the amount calculated by its solicitor, Mr Whitehead, on a specified events basis (see below at [18]).
Both parties seek their costs of the application for security.
EVIDENCE AS TO QUANTUM OF SECURITY
Yey relies on the affidavit of Cameron Lang, employed solicitor, affirmed 14 August 2020. As set out in annexed correspondence from his firm, Mr Lang provides a calculation of anticipated recoverable costs by reference to the costs rules applicable in the Federal Court of Australia (that is, under the FCRules), on a party-party basis, for a 3 day final hearing, estimating a 70% recovery of solicitors’ fees, and 100% recovery of counsel fees, and no other disbursements, giving a total of $65,000. Mr Lang attests to that estimation being conservative. Mr Lang also deposes to an Australian Securities and Investments Commission current and historic company search extract of Active Skin, and certain Google maps’ search results. As Active Skin has agreed to give security (whilst debating the terms of the order, and thus quantum) it is unnecessary to refer to those searches and results further.
Active Skin relies on an affidavit of Peter Whitehead, its instructing solicitor, affirmed 24 August 2020. Mr Whitehead sets out a significant number of proceedings in which he has been involved where his firm has been the solicitor on the record in the Federal Court. Mr Whitehead states that that “if [Yey] succeeds in the proceeding, and [Active Skin] is ordered to pay [Yey’s] costs, the costs payable will be determined in accordance with Part 21 and schedule 1 of the [Rules], unless the Court orders otherwise”. He refers to, and provides his calculations based on Schedule 1, giving a total of $22,322.50. I observe that although referring to the events based scale in Schedule 1, Mr Whitehead omits certain events such as judgment taking, the interim application, and disbursements.
THE PARTIES’ SUBMISSIONS
Active Skin’s submissions
Active Skin’s counsel submit the “only issue for determination is whether the quantum of security to be provided by Active Skin can be calculated by reference to the [FCRules] if the Court does not first make an order to the effect that costs in the proceeding be referred to taxation under the FCR, not the [Rules]”. Active Skin says Yey “quantifies security under the [FCRules] for $65,000, while also opposing costs orders being referred for taxation under the FCR”.
Active Skin says that before requiring it to provide security now in an amount determined under the FCRules, the Court must make an order in the nature of the overarching taxation order (see [14] above). If the Court does not make such order at this time, the quantum of security must be determined by reference to the Rules, “as that is the extent of costs to which Yey would be entitled”. Active Skin says its position is consistent with the Rules, and specifically Rule 21.10. It argues that to order a party to provide security in an amount determined under the FCRules, when the opposing party is not entitled to costs under those rules, would be contrary to Rule 21.10. Active Skin does not explain why it would not be entitled to seek costs in accordance with the FCRules should it succeed in the proceeding.
Yey’s submissions
Yey submits that Active Skin seeks to fetter the Court’s broad discretion in ordering security for costs. There is no principle in this Court which mandates that security for costs be calculated only by reference to Schedule 1.
Yey says that it is not necessary to make the overarching taxation order, and in any event it is undesirable as it precludes the prospect of a negotiated resolution as to costs between the parties, and assumes any costs order should proceed to taxation. It observes that Active Skin does not advance or evidence any case that its capacity to pay could be a relevant factor in determining quantum. Yey says Active Skin had in earlier correspondence accepted the amount sought by Yey as appropriate. Yey submits that Active Skin’s present submission that security should be quantified under the Rules (that is, at the amount calculated by Mr Whitehead, presumably corrected to include all relevant events and disbursements), gives rise to a presumption at this stage that recoverable costs that may be ordered at the conclusion of the proceeding will only be assessed under the Rules, and so has the potential to visit significant unfairness upon Yey, as it would leave Yey, if successful in the proceeding, at risk of not being able to recover its costs taxed under the FCRules.
Yey submits that it has applied an orthodox methodology in calculating the sum sought, and has adopted a conservative approach, seeking only its reasonable costs, in such sum as it would be confident to recover upon a taxation conducted under the FCRules. It submits that should Yey succeed at trial and obtain a costs order, it will then be at liberty to seek that its costs be payable according to the FCRules. Such orders are often made in this Court, particularly in cases that may be regarded as complex.
The legal and factual complexity of the matter is not in dispute
By letter dated 12 June 2020 from Yey to Active Skin, proposing the amount of security be $65,000 quantified by reference to the FCRules, Yey (by its solicitors) contended that the factual and legal matters in issue in this appeal proceeding are complex, and warrant both departure from the Schedule 1 scale, and the application of the costs rules in the FCRules. They drew attention to the “voluminous quantities of evidence regarding their conduct and business activities over a period of many years” put on by both parties, that no allowance for the preparation and review of this material is made in Schedule 1, that “the legal issues to be decided … encompass specialist intellectual property considerations and arguments which would fall within the bounds of it being a relatively complex matter”, and that the 3 day listing for the final hearing reflected the factual and legal complexity of the matter.
In response, by letter dated 16 June 2020, Active Skin’s solicitors recast Yey’s contentions as the proposition that all costs orders made in the proceeding should be referred for taxation under Part 40 of the FCRules. They said Active Skin agreed to pay the sum of $65,000 into Court as security. It suffices to note that Active Skin did not cavil with Yey’s view of the factual and legal complexity of the matter.
RELEVANT PRINCIPLES AND STATUTORY PROVISIONS
The principles concerning the provision of security for costs in this Court are well established. I set out the relevant statutory provisions, and summarise relevant principles below.
Yey brings its application pursuant to s.80 of the FCCA Act, and rule 21.01 of the Rules, and I apprehend from the inter partes correspondence, also pursuant to s.1335 of the Corporations Act 2001 (Cth). In this case nothing turns upon small differences in the approach to security for costs in each of those provisions.
Section 80(2) of the FCCA Act provides that the Court may order an applicant in a proceeding in the Court to give security for the payment of costs that may be awarded against the applicant. The security shall be such amount, and given at such time and in such manner and form, as the Court directs: s.80(3). The Court may reduce or increase the amount of security ordered to be given and may vary the time at which, or manner or form in which, the security is to be given: s.80(4). If security is not given in accordance with that ordered, the Court may dismiss or stay the proceeding: s.80(5). Rule 21.01 reflects the terms of s.80 of the FCCA Act. Section 80 is in substantially similar terms to s.56 of the Federal Court of Australia Act 1976 (Cth) (FCA Act).
Rule 21.01, on which Yey relies, is contained in Part 21, Division 21.1 of the Rules. Rule 21.10, on which Active Skin relies, is contained in Part 21, Division 21.3 of the Rules. To place these rules in context, the relevant provisions of the Rules contained in Part 21, Divisions 21.1, 21.2, and 21.3 (relevantly 21.09, and 21.10) are:
Part 21—Costs
Division 21.1—Security for costs
21.01Security for costs
(1)On application by a respondent, the Court may order the applicant to give the security that the Court considers appropriate for the respondent’s costs of the proceeding.
(2)For this rule:
respondent includes an applicant if a cross‑claim is made or the response to the application seeks orders in relation to matters not covered by the applicant.
…
Division 21.2—Orders for costs
21.02 Order for costs
(1)An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2)In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.
21.03 Determination of maximum costs
(1)The Court may specify the maximum costs that may be recovered on a party and party basis:
(a) by order at the first court date; and
(b) of its own motion or on the application of a party.
…
Division 21.3—Costs and disbursements
21.09 Application
(1)This Subdivision applies to costs payable, or to be taxed, under an Act, these Rules or an order of the Court, in a proceeding.
(2)Subject to paragraphs 21.02(2)(c) and 21.11(2)(a), Chapter 19 of the Family Law Rules does not apply to a family law or child support proceeding in the Court.
(3)Unless otherwise provided, these Rules do not regulate the fees to be charged by lawyers as between lawyer and client in relation to proceedings in the Court.
Note: For any dispute between a lawyer and a client about the fees charged by the lawyer, see the State or Territory legislation governing the legal profession in the State or Territory where the lawyer practises.
21.10 Costs and disbursements
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:
(a)costs in accordance with Parts 1 and 2 of Schedule 1; and
(b)disbursements properly incurred.
Note:For costs in a proceeding to which the Bankruptcy Act 1966 applies, see Part 13 of the Federal Circuit Court (Bankruptcy) Rules 2016.
For completeness, I note that s.1335(1) of the Corporations Act provides:
1335 Costs
(1)Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.
Principles
The Court exercises a broad discretion under the above legislative provisions in determining whether it is appropriate to order security, limited only by the fact that its discretion must be exercised judicially, according to the merits of each case and without any particular predisposition. As reiterated by O’Bryan J in Flujo Holdings Pty Ltd v Merisant Company & Ors [2019] FCA 594:
[6]As observed by Kenny and Edelman JJ in Commissioner of Taxation v Vasiliades (2016) 344 ALR 558; [2016] FCAFC 170 (at [72] and [86]), the parties against whom proceedings are brought are not respondents by choice but because someone else has chosen to sue them. The purpose of an order for security for costs is to ensure that a successful respondent to a claim will have a fund available within the jurisdiction of the Court against which the successful respondent can enforce a judgment for costs in the respondent’s favour.The policy of the law in this regard is related to the accepted understanding in Australian courts that normally costs follow the event.
[7]The discretion conferred by s 56 [of the Federal Court of Australia Act 1976] to award security for costs is broad and unfettered, the only limitation being that the discretion must be exercised judicially: Bell Wholesale Limited v Gates Export Corp (No. 2) (1984) 2 FCR 1 at 3. It is a discretion to be exercised according to the merits of each case and without any particular predisposition: Bryan E Fencott Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 at 511 per French J. The Court’s discretion is to be exercised having regard to whether the interests of justice would be best served by making or refusing the order: Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405 at 411.
In the present case, Active Skin has accepted that security for Yey’s costs should be given, and apart from disagreement about the basis on which the order should be made, has not raised any factor against the Court’s exercise of discretion in ordering the provision of security.
Quantum of security
The Court has a broad discretion under s.80 of the FCCA Act and r.21.02 of the Rules to set the method by which the quantum of security is to be calculated.
It is well established that in determining the quantum of security, the Court engages in a “broad brush” assessment, having regard to the information before it. It does not undertake anything in the nature of a taxation of costs. The Court is not bound to give the amount of security the party seeking the security estimates to be the amount of its costs, nor must the amount be determined with mathematical precision: see Flujo Holdings at [22], and decisions to which O’Bryan J there refers.
Whilst a costs consultant may be engaged to prepare an estimate of the party-party costs of each step which would be recoverable by the respondent were it to succeed and obtain an order for its costs, an alternative approach is for the respondent’s solicitor to give evidence as to the likely steps and the costs to be incurred in completing each step. Such evidence usually relies upon a calculation of actual costs incurred discounted by some factor reflecting the likely recovery of party-party costs: see Flujo Holdings at [23], citing Gordon J in Norcast S.ár.L v Bradken Limited [2012] FCA 765 (at [17] and [18]). Broadly, Mr Lang has followed this approach on behalf of Yey.
Power to award costs
When exercising its jurisdiction and power to make an order for costs, this Court may set the amount of costs, the method by which the costs are to be calculated, refer the costs for taxation under Part 40 of the FCRules, or set a time for payment for costs: r.21.02(2). When making an order for costs, the Court has a general discretion to depart from the event based scale provided for in Part 1 of Schedule 1 to the Rules, although the starting point is that ordinarily costs, if they are to be awarded, will be assessed according to that scale: see Gill v Karan Grewal Pty Ltd [2020] FCCA 1202, at [23].
The Court may award indemnity costs, and may award costs as a lump sum: see generally, in relation to orders for costs in the intellectual property jurisdiction in this Court Henley Arch v Del Monaco (No 2) [2020] FCCA 1911, [7] – [21]; A2B Australia Limited & Anor v OZ Power Group Pty Ltd & Anor [2020] FCCA 2623.
Relative complexity of the matter is a factor which the Court will take into account when determining the basis on which costs are awarded, including whether it is appropriate to depart from the Schedule 1 scale, and apply the applicable costs rules in the FCRules.
CONSIDERATION AND DETERMINATION
Authority makes clear (see [31] above) that the purpose of an order for security for costs is to ensure that a respondent to a proceeding will have a fund available within the jurisdiction of the Court against which the successful respondent can enforce a judgment for costs in the respondent’s favour. The Court does not by an order for security for costs presume that the respondent must succeed, and that the Court will make a costs order in its favour. An order for the giving of security merely ensures that a fund will be available within the jurisdiction should a costs order be made in the future in favour of a successful respondent, and otherwise that the proceeding will be stayed.
The Court is not, by making an order for the giving of security, making a costs order. It makes no such decision; neither by ordering security be given, nor by deciding the form or quantum of security.
The Rules comprised in Part 21 of the Rules distinguish between the Court’s power to make orders for security for costs, and its powers to make costs orders. Part 21 deals with, and provides for, as the separate subject matters they are, the Court’s powers to make orders for security for costs, orders for costs, and costs and disbursements so ordered. As can be seen from the above extracts of the Rules, orders for security for costs are provided for in Division 21.1, orders for costs in Division 21.2, and the costs and disbursements so ordered in Division 21.3.
Simply put, an order for the giving of security under r.21.01 is not an order that a party pay costs under r.21.2. The exercise of the Court’s discretion to award security is not an exercise of the Court’s power and discretion to order costs.
Division 21.3 – and r.21.10 within Div.21.3 - is enlivened if an order is made that costs are payable by a party (relevantly), or costs are to be taxed, that is, as r.21.10 expressly states, when a party is entitled to costs in a proceeding. Rule 21.09 states when and to what circumstance Division 21.3 applies. The rule makes clear that neither r.21.10 nor r.21.11 apply unless there is an order that costs are payable, or are to be taxed, that is, the Court has made an order pursuant to a power contained in Division 21.2 of the Rules, or, not relevant to the present case, another Act. An order for security for costs made pursuant to r.21.01 does not constitute such an order.
To emphasise, in proceedings such as the present (not being brought under a statute which provides otherwise) a party is not entitled to costs until the Court decides to order costs in their favour. Contrary to Active Skin’s submission, it does not follow from an order for security for costs that the beneficiary of the order is entitled to costs in the proceeding.
Active Skin’s submission is misconceived. There is no Rule or principle in this Court that security for costs must be ordered on the Schedule 1 scale: see [33] – [34] above. Rule 21.10 does not so prescribe. Rule 21.10 has no application to the Court’s exercise of its discretion to order security, and decide the quantum to be provided.
It is not necessary, nor in my view desirable (whether at the stage of the proceeding when Yey first raised the issue of security for costs, or now), in determining the issue of the quantum of the security to be provided by Active Skin in this proceeding, that I fetter the Court’s future exercise of its discretion to order costs in the proceeding. The proposition that I should specify now, in advance of judgment in the substantive proceeding, and thereafter making any order for costs, the amount, method of calculation, basis for quantification, assessment, or reference to taxation, or in any other way qualify, any costs the Court may then award is misconceived.
Active Skin’s submission that the overarching taxation order must be made as a precondition to awarding the quantum of security sought by Yey must be rejected.
Following judgment in the matter the parties will be at liberty to make submissions on the question of costs, having had regard to the decision I reach on the grounds of opposition argued before me, and any matters that may then pertain, and on the basis of any material that the parties, properly advised, may then wish to adduce.
In determining the appropriate quantum to order, I have had regard to the Registrar’s decision, the notice of appeal and the notice of contention, that the fact that both parties have filed evidence in the proceeding and the consequence that has on the factual and legal issues to be ventilated in the proceeding. I have referred to the parties’ apparent agreement as to the factual and legal complexity of the matter. I am mindful that the matter of security was not raised until after both parties had filed evidence.
It does not necessarily follow from my rejection of Active Skin’s submissions and proposed order, however that I accept that the quantum of security should be provided in the total sum posited by Mr Lang. I consider that there is a lack of specifics in Mr Lang’s quantification of Yey’s likely reasonable recoverable costs. I am not given any detail about hourly or daily rates, and only the baldest of descriptions of the work involved.
Adopting a broad brush approach, and without seeking mathematical precision, I consider that in the present circumstances the appropriate amount of quantum to order is the sum of $45,000. The Respondent’s costs will be its costs in the cause. I will so order.
I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Baird. Associate:
Dated: 24 February 2021
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