AustCorp Consulting Pty Limited v Callaghan (No 2) - [2024] FCA 367

FEDERAL COURT OF AUSTRALIA
AustCorp Consulting Pty Limited v Callaghan (No 2) [2024] FCA 367

File number: NSD 139 of 2023

Judgment of: YATES J

Date of judgment: 15 April 2024

Catchwords: COSTS – determination of appropriate costs order – review of Registrar’s decision to grant preliminary discovery – where on review prospective respondents unsuccessfully opposed preliminary discovery being granted – where prospective respondents achieved partial success in limiting the scope of some categories of documents to be discovered

Legislation: Federal Court Rules 2011 (Cth) r 7.23

Cases cited: AustCorp Consulting Pty Limited v Callaghan [2023] FCA 1228

Division: General Division

Registry: New South Wales

National Practice Area: Commercial and Corporations

Sub-area: Commercial Contracts, Banking, Finance and Insurance

Number of paragraphs: 23

Date of last submission/s: 20 December 2023

Date of hearing: Determined on the papers

Counsel for the Prospective Applicant: Mr S Meehan SC

Solicitor for the Prospective Applicant: Gadens Lawyers

Counsel for the Prospective Respondents: Mr P Boncardo

Solicitor for the Prospective Respondents: Segelov Taylor Lawyers

ORDERS

NSD 139 of 2023

BETWEEN:
AUSTCORP CONSULTING PTY LIMITED

Prospective Applicant

AND:
MEGAN CALLAGHAN

First Prospective Respondent

LEAD GROUP CONSULTING PTY LTD (ACN 632 022 274)

Second Prospective Respondent

ORDER MADE BY:

YATES J

DATE OF ORDER:

15 APRIL 2024

THE COURT ORDERS THAT:
1.The orders made on 15 May 2023 be discharged.
2.The prospective respondents pay the prospective applicant’s costs of the application for preliminary discovery, including in relation to the costs of the proceeding before the Registrar.
3.If:
(a)the prospective applicant commences a substantive proceeding against the prospective respondents within 90 days of their compliance with the preliminary discovery orders made on 13 November 2023, the prospective respondents’ costs of compliance with those orders be costs in the cause of that proceeding; or if
(b)the prospective applicant does not commence such a proceeding, the prospective applicant pay the prospective respondents’ costs of compliance.

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

REASONS FOR JUDGMENT
YATES J:
INTRODUCTION

On 13 November 2023, I made orders for preliminary discovery against the first prospective respondent, Ms Callaghan, and the second prospective respondent, Lead Group Consulting Pty Ltd (Lead Group). The background to the making of those orders is explained in AustCorp Consulting Pty Limited v Callaghan [2023] FCA 1228.
The application before me (which I will call the review hearing), was a review of an earlier decision of a Registrar of the Court to order, on 15 May 2023, that the prospective respondents give preliminary discovery in favour of the prospective applicant, AustCorp Consulting Pty Limited (AustCorp). In the review hearing, the prospective respondents achieved a degree of success in limiting the scope of some of the categories of documents that the Registrar ordered to be discovered.
Notwithstanding that success, I expressed the conclusion that, as the substantial part of the review hearing had been about whether an order for preliminary discovery should be made at all,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] FCA 367
Decision Date: 15 April 2024

CaseChat Overview and Summary

In AustCorp Consulting Pty Limited v Callaghan (No 2), the Federal Court was tasked with reviewing the decision of a Registrar who had granted a preliminary discovery order in favour of AustCorp Consulting. The respondents, Callaghan and others, had opposed the grant of the order but were unsuccessful. However, they were partially successful in limiting the scope of certain categories of documents required for discovery. The court was required to determine the appropriate costs order to be made in light of the unsuccessful opposition to the discovery order and the limited success in narrowing the scope of the discovery.

The court considered the principle that costs generally follow the event, and that the unsuccessful party should bear the costs of the proceeding. However, the court also recognised that the respondents had achieved some success in limiting the scope of the discovery order, which meant that a full costs order against them might not be appropriate. The court ultimately decided that the respondents should pay the applicant's costs of the application for preliminary discovery, including the costs of the proceeding before the Registrar. If the applicant commenced a substantive proceeding within 90 days of the respondents' compliance with the discovery orders, the respondents' costs of compliance would be costs in the cause. If no such proceeding was commenced, the applicant would bear the respondents' costs of compliance.

The court's decision was based on a careful consideration of the principles of costs in Australian litigation, and the need to balance the interests of both parties in a fair and just manner. The orders made by the court were clear and straightforward, providing certainty for both parties and ensuring that the costs of the litigation were borne by the appropriate party.

The final orders of the court were that the orders made on 15 May 2023 be discharged, and that the respondents pay the applicant's costs of the application for preliminary discovery. If a substantive proceeding was commenced within 90 days of the respondents' compliance with the discovery orders, the respondents' costs of compliance would be costs in the cause. If no such proceeding was commenced, the applicant would bear the respondents' costs of compliance. The entry of these orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The orders made on 15 May 2023 be discharged.

2. The prospective respondents pay the prospective applicant’s costs of the application for preliminary discovery, including in relation to the costs of the proceeding before the Registrar.

3. If:

(a) the prospective applicant commences a substantive proceeding against the prospective respondents within 90 days of their compliance with the preliminary discovery orders made on 13 November 2023, the prospective respondents’ costs of compliance with those orders be costs in the cause of that proceeding; or if

(b) the prospective applicant does not commence such a proceeding, the prospective applicant pay the prospective respondents’ costs of compliance.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	NSD 139 of 2023
Judgment of:	YATES J
Date of judgment:	15 April 2024
Catchwords:	COSTS – determination of appropriate costs order – review of Registrar’s decision to grant preliminary discovery – where on review prospective respondents unsuccessfully opposed preliminary discovery being granted – where prospective respondents achieved partial success in limiting the scope of some categories of documents to be discovered
Legislation:	Federal Court Rules 2011 (Cth) r 7.23
Cases cited:	AustCorp Consulting Pty Limited v Callaghan [2023] FCA 1228
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs:	23
Date of last submission/s:	20 December 2023
Date of hearing:	Determined on the papers
Counsel for the Prospective Applicant:	Mr S Meehan SC
Solicitor for the Prospective Applicant:	Gadens Lawyers
Counsel for the Prospective Respondents:	Mr P Boncardo
Solicitor for the Prospective Respondents:	Segelov Taylor Lawyers

ORDER MADE BY:	YATES J
DATE OF ORDER:	15 APRIL 2024