Colan Products Pty Ltd v Luxon Pty Ltd (No.2)

[2002] FMCA 90

FEDERAL MAGISTRATES COURT OF AUSTRALIA

COLAN v LUXON & ANOR (NO 2) [2002] FMCA 90

COSTS – consideration of the operation of the Federal Magistrates Court scale of costs

Federal Magistrates Court Rules 2001

Pratt & Ors v Latta & Anor (No. 2) [2002] FMCA 43
Levis v McDonald (1997) 75 FCR 36
Malouf v Malouf & Ors 167 ALR 383

Applicant: COLAN PRODUCTS PTY LTD

First Respondent:	LUXON PTY LTD
Second Respondent:	ANDREW JOHN LUCAS

File No: SZ 762 of 2001

Delivered on: 15 May 2002

Delivered at: Sydney

Hearing Date:	20 December 2001
Judgment of:	Raphael FM

REPRESENTATION

Solicitors for the Applicant: John M Barbouttis

Solicitors for the Respondent: Burns Jameson Solicitors

ORDERS

1. That the respondent pay the applicant the sum of $6,891.61 in costs.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ 762 of 2001

COLAN PRODUCTS PTY LTD

Applicant

And

LUXON  PTY LTD ANDREW JOHN LUCAS

First Respondent

ANDREW JOHN LUCAS

Second Respondent

REASONS FOR JUDGMENT

1. In this matter the applicants commenced an application in the Federal Court of Australia seeking orders under Order 15A, rule 6 for pre-trial discovery.  A substantial affidavit was sworn by the solicitor for the applicant in support of that application and filed on the same day.  The matter came before Moore J for a first directions hearing on 15 November 2001.  His Honour ordered that the matter be transferred to the Federal Magistrates Court.  On 20 November 2001 a letter was received from the solicitors for the applicant which contained the following:

   “The matter was transferred to the Federal Magistrates Court by order of Moore J on 15 November 2001.  All parties indicated that they were ready to proceed with affidavits filed on which both parties are relying, and that a half day hearing was all that would be required.”

2. The matter was set down for hearing without further directions on 20 December 2001.  Judgment was given on 15 January 2002.  As indicated the parties proceeded upon the basis of the affidavits filed. 

3. I gave judgment on 15 January 2002 in favour of the applicant. I required the parties to bring in short minutes of order which they did. I ordered that the respondent pay the applicant’s costs pursuant to Part 21.10 of the Federal Magistrates Court Rules and in my reasons for judgment I certified that it was reasonable for the applicant to employ an advocate pursuant to Part 21.15 of those rules. The parties are in dispute as to the application of those rules to the costs which the applicant has assessed. The usual course to be taken in those circumstances is as described by Driver FM in Pratt & Ors v Latta & Anor (No. 2) [2002] FMCA 43:

   “Where there is a dispute about what costs are payable under the Federal Magistrates Court scale it is open to the Court to refer the issue to a Registrar pursuant to Part 18 of the Federal Magistrates Court Rules but the issue can only be finally resolved by a court order.”

4. In this case I agreed with the parties that if they were prepared to deal with the dispute by way of written submissions I would consider the matter in chambers and provide my judgment to them.  Written submissions were provided by the respondent on 11 April 2002 and by the applicant on 29 April 2002.  I have considered both of these documents. 

5. The respondents submissions were provided to me before the applicant amended its assessment to raise it from $9,460.01 to $17,919.75.  The costing of this figure is as follows:

Stage	Instructions	Charge allowed	Amount	No of pages
1	Initiating Application	$1,820.00
5	Preparation for Final Hearing	$4,090.00
6	Attendance at hearing
To take judgment and explain orders	$190.00
Daily hearing fee half day	$685.00
Short mention	$190.00
Disbursements
Fees for Advocate	$8,180.00
Photocopying	$1,258.40	$0.52	2,420
Service	$107.95
Searches	$136.40
Court Fees	$1,262.00
Total	$17,919.75

1. The major difference between the figure set out above and the original figure is the addition of counsel’s fees in the sum of $8,180.00. 

2. The event based system for costs found in the Federal Magistrates Court Rules is an attempt to simplify the assessment of costs and to avoid the necessity for either the state-based consideration by costs assessors or the Federal Court taxation approach. Unfortunately, like all well-intentioned ideas it is hostage to misunderstandings and the purpose of this judgment is to attempt to correct those for the benefit not only of these parties but for the benefit of others who come in the future.

3. Both the applicant and the respondent accept a charge of $1,820.00 for the initiating application to the completion of the first day together with a daily hearing fee of $190.00.  I agree that this is the appropriate scale for preparing the case which went to Moore J for directions and for appearing before his Honour. 

4. The applicant claims for the hearing the sum of $4,090.00 being the scale fee for the preparation for final hearing.  The respondent suggests that the appropriate fee is $1,135.00 being the fee for an interim or summary hearing as a discrete event.  I accept the submission made by the respondent.  The applicant submits that an application under Order 15 is a final proceeding and cites in support Levis v McDonald (1997) 75 FCR 36, although mentioning that the Full Bench of the Federal Court in Malouf v Malouf & Ors 167 ALR 383 considered that an unsuccessful application was indeed an interlocutory application for which there was no appeal as of right. The court at [33] said:

   “It has long been accepted that the terms “final” and “interlocutory” may mean different things in different contexts. 

5. The applicants go on to argue that:

   “In any event the test under the Federal Magistrates Court Rules is different; the question is not whether there has been an interlocutory or final judgment, but whether there was an “interim or summary hearing””

6. They argue that an interim hearing can only mean one held pending a final determination of the subject matter of the hearing and argued that a summary hearing might be one on a matter of law or merely on pleadings or without evidence. 

7. To my mind an application under Order 15A is, for the purposes of a costs application, a hearing in the nature of a summary or interim hearing.  The evidence taken from the applicant was the evidence of the applicant’s solicitor not of a director of the applicant.  This is the type of evidence that is normally given in a hearing for summary judgment.  The application is interim in so far as it does not produce a final determination of the issues between the parties.  The figure identified for stage five is the figure that would be given to whichever party is successful in the final proceedings in this case, if such proceedings eventuate. 

8. I would therefore award the successful applicant the scale figure of $1,135.00 for the interim or summary hearing preparation and the sum of $685.00 for the daily hearing fee on the half day basis (the case took approximately two hours).  In respect of the advocacy loading I would explain this as follows.  Where it has been certified that the matter is fit for an advocate under Part 20.15 this means that the advocate is entitled to 150% of the daily hearing fee.  In addition, the instructing solicitor is entitled to the daily hearing fee.  The only exception is when the advocate and the instructing solicitor both come from the same firm.  In those circumstances (as set out in the Rules) only one fee of 150% of the daily hearing fee is payable.  In this case counsel is therefore entitled to the advocacy loading on the daily hearing fee making the total payable to him of $1,027.50.  This is all that counsel is entitled to.  The applicant is not entitled to submit counsel’s fee note as a disbursement. 

9. Both parties agreed that the applicant was entitled to $190.00 to take the judgment.  The total for fees which I have allowed is therefore $5047.50. 

10. In relation to disbursements there does not appear to be a dispute on court fees in the sum of $1,262.00 nor the urgent service summons fee of $104.05 although for some reason this is put as $107.95 in the applicant’s amended costing.  The applicant argues that search fees of $136.40 should be payable on the basis that searches of all companies related to the respondents were necessary in order to ascertain the correct respondents for the application.  I am not satisfied that all of these searches were necessary and I would limit the searches to $31.90. 

11. There is also a dispute about photocopying.  In my view the appropriate order in respect of photocopying is only in regard to the affidavit that was filed by the applicant and I would reduce the figure of $1,258.40 claimed to $446.16 deemed acceptable by the respondent. 

12. There is reference in the applicant’s submissions to a fee for the drawing of the Statement of Claim.  The costs of drawing an application to the Federal Magistrates Court is included in the initiating application fee.  In this case, there was no Statement of Claim, there was only an application under the Federal Court Rules which was a document of three pages, one of which was taken up with the list of categories of documents for which discovery was required.  I do not consider that the application warranted any special consideration that would entitle the applicants to any special order for costs. 

13. I order that the respondent pay the applicant the sum of $6,891.61 in costs. 

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 
Date: