Frigger v Professional Services of Australia Pty Ltd (No 6)
[2024] FCA 1320
•15 November 2024
FEDERAL COURT OF AUSTRALIA
Frigger v Professional Services of Australia Pty Ltd (No 6) [2024] FCA 1320
File number: WAD 126 of 2022 Judgment of: FEUTRILL J Date of judgment: 15 November 2024 Catchwords: PRACTICE AND PROCEDURE – application to reopen security for costs orders – dismissal of proceeding following determination of separate questions
COSTS – liability for legal costs – consideration of indemnity principle – costs awarded on a lump sum basis
Legislation: Corporations Act 2001 (Cth) s 1322(4)(b)
Federal Court of Australia Act 1976 (Cth) ss 24(1E)(a), 37M, 43, 43(3)(d)
Federal Court Rules 2011 (Cth) rr 30.02, 39.05(c), 40.02(b); Sch 3
Cases cited: Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495
Angor Pty Ltd v Ilich Motor Co Pty Ltd (1992) 37 FCR 65
Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44
Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd [2016] FCA 37
eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd [2015] NSWCA 284; 90 NSWLR 451’
Frigger v Banning (No 13) [2023] FCA 923
Frigger v Banning (Application for Security for Costs on Review of Taxation) [2024] FCA 1207
Frigger v Professional Services of Australia Pty Ltd [2022] FCA 1477
Frigger v Professional Services of Australia Pty Ltd (No 3) [2023] FCA 520
Frigger v Professional Services of Australia Pty Ltd (No 5) [2024] FCA 420
Harvard Nominees Pty Ltd v Dimension Agriculture Pty Ltd (in liq) [2023] FCAFC 140; 299 FCR 224
Marsh v Baxter [2015] WASCA 179
Paciocco v Australia and New Zealand Banking Group Ltd (No 2) [2017] FCAFC 146; 253 FCR 403
Wentworth v Rogers [2006] NSWCA 145; 66 NSWLR 474
Division: General Division Registry: Western Australia National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 40 Date of hearing: 3 July 2024 Counsel for the Plaintiffs: The plaintiffs appeared in person Counsel for the Defendants: Mr TR Stephenson Solicitor for the Defendants: Eastwood Law ORDERS
WAD 126 of 2022 BETWEEN: HARTMUT HUBERT JOSEF FRIGGER
First Plaintiff
ANGELA CECILIA THERESA FRIGGER
Second Plaintiff
AND: PROFESSIONAL SERVICES OF AUSTRALIA PTY LTD (ACN 082 879 641)
First Defendant
SANDRA MAY BANNING
Second Defendant
ORDER MADE BY:
FEUTRILL J
DATE OF ORDER:
15 NOVEMBER 2024
THE COURT ORDERS THAT:
1.The plaintiffs’ originating process, as amended, be dismissed.
2.The plaintiffs pay the defendants’ costs of the proceeding in a lump sum to be assessed by the docket judge.
3.The plaintiffs’ interlocutory application filed on 25 May 2023 for orders to reopen and set aside orders made on 9 December 2022 be dismissed.
4.The plaintiffs pay the defendants’ costs of the interlocutory application filed on 25 May 2023, with such costs to be paid as part of the lump sum to be assessed in accordance with paragraph 2 of these orders.
5.By 29 November 2024 the defendants file and serve a minute of the proposed orders and lump sum assessment, any affidavit(s) and an outline of submissions (limited to 5 pages) in support of the requested orders and assessment.
6.By 13 December 2024 the plaintiffs file and serve a minute of the proposed orders and lump sum assessment, any affidavit(s) and an outline of submissions (limited to 5 pages) in support of the requested orders and assessment.
7.By 20 December 2024 the defendants file and serve any affidavit(s) and (or) submissions (limited to 3 pages) purely in response to any documents the plaintiffs file and serve in accordance with paragraph 6 of these orders.
8.The hearing for assessment of the lump sum and determination of the orders for payment of that sum be listed on a date to be fixed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
FEUTRILL J:
Introduction
These reasons concern what, if any, orders should be made after the determination of certain separate questions that were the subject of a judgment delivered on 26 April 2024. The defendants seek orders dismissing the originating process with costs. The plaintiffs oppose orders dismissing the proceeding and, in any event, any order awarding the defendants costs on the ground that the indemnity principle is not satisfied. Further, for the same reason, the plaintiffs apply to reopen orders that were made for security for the defendants’ costs and seek an order that the security given in accordance with those orders be returned to them.
Background
To place the issues addressed in these reasons into context it is necessary to provide a brief description of the background to the competing orders the parties now seek.
On 12 October 2022 orders were made listing the originating process for final hearing over two days on dates to be fixed. Orders were also made for the parties to complete various interlocutory steps before the final hearing. The final hearing was later listed on 2 and 3 March 2023.
In the meantime, the defendants applied for security for their costs. That application was contested. On 9 December 2022 orders were made requiring the plaintiffs to give security for the defendants’ costs in the sum of $35,000: Frigger v Professional Services of Australia Pty Ltd [2022] FCA 1477. The plaintiffs gave that security by way of payment of the sum into Court.
The final hearing commenced on 2 March 2023 but was not completed within the two days allocated and was adjourned part heard and relisted for a further two days on 28 and 29 June 2023. After the adjournment of the final hearing the plaintiffs made interlocutory applications for leave to adduce expert evidence and to issue subpoenas.
On 1 May 2023 the defendants applied, pursuant to liberty granted at the time the orders for security for costs were made, for an order that the plaintiffs give further security for their costs and filed an affidavit of Cameron Victor Eastwood sworn 24 April 2023 in support of that application and in response to the application to adduce further evidence filed by the plaintiffs.
On 23 May 2023 orders were made to determine certain legal questions arising in the proceeding separately. The listing of the continuation of the final hearing was vacated and the determination of the separate questions was listed for hearing on 28 June 2023: Frigger v Professional Services of Australia Pty Ltd (No 3) [2023] FCA 520.
On 25 May 2023 the plaintiffs filed an interlocutory application, in substance, to reopen the orders made on the security for costs application and set aside most of the orders made on that application. An affidavit of Angela Frigger sworn 3 May 2023 was filed in support of that application.
The defendants’ application for security for costs and the plaintiffs’ application to reopen the orders for security for costs were listed for hearing on 2 June 2023. Having regard to the orders that had been made for the determination of separate questions, the defendants’ application for further security was not pressed at that time. Likewise, the plaintiffs’ application to reopen the security orders was not pressed. Orders were made on 2 June 2023 adjourning each of these applications to a date to be fixed.
On 26 April 2024 judgment was pronounced on the separate questions. Each of the three questions was answered in the negative. As was observed in the reasons for that decision, as a consequence of the answers to the separate questions, the defendants may apply for an order under r 30.02 of the Federal Court Rules 2011 (Cth) for judgment: Frigger v Professional Services of Australia Pty Ltd (No 5) [2024] FCA 420.
The defendants have applied for orders dismissing the plaintiffs’ originating process, as amended, under r 30.02 and for an order that the plaintiffs pay their costs of the proceeding to be fixed as a lump sum pursuant to r 40.02(b) of the Rules. The plaintiffs oppose those orders and have applied to re-list their interlocutory application to reopen the security for costs orders.
Judgment after determination of separate questions
The plaintiffs’ originating process is an application made under s 1322(4)(b) of the Corporations Act 2001 (Cth) to remove the first defendant from the Australian Securities and Investments Commission’s Organisation and Business Names register. In the originating process the plaintiffs seek a declaration that the registration of Liberty Oil (Australia) Pty Ltd (ACN 082 879 641) was invalid ab initio. Liberty Oil (Australia) Pty Ltd was the former name of the first defendant in the proceeding and its name at the time it was registered. The plaintiffs also seek an order to the effect that ASIC rectify the Organisation and Business Names register by removing Professional Services of Australia Pty Ltd (the first defendant) from that register.
The separate questions were determined on the basis of agreed and assumed facts which, in substance, agreed or assumed all facts upon which the plaintiffs relied in support of their contention that the original registration of the first defendant was invalid and that ASIC was obliged to rectify its register. Upon the statement of agreed facts and upon the statement of assumed facts the separate questions were answered as follows:
(1)Was the registration of the company with the name Liberty Oil (Australia) Pty Ltd and Australian Company Number 082 879 641 invalid ab initio?
No.
(2)On the proper construction of section 1322(4)(b) of the Corporations Act 2001 (Cth), has the Court power, on the application of the plaintiffs, to make an order directing the Australian Securities Investments Commission to rectify the register kept by ASIC under the Corporations Act 2001 (Cth) to remove Professional Services of Australia Pty Ltd (ACN 082 879 641) from that register?
No.
(3)If the answer to question (2) is in the affirmative, has the Court power to make such an order with retrospective effect?
No.
Rule 30.02 of the Rules provides that if a decision on a question substantially disposes of the proceeding or renders any further trial of the proceeding unnecessary, a party may apply to the Court for judgment or an order dismissing the whole or any part of the proceeding.
Having regard to the nature of the originating process, the foundation for that application, the orders sought in that application and the determination of the separate questions, there is no doubt that the proceeding should be dismissed. The determination of those questions has disposed of the whole of the proceeding or rendered any further trial of the proceeding unnecessary.
The plaintiffs oppose orders being made to dismiss the proceeding. The plaintiffs filed written submissions to which they attached an application for leave to appeal from the judgment on the separate questions filed in proceeding WAD 104 of 2024 and an affidavit of Angela Frigger sworn 6 May 2024 in support of that application. The plaintiffs oppose orders dismissing the proceeding on the ground that orders dismissing the proceeding will prejudice their application for leave to appeal. I do not accept that submission.
If an order were made under r 30.02 dismissing the proceeding, that order would be a final order. If the plaintiffs wish to appeal from that order they would be entitled to do so without leave. The fact that there has not been an appeal from an interlocutory judgment does not prevent a party from founding an appeal from a final judgment in the proceeding on the interlocutory judgment: s 24(1E)(a) of the Federal Court of Australia Act 1976 (Cth). Therefore, a final order dismissing the proceeding will not prejudice the plaintiffs’ ability to challenge my judgment on the separate questions. Indeed, it may facilitate that challenge as leave would not be necessary.
It follows that orders should be made in terms of the defendants’ application to dismiss the originating process. That leaves the question of what, if any, order should be made concerning the costs of the proceeding.
Costs of the proceeding
The award of costs is discretionary: s 43 of the Federal Court Act. While the discretion is unconstrained by legal rule, it is to be exercised judicially and, in general, in accordance with settled principles that avoid arbitrariness and serve the need for consistency: Harvard Nominees Pty Ltd v Dimension Agriculture Pty Ltd (in liq) [2023] FCAFC 140; 299 FCR 224 at [15] and the authorities there cited.
The ‘indemnity principle’ is among the settled principles which guide the award of costs. Costs are awarded by way of indemnity. That means that a party seeking a costs order must have incurred a liability to pay those costs. The indemnity principle is flexible and is designed to allow for a fair and just result. The onus of establishing that a party seeking a costs order has no liability to pay the legal costs of the proceeding lies on the party alleging that there is no such liability. Further, in the absence of proof of an agreement to the contrary, the legal practitioner on the record for a party is taken to be entitled to look to that party for payment of the practitioner’s legal fees and disbursements: Harvard Nominees at [18] and the authorities there cited.
The plaintiffs contend that the indemnity principle is not engaged in the circumstances of this case. They submit that the defendants are not liable to pay the legal practitioners on the record in the proceeding for legal fees or disbursements. They submit that the evidence that the defendants are not so liable came to their attention after the hearing of the defendants’ application for security for costs and they were ordered to pay security and, for that reason, the Court should reopen the security for costs orders. They also submit that the Court should not order the plaintiffs to pay the costs of the defendants in the proceeding because it would offend the indemnity principle.
Application to reopen the security for costs orders
It is convenient to consider the plaintiffs’ application to reopen the security for costs orders first as the foundations for that application are the same as the grounds upon which the plaintiffs oppose any order that they pay the defendants costs of the proceeding.
The orders of 9 December 2022 were interlocutory. Therefore, r 39.05(c) of the Rules confers power on the Court to vary or set aside those orders even though they have been entered. Nonetheless, the power to reopen interlocutory orders that have been entered is to be exercised judicially and in accordance with established principles. The power is usually exercised where there has been a material change in circumstance or the discovery of new material that could not reasonably have been put before the Court on the hearing of the original application. However, the overarching principle is that the power may be exercised to ‘do whatever the interests of justice require in the particular circumstances of the case’: see Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46-47 (McLelland J). I accept that if evidence emerged after the security for costs orders were made indicating that the defendants are not liable to pay legal costs that could provide a reason, in the interests of justice, to reopen those orders.
Evidence concerning liability for legal costs
The plaintiffs rely, in part, on materials in proceeding WAD 607 of 2015. Mrs Frigger deposes that in that proceeding the defendants in this proceeding filed a bill of costs for taxation in November 2021. In February 2023 the defendants’ solicitor (Mr Eastwood) produced invoices issued by the defendants’ counsel (Mr Stephenson). The bill of costs and invoices are exhibits to Mrs Frigger’s affidavit of 3 May 2023. Mrs Frigger deposes that during the taxation of the bill of costs Mr Eastwood said:
In so far as the accounts in my firm are concerned, it was explained that because of the tax arrangements that we operate under being not a cash basis, but an accrual basis, we are deferring the billing of those matters until such time as we are certain that we're going to be paid and given the long history of this matter and the range of other matters where there are various cost orders that remain outstanding, have done for some time. It's not a practise. That's a commercial decision.
Mrs Frigger deposes that Mr Eastwood later said that he did not understand the indemnity principle. The plaintiffs have not obtained a transcript of the taxation hearing and, therefore, a transcript of what was said and by whom at that hearing is not before the Court.
Additionally, Mrs Frigger’s affidavit exhibits a letter the defendants’ solicitors sent to my chambers dated 16 February 2023. In that letter, the author (who I assume to have been Mr Eastwood) indicated that certain documents had been produced to the Federal Court Registry in compliance with orders I made on 10 February 2023 in this proceeding. Among the documents produced were copies of invoices Mr Stephenson had issued with respect to WAD 607 of 2015. The author then said:
… In the case of the solicitors acting, both this firm, and its predecessor firm Eastwood Sweeney Law, operate on an accrual basis whereby tax is paid on accounts once rendered. Accordingly, all work done in relation that action remains work in progress and no invoices are produced because none have been rendered yet.
Mrs Frigger also exhibited to her affidavit a search of the Australian Business Number website regarding the first defendant. That document indicates that the first defendant does not have an active ABN. Mrs Frigger deposes that, in those circumstances, the first defendant has not been able to conduct any business including bringing or defending legal proceedings. She does not believe that Mr Eastwood or Mr Stephenson will take any enforcement action against the second defendant in this proceeding. Mrs Frigger deposes that, in those circumstances, she believes that neither of the defendants is required to pay legal costs in this proceeding.
In Mr Eastwood’s affidavit of 8 November 2022 he deposes that the defendants had retained his firm and that they then intended to retain Mr Stephenson to conduct the defence of this proceeding. In his affidavit of 24 April 2023 he deposes, in effect, that both his firm and Mr Stephenson were, in fact, retained on the basis of the scales of costs relevant to the work being undertaken in accordance with Sch 3 of the Rules and the Court’s National Guide to Counsel Fees issued on 28 June 2013. Mr Eastwood also deposes to costs incurred up to the date of his affidavit by his firm and Mr Stephenson and an estimate of the likely future costs, at that time, of the continuation of the final hearing.
Consideration of indemnity principle
As already mentioned, in the absence of proof to the contrary, the legal practitioner on the record for a party is taken to be entitled to look to that party for costs. Mr Eastwood has deposed that his firm and Mr Stephenson are retained by the defendants. There is nothing in the materials to which the plaintiffs have referred to suggest that the defendants have not retained them or that the legal practitioners are not entitled to charge the defendants or that the defendants are not liable to pay legal costs. Further, I do not accept that the mere fact that the first defendant does not have an active ABN is an indication that it is not able to commence or defend legal proceedings or retain legal practitioners in such proceedings.
The onus is on the plaintiffs to establish that the defendants have no liability for legal costs. It is not necessary that the legal practitioners have rendered invoices to the defendants or that the defendants have already paid the legal practitioners for legal costs in order for the indemnity principle to be satisfied: eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd [2015] NSWCA 284; 90 NSWLR 451 at [24]-[25] (Basten JA, Beazley P agreeing); Wentworth v Rogers [2006] NSWCA 145; 66 NSWLR 474 at [126] (Basten JA). Moreover, the indemnity principle permits recovery of legal costs where there is a legal liability to pay those costs even though the likelihood of being called upon to do so is remote: Angor Pty Ltd v Ilich Motor Co Pty Ltd (1992) 37 FCR 65 at 71-72 (French J), citing Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495 at 501 (Bankes LJ), 504 (Atkins LJ), 507-508 (Younger LJ). In general, legal liability to pay legal costs arises from the terms (express or implied) of the retainer between solicitor and client.
The evidence, such as it is, upon which the plaintiffs rely largely concerns proceeding WAD 605 of 2015. I understand that the plaintiffs contend that the Court should infer, from the absence of invoices rendered in WAD 605 of 2015, that the defendants have no liability to pay legal costs in that proceeding and that given the parties, firm and counsel are the same in this proceeding, the Court should infer the same circumstances apply to this proceeding.
Insofar as WAD 605 of 2015 is concerned, it is evident that the plaintiffs objected to the amounts claimed in the bill of costs in that proceeding on grounds that included breach of the indemnity principle. Justice Colvin determined that the Registrar had authority to determine whether the indemnity principle had been breached within the taxation of the bill of costs: Frigger v Banning (No 13) [2023] FCA 923. Although no reasons of the Registrar are before the Court in this proceeding, it is evident that the Registrar determined that question against the plaintiffs as it is a matter of public record that they are seeking to have the Registrar’s taxation reviewed and that the Court has ordered them to give security for the costs of that review. The grounds of review include, amongst others, that the indemnity principle is not satisfied: Frigger v Banning (Application for Security for Costs on Review of Taxation) [2024] FCA 1207.
Notwithstanding the outcome of the taxation in WAD 605 of 2015, I am prepared to assume, without deciding, that the conclusions of the Registrar in WAD 605 of 2015 do not give rise to an issue estoppel or otherwise to finally determine the question of whether the defendants have a legal liability to pay legal costs to their legal representatives in proceeding WAD 605 of 2015. Therefore, for the purposes of this proceeding, whatever evidence or other material was before the Registrar in WAD 605 of 2015, the Court must proceed on the evidence that has been adduced and upon which the plaintiffs rely in this proceeding. That evidence does not demonstrate, give rise to an inference or identify reasonable grounds to suspect that the defendants are not liable for payment of legal costs in WAD 605 of 2015 let alone demonstrate, infer or indicate reasonable grounds to suspect that they are not liable for the legal costs of this proceeding.
While at one point in the plaintiffs’ submissions Mrs Frigger suggested that it was a matter that ‘needs to be investigated in more detail’, the plaintiffs made no application or submission regarding the manner in which the Court should undertake such an investigation or the grounds upon which it was necessary. I accept that, in an appropriate case, the trial judge has power to consider whether the requirements of the indemnity principle have been satisfied and to make orders and conduct a hearing for that purpose: Marsh v Baxter [2015] WASCA 179 (Newnes and Murphy JJA) and the authorities there cited. I also accept that if the plaintiffs are able to point to evidence that discloses a reasonable basis or reasonable grounds sufficient to query whether the defendants have a liability to pay legal costs, the Court should not make cost orders that assume the indemnity principle is satisfied. Therefore, even though the plaintiffs have not made any specific application for orders to be made to facilitate an enquiry into the indemnity principle issue, if the Court were satisfied that there is sufficient doubt as to whether the indemnity principle is satisfied it would be appropriate to make orders to undertake that enquiry before making any orders for costs. However, I am not satisfied that the matters the plaintiffs have raised provide any reasonable basis or ground to doubt that the indemnity principle is satisfied in this case.
It follows that there is no reason to reopen or vary the security for costs order. Likewise, there is no reason that a costs order should not be made in favour of the defendants on the basis that the legal practitioners on the record in the proceeding are entitled to look to the defendants for payment of legal fees and disbursements.
What, if any, costs orders should be made?
The defendants apply for an order that the plaintiffs pay their costs. In my view, it is appropriate that costs should follow the event and that there should be such an order. The defendants also apply for an order that the plaintiffs pay their costs on a lump sum basis, for the lump sum be determined by the docket judge and for payment of the $35,000 sum of security to the defendants’ solicitors upon determination of the lump sum.
The Court has power to make an order for payment of lump sum costs under s 43(3)(d) of the Federal Court Act and r 40.02(b) of the Rules. The Chief Justice has issued the Central Practice Note: National Cout Framework and Case Management (CPN-1) and the Costs Practice Note (GPN COSTS). These powers and practice notes were considered in Paciocco v Australia and New Zealand Banking Group Ltd (No 2) [2017] FCAFC 146; 253 FCR 403. There, the Court (Allsop CJ, Besanko and Middleton JJ) observed:
15The purpose of such a rule is “to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”: see Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 (‘Beach Petroleum’) at 120.
16On 25 October 2016 the Chief Justice issued the Central Practice Note: National Court Framework and Case Management (CPN-1) (‘Central Practice Note’) and the Costs Practice Note (GPN COSTS) (‘Costs Practice Note’). The Central Practice Note states that the determination of the quantum of costs of a successful party (in a proceeding) should not be delayed and, to this end, the Court will, where appropriate, facilitate the making of lump sum costs orders. The Costs Practice Note provides that the Court’s preference, wherever it is practicable and appropriate to do so, is to make a lump sum costs order so as to finalise costs and avoid potentially expensive and lengthy taxation hearings. It makes clear that the Court should now proceed on the basis that taxation “should be the exception” and confined to matters which are unable to be determined otherwise: Costs Practice Note at [3.3]. The guiding principles are to reduce delay and cost when quantifying costs: Costs Practice Note at [3.1].
17The Costs Practice Note provides for the Court to make use of sophisticated costs orders and procedures, and to take such steps as it considers necessary to ensure that it has the requisite level of detail to make a costs determination that is fair, logical and reasonable and to avoid orders that lead to potentially expensive and lengthy taxation hearings: Costs Practice Note at [3.3].
18We emphasise that in making a lump sum award of costs, the Court in undertaking the task of assessing costs is not precluded from undertaking a close inquiry of costs relating to a particular issue or category of costs, should the Court consider it appropriate to do so: see e.g. Hudson v Sigalla (No 2) [2017] FCA 339 at [30] (‘Sigalla’). The Court is able to adopt its own procedures in inquiring into costs, is able to be flexible in how it conducts that inquiry, including by the obtaining of suitable assistance whether by referee’s report or other reporting, and is able to acquire the level of detail needed to make a determination that is fair, logical and reasonable.
19Whilst the Costs Practice Note now suggests that most cases should have a lump sum costs order approach applied unless there is some characteristic that would make it unsuitable, a lump sum costs order is not mandated in all instances. In all cases it is a matter for the Court to exercise the discretion given to the Court by the Federal Court Act and the Rules as appropriate: see Sigalla at [18]-[19].
20There is no particular characteristic that a case must possess for it to be suitable for the making of a lump sum costs order. Particular circumstances that may make a lump sum order especially appropriate include where in a large and complex commercial matter it would save the time, trouble, expense and aggravation of a taxation; where a taxation would require the parties to consume additional time and incur additional expenditure prolonging already protracted litigation; and generally to avoid an ongoing, counter-productive dispute as to costs, in the interests of achieving finality.
In Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd [2016] FCA 37 Perram J made the following further apposite observations concerning the circumstances in which it may be appropriate to award costs on a lump sum basis:
10Such an order may also be appropriate where the proceedings are complex and where it may be more efficient for a trial judge to determine the issue of costs than to condemn the parties to a taxation: Sony Entertainment (Australia) Limited v Smith (2005) ALR 788 at [[189] per Jacobson J]. Another reason to make such an order will arise in those cases where there is a basis to think that the costs of the taxation themselves may turn out to be irrecoverable (Sony at [195]) or where one party has been particularly truculent so that it may be thought just to spare the other from the inconvenience of further engagement over the process of taxation: Ariix LLC v Mahilall(No 2) [2014] FCA 494 at [10] per Rares J. Another circumstance sometimes thought relevant is where a party has failed to appear: Sony at [193].
Taking into account these principles, I consider it appropriate to award costs on a lump sum basis in this proceeding primarily because I consider it is likely to be significantly more efficient. While the proceeding was not particularly complex, having regard to the manner in which it was conducted and the plethora of proceedings and reported judgments involving these parties, there is good reason to think that a taxation of costs would become unduly protracted and disproportionate to the importance and complexity of the matter in general and the subject matter of the taxation in particular. In a nutshell, I need little convincing that a lump sum award of costs is likely to be more efficient and consistent with the overarching purpose of the civil practice and procedure provisions than a taxation of costs is likely to be in this case: see, s 37M of the Federal Court Act.
It follows that an order will be made for the plaintiffs to pay the defendants’ costs of the proceeding to be assessed as a lump sum. Orders will also be made to facilitate the assessment of that lump sum. I also accept that in the interests of efficiency in this case it is appropriate that the assessment be undertaken by me as the docket judge. Otherwise, I do not consider it appropriate to order the payment of the security out of court until such time as the amount of the lump sum has been determined.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill. Associate:
Dated: 15 November 2024
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