Good Living Company Pty Ltd as trustee for the Warren Duncan Trust No 3 v Kingsmede Pty Ltd (No 2)
[2021] FCAFC 105
•17 June 2021
FEDERAL COURT OF AUSTRALIA
Good Living Company Pty Ltd as trustee for the Warren Duncan Trust No 3 v Kingsmede Pty Ltd (No 2) [2021] FCAFC 105
File number: NSD 120 of 2020 Judgment of: ALLSOP CJ, BESANKO AND JAGOT JJ Date of judgment: 17 June 2021 Catchwords: COSTS – indemnity costs – claim for indemnity costs based on offers to compromise made under rule 25.01 of the Federal Court Rules 2011 (Cth) – whether costs should be awarded on an indemnity basis – where offerees made application a month after judgment – where rejections of offers were not unreasonable – indemnity costs not awarded Legislation: Federal Court Rules 2011 (Cth) r 25.01 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 11 Date of last submissions: 19 May 2021 Date of hearing: Determined on the papers Counsel for the Appellants: Mr V Bedrossian SC Solicitor for the Appellants: Keypoint Law Counsel for the Respondents: Mr T Maltz Solicitor for the Respondents: Herman Legal ORDERS
NSD 120 of 2020 BETWEEN: THE GOOD LIVING COMPANY PTY LTD ACN 001 974 705 ATF THE WARREN DUNCAN TRUST NO 3
First Appellant
KIMANA PTY LTD ACN 002 731 599
Second Appellant
AND: KINGSMEDE PTY LTD ACN 054 526 635
First Respondent
PAMIERS PTY LTD ACN 010 650 236
Second Respondent
ORDER MADE BY:
ALLSOP CJ, BESANKO AND JAGOT JJ
DATE OF ORDER:
17 JUNE 2021
THE COURT ORDERS THAT:
1.On the undertaking of the respondents to repay amounts (if any) that are ultimately shown to have been overpaid, the appellants direct their solicitor, Keypoint Law, to pay the respondents the amount currently held as security for costs (namely, $177,500 plus any interest earned) in Keypoint Law’s controlled moneys account, in partial discharge of costs payable in these and the related trial proceedings.
2.The interlocutory application filed on 19 April 2021 be otherwise dismissed with costs, as agreed or assessed, such costs to be set off against the costs the subject of Order 2 made by the Court on 16 March 2021.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
In this matter the respondents by interlocutory application filed on 19 April 2021 seek an order for indemnity costs and an order that moneys held for security for the respondents’ costs be released to the respondents.
The appeal was argued on 5 November 2020 and judgment was delivered on 16 March 2021. On neither occasion was the Court informed that should the appeal be unsuccessful there would be an application for indemnity costs.
Over a month after the appeal was resolved the respondents seek to reopen issues of costs.
The appellants do not oppose the order prepared for the release of security.
The appellants oppose the making of an order for indemnity costs. They did not submit that the Court was functus officio: cf rule 39.05(f) of the Federal Court Rules 2011 (Cth).
Whilst we do not proceed on the basis that we are functus, we wish to make it plain that the Court expects costs arguments of this kind to be brought to the attention of the Court at the time of delivery of judgment, or earlier during argument. It is highly inconvenient to the Court to go back over a month after judgment and re-examine material from the perspective of costs. The judges of the Court have moved on to other judicial business and to require a re-examination of matters that have passed without the assistance of contemporaneity is an imposition on other litigants as much as it is on the Court.
Five offers to compromise were made pursuant to rule 25.01 of the Federal Court Rules 2011 (Cth): on 14 February, 25 May, 17 July, 7 August and 1 October 2020. The first (14 February 2020) sought dismissal of the appeal with a payment by the respondents to the appellants of $2,000. The second (25 May 2020) sought dismissal of the appeal with no order as to costs. The third (17 July 2020) again sought dismissal of the appeal with no order as to costs. The fourth (7 August 2020) and fifth (1 October 2020) repeated the offer.
Each offer was accompanied by a short submission as to why the appellants would be unsuccessful.
The issue is whether the appellants were imprudent or unreasonable in rejecting the offers.
In short, we do not consider that the appellants were imprudent or unreasonable. The issue of unconscionability has been the subject of developing jurisprudence. The appellants’ argument was far from untenable, albeit that it failed. The misconceived nature of the Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law) s 20 case caused no additional costs. Considering all the arguments contained in the written submissions of the respondents, we are not persuaded that there should be any order for indemnity costs.
The orders of the Court will be:
(1)On the undertaking of the respondents to repay amounts (if any) that are ultimately shown to have been overpaid, the appellants direct their solicitor, Keypoint Law, to pay the respondents the amount currently held as security for costs (namely, $177,500 plus any interest earned) in Keypoint Law’s controlled moneys account, in partial discharge of costs payable in these and the related trial proceedings.
(2)The interlocutory application filed on 19 April 2021 be otherwise dismissed with costs, as agreed or assessed, such costs to be set off against the costs the subject of Order 2 made by the Court on 16 March 2021.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Chief Justice Allsop, and Justices Besanko and Jagot. Associate:
Dated: 17 June 2021
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