HBSY Pty Ltd v Lewis (Costs)

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FEDERAL COURT OF AUSTRALIA

HBSY Pty Ltd v Lewis (Costs) [2025] FCAFC 80

Appeal from: HBSY Pty Ltd v Lewis [2022] NSWSC 841
File number(s): NSD 726 of 2022
Judgment of: MARKOVIC, DOWNES AND KENNETT JJ
Date of judgment: 13 June 2025
Catchwords: COSTS – where respondent successful in the appeal proceedings – where previous costs orders made
Legislation: Federal Court of Australia Act 1976 s 43(1)
Cases cited:

HBSY Pty Ltd v Lewis (No 2) [2025] FCAFC 44

HBSY v Lewis (2024) 419 ALR 280; [2024] HCA 35

Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 8) [2025] FCA 20
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 20
Date of last submission/s: 10 April 2025
Counsel for the Appellant: M K Condon SC with D K Smith
Solicitor for the Appellant: Roberts & Partners Lawyers
Counsel for the Respondent: P J Menadue
Solicitor for the Respondent: Shields Lawyers

ORDERS

NSD 726 of 2022
BETWEEN:

HBSY PTY LTD ACN 151 894 049

Appellant
AND:

GEOFFREY LEWIS

Respondent

ORDER MADE BY:

MARKOVIC, DOWNES AND KENNETT JJ

DATE OF ORDER:

13 JUNE 2025

THE COURT ORDERS THAT:

1.The appellant pay the respondent’s costs of the appeal (which do not include the respondent’s costs of the application for an extension of time to appeal).

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


REASONS FOR JUDGMENT

THE COURT:

  1. On 3 April 2025, we published our reasons for judgment in HBSY Pty Ltd v Lewis (No 2) [2025] FCAFC 44 (HBSY No 2) dismissing the appellant’s appeal against the decision of the primary judge.  This judgment relates to the issue of the costs of the appeal. 

  2. Definitions adopted in HBSY No 2 will also be adopted in these reasons.

    Background

  3. The relevant background is set out in HBSY No 2 at [8]–[16].

  4. In HBSY HCA, by order 3 of its orders dated 9 October 2024, the High Court of Australia ordered that (High Court orders):

    The first defendant pay the plaintiff’s costs in the Full Court of the Federal Court of   Australia and in this Court.

  5. In HBSY No 2, we observed at [110] that:

    Ordinarily, having dismissed the appeal we would order that HBSY pay Geoffrey’s costs of the appeal. However, in HBSY HCA the High Court ordered Geoffrey to pay HBSY’s “costs in the Full Court of the Federal Court of Australia and in this Court”. That order appears to cover the whole of the costs of the proceeding in this Court, even though a substantial part of the argument was directed at the substantive issues in the case (which had not been decided and did not reach the High Court). It is not for us to decide that an order of the High Court was made per incuriam. We will therefore make no order as to costs.

  6. After the…

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Details
Case
[2025] FCAFC 80
Decision Date

CaseChat Overview and Summary

The parties in this case are HBSY Pty Ltd and Geoffrey Lewis. The dispute concerns the interpretation and application of a costs order made by the High Court in relation to an appeal proceeding. The matter was heard in the Federal Court of Australia. The central legal issue the court had to decide was the interpretation of order 3 of the High Court orders, which directed that Geoffrey Lewis pay HBSY's costs in the Full Court of the Federal Court of Australia and in the High Court. Specifically, the court needed to determine whether this order applied to the costs incurred in the substantive appeal or was limited to the costs associated with an application for an extension of time to appeal.

The court examined the language of the High Court orders and found that order 3 could be interpreted as applying only to the costs related to the application for an extension of time, rather than the entire substantive appeal. This interpretation was supported by the fact that the High Court did not make any orders determining any aspect of the substantive appeal, and instead issued a writ of mandamus directing the Full Court to hear and determine HBSY's appeal. The court also considered the judgment of the High Court and found that it was consistent with the interpretation that order 3 was limited to the costs of the extension of time application. Consequently, the court concluded that Geoffrey Lewis, as the successful party in the appeal, should be awarded his costs of the appeal, excluding those related to the application for an extension of time.

The court's decision was based on a careful construction of the High Court orders, taking into account the surrounding circumstances and the judgment of the High Court. By interpreting order 3 narrowly, the court ensured that the costs order was applied fairly and in line with the intentions of the High Court. The outcome reflects a balanced approach to the interpretation of court orders, ensuring that the successful party in the appeal is appropriately compensated for their costs while also respecting the original intent of the High Court's orders.

The final orders of the court are as follows: the appellant, HBSY Pty Ltd, shall pay the respondent's costs of the appeal, excluding the respondent's costs of the application for an extension of time to appeal.

Orders

Orders of the court

1. The appellant pay the respondent’s costs of the appeal (which do not include the respondent’s costs of the application for an extension of time to appeal).

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

Background

Background to the litigation

Definitions adopted in HBSY No 2 will also be adopted in these reasons. Background The relevant background is set out in HBSY No 2 at [8]–[16]. In HBSY HCA, by order 3 of its orders dated 9 October 2024, the High Court of Australia ordered that (High Court orders): The first defendant pay the plaintiff’s costs in the Full Court of the Federal Court of Australia and in this Court. In HBSY No 2, we observed at [110] that:Ordinarily, having dismissed the appeal we would order that HBSY pay Geoffrey’s costs of the appeal. However, in HBSY HCA the High Court ordered Geoffrey to pay HBSY’s “costs in the Full Court of the Federal Court of Australia and in this Court”. That order appears to cover the whole of the costs of the proceeding in this Court, even though a substantial part of the argument was directed at the substantive issues in the case (which had not been decided and did not reach the High Court). It is not for us to decide that an order of the High Court was made per incuriam. We will therefore make no order as to costs. After the delivery of HBSY No 2, the parties sought to be heard further on the question of costs and were ordered to file written submissions addressing that question. The costs issue is to be determined on the papers. Geoffrey submits that order 3 of the High Court orders only refers to the costs that HBSY incurred in relation to its application for an extension of time to file a notice of appeal in the Federal Court dated 2 September 2022, and not to the costs that HBSY incurred in relation to the substantive appeal. Geoffrey seeks his costs as the successful party in the appeal. HBSY contends that order 3 refers to all of the costs that HBSY incurred in the substantive appeal before this Court, and says that is also the conclusion reached by this Court at [110] of HBSY No 2. Therefore, HBSY alleges that the power to make the costs order sought by Geoffrey must be pursuant to r 39.04 of the Federal Court Rules 2011 (Cth). That rule provides that:The Court may vary or set aside a judgment or order before it has been entered. However, notwithstanding the comments made at [110], HBSY No 2 did not determine whether the High Court orders covered the entire question of costs. The orders made in connection with HBSY No 2 were silent on the issue of costs, and thus there is no order of this Court that needs to be set aside before an order concerning the costs of the appeal can be made. Further, the observations at [110] did not purport conclusively to determine any issue: that paragraph stated that the High Court order appeared to cover the whole of the substantive appeal before this Court and noted that it was inappropriate to decide whether an order of the High Court was made per incuriam. The issue is therefore a question of the construction of order 3 of the High Court orders, which was left open by HBSY No 2. It is not necessary to vary HBSY No 2 as HBSY contends. HBSY also advanced submissions in reply on the basis of correspondence between the solicitors for Geoffrey and the High Court registry in relation to the High Court orders. Geoffrey seeks leave to file submissions in response on that limited issue. However, as will become apparent, it is not necessary for further submissions to be received from Geoffrey.Consideration

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

However, this background does not assist HBSY’s construction. The fact that Geoffrey agreed to the entry of order 3 does not change its meaning. Consenting to order 3 does not mean that Geoffrey consented to any particular interpretation of order 3. It is entirely consistent with Geoffrey’s position that he may have formed the view that order 3 did not apply to the substantive appeal, and this was the basis for him consenting to that order in those terms. Conclusion It is therefore appropriate to make an order that costs follow the event. Geoffrey should have his costs of the appeal, except for his costs relating to the application for an extension of time to appeal.

Ratio Decidendi

Legal Principle Established

HBSY also advanced submissions in reply on the basis of correspondence between the solicitors for Geoffrey and the High Court registry in relation to the High Court orders. Geoffrey seeks leave to file submissions in response on that limited issue. However, as will become apparent, it is not necessary for further submissions to be received from Geoffrey.Consideration The materials that a court is permitted to use when construing court orders were set out in Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 8) [2025] FCA 20 at [33]–[34] (Markovic J): … It is clear based on the authorities that where orders are ambiguous a court may have regard to the judgment to which those orders are intended to give effect in resolving the ambiguity: see Athens v Randwick City Council (2005) 64 NSWLR 58 at [129]–[140]; Lim v Comcare [2019] FCAFC 104; (2019) 165 ALD 217 at [40]–[42]. Where that is so, the judgment to which the orders are intended to give effect is the primary point of reference for the court: see Athens at [140].There is also ample authority for the proposition that where a court construes orders that are ambiguous, it may have regard to surrounding circumstances in doing so: see Shout Rocks Cafes Pty Ltd v City of Port Philip [2018] VSC 120 at [14]; Nokia Corporation v Liu (2009) 179 FCR 422 at [30]–[31]. Relevantly, a court may have regard to the proceedings giving rise to the judgment and in particular the pleadings which defined the issues to be resolved: Athens at [140]; Hamersley Iron Pty Ltd v National Competition Council [2008] FCA 598; (2008) 247 ALR 385 at [85]–[86].(Emphasis omitted.) At first glance, order 3 might appear to be a complete determination of the question of costs in the entire proceeding: the order refers to Geoffrey paying the costs of HBSY “in the Full Court of the Federal Court of Australia”. However, other aspects of the High Court orders bear noting. The High Court did not make any orders determining any aspect of the substantive appeal. Rather, order 2 issues a writ of mandamus directing that the Full Court “hear” HBSY’s appeal from the whole of the primary judgment. This contemplates that there may have been preliminary or further steps in the appeal to be completed by the Full Court. Order 2 also requires the Full Court to “determine” HBSY’s appeal. When a court determines an appeal, it has jurisdiction to determine which party (if any) should pay costs: Federal Court of Australia Act 1976 s 43(1). This supports a construction that order 3 does not make a final costs order in relation to the substantive appeal but rather relates to the costs flowing from HBSY’s successful application for the extension of time to appeal. This interpretation is also consistent with the HBSY HCA judgment to which the High Court orders are intended to give effect. The only matter dealt with in HBSY HCA was whether this Court erred in determining that it would not grant HBSY’s extension of time application because it did not have jurisdiction. The majority of the High Court stated at [73] that:This case concerns the scope of the appellate jurisdiction of the Full Court of the Federal Court of Australia … to hear and determine an appeal …