Hoser v Georges (No 3)
[2024] FedCFamC2G 958
•26 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Hoser v Georges (No 3) [2024] FedCFamC2G 958
File number(s): MLG 2313 of 2022 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 26 September 2024 Catchwords: INTELLECTUAL PROPERTY – Costs – on 15 March 2024 the Court ordered that the applicant pay the costs of the respondents but reserved liberty to the respondents to apply for their costs to be assessed according to Schedule 2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules) or on some other basis – the respondents applied for costs to be assessed according to Part 1 of Schedule 2 to the GFL Rules – whether counsel’s fees are recoverable under item 11 of Part 1 of Schedule 2 to the GFL Rules or may only be recovered under item 10 as an advocacy loading – counsel’s fees are recoverable only as an advocacy loading – costs of the respondents assessed on that basis. Legislation: Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Circuit Court of Australia Act 1999 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), Sch 2 (Pt 1), rr 22.09, 22.15
Federal Circuit Court Rules 2001 (Cth)
Federal Court Rules 2011 (Cth), Sch 3
Cases cited: AYT22 v Minister for Immigration, Citizenship and Multicultural Affairs (No 2) [2023] FedCFamC2G 256
CIQ17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) [2020] FCCA 3467
Colan Products Pty Ltd v Luxon Pty Ltd (No.2) [2002] FMCA 90
Hoser v Georges [2023] FedCFamC2G 550
Hoser v Georges (No 2) [2024] FedCFamC2G 243
Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq) [2011] FCAFC 136
Murphie v Vita Domus Pty Ltd (No.2) [2019] FCCA 2370
Division: General Number of paragraphs: 28 Date of last submission/s: 10 May 2024 Date of hearing: Decided on the papers Place: Sydney The Applicant: Appeared in person Solicitor for the First and Seventh Respondents: Ms I Kraus of Meridian Lawyers Solicitor for the Second, Third, Fourth, Fifth and Eighth Respondents: Ms N Wilson of CIE Legal Solicitor for the Sixth Respondent: Mr M Swinn of King & Wood Mallesons ORDERS
MLG 2313 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: RAYMOND HOSER
ApplicantAND: ARTHUR GEORGES
First RespondentPETER PAUL VAN DIJK
Second RespondentANDERS G. J. RHODIN (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
26 SEPTEMBER 2024
THE COURT CERTIFIES THAT:
1.It was reasonable for the first and seventh respondents to engage counsel in relation to the applications that are the subject of the orders made on 27 June 2023 and 15 March 2024.
THE COURT ORDERS THAT:
2.The costs of the respondents which the applicant on 15 March 2024 was ordered to pay:
(a)in relation to the first and seventh respondents, be set in the amount of $14,433;
(b)in relation to the second, third, fourth, fifth, and eighth respondents, be set in the amount of $15,829.74; and
(c)in relation to the sixth respondent, be set in the amount of $12,762.39.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
On 15 March 2024, based on reasons for judgment I published on that day (earlier reasons),[1] I ordered that the proceeding be dismissed, and that the applicant, Mr Hoser, pay the respondents’ costs. I also ordered that the respondents have liberty to apply within 35 days for an order that their costs be set in accordance with Schedule 2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules) or, in the alternative, for an order pursuant to r 22.09 of the GFL Rules that their costs be set or assessed otherwise than in accordance with Schedule 2 to the GFL Rules.
[1] Hoser v Georges (No 2) [2024] FedCFamC2G 243
The reasons for my granting the respondents’ liberty to apply are to be found in the following passage from the earlier reasons:[2]
The respondents also apply that I assess their costs. The first and seventh respondents, and the second, third, fourth fifth, sixth, and eighth respondents have provided separate schedules of costs. The costs appear to have been purportedly assessed in accordance with Schedule 2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules). I say “purportedly” because the schedule in relation to the first and seventh respondents’ [costs] claims as a disbursement fees paid to counsel ($23,292.50 and $24,736.25) which exceed the amounts allowed by Schedule 2, being the amount specified in r 22.15 of the GFL Rules, which provides:
If the employment of an advocate is certified as reasonable, the amount payable for counsel to appear is the daily hearing fee and advocacy loading in accordance with Part 1 of Schedule 2.
Further, there appears to be double counting to the extent that all respondents claim hearing fees in circumstances where one counsel represented all respondents.
I therefore do not propose to set costs in the amount stated in the schedules the respondents have provided. I will, however, grant the respondents liberty to apply within 35 days after I publish these reasons for an order that I set the amount of the respondents’ costs in accordance with Schedule 2 to the GFL Rules or, in the alternative, for an order that the respondents’ costs be assessed or set in a manner otherwise than in accordance with Schedule 2.
[2] Hoser v Georges (No 2) [2024] FedCFamC2G 243, at [50]-[52]
The respondents exercised the liberty to apply on 19 April 2024 by filing three sets of written submissions, one by the first and seventh respondents, one by the sixth respondent, and one by the second, third, fourth, fifth, and eighth respondents. Each set of submissions is supported by a schedule which identifies the amounts to which the respective sets of respondents submit they are entitled under Part 1 of Schedule 2 to the GFL Rules.[3] The first and seventh respondents also filed an affidavit by their lawyer annexing a copy of invoices counsel for the first and seventh respondents had issued for the work counsel performed.
[3] Each set of respondents in fact submitted two schedules of costs, one headed “Schedule of Costs of Interlocutory Application (Schedule 2 of the Rules)”, and the other headed “Schedule of Costs of Proceeding including Interlocutory Application (Schedule 2 of the Rules)”. I have taken the second of the two schedules to constitute the respondents’ claims for costs.
At my direction, on 2 May 2024 my Associate sent to the parties an email in which the parties were informed that the documents the respondents had filed had come to my attention, and that I inquired whether Mr Hoser proposed to file any material in response to the material the respondents filed. The email also stated that unless by 10 May 2024 the parties informed me that they required an oral hearing, I would proceed to determine the question of costs on the papers.
On 2 May 2024 Mr Hoser sent an email to my Associate’s inbox in which he stated that, in view of his having filed an appeal against my orders of 15 March 2024, the issue of costs should not be dealt with until after the appeal is heard. On 10 May 2024 Mr Hoser filed written submissions in which he repeated the same submission, but in which he also made submissions in response to the respondents’ written submissions.
That Mr Hoser has filed an appeal against the orders I made on 15 March 2024 is no reason for not proceeding to assess costs. Accordingly, in these reasons for judgment I consider whether I should assess the respondents’ costs in the amounts they claim or for some lesser amounts.
PROVISIONS
In CIQ17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) I set out and discussed the provisions that regulate this Court’s power to award costs under the Federal Circuit Court of Australia Act 1999 (Cth),[4] being provisions that have been reproduced in the Federal Circuit and Family Court of Australia Act 2021 (Cth). I also referred to the rule under the Federal Circuit Court Rules 2001 (Cth) that regulated the assessment of costs once the Court has ordered that a party pay them.[5] That rule is repeated in r 22.09 of the GFL Rules, which provides:
Unless the Court otherwise orders, a party entitled to costs in a general federal law proceeding (other than a proceeding to which the Bankruptcy Act 1966 applies) is entitled to:
(a) costs in accordance with Schedule 2; and
(b) disbursements properly incurred.
[4] CIQ17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) [2020] FCCA 3467, at [4]-[8]
[5] CIQ17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) [2020] FCCA 3467, at [9]
Adapting what I said in CIQ17,[6] Part 1 of Schedule 2 to the GFL Rules identifies a relatively small number of, but in most cases broadly defined, activities or events that occur in a proceeding, and assigns an amount to each activity or event. The assessment of costs in accordance with Part 1 of Schedule 2 to the GFL Rules, therefore, consists of identifying the events that have actually occurred in the proceeding that fall within the scope of the order for costs and which also fall within the terms of the activities or events specified in Schedule 2 to the GFL Rules, assigning the appropriate amount to each activity or event, identifying all disbursements and the amounts of those disbursements, and adding all these amounts.
[6] CIQ17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) [2020] FCCA 3467, at [9]
Relevant to these reasons are items 9, 10, and 11 of Part 1 of Schedule 2:
9 Daily hearing fee (a) for a short mention—$342.19; or
(b) for a half day hearing—$1,255.75; or
(c) for a full day hearing—$2,512.5610 Advocacy loading 50% of the daily hearing fee mentioned in item 9 that applies to the hearing 11 Disbursements—Court fees and other fees and payments to the extent that they have been reasonably incurred The amount of the fees and payments
The first and seventh respondents submit that counsel’s fees may be recovered as a “disbursement” under item 11. They rely on the judgment of Judge Given in AYT22 v Minister for Immigration, Citizenship and Multicultural Affairs (No 2) where her Honour said:[7]
Counsel’s fees are a disbursement and ought to be excluded from the calculation of party/party costs. The proper calculation for each of the aforesaid amounts requires that the 25 per cent reduction be first applied to the solicitor’s professional fees, and that the Counsel’s fees be applied afterwards to that figure.
[7] AYT22 v Minister for Immigration, Citizenship and Multicultural Affairs (No 2) [2023] FedCFamC2G 256, at [14]
It appears her Honour was not taken to a consistent line of decisions of this Court that have held that, under the predecessor of Part 1 of Schedule 2 to the GFL Rules, counsel’s fees are not recoverable as a disbursement, but may only be recovered as an “advocacy loading”. The position was stated by Judge Barnes in Murphie v Vita Domus Pty Ltd (No.2).[8] In that case, the successful applicant claimed a daily hearing fee calculated on the basis of a half-day hearing, an advocacy loading, and counsel’s fees, charged as a disbursement. Her Honour found that the “claim that counsel’s fees should be included as a disbursement is inconsistent with the approach taken by this court to the proper construction of the FCC Rules”.[9] Her Honour continued:[10]
[8] Murphie v Vita Domus Pty Ltd (No.2) [2019] FCCA 2370
[9] Murphie v Vita Domus Pty Ltd (No.2) [2019] FCCA 2370, at [17]
[10] Murphie v Vita Domus Pty Ltd (No.2) [2019] FCCA 2370, at [18]-[22]
In Colan Products Pty Ltd v Luxon Pty Ltd (No.2) [2002] FMCA 90, Raphael FM considered circumstances in which a party had claimed counsel’s fees as a disbursement in addition to a daily hearing fee for an instructing solicitor. His Honour stated at [7] in relation to Part 1 of Schedule 1 to the Federal Magistrates Court Rules 2001 (Cth) (the FMCA Rules) (the predecessor to the FCC Rules):
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.
In circumstances where the hearing in question took approximately 2 hours, Raphael FM allowed the “scale” figure in Part 1 of Schedule 1 to the FMCA Rules for hearing preparation (in that case for an interim or summary hearing), the half-day daily hearing fee for counsel and for the instructing solicitor, and the advocacy loading for counsel.
His Honour relevantly explained at [13]:
… 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.
The judgment in Colan has been followed on a number of occasions including in relation to the provisions of Part 1 of Schedule 1 to the FCC Rules (see for example Rentoul v Poynton (No.2) [2008] FMCAFam 295 at [36]; Kavangh & Madgwick (No.3) [2008] FMCAFam 287 at [42]; Bunnag vMinister for Immigration and Citizenship [2008] FMCA 430 at [11]; Lee v Procter & Gamble Australia Pty Ltd (No.2) [2012] FMCA 1075 at [39]; Hamlin v University of Queensland (No.3) [2013] FCCA 1129 and Starr v Westpac Banking Corporation (No.2) [2019] FCCA 18 at [20]).
Consistent with the approach taken in these cases, counsel’s fees are not recoverable as a disbursement within item 14, but are to be calculated to include advocacy loading as well as the daily hearing fee in accordance with items 12 and 13 in Part 1 of Schedule 1 to the FCC Rules.
With respect, the position stated by Judge Barnes, and by the authorities to which her Honour refers, reflect the intent behind Part 1 of Schedule 2 (and their predecessors) including as item 10 an advocacy loading in addition to including as item 9 a daily hearing fee; and also by r 22.15 of the GFL Rules which provides:
If the employment of an advocate is certified as reasonable, the amount payable for counsel to appear is the daily hearing fee and advocacy loading in accordance with Part 1 of Schedule 2.
I note in passing that under item 16.1 of Schedule 3 to the Federal Court Rules 2011 (Cth) counsel’s fees must be claimed as a disbursement; but counsel’s fees are to be assessed by reference to the “National Guide to Counsel Fees”.
PARTIES’ SUBMISSIONS
In his written submissions, Mr Hoser submits that the total of the amounts the respondents claim is excessive; there is no proof that the work for which the respondents claim costs has been performed; and, in any event, the three claims for costs constitute a tripling of the respondents’ costs because the “respondents acted in concert and yet have filed costs bills for each as if separate”.[11] Further, Mr Hoser submits that because the law with respect to moral rights was untested before the courts, it is unreasonable that the applicant should be made to pay costs.
[11] Applicant’s Submissions Relating to a Potential Costs Order, [13]
The respondents, for their part, in effect submit they have sought to claim no more than the amounts provided for by Part 1 of Schedule 2 to the GFL Rules; and the first and seventh respondents additionally submit they are entitled to recover an amount for counsel’s fees as a disbursement.
DETERMINATION
General
I have already ordered that Mr Hoser pay the respondents’ costs of the proceeding. Even if I had not so ordered, however, I would not have considered the matters Mr Hoser has raised in his written submissions as reasons for my not awarding costs against him. Whether an order for costs should be made is within the discretion of the Court; but the proper exercise of that discretion usually requires the Court to order the party or person who has not succeeded in the proceeding to pay the costs of the party who has succeeded. This principle has been recognised on many occasions, including by the Full Federal Court in Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq):[12]
The exercise of the discretion takes account of all of the contextual circumstances of the litigation and the conduct of the parties. One aspect of the award of costs is a recognition that a party has been put to expense which, taking account of the merits as ultimately found on the trial of the action, might otherwise have been avoided. That consideration does not infuse the award of costs with any sense of penalty or punishment but simply recognises the compensatory nature of an award of costs, in context and according to principle. That is why an award of costs, although involving the exercise of a discretion, generally favours the successful party.
[12] Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq) [2011] FCAFC 136, at [9] (Greenwood, Rares and Foster JJ)
It is the case, as Mr Hoser submits, that, apart from the first and seventh respondents adducing evidence of invoices counsel has issued, the respondents have not adduced evidence of the work they performed, such as invoices, or time sheets. That, however, is not relevant to the assessment of costs under Part 1 of Schedule 2 to the GFL Rules. As I have already noted, Part 1 of Schedule 2 is premised on there being events to which the amounts provided for in that schedule are assigned; and there is no doubt that the events the respondents identify in their schedules have occurred.
It is the case that the respondents had a common interest in the applications that were made to strike out the statement of claim, and to dismiss the proceeding. That does not mean they were not entitled to secure, as they did, the three sets of separate legal representation for the purpose of the proceeding. The respondents were entitled to obtain their own separate legal representation.
The first and seventh respondents’ costs
It was reasonable for the first and seventh respondents to retain counsel, and I will so certify. As I have already noted, however, counsel’s fees are not liable to be recovered as a disbursement. Applying what Raphael FM (as his Honour then was) held in Colan Products Pty Ltd v Luxon Pty Ltd (No.2),[13] in “this case counsel is therefore entitled to the advocacy loading . . . This is all that counsel is entitled to”.[14] That means that the first and seventh respondents are not entitled to recover the $18,961.25 fees for counsel claimed as a disbursement in item 11 of the first and seventh respondents’ schedule of costs. No adjustment needs to be made if this amount is removed because the first and seventh respondents have claimed an advocacy loading for the mentions of 8 November 2022 and 20 December 2022, and for the hearings of 7 March 2023 and 12 October 2023.
[13] Colan Products Pty Ltd v Luxon Pty Ltd (No.2) [2002] FMCA 90, at [11]
[14] Colan Products Pty Ltd v Luxon Pty Ltd (No.2) [2002] FMCA 90, at [13]
I am otherwise satisfied that the first and seventh respondents are entitled, under Part 1 to Schedule 2 to the GFL Rules, to the amounts they claim in the first and seventh respondents’ schedule of costs. I therefore propose to set the first and seventh respondents’ costs in the amount of $14,433.[15]
[15] $33,394.25-$18,961.25 = $14,433
The second, third, fourth, fifth, and eighth respondents’ costs
In their schedule of costs, the second, third, fourth, fifth, and eighth respondents claim costs totalling $17,447.70. These include an advocacy loading for each of the directions hearings on 8 November 2022, 20 December 2022, and for each of the hearings of 7 March 2023 and 12 October 2023, totaling $1,617.96.[16] These amounts should not be allowed because the second, third, fourth, fifth, and eighth respondents were not represented by counsel.
[16] $171.10 + $171.10 + $637.88 + $637.88 = $1,617.96
The second, third, fourth, fifth, and eighth respondents claim $2,093.62 under item 3 for each of the hearings on 7 March 2023 and 12 October 2023. Item 3 of Part 1 of Schedule 2 to the GFL Rules states as follows:
Interim or summary hearing—as a discrete event
Note: This stage applies to an interim application or a summary proceeding of a type not otherwise addressed in this fee structure. It does not include the item1 or 2 component.
The second, third, fourth, fifth, and eighth respondents have assessed their costs on the footing that the hearings of 7 March 2023 and 12 October 2023 were each discrete events. That is appropriate, even though the respondents did not file a fresh interlocutory application. The hearing of 7 March 2023 was directed to a set of premises I had identified in the reasons for judgment I published on 27 June 2023,[17] and which were not the subject of submissions made at the hearing of 7 March 2023.
[17] Hoser v Georges [2023] FedCFamC2G 550
I am satisfied that the second, third, fourth, fifth, and eighth respondents are entitled to have their costs set under Part 1 of Schedule 2 to the GFL Rules in the amount of $15,829.74.[18]
[18] $17,447.70 - $1,617.96 = $15,829.74
Sixth respondent’s costs
The sixth respondent has not included in his schedule of costs amounts for advocacy loading but, like the second, third, fourth, fifth, and eighth respondents, includes $2,093.62 under item 3 for each of the hearings on 7 March 2023 and 12 October 2023. I have already found that this is appropriate.
I am therefore satisfied that the sixth respondent is entitled to have his costs set in the amount of $12,762.39, as set out in his schedule of costs.
DISPOSITION
I propose to certify that it was reasonable for the first and seventh respondents to engage counsel, and to order that the costs of the respondents which Mr Hoser was ordered to pay on 15 March 2024:
(a)in relation to the first and seventh respondents, be set in the amount of $14,433;
(b)in relation to the second, third, fourth, fifth, and eighth respondents, be set in the amount of $15,829.74; and
(c)in relation to the sixth respondent, be set in the amount of $12,762.39.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 26 September 2024
SCHEDULE OF PARTIES
MLG 2313 of 2022 Respondents Fourth Respondent: JOHN B IVERSON Fifth Respondent: UWE FRITZ Sixth Respondent: HOWARD BRADLEY SHAFFER Seventh Respondent: UNIVERSITY OF CANBERRA Eighth Respondent: SCOTT THOMSON
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