Hudson v Sigalla (No 2)

The matter of Hudson v Sigalla (No 2) involves a dispute concerning costs arising from an appeal that was deemed incompetent by the Federal Court of Australia. Frank Hudson appealed against orders made in the Federal Circuit Court, which required him to pay a lump sum of $317,106 in costs to Andrew Sigalla. The lump sum was set following an application by Sigalla’s lawyers, who sought to have the costs taxed. The respondents' legal team included Kemp Strang Lawyers, Guy Reynolds SC, and Christopher Botsman. Hudson's appeal raised preliminary questions about whether he needed leave to appeal and whether a partial stay of the primary judge's orders should be granted. The appeal was dismissed, and Hudson was ordered to pay the respondents' costs. The respondents then applied for a fixed costs order, seeking at least $49,709.78, which they argued represented 85% of their total costs of $58,481.50.

The primary legal issues before the court were whether a substantial portion of the costs claimed should be paid on an indemnity basis, and if the amount sought was fair and reasonable or excessive. The respondents argued that the costs were appropriate due to a lean mix of costs, with the person who did most of the work charging the lowest hourly rate, and no duplication or unreasonable fees. They also contended that the court was not required to discount fees when fixing a lump sum and that, where counsel’s fees are reasonable, they only need to be reduced by 5%. Hudson, on the other hand, argued that the amount claimed was manifestly unreasonable.

The court found that the claim for fees charged by Mr Jolly and Mr Botsman lacked discretion and conservative moderation. The application for indemnity costs was refused, and it was determined that Hudson should pay the respondents' costs in the sum of $28,300. The breakdown of this amount includes $10,450 for Mr Katekar’s fees, $11,950 for Mr Botsman’s fees, and $5,900 for Mr Jolly’s costs and other disbursements. Each party was ordered to pay their own costs of the present application.

The final orders of the court were to vary Order 3 made on 28 November 2016 by adding the specified sum for the respondents' costs and for each party to bear their own costs of the present application.