Islam v Australian Securities & Investments Commission

The applicant in this matter, Mr Islam, sought indemnity costs from the Australian Securities & Investments Commission (ASIC) or, in the alternative, a gross sum costs order. The dispute arose from ASIC's decision to take legal action against Mr Islam, which ultimately resulted in a settlement. The application was heard in the Federal Court of Australia.

The primary legal issue before the court was whether the costs incurred by Mr Islam were recoverable under the circumstances. Given that the parties had settled and an offer of compromise had been made, the court had to consider the principles governing costs orders in such contexts. Specifically, the court had to determine whether the costs summary provided by Mr Islam was sufficient to warrant an assessment of costs, or whether it was more appropriate to make a gross sum costs order under the overriding purpose of the Civil Procedure Act 2005.

The court concluded that the costs summary provided by Mr Islam was not sufficiently detailed to warrant a full assessment of costs. It found that the overriding purpose of the Civil Procedure Act required the court to consider whether the costs incurred were proportionate to the matter. Given the nature of the dispute and the settlement achieved, the court determined that a gross sum costs order was appropriate. The court emphasised that while the applicant's costs were significant, they were not disproportionate to the matter overall. Therefore, the court made a gross sum costs order against ASIC.

The court's final order was that ASIC pay Mr Islam $600,000 in costs, representing a gross sum costs order. This amount reflected the court's assessment of the proportionality of the costs incurred in light of the overriding purpose of the Civil Procedure Act.