Karpik v Carnival plc (The Ruby Princess) (Stay Application Costs) - [2021] FCA 1290

FEDERAL COURT OF AUSTRALIA
Karpik v Carnival plc (The Ruby Princess) (Stay Application Costs) [2021] FCA 1290

File number(s): NSD 806 of 2020

Judgment of: STEWART J

Date of judgment: 21 October 2021

Catchwords: COSTS – application for costs of interlocutory application to be payable forthwith – general rule that costs of an interlocutory application should not be taxed until the proceeding is finished – whether any reason to depart from the general rule – application refused

Legislation: Federal Court Rules 2011 (Cth) r 40.13

Cases cited:
Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 4) [2013] FCA 567

Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International BV (No 5) [2018] FCA 19

The Owners – Strata Plan No 87231 v 3A Composites GmbH (No 2) [2020] FCA 333

Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd [1992] FCA 423; 36 FCR 297

Division: General Division

Registry: New South Wales

National Practice Area: Other Federal Jurisdiction

Number of paragraphs: 17

Date of hearing: 21 October 2021

Counsel for the Applicant: I Pike SC, R May and D Farinha

Solicitor for the Applicant: Shine Lawyers Pty Ltd

Counsel for the Respondents: D McLure SC, G O’Mahoney, A Reid and H Cooper

Solicitor for the Respondents: Clyde & Co

ORDERS

NSD 806 of 2020

BETWEEN:
SUSAN KARPIK

Applicant

AND:
CARNIVAL PLC (ARBN 107 998 443 / ABN 23107998443)

First Respondent

PRINCESS CRUISE LINES LTD (A COMPANY REGISTERED IN BERMUDA)

Second Respondent

ORDER MADE BY:

STEWART J

DATE OF ORDER:

21 OCTOBER 2021

THE COURT ORDERS THAT:
1.The respondents pay the applicant’s costs of the amended interlocutory application filed 28 June 2021.

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

REASONS FOR JUDGMENT
(Revised from the transcript)
STEWART J:

On 20 September 2021, I made orders dismissing the stay and associated relief sought by the respondents in their amended interlocutory application filed on 28 June 2021. I must now deal with the question of the costs of that application. The respondents accept that as the substantially unsuccessful party, they should, in accordance with the usual rule, bear the costs.
The plaintiff is dissatisfied with that position. She submits that, because the relief sought by the respondents was final in nature, I should order that the costs of the interlocutory application be taxed immediately as allowed by the note to r 40.13 of the Federal Court Rules 2011 (Cth). That is an exception to the rule itself, which provides:
If an order for costs is made on an interlocutory application, the party in whose favour the order is made must not tax those costs until the proceeding in which the order is made is finished.
Note: The Court may order that costs of an interlocutory application be taxed immediately.
The rule applies to interlocutory applications, as indeed the respondents’ application was. The question of the extent to which the relief sought was final in nature is a separate question…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] FCA 1290
Decision Date

CaseChat Overview and Summary

The case of Karpik v Carnival plc (The Ruby Princess) (Stay Application Costs) was heard in the Federal Court of Australia, where Susan Karpik, as the applicant, sought an order for the costs of an interlocutory application to be taxed immediately. The respondents, Carnival plc and Princess Cruise Lines Ltd, had filed an amended interlocutory application on 28 June 2021, which the court dismissed on 20 September 2021. The main legal issue before the court was whether the general rule, which dictates that costs of an interlocutory application should not be taxed until the proceeding is finished, should be departed from in this instance.

Stewart J, the presiding judge, examined the matter through the lens of established legal principles. The court highlighted that the discretion to order costs to be paid forthwith should only be exercised when the moving party demonstrates that the demands of justice require a departure from the general practice envisaged by the rule. The judge noted that the applicant bore the onus of demonstrating a good reason for such a departure. The court also considered the underlying policy considerations of Rule 40.13 of the Federal Court Rules 2011 (Cth), which include avoiding multiple taxation proceedings and recognising that the unsuccessful party on an interlocutory application may ultimately succeed in the substantive proceeding.

The applicant argued several factors that, in her view, justified departing from the usual rule, including the nature of the relief sought by the respondents, the significance of the costs, and the likelihood of a delay in concluding the proceeding. However, the court found these factors insufficient to displace the usual rule. The interlocutory application did not determine any substantive issue in the case, the proceedings were not at an early stage, the downside of the diversion of attention and resources was not outweighed by the disadvantage to the applicant in having to wait, and the applicant's case was a funded class action. Consequently, the judge concluded that the respondents should bear the costs of their amended interlocutory application filed on 28 June 2021.

Orders