LFDB v SM (No 2)

Case [2015] FCA 1013

FEDERAL COURT OF AUSTRALIA

LFDB v SM (No 2) [2015] FCA 1013

Citation: LFDB v SM (No 2) [2015] FCA 1013
Parties:

LFDB, DBA(AU), DBA(AU) AS TRUSTEE FOR DBP TRUST, BWP and SE v SM

LFDB, DBA(AU), DBA(AU) AS TRUSTEE FOR DBP TRUST, BWP and SE v SM
File number: NSD 353 of 2015
NSD 354 of 2015
Judge: GLEESON J
Date of judgment: 14 September 2015
Catchwords: COSTS – indemnity costs – whether action had no prospect of success – effect of applicants’ letter to respondent – whether respondent’s failure to resolve proceedings contrary to Federal Court of Australia Act 1976 (Cth), s 38N(1) – where respondent enjoyed partial success – no reason to depart from the usual rule
Legislation: Federal Court of Australia Act 1976 (Cth), ss 37M, 37N, 43
Trans-Tasman Proceedings Act 2010 (Cth)
Cases cited: Black v Lipovac [1998] FCA 699; (1998) 217 ALR 386
CGU Insurance Ltd v Corrections Corp of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173
Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354
Dowling v Fairfax Media Publications Pty Ltd (No 2) [2010] FCAFC 28; (2010) 62 AILR 101-129
DSE (Holdings) Pty Ltd v InterTAN Inc [2004] FCA 1251; (2004) 51 ACSR 555
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Futuretronics.com.au Pty Ltd v Graphix Pty Ltd [2009] FCAFC 40
Gersten v Minister for Immigration and Multicultural Affairs [2001] FCA 260
Growth Equities Corporation Ltd v Genesis Growth Investments Pty Ltd [2010] NSWSC 1302
Investec Bank (Australia) v Goldale Pty Ltd (No 2) [2009] VSCA 113
Ogawa v Spender [2006] FCAFC 68; (2006) 151 FCR 228
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Pricom Pty Ltd v Sgarioto (unreported, Supreme Court of Victoria, Eames J, 10 April 1995, 24 April 1995)
Re Smith; Ex parte Rundle (No 2) (1991) 6 WAR 299
Seven Network Ltd v News Ltd [2009] FCAFC 166; (2009) 182 FCR 160
Date of hearing: Heard on the papers
Date of last submissions 10 August 2015
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 27
Counsel for the Applicants: Mr P Herzfeld
Solicitor for the Applicants: Evangelos Patakas & Associates
Counsel for the Respondent: Dr C Ward with Ms AS Rose
Solicitor for the Respondent: Marque Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 353 of 2015
BETWEEN:

LFDB
First Applicant

DBA(AU)
Second Applicant

DBA(AU) as trustee for DBP Trust
Third Applicant

BWP
Fourth Applicant

SE
Fifth Applicant
AND:

SM
Respondent

JUDGE:

GLEESON J

DATE OF ORDER:

14 SEPTEMBER 2015

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The applicants’ application for indemnity costs be refused.

2.The respondent’s application for a variation of the order that the respondent pay the applicants’ costs be refused.

3.Each party bear its own costs of the costs applications.

Note:    Entry of orders is dealt with in Rule 39.32 of…

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AGLC
LFDB v SM (No 2) [2015] FCA 1013
Case
[2015] FCA 1013
Decision Date

CaseChat Overview and Summary

In LFDB v SM (No 2), the applicants sought indemnity costs and the respondent applied for a variation of the existing costs orders. The case was heard in the Federal Court of Australia. The applicants argued that the outcome of the proceedings was inevitable and sought indemnity costs, contending that the respondent's failure to consent to the orders sought was contrary to the Federal Court of Australia Act 1976 (Cth), s 38N(1). The respondent argued that the applicants had not pursued their application for a stay of enforcement of the registrations, and that she had enjoyed partial success in the proceedings.

The court considered whether the applicants' action had no prospect of success, and whether the respondent's failure to resolve the proceedings contravened s 38N(1). The court found that the applicants' decision to put detailed submissions to the court concerning alternative bases to justify their case demonstrated that they did not consider the outcome to be inevitable. The court also found that the issue of whether the New Zealand proceeding should be characterised as proceedings in rem was not argued in detail and that the applicants acknowledged in their written submissions that there was authority to the contrary of their contention in relation to arguably analogous Australian proceedings.

The court concluded that there was no reason to depart from the usual rule that costs follow the event. The court found that the applicants did not offer to resolve the proceedings on the basis of any compromise, and that the respondent's failure to consent to the orders sought was not a matter warranting a departure from the usual rule. The court also found that the respondent did not contravene s 38N(1) in the manner in which she conducted the proceedings.

The court dismissed each application and ordered that each party bear its own costs of the costs applications.

Orders

Orders of the court

1. The applicants’ application for indemnity costs be refused.

2. The respondent’s application for a variation of the order that the respondent pay the applicants’ costs be refused.

3. Each party bear its own costs of the costs applications.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I do not accept that any time required to be spent on the argument that the New Zealand proceeding should be characterised as proceedings in rem warrants a departure from the usual rule, where the issue was not argued in detail and the applicants acknowledged in their written submissions that there was authority to the contrary of their contention in relation to arguably analogous Australian proceedings. CONCLUSION Each application should be dismissed. The parties should each bear their own costs.

Ratio Decidendi

Legal Principle Established

On the respondent’s application to vary the costs orders currently in place, the respondent contends that the Court should take into account that:(1)The applicants did not pursue their application for a stay of enforcement of the registrations;(2)The respondent was successful on the question of whether registration was contrary to public policy, as against the second to fifth applicants, and no finding was made concerning the first applicant;(3)The respondent was required to spent significant time considering the applicant’s contention that the New Zealand proceeding should be characterised as proceedings in rem.ConsiderationIndemnity costs I am not persuaded that an order for indemnity costs is warranted. The applicants’ submission that the outcome was inevitable is inconsistent with their decision to put detailed submissions to the Court concerning alternative bases to justify their case. Having regard to the debate that passed in correspondence between the parties as to the legal correctness of the applicants’ submission, I accept that there was no lack of bona fides in the position taken by the respondent to contest the applications. The applicants did not offer to resolve the proceedings on the basis of any compromise. I am not satisfied that the correspondence affects the position that the respondent’s failure to consent to the orders sought was not a matter warranting a departure from the usual rule that costs follow the event. I am not satisfied that the respondent contravened s 37N(1) in the manner in which she conducted the proceedings.Variation to costs orders made on 20 July 2015 I am not satisfied that any of the matters raised by the respondent warrant any variation to the costs orders already made, which reflect the usual rule. The stay application was not pursued in the context of the relatively early hearing of the substantive matter. The respondent does not point to any specific costs wasted because the stay application was not pursued. As to the Court’s rejection of alternative arguments by the applicants, having regard to the applicants’ complete success in obtaining the orders which it sought, I am not satisfied that there are any circumstances affecting those alternative arguments which warrant a departure from the usual rule. In my view, the mere fact that the applicants did not succeed on all arguments in the circumstances of this case does not warrant a departure from the usual rule. I do not accept that any time required to be spent on the argument that the New Zealand proceeding should be characterised as proceedings in rem warrants a departure from the usual rule, where the issue was not argued in detail and the applicants acknowledged in their written submissions that there was authority to the contrary of their contention in relation to arguably analogous Australian proceedings. CONCLUSION Each application should be dismissed. The parties should each bear their own costs.