LK Law Pty Ltd v Karas (Costs)
[2024] FCA 124
•23 February 2024
FEDERAL COURT OF AUSTRALIA
LK Law Pty Ltd v Karas (Costs) [2024] FCA 124
File number(s): SAD 222 of 2021 Judgment of: O'SULLIVAN J Date of judgment: 23 February 2024 Catchwords: COSTS – application for costs of interlocutory application – where the applicant had prepared written submissions – where interlocutory application was not opposed – where the respondents seek costs in the cause – whether the respondents should bear the costs of the interlocutory application – orders made Legislation: Federal Court of Australia Act 1976 (Cth), s 43
Federal Court Rules 2011 (Cth), rr 1.32, 2.32(3)(a), 40.04
Cases cited: Knowles v Secretary, Department of Defence [2021] FCAFC 215; (2021) 287 FCR 348
RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd (No 2) [2021] FCA 1194
Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 19 Date of last submission/s: 20 October 2023 Date of hearing: Determined on the papers Counsel for the Applicants: Mr B Roberts KC with Mr T Besanko and Ms H Doyle Solicitor for the Applicants: Kerrs Counsel for the First, Second and Third Respondents: Ms N Miller Solicitor for the First, Second and Third Respondents: Piper Alderman Counsel for the Fourth Respondent: Mr I Robertson KC with Ms A Wells Solicitor for the Fourth Respondent: Piper Alderman ORDERS
SAD 222 of 2021 BETWEEN: LK LAW PTY LTD
First Applicant
SCIPIO JOHN LIPMAN
Second Applicant
LIPMAN FAMILY PTY LTD (ACN 627 125 580)
Third Applicant
AND: JASON DEMETRIOS KARAS
First Respondent
J&A KARAS PTY LTD
Second Respondent
KARAS LLP (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
O'SULLIVAN J
DATE OF ORDER:
23 FEBRUARY 2024
THE COURT ORDERS THAT:
1.The first to third respondents pay the applicants’ costs of and incidental to the applicants’ interlocutory application filed 5 September 2023 in any event.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
O’SULLIVAN J:
INTRODUCTION
On 5 September 2023, the applicants filed an interlocutory application in which they sought orders lifting suppression orders previously made, specifically:
(1)Pursuant to r 1.32 of the Federal Court Rules 2011 (FCR), orders 2, 3 and 5 made in this proceeding on 27 April 2022 and order 3 made in this proceeding on 1 July 2022 be discharged.
(2)Pursuant to r 1.32 of the Federal Court Rules 2011, order 12 made in this proceeding on 11 February 2022 and order 4 made in this proceeding on 1 July 2022 be discharged.
(3)The respondents pay the applicants' costs of and incidental to this application.
(4)Such further or other orders as this Honourable Court deems fit.
Background
On 11 February 2022, I ordered (the suppression order):
[12]Pursuant to r 2.32(3)(a) of the Federal Court Rules 2011 (Cth) pending hearing and determination of the Interlocutory Application filed in accordance with order 4 above, the Registrar is directed not to permit any person, other than parties or their representatives, to inspect documents filed in this proceeding without leave of the judge.
On 27 April 2022, I ordered (the confidentiality orders):
[2]Pursuant to ss 37AF(1)(b) and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth), on the ground that it is necessary to prevent prejudice to the proper administration of justice, the documents referred to in Schedule A to these orders and their contents be treated as confidential, not be published or disclosed to or by any person or entity and not be disclosed in open court or disclosed in the open part of any court transcript.
Schedule A to the orders of 27 April 2022 identified the following documents:
The emails, attachments and documents referred to or relied on in paragraphs 33 to 39, 40, 43, 45 to 52, 61, 62, 69, 71, 76, 78, 79, 82, 83 and 84.2 of the statement of claim filed in Proceeding No. SAD222/2021 on 21 December 2021.
On 1 July 2022, I extended the suppression order until the first day of trial (order 4).
The interlocutory application was listed for argument on 17 October 2023, by which time the applicants had filed written submissions in support.
On 17 October 2023, the parties attended the hearing at which time the first to third respondents informed the Court that the interlocutory application was unopposed. Other than a small caveat, orders (1) and (2) sought in the interlocutory application were made that day.
At the hearing of 17 October 2023, counsel for the applicants informed the Court that there was a dispute about the costs of the interlocutory application. Counsel for the applicants submitted that there should be a third order made, being that the respondents pay the applicants’ costs of the interlocutory application.
The respondents asked that costs be reserved and requested an opportunity to put submissions in writing on the issue. The fourth respondent did not take a position on the question of costs.
The first to third respondents’ submissions
The respondents contend that the appropriate order is that costs ought to be in the cause, and set out the following explanation for why the interlocutory application proceeded to a hearing:
[9]At the time that the Suppression Application was served, the Respondents were in the process of addressing three other interlocutory matters pressed by the Applicants, including a hearing in relation to one of the interlocutory matters, together with preparing their evidence and defence to the Further Amended Statement of Claim. As the Court is aware, the factual matrix of this case is extraordinarily complex, and those tasks (perhaps unsurprisingly) occupied considerable resources.
[10]Due to the suppression regime in place, neither party was able to access procedural orders made at the time that the Suppression Application was listed. The parties ultimately realised this issue, and requested the orders on 10 October 2023. At that point, the parties became aware of the procedural timeframe set out in those orders.
[11]The Respondents received the Applicants’ submissions just after midday on Friday. The Respondents promptly advised the Applicants’ solicitors that (subject to obtaining final instructions) no opposition would be taken to the lifting of suppression orders. The Applicants also proposed redactions for client information (a matter which is still the subject of deliberations).
[12]In short, the Respondents promptly advised the Applicants that the Suppression Application would not be opposed. In so doing, they sought to minimise unnecessary expenditure and use of Court resources. Had the parties (together) obtained the programming orders earlier, then the position may well have been dealt with by consent, without the need for a hearing. That a hearing was required was the result of a unique set of circumstances whereby the parties together did not realise they had not been able to view the programming orders made in respect of the Suppression Application until 10 October 2023.
The respondents submit that the resolution of the interlocutory application does not align with FCR 40.04, where a party has succeeded on a discrete question, such as determination of a separate question in advance of a final hearing. I do not accept that submission. The Court was not ultimately called on to finally determine a controversy between the parties.
The respondents submit that contrary to the position urged by the applicants, the usual position in relation to the costs of an application where interim injunctive or analogous relief is sought, is for the costs of such application to be costs in the cause: RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd (No 2) [2021] FCA 1194 at [14].
In the applicants’ 13 October 2023 written submissions, they submit that the respondents never sought to demonstrate any basis as to why the continued operation of the suppression or confidentiality orders were necessary to prevent prejudice to the proper administration of justice.
CONSIDERATION
Costs are in the Court’s discretion: s 43 of the Federal Court of Australia Act 1976 (Cth). That discretion is not expressly constrained, subject to the requirement that the power is to be exercised judicially: Knowles v Secretary, Department of Defence [2021] FCAFC 215; (2021) 287 FCR 348 at [76].
To the extent that the respondents refer to RB (Hygiene Home) Australia in support of their argument, that case dealt with an interlocutory injunction and is not analogous.
The interlocutory application was for the removal of suppression orders made under FCR 2.32(3)(a).
The applicants were put to the expense of bringing the interlocutory application and preparing written submissions, however it was not until the matter was called on for argument that the Court was informed that the interlocutory application was conceded.
I accept that the respondents may not have realised the procedural orders for the exchange of submissions had been made, but they must have been aware of the interlocutory application.
In the circumstances, there is no reason why the applicants should not receive their costs of and incidental to the interlocutory application in any event and there will be orders accordingly.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Sullivan. Associate:
Dated: 23 February 2024
SCHEDULE OF PARTIES
SAD 222 of 2021 Respondents
Fourth Respondent:
MISHCON DE REYA LLP
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