McFarlane as Trustee for the S McFarlane Superannuation Fund v IOOF Holdings Limited (No 2)

McFarlane as Trustee for the S McFarlane Superannuation Fund v IOOF Holdings Limited (No 2) involved an application for costs of a preliminary discovery application brought by Mr McFarlane against IOOF. The Federal Court was required to decide the appropriate costs order given that both parties enjoyed a measure of success in their respective positions. The court also had to consider whether IOOF acted unreasonably in its opposition to the application.

The court found that both parties enjoyed a measure of success: Mr McFarlane was successful in obtaining fairly extensive preliminary discovery, while IOOF was successful in limiting the preliminary discovery to the extent of the application’s substantial overreach. Given the wide discretion in making costs orders pursuant to s 43(2) of the Federal Court of Australia Act 1976 (Cth), the court considered it appropriate for each party to bear their own costs of the preliminary discovery application. However, Mr McFarlane was ordered to pay IOOF’s reasonable costs of complying with the order for preliminary discovery made on 18 May 2018. This was based on the approach adopted in Optivision, Cobankara and Gooley, and the court found that if subsequent proceedings were commenced, the costs orders made in this proceeding may be affected by orders made in those subsequent proceedings.

The court concluded that each party should bear its own costs of the preliminary discovery application, while Mr McFarlane should pay the costs of compliance with the preliminary discovery order. These orders reflect the respective degrees of success enjoyed by both parties and the costs associated with complying with the discovery order.