Molnar v Good Mood Food Pty Ltd
[2020] FCA 1242
•27 August 2020
FEDERAL COURT OF AUSTRALIA
Molnar v Good Mood Food Pty Ltd [2020] FCA 1242
File number: WAD 583 of 2019 Judgment of: JACKSON J Date of judgment: 27 August 2020 Catchwords: COSTS - consent orders made in favour of plaintiff without merits hearing - application for costs to be awarded on indemnity basis - whether parties' conduct of case was reasonable - whether position of defendant was reasonably arguable - where each party alleged that the other committed an abuse of process - not appropriate to make substantive findings regarding abuse of process in a costs decision - party-party costs awarded to plaintiff up to date of consent orders disposing of matter - no order as to costs of costs dispute Legislation: Corporations Act 2001 (Cth) ss 293, 315 Cases cited: Civil Properties Pty Ltd v Miluc Pty Ltd [2011] WASCA 195
Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84; (2018) 97 NSWLR 681
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
Williams v Spautz (1992) 174 CLR 509
Division: General Division Registry: Western Australia National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 35 Date of last submission/s: 19 June 2020 & 3 July 2020 (plaintiff)
26 June 2020 (defendant)Date of hearing: Determined on the papers Counsel for the Plaintiff: Mr MW Mistilis Solicitor for the Plaintiff: Hotchkin Hanly Lawyers Counsel for the Defendant: Mr JA Robertson Solicitor for the Defendant: Williams & Hughes ORDERS
WAD 583 of 2019 BETWEEN: BRYAN RAYMOND MOLNAR
Plaintiff
AND: GOOD MOOD FOOD PTY LTD (ACN 103 073 383)
Defendant
ORDER MADE BY:
JACKSON J
DATE OF ORDER:
27 AUGUST 2020
THE COURT ORDERS THAT:
1.The defendant must pay the plaintiff's costs of the proceeding up to and including 9 June 2020 on a party-party basis, to be assessed if not agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
JACKSON J:
These reasons concern the costs of a proceeding that is one of a number of disputes arising out of a breakdown in the relationship between the two shareholders of the defendant, Good Mood Food Pty Ltd (GMF). Those shareholders are the plaintiff, Bryan Molnar, and David Philipsz. Mr Molnar holds approximately 30% of the shares in GMF and Mr Philipsz holds the remainder (the parties do not agree on the precise percentages, but nothing turns on that). It seems that GMF is under Mr Philipsz's control, as it appears from the evidence that he is the sole director of the company and that Mr Molnar's previous directorship was terminated in August 2014.
Mr Molnar commenced this proceeding to enforce a direction he gave to GMF under s 293(1) of the Corporations Act 2001 (Cth) to prepare an audited financial report and directors' report for the financial year ended 30 June 2018 and send them to all shareholders. GMF resisted the application and made its own interlocutory application to stay the proceeding.
Both the interlocutory application and the proceeding as a whole were listed for hearing on 10 June 2020. On 4 June 2020, GMF's solicitors wrote to Mr Molnar's solicitors saying that GMF agreed to provide an audited financial report for the year ended 30 June 2018. After further correspondence, and with the consent of the parties, on 9 June 2020 the court ordered the provision of the audited financial report and directors' report, dismissed the interlocutory application, and vacated the hearing. But the parties did not agree on the costs of the proceeding.
The parties' submissions in the substantive proceeding
It is necessary to describe to some extent the parties' written submissions in the substantive proceeding, that is, the part of it that was resolved by the orders of 9 June 2020 and did not concern the current issue of costs. That includes their submissions on the interlocutory application for a stay. Those submissions are relevant to the costs issue because the parties rely on them in support of their respective positions in relation to costs, and because they show how the parties conducted the proceeding, which is relevant to the exercise of the discretion as to costs.
In Mr Molnar's substantive submissions filed at a time when the matter was proceeding to the hearing listed for 10 June 2020, he claimed that the requirements for an effective direction under s 293 had been met, the deadline for provision of the reports pursuant to the direction which arose under s 315(2) of the Act had passed, and there was no basis to resist an order enforcing GMF's obligation to provide the reports. On that basis, he sought indemnity costs in his initial submission.
In submissions filed in support of its interlocutory application for a stay, GMF claimed that Mr Molnar's application was an abuse of process. The submissions recited allegations about Mr Molnar's conduct while he was a director of GMF which are said to have led to the termination of his directorship. The allegations have not been established in any court and it is unnecessary to describe them. The submissions also described claims which Mr Philipsz and GMF commenced in the District Court of Western Australia against Mr Molnar and a proceeding which Mr Molnar commenced in the Supreme Court against Mr Philipsz. Counterclaims have been made in some of those proceedings. One of the proceedings has been dismissed by the District Court due to inactivity.
According to GMF's submissions in support of its interlocutory application for a stay, it was at all times willing to comply with Mr Molnar's 'request' (that is, direction) for the reports, provided that he paid for the $7,000 to $10,000 estimated costs of the reports. GMF claimed that it only had modest financial resources which were being applied to pay its trade creditors and to fund 'all legal proceedings on foot'. It claimed that the rapidly deteriorating economic climate surrounding COVID‑19 made it vulnerable to insolvency, which vulnerability would 'be brought to bear' if GMF was ordered to produce audited financial reports complying with accounting standards. It further claimed that paying the audit fees would place it 'under financial stress sufficient to deprive GMF of its ability to pay its trade creditors and its lawyers'.
On that foundation, GMF sought to build a case for abuse of process. GMF submitted that if it were deprived of its ability to pay its trade creditors and lawyers, it was inevitable that Mr Molnar and his wife would be released from GMF's District Court claim. It was said that this release of claim would mean that Mr Philipsz would be unable to recover substantial directors' loans owed to him. This in turn would mean that Mr Philipsz would be unable to sustain the other District Court claim he has commenced in his personal capacity against Mr Molnar. This was said then to lead to the inference that this result was Mr Molnar's desired outcome for the present proceeding. It is thus alleged that the proceeding was commenced for the improper purpose of inflicting financial harm or pressure on GMF so as to reduce its capacity and, by extension, Mr Philipsz's ability, to sustain various other proceedings. The written submission went on at some length in the same vein, to culminate a claim by GMF that it should be entitled to indemnity costs.
GMF also filed written submissions in opposition to Mr Molnar's application to enforce the direction to produce the directors' report and financial report, that is, the application which commenced this proceeding. It did not raise any reason why the direction failed to comply with the requirements of s 293 of the Act, or claim that GMF had complied with its obligations under that provision and s 315(2). It mainly relied on (and repeated) the same allegations of abuse of process. It also responded to Mr Molnar's claim for indemnity costs, in a way which led to more repetition of the submissions about abuse of process.
Mr Molnar filed submissions in opposition to GMF's application for a stay. He denied any abuse of process and said that he commenced the proceeding to vindicate his right as a shareholder to the directors' report and financial report. He pointed out that, despite GMF's claimed impecuniosity, it appeared that the company had instructed lawyers to put great effort into defending the proceeding when it would have been quicker and cheaper to have complied with the direction to produce the reports. After attacking other arguments GMF raised, Mr Molnar submitted that it was GMF that was engaging in abuse of process by pursuing an ulterior purpose of seeking to avoid disclosure of financial information and scrutiny. These submissions too proceeded on in a similar and repetitive vein, which it is not necessary to describe further.
The parties' respective positions on costs
In further written submissions, Mr Molnar pursued his claim for the costs of the proceeding to be paid to him on an indemnity basis. He recited the well‑established principles governing awards of indemnity costs. He submitted that there could be no contention that the direction to provide the reports was not regularly given in accordance with s 293 of the Act. He submitted that since the right to the reports had arisen, and its existence was not contested, then the proceeding would necessarily vindicate that right, and there could be no abuse of process. His submissions relied on passages from the joint judgment of Mason CJ, Dawson, Toohey and McHugh JJ in Williams v Spautz (1992) 174 CLR 509, in which their Honours confirmed that provided that the object sought by litigation is within the lawful scope of the process, there will be no abuse of process, even if the use of the process is malicious or fraudulent (see in particular 524‑525). Mr Molnar claimed that there was no suggestion that he did not intend to prosecute the proceeding to its conclusion; to the contrary, the submission that the cost of providing the reports would have deleterious consequences assumes that the proceeding will be pursued to the end. And those consequences, if they did arise, would be within the scope of the consequences provided for by the law. Mr Molnar's submissions also attacked the factual basis for the contention that the proceeding was an abuse of process. In short, he submitted that GMF's case was hopeless, so indemnity costs should be awarded.
GMF's responsive submissions on costs take issue with all of this. The company offers an explanation for its capitulation in relation to the substantive part of the proceeding. That explanation, contained in an affidavit of Mr Philipsz, is that in early June 2020, GMF obtained advice from Queen's Counsel regarding the proportionality of the action, in particular the likely costs to prepare and argue its application for a stay. Queen's Counsel's advice appears to have been that those costs would far outweigh 'any possible return for vindicating GMF's rights'. Mr Molnar objects to this evidence on the basis that it is conclusory and vague but I do not accept that is a proper basis not to admit it into evidence; rather, it goes to the weight to be given to it. For reasons that will appear, I do not consider that the explanation assists GMF.
As best the court can discern from GMF's submission, the company does not resist all liability for costs, but submits that it should only be liable for party-party costs. GMF also relies on a Calderbank letter which its solicitors sent to Mr Molnar's solicitors on 4 June 2020 offering to resolve the proceeding on the basis that:
(1)GMF will provide an audited financial report and directors' report for the financial year ended 30 June 2018;
(2)the hearing then listed for 10 June 2020 would be adjourned to a date after 30 September 2020; and
(3)GMF would pay Mr Molnar's costs of the action on a party-party basis.
The letter indicated that the auditors would require until 30 September 2020 to perform the audit. The offer was open for acceptance until 4.00 pm on 9 June 2020. So GMF submits that Mr Molnar should be liable to pay its costs from 10 June 2020 onwards.
Mr Molnar has filed further submissions on costs which were ordered to be responsive, but are largely repetitive of its first set of submissions. In relation to the explanation for ceasing the defence of the proceeding which GMF proffers, Mr Molnar submits that if GMF had succeeded, and obtained a party‑party costs order in its favour, then that 'would surely justify the costs of preparation for and attendance at a hearing of the substantive issues'. This, it is submitted, means that GMF's reference to vindicating its rights only makes sense if the right being referred to is its right to be heard on its application, rather than its alleged right for the action to be stayed. That in turn, so Mr Molnar asserts, means that the court should infer that GMF abandoned its case because properly advised it considered its case was hopeless.
In relation to the Calderbank letter, Mr Molnar submits that the orders the court ended up making by consent were more favourable to it than the orders proposed in the letter, because they provide for the reports to be produced by 10 August 2020 and in the manner required by the Act, in accordance with Mr Molnar's originating application. So, he says, it was not unreasonable for him not to accept the offer contained in the letter.
Consideration
The parties have both approached the dispute as to the costs of this proceeding in the wrong way. I say that for two reasons.
First, there is a distinct lack of proportionality in each party's approach. GMF, the company at the centre of the dispute, is a small proprietary company. It operates a single café business. In recent years it has variously traded at a loss or barely broken even. According to a balance sheet dated 26 June 2020 which is in evidence, the company has negative shareholders' equity and a substantial deficit in working capital. The proceeding involves a dispute about the production of a financial report and a directors' report for a single year. The sticking point, according to one of the parties, was the likely $7,000 to $10,000 cost of producing that report. The surviving vestige of the dispute is not even about that; it is about the legal costs of arguing about that. In that context, the parties have each produced written submissions that are lengthy, repetitive, discursive and strident. The wider context of apparently acrimonious disputes between Mr Molnar and Mr Philipsz may explain that approach, but it does not justify it.
Second, for all their length, the parties' submissions on costs have entirely failed to identify the well‑established principles which apply in situations of this kind. I will describe those principles shortly, but in broad terms they recognise that where a matter is resolved without a trial, it will not usually be possible or appropriate for the court to award costs on the basis of any firm determination as to who would have succeeded in the issues in dispute. The parties' respective submissions betray no awareness of those principles on the part of their respective solicitors. Instead, their submissions proceed on the basis that, the need for a trial having been avoided, the court should nevertheless make firm findings about all of the issues that would have been in dispute at trial, purely for the purposes of resolving the costs dispute.
That approach is generally to be deprecated. In Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84; (2018) 97 NSWLR 681 at [8], Basten JA observed that:
although it is possible to make an order for costs against one party if it can be shown that it has invited the litigation by its unreasonable behaviour, or has unreasonably pursued the litigation, such an order should only be made where that judgment is manifest by reference to known circumstances, not in dispute between the parties. If the question cannot be answered without reviewing large swathes of evidence and resolving, on a tentative basis, disputed questions of fact, the task should not be embarked upon.
Yet that is what the parties seek to have the court do here. It must be said that Mr Molnar's submissions on costs deserve more criticism for that reason than GMF's. GMF, at least, put its position on costs on the basis that its position was not hopeless, not on the basis that the court should conclude without trial that it definitely would have won. That position was perhaps inevitable, given that GMF needed to respond to Mr Molnar's submissions that its case was hopeless, and in light of its capitulation it could hardly put the point in any stronger way. In contrast, Mr Molnar pursued the ambitious goal of persuading the court, in the absence of any trial, not just that he would inevitably have won and so is entitled to costs, but that his case was so strong and GMF's so weak that the court should conclude, without trial, that he is entitled to indemnity costs.
I will now describe the principles which guide the exercise of the discretion to award costs in the present circumstances. They are well known, and arise chiefly from the decision of McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624‑625. The prosecutrix in that case had applied for judicial review of the Minister's refusal of a protection visa for her. Shortly after the proceeding was commenced, the Minister granted a protection visa to her, so she did not proceed with the application.
McHugh J stated the principles that apply to an application for costs where a party elects not to pursue an action either by settlement or by extra‑curial means. His Honour observed (at 624‑625, some citations removed):
In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra‑curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action …
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission [Unreported; Federal Court of Australia; 10 February 1989] where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare.
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
While the proceeding before McHugh J appears to have been either dismissed or discontinued, I do not consider that this makes the principles he outlined inapplicable to the present case. The reality is that in this case the matter settled by consent, albeit by means of substantive orders in favour of the plaintiff. Nichols v NFS Agribusiness Pty Ltd is an example where the principles in Lai Qin were applied to a situation where substantive orders were made without trial, largely (but not entirely) in terms sought by the plaintiff.
To apply the above principles here leads to the conclusion that GMF should bear Mr Molnar's costs of the substantive part of the proceeding, at least on a party‑party basis. GMF does not appear to dispute its liability for party‑party costs. That is appropriate where Mr Molnar has achieved substantial victory in the proceeding and where, in my view, GMF behaved unreasonably in resisting GMF's application. As I have explained, GMF's expressed reason for not being willing to produce the financial and directors' reports for the 2018 financial year was that it could not afford the $7,000 to $10,000 cost. And yet, to avoid that consequence, it proceeded, though solicitors, to incur the expense of filing an interlocutory application raising contentious and potentially complex issues about abuse of process and filed two sets of written submissions and four affidavits, on the way to a contested hearing in this court. With respect, it should not have been necessary for GMF to engage Queen's Counsel in order to realise that the cost of resisting the application far outweighed any likely benefit. It is obvious that the costs that GMF has incurred and would have been likely to incur in resisting the application would greatly exceed the costs it was seeking to avoid. In that context, it was unreasonable for GMF to prolong the proceeding by maintaining its defence of the proceeding. So GMF's explanation for its capitulation does not advance its position on costs.
Should the order provide for indemnity costs? The observations of McHugh J quoted above proceed on the basis that if there is no trial, unreasonable conduct may justify an award of party-party costs. Unreasonable conduct by a litigant is not necessarily enough by itself to justify an order for indemnity costs. In Civil Properties Pty Ltd v Miluc Pty Ltd [2011] WASCA 195 at [82]‑[85] Newnes JA (Murphy JA and Hall J agreeing) summarised the principles that apply after a contested trial as follows (some citations removed):
[82]It is well-established that a court has a wide discretion as to costs (albeit, a discretion to be exercised judicially) ... Whether or not an order for indemnity costs is appropriate must depend upon the facts of the particular case. There are not, and cannot be, any hard and fast rules. But an indemnity costs order is a departure from the usual order that costs are awarded on a party and party basis. Ordinarily an indemnity costs order is appropriate only where the unsuccessful party has been involved in some unreasonable conduct in relation to the proceedings, such as where the institution or continuation of the proceeding was plainly unreasonable or the proceeding was issued or maintained for an ulterior or collateral purpose. An order for indemnity costs reflects the court's disapproval of the conduct of the unsuccessful party.
[83]If a party brings a case which is hopeless it can normally be inferred that the proceeding was commenced or continued 'for some ulterior motive or because of some wilful disregard of the known facts or the clearly established law': Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401. But it is not necessary that such an inference be drawn; it is sufficient that the court's resources and the successful party's costs have been wasted on entirely frivolous litigation.
[84]However, while indemnity costs may be awarded where an action has been commenced or continued in circumstances where the plaintiff, properly advised, should have known that the action had no prospect of success, a court must not be too ready to find that a case was hopeless. As Wheeler J pointed out in Quancorp Pty Ltd v MacDonald [1999] WASCA 101:
On the one hand, a party should not be discouraged, by the prospect of an unusual costs order, from persisting in an action where its success is not certain. Uncertainty is inherent in many areas of law, and the law changes with changing circumstances. It is inappropriate that a case be too readily characterised as 'hopeless' so as to justify an award of indemnity costs to the successful party. However, where a party has by its conduct unnecessarily increased the cost of litigation, it is appropriate that the party so acting should bear that increased cost. Persisting in a case which can only be characterised as 'hopeless' is an example of the type of conduct which may lead the court to a view that the party whose conduct gave rise to the costs should bear them in full [7].
[85]It must also be borne in mind that what is apparent at the end of a trial may not have been so obvious beforehand. Whether or not a case was hopeless is not to be determined with the benefit of hindsight.
Here, the court does not even have the benefit of hindsight. The above observations concerned situations where adverse findings were made after a contested trial and the party against which those findings were made acted unreasonably. Each case depends on its facts. While I have concluded that GMF acted unreasonably in defending the proceeding, I do not consider that it was so unreasonable that the court should express its disapproval by taking the exceptional step of ordering indemnity costs in the absence of any trial on the merits. In my view, in the present circumstances the court should only take that step if it was able to conclude (without trial) that GMF's case for abuse of process was hopeless and doomed to fail.
That is indeed what Mr Molnar seeks to persuade me to conclude here. But while my impression, on reading GMF's submissions in the substantive part of the proceeding, is that the company's case for abuse of process was weak, it is not usually the function of a court on a costs application to make a prediction about the outcome of a hypothetical case: see Lai Qin at 626. To the extent that Mr Molnar's submissions were based on disputed matters of fact, such as what his purpose in pursuing the proceeding actually was, it would be obviously inappropriate to determine that without trial.
Setting that aside, the nub of Mr Molnar's argument was that abuse of process, the only real basis of GMF's resistance to the claim, depends on a finding that the proceeding is being pursued for a purpose outside the lawful scope of the process. Mr Molnar submitted that there was never any chance of GMF establishing that here, because he had issued the direction, there was no legitimate dispute that it was regular and effective, the direction had not been complied with, Mr Molnar had pursued compliance, the proceeding would, if successful, enforce compliance, and there was no basis to say that he did not intend to prosecute it to that result. In those circumstances, he submitted, it was plain that the purpose of commencing and pursuing the proceeding was to achieve compliance with his statutory right. The fact that compliance might have other results, such as requiring GMF to spend money on an audit which it would rather spend on something else, does not take it outside the lawful scope of the process. Nor would any finding that he was actuated by malice in pursuing the proceeding.
Mr Molnar relied on Williams v Spautz and authorities that apply it in support of this submission. In Williams v Spautz at 532-535 Brennan J set out the principles that are to be applied. It would not be appropriate to quote a passage of that length in a judgment of this kind, but the following paragraph (from 535) in my view puts the position advanced by Mr Molnar here at its highest:
There is no impropriety of purpose (whatever may be said of motive) when a plaintiff commences or maintains a proceeding desiring to obtain a result within the scope of the remedy, even though the plaintiff has an ulterior purpose - or motive - which will be fulfilled in consequence of obtaining the legal remedy which the proceeding is intended to produce. To amount to an abuse of process, the commencement or maintenance of the proceeding must be for a purpose which does not include - at least to any substantial extent - the obtaining of relief within the scope of the remedy.
I do not consider that this is enough to justify an order for indemnity costs here. That is because Mr Molnar's reliance on this principle begs the question of whether he has commenced this proceeding because he desires to obtain the result within the scope of the remedy, that is, whether he actually did want to get the directors' report and financial report. It is at least arguable in my view that, while he may have had every intention of obtaining and enforcing an order compelling the production to him of those reports, it does not follow that this was his predominant purpose (see Williams v Spautz at 529) in doing so. Despite all the steps he took to give rise to and vindicate his right to obtain those reports, it remains possible that he had no interest in the reports themselves, and merely intended to use the proceeding as a vehicle for oppression of GMF. Of course I am making no finding that this was indeed Mr Molnar's state of mind or that, viewed objectively, that is what his predominant purpose should be found to be. The point is, I do not know, because there has been no trial of that question. I do not consider it appropriate in the absence of a full hearing of the merits to make a determination as to how the legal principles found in Williams v Spautz apply here.
I do not therefore conclude in the absence of trial that GMF's defence, founded in substance on allegations of abuse of process, was so hopeless that Mr Molnar is entitled to indemnity costs. Nor am I prepared to find that GMF resisted the proceeding for any ulterior motive, or to infer that it had been advised that its case was hopeless. I do not accept Mr Molnar's submission that a party-party costs order in GMF's favour would have justified the costs of preparation for and attendance at a hearing of the substantive issues. It is notorious that party‑party costs orders rarely provide full compensation for the costs of litigation; no doubt that is why Mr Molnar is pursuing indemnity costs. In the absence of a trial I am not prepared to make a firm finding that GMF had an ulterior purpose for defending the proceeding or applying for a stay.
Mr Molnar submitted that if indemnity costs are not ordered he should at least receive the benefit of an order removing the limit on costs found in Schedule 3 to the Federal Court Rules 2011 (Cth). But he has not provided any reason to think that those limits will not give him appropriate compensation for his legal costs in the present case. I will not remove those limits.
There remains the question of the costs after 9 June 2020, which are substantially the costs of the dispute about costs. I accept Mr Molnar's submission that the orders made on that date were more favourable to him than the orders proposed in the Calderbank letter, so that it was not unreasonable for him to decline the offer contained in the letter. It follows that the letter provides no basis for an order that Mr Molnar should bear GMF's costs after that date.
In the event, I consider the appropriate exercise of discretion here is to award neither party its costs after 9 June 2020. That is for three related reasons. First, while Mr Molnar has received an order for the costs of the substantive part of the proceedings in his favour, and costs usually follow the event, that was in a context where Mr Philipsz did not resist an order to that effect, and Mr Molnar has unsuccessfully extended the scope of the dispute in pursuit of an order for indemnity costs. Second, for the reasons I have given above, I consider that the approach of both parties to the costs dispute has been disproportionate and misconceived. Third, given the first two matters I have mentioned, I consider it is also appropriate to make no order as to the costs of the costs dispute, so as to mark the court's disapproval of satellite litigation of this kind.
Disposition
It is convenient to reflect these reasons by ordering that GMF must pay the costs of the proceeding up to and including 9 June 2020, to be assessed on a party-party basis if not agreed.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackson. Associate:
Dated: 27 August 2020
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