FEDERAL COURT OF AUSTRALIA
Morad v El-Ashey (No 2) [2017] FCA 1612
ORDERS
VID 536 of 2017 BETWEEN: TERRY MORAD
Applicant
AND: MALAK ELASHEY
Respondent
JUDGE:
KENNY J
DATE OF ORDER:
21 DECEMBER 2017
THE COURT ORDERS THAT:
1.The applicant pay the respondent’s costs of and incidental to the proceeding, including the respondent’s costs of her interlocutory application dated 14 June 2017, to be taxed on a party/party basis in default of agreement.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
KENNY J:
These reasons concern a claim by Ms Malak El-Ashey for an award of costs on an indemnity basis against Mr Terry Morad. Mr Morad has conceded that he should pay Ms El-Ashey’s costs on a party/party basis but he had contended that the circumstances do not justify payment on an indemnity basis as sought by Ms El-Ashley.
The question of the appropriate costs order arises following the orders of the Court, on 22 September 2017, that summary judgment be entered for Ms El-Ashey against Mr Morad, and that the originating application filed by Mr Morad on 18 May 2017 be dismissed under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (
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- AGLC
- Morad v El-Ashey (No 2) [2017] FCA 1612
- Case
- [2017] FCA 1612
- Decision Date
CaseChat Overview and Summary
In considering the appropriate basis for awarding costs, the court noted that indemnity costs may be awarded where the circumstances justify it, such as when an action has been commenced or continued in circumstances where the applicant should have known there was no chance of success. However, the court found that the circumstances in this case did not warrant an indemnity costs order. The court observed that Mr Morad had a sufficient basis to institute and pursue the proceeding until Ms El-Ashey's summary judgment application was heard and determined. Furthermore, the application of the relevant provisions of the Trade Practices Act required particular attention, and both parties co-operated in addressing the summary judgment application in a cost-effective manner.
Accordingly, the court ordered that Mr Morad pay Ms El-Ashey's costs of and incidental to the proceeding, including the costs of her interlocutory application, to be taxed on a party and party basis in default of agreement. The court did not find that the circumstances justified an indemnity costs order, but rather that a party and party costs order was appropriate given the facts of the case.
Orders
Orders of the court
1. The applicant pay the respondent’s costs of and incidental to the proceeding, including the respondent’s costs of her interlocutory application dated 14 June 2017, to be taxed on a party/party basis in default of agreement.
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
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Finally, Mr Morad submitted that he had incurred significant debts and faced financial hardship, and that an order for indemnity costs would impose further financial hardship on him. CONSIDERATION It may be accepted that the court may award costs on an indemnity basis where the circumstances justify so doing. Costs were awarded on this basis in Australian Guarantee Corp Ltd v De Jager [1984] VR 483, where Tadgell J held (at 502) that the pursuit of the action had been “a high-handed presumption”. In Fountain Selected Meats at 401, Woodward J said:No doubt the expression “high-handed presumption” was appropriate in the case Tadgell J had to decide, and he needed to go no further; but in order to establish a convenient principle in such cases it is necessary to be a little more prosaic. I believe that it is appropriate to consider awarding “solicitor and client” or “indemnity” costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion. In Gaffney v RSM Bird Cameron Partners (A Firm) (No 2) [2013] FCA 945, Gilmour J held (at [15]-[19]) that the claims in that case were made and continued “in circumstances where the applicant, properly advised, should have known that there was no chance of success”, and that “[t]hese circumstances would of themselves justify an indemnity costs order”. In that case, however, there were also additional factors that led to an indemnity costs award: see Gaffney at [20]-[23]. There is a relevant difference between having a sufficient case reasonably to institute and pursue proceedings and having no case at all to do so. I concluded, after consideration of the parties’ respective submissions, that Mr Morad had no reasonable prospect of successfully prosecuting the proceeding and that an order for summary judgment should therefore be made under s 31A of the FCA Act: Morad v El-Ashey [2017] FCA 1136 at [41] and [47]. It does not, however, follow from this that Mr Morad had no sufficient basis reasonably to institute and pursue the proceeding until Ms El-Ashey’s summary judgment application was heard and determined. Having regard to the uncontested circumstances that gave rise to the proceeding and the relevant provisions of the TIA Act on which Mr Morad relied, I would not so conclude. Examination of my reasons for judgment in Morad v El-Ashey [2017] FCA 1136 shows that the application of the relevant provisions of the TIA Act is not straightforward and that the application of ss 108 and 133 required particular attention. In this circumstance an award of indemnity costs is not justified on the basis that Ms El-Ashey proposes. It should also be borne in mind that Ms El-Ashey’s summary judgment application was properly made at the earliest appropriate stage in the proceeding, and that, broadly speaking, both parties co-operated in addressing that application efficiently and in a cost-effective manner.