Natch v Stennson Pty Ltd (No 4)

Case [2025] FCA 473

FEDERAL COURT OF AUSTRALIA

Natch v Stennson Pty Ltd (No 4) [2025] FCA 473

File numbers: VID 569 of 2019
VID 720 of 2021
Judgment of: O'BRYAN J
Date of judgment: 15 May 2025
Catchwords: COSTS – application pursuant to r 40.34 of the Federal Court Rules 2011 (Cth) (FCRules) for review of a taxation conducted by a Judicial Registrar as taxing officer – whether to permit the applicants to raise a ground of objection not taken in their notice of objection before the taxing officer – whether to permit the first applicant to rely on a notice to admit and affidavit evidence that was not adduced before the taxing officer on the taxation – Court’s discretion under r 1.34 of the FC Rules to dispense compliance with any of the FC Rules – whether and to what extent a solicitor’s cost can be recovered when the solicitor’s name is not entered on the Register of Practitioners kept by the Registry of the High Court
Legislation:

Federal Court of Australia Act 1976 (Cth) ss 37M, 37N, 43

Judiciary Act 1903 (Cth) s 55B(3)

Federal Court Rules 2011 (Cth) rr 1.34, 40.33, 40.34
Cases cited:

Australian Coal and Shale Employees Federation v Commonwealth (1953) 94 CLR 621

Cassimatis v Australian Securities and Investments Commission [2016] FCA 131

Clark, Tait & Co v Federal Commissioner of Taxation (1931) 47 CLR 142

Jadwan Pty Ltd v Rae & Partners (A Firm) (No 7) [2022] FCA 1174

Natch v Stennson Pty Ltd [2022] FCA 641

Natch v Stennson Pty Ltd (No 2) [2024] FCA 1498

Natch v Stennson Pty Ltd (No 3) [2025] FCA 472

Northern Territory v Sangare (2019) 265 CLR 164

Schweppes Ltd v Archer (1934) 34 SR (NSW) 178

University of Western Australia v Gray (No 25) (2009) 180 FCR 483
Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Number of paragraphs: 85
Date of hearing: 28 March 2025
Counsel for the First Applicant: The First Applicant appeared in person
Solicitors for the First Applicant: TLM Law until 10 February 2025
The First Applicant was self-represented from 10 February 2025
Counsel for the Second and Third Applicants: O K Wolahan
Solicitors for the Second and Third Applicants: TLM Law
Counsel for the Respondent: T Scotter
Solicitors for the Respondent: KCL Law

ORDERS

VID 569 of 2019
BETWEEN:

MOHAN NATCH

First Applicant

MOHAN NATCH AND KARAN NATCH (AS EXECUTORS AND TRUSTEES OF THE WILL OF ANDAL NATCH)

Second Applicant

OWNERS CORPORATION PLAN NO SP026738V

Third Applicant
AND:

STENNSON PTY LTD (ACN 109 103 559)
Respondent

ORDER MADE BY:

O'BRYAN J

DATE OF ORDER:

15 MAY 2025

THE COURT ORDERS THAT:

1.Within 14 days, the respondent file and serve an affidavit made by its solicitor verifying the following:

(a)a copy of the original bill of costs (excluding annexures) with the adjustments made pursuant to the taxing officer’s rulings and the further adjustment to Mr Cain’s fees as required by the reasons of…

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Details
AGLC
Natch v Stennson Pty Ltd (No 4) [2025] FCA 473
Case
[2025] FCA 473
Decision Date

CaseChat Overview and Summary

Natch v Stennson Pty Ltd (No 4) involved an application by Stennson for costs related to a taxation process following the principal proceeding and an appeal proceeding. The applicants, Natch, had been successful in one ground of objection in the taxation process but had failed to raise this ground before the taxing officer. Additionally, the applicants' conduct had resulted in substantial wasted costs. Stennson sought an award of costs on a lump sum basis and an opportunity to apply for a different costs order. The applicants contested the amount of costs and the appropriateness of the lump sum award.

The legal issues before the court included whether the applicants could raise a ground of objection not taken before the taxing officer, whether the applicants could rely on a notice to admit and affidavit evidence that was not presented to the taxing officer, and the court's discretion to dispense with compliance with the Federal Court Rules. Additionally, the court had to determine the extent to which a solicitor’s costs could be recovered when the solicitor’s name is not on the Register of Practitioners.

The court found that the applicants could not raise a new ground of objection after the taxing officer's decision and that their reliance on new evidence was inappropriate. It exercised its discretion under rule 1.34 of the Federal Court Rules to award costs on a lump sum basis, considering the applicants' conduct and the wasted costs. The court also noted that the costs of a solicitor not on the Register of Practitioners could still be recoverable if they were reasonable and necessary. The court ordered Stennson to provide an affidavit verifying the costs and Stennson was to be paid a lump sum of $8,815 for the costs of the taxation review, with an opportunity to apply for a different costs order.

Orders

Orders of the court

1. Within 14 days, the respondent file and serve an affidavit made by its solicitor verifying the following:

(a) a copy of the original bill of costs (excluding annexures) with the adjustments made pursuant to the taxing officer’s rulings and the further adjustment to Mr Cain’s fees as required by the reasons of the Court published today;

(b) the amount payable to the respondent on the taxation, including the costs of the taxation.

2. Within 21 days, the applicants file and serve a submission confirming their agreement to the calculations contained in the affidavit filed and served pursuant to order 1 or stating, with reasons, their disagreement.

3. Any dispute with respect to the calculations contained in the affidavit filed and served pursuant to order 1 be determined by the Court on the papers.

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

Background

Background to the litigation

Although the applicants have been successful in respect of one ground of objection, the ground was not raised before the taxing officer. Further, the applicants’ conduct of the taxation review has occasioned substantial wasted costs. In the circumstances, an award of costs on a lump sum basis fixed in the amount of $8,815 should be made in favour of Stennson in respect of the costs of the taxation review. Stennson will also be afforded an opportunity to apply for a different costs order under r 40.02 of the FC Rules.Relevant background In May 2019, the applicants commenced the principal proceeding against Stennson (as first respondent) and three other respondents. The principal proceeding was heard by Anastassiou J in October 2021. At the start of the fifth day of the hearing, the parties told his Honour that the proceeding against Stennson was to be discontinued to give effect to the terms of compromise agreed between the applicants and the second to fourth respondents. On 27 October 2021, his Honour made the following order giving the applicants leave to discontinue their claims against Stennson subject to the payment of costs:The Applicants have leave to discontinue their claims set out in the Applicants’ Further Amended Statement of Claim dated 1 October 2020 against the First Respondent on the condition that the Applicants pay the First Respondent its costs of and incidental to this proceeding, and its costs of bringing its cross claims and defending the Second Respondent’s cross claim, including all reserved costs, on a party and party basis, to be taxed in default of agreement. On 2 December 2021, the applicants filed an application for an extension of time in which to seek leave to appeal the above costs order (which is referred to as the appeal proceeding). On 2 June 2022, O’Callaghan J dismissed that application and ordered the applicants to pay the costs of Stennson (as first respondent). His Honour’s reasons are published in Natch v Stennson Pty Ltd [2022] FCA 641, which sets out the background to the litigation before Anastassiou J. Accordingly, the applicants are liable for the costs of Stennson in both the principal proceeding and the appeal proceeding. The parties did not reach agreement on the amount of costs payable, and Stennson initiated the taxation processes under Div 40.2 of the FC Rules. It is sufficient for present purposes to note that:(a)On 5 June 2023, Stennson filed a bill of costs under r 40.17 in both proceedings.(b)On 14 July 2023, the taxing officer issued a notice under r 40.20 in both proceedings estimating the approximate total for which, if the bills were to be taxed, the certificates of taxation would be likely to issue. The estimate in the principal proceeding was $168,452 and the estimate in the appeal proceeding was $23,298.(c)On 4 August 2023, the applicants filed notices of objection to the estimate of costs under r 40.21 in both proceedings.(d)On 1 May 2024, the applicants filed notices of objection to the bills of costs under r 40.25 in both proceedings.(e)On 26 June 2024, Stennson filed notices of response to the notices of objection under r 40.26 in both proceedings.(f)On 19 and 20 August 2024, a taxation hearing occurred before the taxing officer. (g)On 12 September 2024, the taxing officer issued a certificate of taxation in the principal proceeding in the amount of $197,996.72 and in the appeal proceeding in the amount of $31,631.75.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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