Ritson v Commissioner of Police, New South Wales Police Force (No 2)

In *Ritson v Commissioner of Police, New South Wales Police Force (No 2)*, Judge Smith of the Federal Circuit Court of Australia considered an application for costs following an earlier substantive judgment that had set aside a Bankruptcy Notice. The applicant had sought to have the Bankruptcy Notice declared invalid and challenged the authority of the respondent's solicitors. Following the substantive judgment, the parties were ordered to file submissions regarding costs, with the respondent seeking an order for the applicant to pay their costs on a lump sum and ordinary basis, and further requesting that any remaining balance of the costs order be treated as the respondent's petitioning creditor's costs if a sequestration order was made against the applicant.

The primary legal issues before the Court were whether to award costs to the respondent, and if so, whether those costs should be ordered on a lump sum basis. The respondent argued for a lump sum order due to the applicant's conduct, suggesting it would lead to a protracted and expensive taxation process, and provided an affidavit detailing incurred legal fees and applied discounts. The applicant, who filed submissions out of time, argued against a costs order on the basis of an intended appeal of the substantive judgment, and contended that a lump sum order would be excessive, unreasonable, and deny him the opportunity to scrutinise the claimed costs. He also submitted that if a lump sum order was made, he should be heard at a costs hearing as per the relevant practice note.

The Court affirmed its power to award costs under s.79 of the *Federal Circuit Court of Australia Act 1999* (Cth) and noted that costs in bankruptcy proceedings are generally governed by Part 40 of the *Federal Court Rules 2011* (Cth), which permits applications for lump sum costs under r.40.02(b). Citing *Nine Films Television Pty Ltd v Ninox Television Ltd* [2006] FCA 1046, the Court acknowledged that the discretion to award costs on a lump sum basis is broad and unfettered, intended to avoid the expense, delay, and protraction associated with the taxation process, and can be applied in both complex and simple cases, as per *Beach Petroleum NL v Johnson* (1995) 57 FCR 119. The Court also stated that it was not required to consider the applicant's potential appeal before making a costs order.