Ross (Liquidator) in the matter of Print Mail Logistics (International) Pty Ltd (in liq) v Elias (No 2)

[2022] FCA 398

FEDERAL COURT OF AUSTRALIA

Ross (Liquidator) in the matter of Print Mail Logistics (International) Pty Ltd (in liq) v Elias (No 2) [2022] FCA 398  

Appeal from:

Application for extension of time and leave to appeal: Ross, in the matter of Print Mail Logistics (International) Pty Ltd (in liq) v Elias (No 2) [2021] FCA 1334

File number(s):

QUD 401 of 2021

Judgment of:

DOWNES J

Date of judgment:

14 April 2022

Catchwords:

COSTS – whether indemnity costs should be awarded following refusal of application for extension of time and leave to appeal – where problems with merits of proposed appeal were raised at case management hearing – whether application should have been withdrawn in the circumstances

Cases cited:

Ross (Liquidator) in the matter of Print Mail Logistics (International) Pty Ltd (in liq) v Elias [2022] FCA 296

Wills v Chief Executive Officer of the Australian Skills Quality Authority (Costs) [2022] FCAFC 43

Division:

General Division

Registry:

Queensland

National Practice Area:

Commercial and Corporations

Sub-area:

Corporations and Corporate Insolvency

Number of paragraphs:

9

Date of last submissions:

1 April 2022

Date of hearing:

Determined on the papers

Counsel for the Applicants:

Mr BA Hall

Solicitor for the Applicants:

AJ & Co Lawyers

Counsel for the Respondents:

Ms A Rae

Solicitor for the Respondents:

Bridge Brideaux Solicitors

ORDERS

QUD 401 of 2021

BETWEEN:

DAVID ROSS & BLAIR PLEASH AS LIQUIDATORS OF PRINT MAIL LOGISTICS (INTERNATIONAL) PTY LTD (IN LIQUIDATION) ACN 142 144 830

First Applicant

PRINT MAIL LOGISTICS (INTERNATIONAL) PTY LTD (IN LIQUIDATION) ACN 142 144 830

Second Applicant

AND:

NIGEL BENJAMIN ELIAS

First Respondent

LUIS GARCIA

Second Respondent

JOHN WILLIAM WOODS (and another named in the Schedule)

Third Respondent

ORDER MADE BY:	DOWNES J
DATE OF ORDER:	14 APRIL 2022

THE COURT ORDERS THAT:

1.The applicants pay the respondents’ costs of and incidental to this proceeding.

2.Pursuant to r 40.02(b) Federal Court Rules 2011 (Cth), the respondents’ costs be fixed by way of lump sum.

3.On or before 4.00 pm 29 April 2022, the respondents shall file and serve any affidavit in the form of a Costs Summary (as referred to at and drawn in accordance with paragraphs 4.10, 4.11 and 4.12 of the Costs Practice Note (GPN-Costs)).

4.On or before 4.00 pm 9 May 2022, the applicants shall file and serve any affidavit in the form of a Costs Response (as referred to at and drawn in accordance with paragraphs 4.13 and 4.14 of the Costs Practice Note (GPN-Costs)).

5.On or before 4.00 pm 16 May 2022, the parties shall file and serve any submissions in accordance with paragraph 4.15 of the Costs Practice Note (GPN-Costs).

6.The matter shall be referred to a Registrar for determination of the quantum of the respondents’ costs payable by the applicants and the date by which that sum shall be payable.

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

REASONS FOR JUDGMENT

DOWNES J:

1. The applicants brought an application for an extension of time and leave to appeal, which application was refused: Ross (Liquidator) in the matter of Print Mail Logistics (International) Pty Ltd (in liq) v Elias [2022] FCA 296.

2. The successful respondents seek an order that their costs be paid on the indemnity basis. 

3. They submit that:

   The respondents are entitled to their costs incurred in the appeal to date, including the directions hearing of 28 January 2022 and the applications recently filed.  However, the respondents seek their costs of appeal not on the standard basis, but rather on the indemnity basis.  This is because:

   (a)the appeal is wholly unmeritorious for the reasons discussed above;

   (b)if the problems in the applicants/appellants’ appeal were not apparent to them before the 28 January 2022 directions hearing, they were discussed by the Bench during that hearing;

   (c)the applicants/appellants have substantial opportunity to, in effect, discontinue the appeal – including the opportunity simply not to file further material after 28 January 2022 with the result that the appeal be dismissed with costs – but have persisted regardless, requiring the respondents to incur more time and cost;

   (d)the long delay since the original trial decision has resulted in the respondents being unable to recover any part of their costs from the applicants/appellants for the whole of that time; the applicants/appellants’ use of unmeritorious appeal proceedings has enabled them to avoid payment without pain of an interest charge.

   (footnotes omitted)

4. In Wills v Chief Executive Officer of the Australian Skills Quality Authority (Costs) [2022] FCAFC 43, the Full Court (Logan, Griffiths and Perry JJ) stated at [20]:

   The Court’s discretion to award costs is wide.  That discretion includes the power to order that costs be paid on an indemnity, rather than a party and party, basis:  Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (Colgate-Palmolive) at 232–233; NMFM Property Pty Ltd v Citibank Ltd (No 2) (Court’s “NMFM” Judgment No 11) [2001] FCA 480; (2001) 109 FCR 77 at [53]. As Sheppard J explained in Colgate-Palmolive at 233, there should be “some special or unusual feature in the case to justify the Court in departing from the ordinary practice” of awarding costs on a party and party basis. 

   (emphasis original)

5. Although potential problems with the merits of the appeal were raised at a case management hearing on 28 January 2022, it does not follow that the applicants ought to have given up at that point, especially as these issues were raised in circumstances where the parties were yet to file submissions.  Further, the merits of the application and the proposed appeal were not such that it should have been obvious to the applicants that their application would not succeed.

6. Following the case management hearing, the applicants limited the basis of their application by reference to two proposed grounds of appeal and accepted that the application would succeed or fail depending on the assessment of the merits of those two grounds.  Such an approach is commendable.

7. Finally, there is no apparent reason why the commencement of the proposed appeal (and the belated bringing of the application for an extension of time and leave to appeal) has prevented the respondents from enforcing the costs order obtained from the primary judge. 

8. For these reasons, there is no special or unusual feature in this case to warrant a departure from the ordinary practice of awarding costs on a party and party basis.  It follows that the application by the respondents for indemnity costs is refused.

9. The applicants do not oppose an order that costs be assessed on a lump sum basis, and orders will be made accordingly.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Downes.

Associate:

Dated:       14 April 2022

SCHEDULE OF PARTIES

QUD 401 of 2021
Respondents
Fourth Respondent:	ADRIAN JOSEPH PEREIRA