Taylor v August and Pemberton Pty Ltd (Costs)

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FEDERAL COURT OF AUSTRALIA

Taylor v August and Pemberton Pty Ltd (Costs) [2023] FCA 1575

File number: NSD 643 of 2021
Judgment of: KATZMANN J
Date of judgment: 12 December 2023
Catchwords: COSTS – application for indemnity costs following offer of compromise – where application made in accordance with the rules but applicant unsuccessful on some aspects of her case, whether applicant should recover only a portion of her costs
Legislation:

Federal Court of Australia Act 1976 (Cth) s 37M

Federal Court Rules 2011 (Cth) rr 1.35, 25.01, 25.02, 25.03, 25.05, 25.08, 25.14)
Cases cited:

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373

IFTC Broking Services Ltd v Commissioner of Taxation [2010] FCAFC 31; 268 ALR 1

JMC Pty Ltd v Commissioner of Taxation (Costs) [2023] FCAFC 95

Lodestar Anstalt v Campari America LLC (No 2) [2016] FCAFC 118

Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721

Oshlack v Richmond River Council (1998) 193 CLR 72

South Eastern Sydney Area Health Service v King [2006] NSWCA 2
Division: General Division
Registry: New South Wales
National Practice Area: Administrative and Constitutional Law and Human Rights
Number of paragraphs: 28
Date of last submissions: 8 December 2023
Date of hearing: Determined on the papers.
Counsel for the Applicant: Mr D Mahendra
Solicitor for the Applicant: Maurice Blackburn Lawyers
Counsel for the Respondents: Ms V Bulut
Solicitor for the Respondents: Beswick Lynch

ORDERS

NSD 643 of 2021
BETWEEN:

FIONA TAYLOR

Applicant
AND:

AUGUST AND PEMBERTON PTY LTD (ACN 150 962 315)

First Respondent

SIMON GREW

Second Respondent

ORDER MADE BY:

KATZMANN J

DATE OF ORDER:

12 DECEMBER 2023

THE COURT ORDERS THAT:

1.Order 4 of the orders made on 31 October 2023 be varied by substituting an order in the following terms:

The respondents pay the applicant’s costs:

(a)before 11 am on 26 November 2021 on a party and party basis; and

(b)thereafter on an indemnity basis.

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


REASONS FOR JUDGMENT

KATZMANN J:

  1. On 31 October 2023 I ordered that judgment be entered in favour of the applicant, Fiona Taylor, with costs and required the parties to provide short minutes of order giving effect to the judgment:  Taylor v August and Pemberton Pty Ltd [2023] FCA 1313 (the principal judgment). On 21 November 2023, after receiving those minutes, I ordered, amongst other things, that the respondents pay damages to Ms Taylor in the sum of $235,719.03 for their contraventions of s 28B(2) of the Sex Discrimination Act 1984 (Cth) (SDA) and that the second respondent, Simon Grew, pay damages to Ms Taylor in the sum of $42,138.74 for his contravention of s 94 of that Act.  This judgment relates to Ms Taylor’s application to vary the costs order.  In these reasons familiarity with the principal judgment is assumed.

  2. The application is supported by an affidavit…

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Details
Case
[2023] FCA 1575
Decision Date

CaseChat Overview and Summary

The case involves an application by Fiona Taylor for indemnity costs following an offer of compromise against August and Pemberton Pty Ltd and Simon Grew. The proceedings originated from a judgment in Taylor's favour on 31 October 2023, where she was awarded damages for contraventions of the Sex Discrimination Act 1984 (Cth). Taylor sought to vary the costs order to reflect indemnity costs due to the respondents' failure to accept her offer of compromise made 11 months prior to the trial. The primary legal issue before the court was whether Taylor should be granted indemnity costs for the entire litigation period or only a portion of it, given her partial success in the proceedings. The court had to interpret and apply the relevant provisions of the Federal Court Rules 2011 (Cth) concerning offers of compromise and the costs consequences of such offers.

The court examined Rule 25.14 of the Federal Court Rules, which provides for indemnity costs if an applicant makes an offer of compromise that is not accepted and the applicant subsequently obtains a more favourable judgment. The court noted that while Taylor's application for costs was made in accordance with the Rules, she had not been entirely successful in her case. The court had to balance the principle of indemnity costs with the need to ensure that costs orders are proportionate to the success achieved. The court concluded that, despite Taylor's partial success, the significant advantage she obtained over her initial offer justified an order for indemnity costs. However, given the timing of the offer and the subsequent judgment, the indemnity costs were to be calculated from the date of the offer rather than from the outset of the litigation.

In light of the above, the court varied the costs order to reflect that the respondents were to pay Taylor's costs on a party and party basis until the date the offer of compromise was served, and on an indemnity basis thereafter. This decision recognises the importance of offers of compromise in encouraging early settlements and the corresponding need to incentivize such offers with the prospect of indemnity costs upon success. The court's ruling ensures that the overarching purpose of the civil practice and procedure provisions, including the efficient and just resolution of disputes, is upheld. The final order mandated the respondents to pay Taylor's costs according to the specified basis, reflecting a balanced approach to the application of indemnity costs in the context of a partially successful litigation.

Orders

Orders of the court

1. Order 4 of the orders made on 31 October 2023 be varied by substituting an order in the following terms:

The respondents pay the applicant’s costs:

(a) before 11 am on 26 November 2021 on a party and party basis; and

(b) thereafter on an indemnity basis.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

On 31 October 2023 I ordered that judgment be entered in favour of the applicant, Fiona Taylor, with costs and required the parties to provide short minutes of order giving effect to the judgment: Taylor v August and Pemberton Pty Ltd [2023] FCA 1313 (the principal judgment). On 21 November 2023, after receiving those minutes, I ordered, amongst other things, that the respondents pay damages to Ms Taylor in the sum of $235,719.03 for their contraventions of s 28B(2) of the Sex Discrimination Act 1984 (Cth) (SDA) and that the second respondent, Simon Grew, pay damages to Ms Taylor in the sum of $42,138.74 for his contravention of s 94 of that Act. This judgment relates to Ms Taylor’s application to vary the costs order. In these reasons familiarity with the principal judgment is assumed. The application is supported by an affidavit affirmed by Ms Taylor’s solicitor, Mia Pantechis, on 30 November 2023. It is based on an offer of compromise served on the respondents on 24 November 2021 (the offer), 11 months before the trial commenced. Rule 25.01 of the Federal Court Rules 2011 (Cth) (Rules) provides that a party may make an offer of compromise (strictly an offer “to” compromise) by serving a notice in accordance with Form 45 on another party. The notice must be signed by the offeror (r 25.02). Such an offer may be made at any time before judgment (r 25.05(1)) and is open to be accepted within the time stated in the notice, which must not be less than 14 days after the offer is made (rr 25.05(3), 25.08(1)). The content of an offer of compromise is prescribed by r 25.03 as follows:(1) The notice must state whether:(a) the offer is inclusive of costs; or (b) costs are in addition to the offer.(2)If the offer is of a sum of money, the notice may separately specify the amount that represents:(a) the offer in respect to the claim; and(b) interest (if any). Rule 25.14 relevantly provides that:(3)If an offer is made by an applicant and not accepted by a respondent, and the applicant obtains a judgment that is more favourable than the terms of the offer, the applicant is entitled to an order that the respondent pay the applicant’s costs:(a)before 11.00 am on the second business day after the offer was served—on a party and party basis; and(b)after the time mentioned in paragraph (a)—on an indemnity basis.Note 1:Costs on an indemnity basis is defined in the Dictionary.Note 2:The Court may make an order inconsistent with these rules–see rule 1.35. Section 37M(3) of the Federal Court of Australia Act 1976 (Cth) imposes an obligation on the Court to exercise powers conferred by the civil practice and procedure provisions, which include the Rules, in the way that best promotes their overarching purpose. That purpose is defined in s 37M(1) as the facilitation of the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. Section 37M(2) provides that the overarching purpose includes the following objectives:(a)the just determination of all proceedings before the Court;(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;(c)the efficient disposal of the Court’s overall caseload;(d)the disposal of all proceedings in a timely manner;(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

Ratio Decidendi

Legal Principle Established

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