FEDERAL COURT OF AUSTRALIA
Watson v Kriticos (Costs Payable Forthwith) [2022] FCA 4
File number: NSD 970 of 2019 Judgment of: PERRAM J Date of judgment: 13 January 2022 Catchwords: COSTS – costs thrown away – application to dispense with Federal Court Rules 2011 (Cth) r 40.13 Legislation: Federal Court Rules 2011 (Cth) r 40.13 Cases cited: Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 13) [1995] FCA 1459
Australian Flight Test Services v Minister for Industry, Science and Technology [1996] FCA 1425
Batten v CTMS Ltd [1999] FCA 1576
Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd [2016] FCA 37
Courtney v Medtel Pty Limited (No 3) [2004] FCA 347
Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International B.V. (No 5) [2018] FCA 19
Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545
Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297
Watson v Kriticos (Costs of Summary Judgment Application) [2021] FCA 917
Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Number of paragraphs: 26 Date of last submissions: Applicant: 15 November 2021
First Respondent: 26 November 2021Date of hearing: Determined on the papers Counsel for the Applicant: Dr A Hanak QC with Dr W Rothnie and Mr G Campbell Solicitor for the Applicant: Heathfield Grosvenor Lawyers Pty Ltd Counsel for the First Respondent: Mr D Ananian-Cooper Solicitor for the First Respondent: Plastiras Lawyers Counsel for the Second Respondent: The Second Respondent did not appear ORDERS
NSD 970 of 2019 BETWEEN: DALE CAMERON WATSON
Applicant
AND: STEPHEN CON KRITICOS
First Respondent
WHITEWATER WEST INDUSTRIES LTD.
Second Respondent
ORDER MADE BY:
PERRAM J
DATE OF ORDER:
13 JANUARY 2022
THE COURT ORDERS THAT:
1.The Applicant pay the First Respondent’s costs thrown away by reason of the amendment of the pleadings undertaken pursuant to the orders of 10 September 2021.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
PERRAM J:
INTRODUCTION
On 10 September 2021, I made orders striking out the Applicant’s Third Further Amended Statement of Claim (‘3FASOC’) and granting him leave to file a Fourth Further Amended Statement of Claim (‘4FASOC’) on the proviso that the 4FASOC was to address certain matters identified in the orders. The 4FASOC was filed on 2 November 2021.
The First Respondent now seeks his costs thrown away by reason of the amendments. He further seeks:
(a)an order that the requirements of r 40.13 of the Federal Court Rules 2011 (Cth) (‘FCR’) be dispensed with such that the costs be taxed immediately; and
(b)an order that the costs be payable forthwith.
The Applicant concedes that he must pay the First Respondent’s costs thrown away but contends that neither of the orders at (a) and (b) of the preceding paragraph should be made.
SHOULD RULE 40.13 BE DISPENSED WITH?
Applicable principles
Rule 40.13…
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- AGLC
- Watson v Kriticos (Costs Payable Forthwith) [2022] FCA 4
- Case
- [2022] FCA 4
- Decision Date
CaseChat Overview and Summary
The court examined the extent of the amendment and whether it justified dispensing with the usual costs taxation process. The Applicant argued that the amendments were significant, necessitating a complete redrafting of the defence. However, the court held that the amendments did not introduce an entirely new case, as the core allegations remained unchanged. The court also considered the Applicant's concession of certain withdrawn allegations and the potential for creating perverse incentives for the Respondents. Ultimately, the court declined to make an order that the costs be payable forthwith, as there was no utility in such an order without an immediate taxation order.
In conclusion, the court ordered that the Applicant pay the First Respondent's costs thrown away due to the amendment of the pleadings. The court did not make an order for costs to be payable forthwith, as it found no grounds to dispense with the usual costs taxation process under r 40.13.
Orders
Orders of the court
1. The Applicant pay the First Respondent’s costs thrown away by reason of the amendment of the pleadings undertaken pursuant to the orders of 10 September 2021.
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
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Fourthly, although the Applicant concedes that certain allegations have been withdrawn, he says that these were ancillary and that the core allegations remain intact: §72. Fifthly, because the pleading has undergone change in response to interlocutory applications by the Respondents, the Applicant asserts that a special costs order would create a perverse incentive for the Respondents to make similar allegations in future: §73. Sixthly, he points to an absence of evidence by the First Respondent of any costs actually thrown away: §74. Seventhly, the Applicant avows an eagerness on his part for the proceeding to be resolved as quickly as possible and says that the principal obstacle to this has been the Respondents’ interlocutory applications: §75. Lastly, the Applicant relies upon the ‘twin policy considerations’ to which I have referred above. Consideration I have already indicated that I do not accept the First Respondent’s third submission (on either possible interpretation of it). With respect to his first and second submissions, I do not consider that the extent of amendment embodied within the 4FASOC justifies an exercise of the discretion to dispense with FCR r 40.13. The amendments are certainly considerable and it may be accepted that the First Respondent must significantly redraw his defence in order to plead to them. On the other hand, I do not think that the 4FASOC discloses an entirely new case – the substance of the dispute and the core allegations against the First Respondent remain the same as that disclosed in the 3FASOC. It may also be accepted that the new allegations will require evidence and submissions at trial which would not otherwise have been required (although, equally, the abandoned allegations will have the opposite effect on the scope of the trial) and the Applicant’s inability properly to plead his case in the beginning has added a degree of expense and delay to the matter. But these considerations form the basis of the First Respondent’s entitlement to costs thrown away. They do not, either individually or taken together, ground a conclusion that it would be unjust for those costs to be taxed in the usual manner. In that circumstance, I decline to make an order that r 40.13 be dispensed with. PAYABLE FORTHWITH? There would be no utility in an order that costs be payable forthwith if there were no order that the costs may be taxed immediately notwithstanding r 40.13. Accordingly, I decline to make an order that the First Respondent’s costs be payable forthwith. CONCLUSION AND DISPOSITION The only order I will make is that the Applicant pay the First Respondent’s costs thrown away by reason of the amendment of the pleadings undertaken pursuant to the orders of 10 September 2021.