FEDERAL COURT OF AUSTRALIA
Wong v Wong (No 2) [2022] FCA 269
File number(s): NSD 682 of 2021 Judgment of: HALLEY J Date of judgment: 24 March 2022 Catchwords: COSTS – costs of interlocutory application by second respondent seeking declaration that settlement agreement was binding and enforceable – where applicant’s primary submission was that each party should bear its own costs – where second respondent submitted that applicant and third respondent should pay second respondent’s costs up to and including first hearing day, and third respondent pay second respondent’s costs on an indemnity basis from first hearing day – where third respondent’s primary submission was that as between third respondent and second respondent, each party should pay its own costs, and otherwise applicant should pay second respondent’s costs – second respondent wholly successful – implications of late withdrawal by second respondent of application for an executory order – where each party took different positions as to whether there was a binding and enforceable agreement and the relief that should be granted – appropriate costs order is that applicant pay 75%, and third respondent pay 25%, of the second respondent’s costs of and incidental to the application, as agreed or assessed on usual basis Legislation: Federal Court of Australia Act 1976 (Cth) s 43
Federal Court Rules 2011 (Cth) rr 40.01, 40.04
Cases cited: Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (No 2) [2017] FCAFC 110
Alhalek v Quintiliani trading as Kells Lawyers (No 3) [2021] FCAFC 150
Commissioner of Taxation v Bosanac (No 2) [2022] FCAFC 5
Elite Protective Personnel Pty Ltd & Anor v Salmon (No 2) [2007] NSWCA 373
Faraday v Rappaport [2007] NSWSC 253
Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 327 ALR 192; [2015] HCA 35
Hughes v Western Australian Cricket Association (Inc) (1986) 8 ATPR 40-748
Moroccanoil Israel Ltd v Aldi Foods Pty Ltd (No 2) [2017] FCA 1393
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Queensland North Australia Pty Ltd v Takeovers Panel (No 2) (2015) 236 FCR 370; [2015] FCAFC 128
Ruddock and Others v Vadarlis and Others (No 2) (2001) 115 FCR 229; [2001] FCA 1865
Smith v Starke, in the matter of Action Paintball Games Pty Ltd (in liq) (No 3) [2016] FCA 40
Summers v Repatriation Commission (No 2) [2015] FCAFC 64
Vantage Holdings Pty Ltd v Huang (No 2) (2015) 232 FCR 556; [2015] FCA 185
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 65 Date of last submission/s: 28 February 2022 Date of hearing:
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- AGLC
- Wong v Wong (No 2) [2022] FCA 269
- Case
- [2022] FCA 269
- Decision Date
CaseChat Overview and Summary
The legal issue before the court was how to determine the appropriate costs order in light of the late withdrawal by the second respondent of their application for an executory order, and the different positions taken by the parties as to whether there was a binding and enforceable agreement and the relief that should be granted. The court considered the competing contentions on costs advanced by the parties and concluded that the appropriate costs order was that the applicant should pay 75% and the third respondent should pay 25% of the second respondent’s costs of and incidental to the application, as agreed or assessed on the usual basis.
The court found that the Substantive Dispute and the Relief Dispute, although conceptually distinct, were factually interrelated, and any attempt to allocate costs incurred in respect of each dispute in the period leading up to the conclusion of the hearing on 6 October 2021 would likely be problematic and lead to further disputes. The interrelationship was highlighted by the position taken by the third respondent that it did not wish to be heard on whether the Agreement was binding and enforceable but at the same time wished to oppose the making of any declaration to that effect. The court also found that any costs order that the applicant and the third respondent pay the costs of the second respondent in equal proportions up to the conclusion of the 6 October 2021 hearing would not fairly reflect the comparative significance of the Substantive Dispute compared with the Relief Dispute. The court rejected the applicant's argument that the alleged conduct of the second respondent provided any basis for them to be deprived of their costs, finding that the allegations of misconduct were not substantiated.
The court made orders that the applicant should pay 75% of the costs of the second respondent of and incidental to the hearing and determination of the interlocutory application, as agreed or assessed, and that the third respondent should pay 25% of the costs of the second respondent of and incidental to the hearing and determination of the interlocutory application, as agreed or assessed. The court made no order as to the costs of the parties with respect to the contest on costs incurred with respect to the hearing and determination of the interlocutory application.
Orders
Orders of the court
1. The applicant is to pay 75% of the costs of the second respondent of and incidental to the hearing and determination of the interlocutory application of the second respondent dated 24 August 2021 (interlocutory application), as agreed or assessed.
2. The third respondent is to pay 25% of the costs of the second respondent of and incidental to the hearing and determination of the interlocutory application, as agreed or assessed.
3. There is to be no order as to the costs of the parties with respect to the contest on costs incurred with respect to the hearing and determination of the interlocutory application.
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
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Ratio Decidendi
Legal Principle Established
Fifth, Bankwest submits in the alternative that if the Court considers it appropriate that Bankwest pay a portion of the Trustee’s costs, it should be ordered to pay no more than 20% of the Trustee’s costs, being its estimate of the proportion of time spent on the Relief Dispute. CONSIDERATION It is convenient to adopt the taxonomy used by Bankwest of the “Substantive Dispute” and the “Relief Dispute” for the purpose of addressing the question of costs with respect to the hearing and determination of the interlocutory application. The Trustee was wholly successful on the Substantive Dispute and the ground that it pressed with respect to the Relief Dispute. In the usual course costs would therefore simply follow the event and the Trustee would be entitled to its costs. Any costs orders, however, in the present case need to have regard to the potential implications on costs of the late withdrawal of the application for the Executory Order, and the different positions taken by the parties to the substantive question of whether there was a binding and enforceable agreement and the relief that should be granted. In the light of these two considerations and the competing contentions on costs advanced by Mr Wong, the Trustee and Bankwest, I have concluded that having regard to the relevant principles and the justice of the case the appropriate costs order is that Mr Wong should pay 75% of the Trustee’s costs of the interlocutory application and Bankwest should pay 25% of the Trustee’s costs of the interlocutory application, on the usual basis. I have reached that conclusion for the following reasons. First, although the Substantive Dispute and the Relief Dispute are conceptually distinct, they were factually interrelated and any attempt to allocate costs incurred in respect of each dispute in the period leading up the conclusion of the hearing on 6 October 2021 would likely be problematic and lead to further disputes. The interrelationship was highlighted by the position taken by Bankwest that it did not wish to be heard on whether the Agreement was binding and enforceable but at the same time wished to oppose the making of any declaration to that effect. Second, a costs order that Mr Wong pay the Trustee’s costs up to the conclusion of the 6 October 2021 hearing and Bankwest pay the Trustee’s costs from 7 October 2021 would not take into account the costs incurred by the Trustee in response to the position taken by Bankwest on the Relief Dispute prior to 7 October 2021. Third, any costs order that Mr Wong and Bankwest pay the costs of the Trustee in equal proportions up to the conclusion of the 6 October 2021 hearing would not fairly reflect the comparative significance of the Substantive Dispute compared with the Relief Dispute. Fourth, I do not accept that the alleged conduct of the Trustee relied upon by Mr Wong provided any basis for the Trustee to be deprived of his costs. The allegations of misconduct were not substantiated. Further, the conduct of the Trustee in providing for a “sum certain” and providing a draft deed for consideration was not conduct that was “bound to cause disputation” and “invited or materially contributed” to the dispute having to be determined by the Court. In the context of a commercial resolution of a dispute it was conduct that was entirely unexceptional.