CATCHWORDS Practice and Procedure - motion seeking leave under Order 62 rule 3 of the Federal Court Rules to assess or tax costs of a discrete interlocutory proceeding forthwith and for payment forthwith of same - tests applicable - whether circumstances take case outside the ordinary rule Practice and Procedure - motion seeking stay of proceedings pending payment of costs - whether premature Federal Court Rules O 62 r 3 ANTHONY VASYLI v AOL INTERNATIONAL PTY LIMITED & ANOR No. NG 219 of 1996 CORAM: Lehane J PLACE: Sydney DATE: 2 September 1996 IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISION ) No. NG 219 of 1996 BETWEEN: ANTHONY VASYLI Applicant AND: AOL INTERNATIONAL PTY LIMITED First Respondent PHILLIP VASYLI Second Respondent CORAM: Lehane J PLACE: Sydney DATE: 2 September 1996 MINUTE OF ORDERS THE COURT ORDERS THAT: 1. The respondents have leave to assess or tax their costs ordered on 19 August 1996 forthwith. 2. Such costs include the respondents' costs as and from the date their solicitors made a formal request for particulars of the statement of claim, being 27 March 1996. 3. The said costs be paid forthwith after taxation or assessment. 4. The costs of todays' motion are reserved. 5. The parties are granted liberty to apply on three days' notice. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISION ) No. NG 219 of 1996 BETWEEN: ANTHONY VASYLI Applicant AND: AOL INTERNATIONAL PTY LIMITED First Respondent PHILLIP VASYLI Second Respondent CORAM: Lehane J PLACE: Sydney DATE: 2 September 1996 EXTEMPORE REASONS FOR JUDGMENT LEHANE J: On 19 August 1996 I made orders on a motion of the respondents that the applicant's statement of claim be struck out and that the applicant pay the respondents' costs of the motion. I declined to exercise the jurisdiction to dismiss the proceedings summarily and I granted the applicant leave to file and serve within 28 days from 19 August 1996 an amended statement of claim. On the application of the respondent, made at the time I delivered judgment, I granted the parties liberty to apply on three days' notice. The respondents now apply by motion in accordance with a notice of motion filed on 27 August 1996 for leave under Order 62 rule 3 of the Federal Court Rules to assess or tax their costs forthwith and for payment forthwith of those costs after taxation or assessment. The respondents also seek an order staying the proceedings pending payment of the whole of those costs. The power under Order 62 rule 3 to order taxation and payment forthwith, notwithstanding that the proceedings are not concluded, is one which has been rarely used. It is well established in this Court that the usual practice is to defer the taxation and payment of costs of interlocutory proceedings until the principal proceedings have been decided. That general rule is enshrined in subrule (1) of Order 62 rule 3. In one of his series of interlocutory judgments in the All State litigation, AllState Life Insurance Co v Australia & New Zealand Banking Group Limited (No 14) 18 August 1995, unreported, Lindgren J suggested that the provision for leave to tax costs before the conclusion of proceedings and to order that those costs be paid forthwith was possibly under utilised. The fact nevertheless remains that the ordinary rule is usually applied; and even where there is a discrete interlocutory proceeding in respect of which a costs order is made, the taxation and payment of those costs are normally deferred until the proceedings are concluded. Mr Morris, who appears for the applicant (the respondent to the motion), argues that there is nothing which should take this matter outside the general rule. He says, additionally, that in circumstances where I have granted leave to file an amended statement of claim within 28 days, the motion is premature and would more appropriately be dealt with at the time when, the 28 days having expired, the applicant either has or has not filed and served an amended statement of claim. Mr Reuben, who appears for the respondents (the applicants on the motion), replies in effect that I ought to make an order on several bases. One is that the effect of my judgment is that despite clear warnings in the correspondence about particulars no action was taken by the applicant to propound a satisfactory amendment of a statement of claim which I have now held, substantially in accordance with the respondents' submissions, to have been totally unsatisfactory. He then says that the substantial result of my judgment of 19 August is that if these proceedings are to continue they will in effect be started again with the filing and service of a further statement of claim which, if it is to stand, will inevitably be significantly different from its predecessor. He says, thirdly, that the respondents, who are resident outside the jurisdiction, are entitled to some protection in circumstances where, as he puts it, they have been brought before the Court here on the footing of an application and a statement of claim which I have held to have been seriously defective. That third argument was put also by Mr Reuben strongly in support of his application for a stay pending payment of costs. This is not altogether an easy matter, particularly given the rather unusual character which the proceedings before me took, seen in the context of a clear practice on the part of the Court to make use of the power in Order 62 rule 3 only in very special circumstances. The justification for the general rule is clear enough, particularly in proceedings in which there are a substantial number of interlocutory applications. Plainly in such circumstances it can be highly inconvenient and may be oppressive if before proceedings are finally concluded there is a series of taxations of costs of a series of interlocutory applications. In the end, however, I have concluded that this is a case which is outside the ordinary rule. I was initially inclined to accept the argument of Mr Morris that it was inappropriate and premature to bring this motion in circumstances where, in any event, within a short period from today the applicant, if he is to continue with these proceedings, must file and serve an amended statement of claim. However, I did, on the motion of the respondents, grant liberty to apply. It is, I think, clear that whatever happens in relation to the future conduct of these proceedings the costs to date, at least since the making of the formal request for particulars of the statement of claim, have been, as Mr Reuben put it, thrown away, and those costs of the respondents are in any event payable by the applicant. The proceedings, if they are to be continued by the filing and service of an amended statement of claim, will to a large extent be new proceedings. Whatever the course of those proceedings, there will in substance be a fresh start and nothing that happens in them will affect the liability of the applicant for the costs which, in accordance with the order made on 19 August 1996, he must pay. In the end, therefore, I think this is one of those rare cases where it is appropriate to make an order for taxation and payment forthwith, and I propose to make the orders set out in paragraphs 1, 2 and 3 of the notice of motion. The application for a stay, however, is quite a different matter. Mr Reuben conceded in his reply that it was in any event appropriate that a stay should not affect the liberty I have already given the applicant to file and serve an amended statement of claim. Certainly it would be inappropriate to make an order now which would deprive the applicant of that opportunity. I think Mr Morris' argument about prematurity is right in relation to the application for a stay. In circumstances where the applicant either may or may not take advantage of his right to file and serve an amended statement of claim and where the content of any such pleading is, of course, as yet unknown, it seems to me wrong to take that step. The appropriate course in my view is to await the expiry of the 28 days from 19 August and the filing and service of any amended statement of claim. Accordingly, I propose to refuse to make an order staying the proceedings. I propose, rather, to grant liberty to apply on the same terms as those on which I granted it on 19 August. That leaves finally the question of the costs of this motion. My view is that, having regard to a number of matters - one being the short time remaining between today and the date on which an amended statement of claim, if it is to be filed, must be filed and another being the respondents' substantial success but partial failure on the motion - the question of the costs of the motion should be deferred pending at least the expiry of the time for filing and service of an amended statement of claim. Accordingly, I propose simply to reserve the costs of today's motion. I make orders 1, 2 and 3 as set out in the notice of motion. The costs of the motion are reserved and the parties have liberty to apply on three days' notice. I certify that this and the preceding 5 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane. Associate: Dated: 2 September 1996 Heard: 2 September 1996 Place: Sydney Decision: 2 September 1996 Appearances:Mr B Morris of counsel instructed by Benjamin & Khoury appeared for the applicant. Mr S Y Reuben of counsel instructed by Cassidy Gibson Howlin appeared for the respondents.