FEDERAL COURT OF AUSTRALIA J P Morgan Portfolio Services Limited v Deloitte Touche Tohmatsu [2006] FCA 84 J P MORGAN PORTFOLIO SERVICES LIMITED v DELOITTE TOUCHE TOHMATSU, MOXLABIA PTY LTD, GREENWOOD CHALLONER & CO, ALLAN MARTIN DELANEY AND A M DELANEY NOMINEES PTY LTD NSD 1790 of 2004 WILCOX J 3 FEBRUARY 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1790 of 2004 BETWEEN: J P MORGAN PORTFOLIO SERVICES LIMITED APPLICANT AND: DELOITTE TOUCHE TOHMATSU FIRST RESPONDENT MOXLABIA PTY LTD SECOND RESPONDENT GREENWOOD CHALLONER & CO THIRD RESPONDENT ALLAN MARTIN DELANEY FOURTH RESPONDENT A M DELANEY NOMINEES PTY LTD FIFTH RESPONDENT JUDGE: WILCOX J DATE OF ORDER: 3 FEBRUARY 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The notice of motion of 9 December 2005 be dismissed. 2. The applicant in the motion pay the respondents' costs on a party/party basis. 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 NSD 1790 of 2004 BETWEEN: J P MORGAN PORTFOLIO SERVICES LIMITED APPLICANT AND: DELOITTE TOUCHE TOHMATSU FIRST RESPONDENT MOXLABIA PTY LTD SECOND RESPONDENT GREENWOOD CHALLONER & CO THIRD RESPONDENT ALLAN MARTIN DELANEY FOURTH RESPONDENT A M DELANEY NOMINEES PTY LTD FIFTH RESPONDENT JUDGE: WILCOX J DATE: 3 FEBRUARY 2006 PLACE: SYDNEY REASONS FOR JUDGMENT WILCOX J: 1 On 16 November 2005, I made some orders in relation to an interlocutory application by the respondents in the principal proceeding. I dismissed a notice of motion filed on 22 July 2005 by which the respondents sought summary dismissal or a permanent stay of the principal proceeding. I ordered that the applicants on the motion - that is, the respondents to the principal proceeding - pay the costs of the motion incurred by the respondent to the motion, JP Morgan Portfolio Services Limited ('J P Morgan'). 2 On 9 December 2005, J P Morgan filed a notice of motion, seeking two specific orders in relation to the costs order I made on 16 November 2005. The first proposed order was that the costs incurred by the applicant in respect of, and incidental to, the respondent's notices to produce of 10 August 2005 and 17 August 2005 be assessed on an indemnity basis. The second proposed order was that the costs awarded on 16 November 2005 be taxed and payable forthwith. 3 Both orders proposed by J P Morgan would require the Court to depart from its ordinary practice. It is open to the Court to do this in an appropriate case, but invitations to depart from ordinary practice are not to be encouraged. It is an unfortunate situation where a routine order regarding costs of a motion itself becomes the subject of a fresh notice of motion, with consequential demands on court time and added cost to the parties. 4 In support of the proposed order for indemnity costs, it is asserted on behalf of the applicant that the notices to produce were unnecessary or too wide. I have not directed my mind to the correctness of those assertions, but I have sought information as to what would be the difference, in practical terms, between taxation of those costs on a party/party basis and an award of indemnity costs. Unfortunately, Mr Stoljar, who appeared for the applicant, was unable to give me any information about that matter. I am left in the position that I have no idea what would be the effect, in dollar terms, of my acceding to the application for indemnity costs. 5 I have a longstanding reluctance to grant indemnity costs. The reason, simply, is that this course puts the Court in the position of imposing a costs burden that may, when properly examined, turn out to be excessive, in terms of the work done, the rates charged or both. In the present case, I see no reason to take a different view. I think the usual rule should apply, permitting recovery of only party/party costs. If it is necessary for me to make it clear, and I do not think it is, that the costs order of 16 November 2005 covered all that was necessary and incidental to the preparation for the hearing of the notice of motion, then I make this clear. This should include compliance with any notices to produce. 6 The second proposed order is that the costs be taxed and payable forthwith. I do not have any problem in principle about orders of that nature. It is a question of discretion in each case. In the present case, the only factor that Mr Stoljar has been able to point to is the circumstance, which is undoubtedly true, that it will be some time before the matter is finalised by a hearing. 7 This is not a case where it can be said that the respondents, the applicants in the original notice of motion, were dilatory or otherwise caused problems for J P Morgan. Nor is this a case where it can be said that lack of access to the costs, at this stage, will put J P Morgan in a position where it is unable to continue to fund the litigation. There is a good reason for the usual practice: the possibility that later costs orders may offset the effect of an earlier order. 8 A further factor inclining me against acceding to the present application is that the order I made on 16 November 2005 is the subject of an unresolved application for leave to appeal. Until that application is resolved, and any consequential appeal determined, it will not be possible to know whether the costs order I made on 16 November 2005 will stand. It would be unfortunate if time in assessing and taxing those costs was wasted because the costs order was set aside later. 9 I am not persuaded I should accede to either of the orders sought in the motion of 9 December 2005. I will dismiss that motion and order that the applicant in the motion pay the respondent's costs of the motion on a party/party basis. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox. Associate: Dated: 14 February 2006 Counsel for the Applicant in the principal proceeding: Mr J Stoljar Solicitor for the Applicant in the principal proceeding: Clayton Utz Counsel for the Respondents in the principal proceeding: Mr A Spencer Solicitor for the Respondents in the principal proceeding: Holding Redlich Date of Hearing: 3 February 2006 Date of Judgment: 3 February 2006