FEDERAL COURT OF AUSTRALIA Meaden v Bell Potter Securities Limited (No 3) [2012] FCA 1394 Citation: Meaden v Bell Potter Securities Limited (No 3) [2012] FCA 1394 Parties: JILLIAN ANNETTA MEADEN, DAVID DARVILL, ELRYG NOMINEES PTY LTD (ATF THE ELRYG NOMINEES SUPERANNUATION FUND), YAEL SUPER, SHULVO INVESTMENTS PTY LTD (IN LIQUIDATION), ROOSEYCORP PTY LTD ACN 125 400 080 (ATF NORLEX SUPER FUND), TECHNICAL INVESTING PTY LTD ACN 111 646 032 (ATF TECHNICAL INVESTING ABSOLUTE RETURN FUND), KAS DEVELOPMENTS PTY LTD ACN 065 305 204, NEIL MOUNT AND GEOFFREY JONES (ATF NEIL MOUNT SUPERANNUATION FUND ACCOUNT), MDS TILING PTY LTD ACN 096 842 152, PETER GEOFFREY TURNER AND ZENA TURNER (ATF THE P&Z SUPER FUND), CHRISTINE HILDEBRAND, CHRISTOPHER HO, IATRIX ENTERPRISES PTY LTD ACN 113 233 159, TPC PTY LTD ACN 000 823 414 (ATF THE ADAM FREIER FAMILY TRUST), PETER COPE PTY LTD ACN 123 888 586 (ATF COPE FAMILY SUPERANNUATION FUND), HAMMOND ROYCE CORPORATION PTY LTD ACN 005 562 050 (ATF LEN DAVID SUPER FUND), HAYSON BLOODSTOCK PTY LTD ACN 108 655 367, HAYSON SUPER INVESTMENTS PTY LTD ACN 108 655 376, 242 CAPITAL PTY LTD ACN 123 073 754 (ATF 288 SUPERANNUATION FUND), QUATRO FINANCIAL SERVICES PTY LTD ACN 108 057 870 (IN LIQUIDATION), JADWIGA MAJ, ROLAND HELBY, CHRISTOPHER PERDIS, PETER HALL (ATF SANDRA & PETER HALL TRUST), CLARE PLUMBING SERVICES SUPER FUND ACCOUNT PTY LTD ACN 003 814 257, VICPAR HOLDINGS PTY LTD ACN 113 077 419 (ATF VICPAR TRUST) (IN LIQUIDATION), ANDREW GEORGE, C A ARCHER HOLDINGS PTY LTD ACN 131 711 898 (ATF THE CA MELBOURNE SUPER FUND ACCOUNT), CYNTHIA ARCHER, ROSS GEORGE, DAVID AZAR, BRETT JOHNSON, WOODVEST PTY LTD ACN 001 659 892 (ATF WOODVEST PTY SUPERANNUATION FUND ACCOUNT), TIM STAR, ANNE AZAR, RICHARD AZAR, CRANPORT PTY LTD ACN 003 854 000, SOLOMONS & SHAW PTY LTD ACN 089 034 060, CHAGALL INTERNATIONAL PTY LTD ACN 084 160 583, MARIANNE DOWNS, STEVEN AND GLENDA SKEELS, ANDREW RANDALL, RYAN CROSS, SIMON MCLACHLAN, JOYBECK PTY LTD ACN 050 236 863 (ATF BLACK FAMILY TRUST), BRETT TYACK, JTW TRADING PTY LTD ACN 105 305 333, DRCW TRADING PTY LTD ACN 105 303 777, LAURAINE WORTHINGTON, APPLIKOTE PTY LIMITED ACN 010 446 269, PETER GIBSON AND KYLIE RUSSELL, ANDREW HARE (ATF HALES DOUGLAS HARE SUPERANNUATION FUND), BRETT MATTHEW LOUDEN & MELANIE JOY LOUDEN, ROGAN YATES, HOMEBOY PTY LTD ACN 123 378 512, KENOATH PTY LTD ACN 074 397 667, CHARMAINE PAYTEN, HELEN AND RICHARD PERESE, SHARPAZZ PTY LTD ACN 958 037 665, JUSTINE ASHTON, TRANSWORLD CHEMICAL (AUST) PTY LTD ACN 005 625 981, CHRISTOPHER SPURRIER, MISTYGLARE PTY LTD ACN 089 670 888, DOUG AND LYNETTE ELLEN PADDON (ATF PADDON FAMILY SUPER FUND), SIEGFRIED LINK, IAN MILLER, LEE MILLER and VERONIQUE GUICHON v BELL POTTER SECURITIES LIMITED ACN 006 390 772 File number: NSD 1310 of 2010 Judge: EDMONDS J Date of judgment: 14 December 2012 Catchwords: COSTS – application for certain costs orders made in favour of the respondent to be taxable and payable forthwith – whether demands of justice require that there be a departure from the general practice that a party is not entitled to have a bill of costs taxed until the principal proceeding is concluded – relevant circumstances include that the respondent will be out of pocket for its costs for a very long time and that the case to which the costs orders relate has, in large part, been abandoned Held: Application allowed in part Legislation: Federal Court of Australia Act 1976 (Cth) s 33N Federal Court Rules 1979 (Cth) O 62 Cases cited: Australia Agricultural Co Ltd v AMP Life Ltd [2003] FCA 1134 (17 October 2003) applied Date of hearing: 1 November 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 8 Counsel for the Applicant: Mr CD Freeman Solicitor for the Applicant: Slater & Gordon Lawyers Counsel for the Respondent: Mr JAC Potts Solicitor for the Respondent: Speed & Stracey Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1310 of 2010 BETWEEN: JILLIAN ANNETTA MEADEN First Applicant DAVID DARVILL Second Applicant ELRYG NOMINEES PTY LTD (ATF THE ELRYG NOMINEES SUPERANNUATION FUND) Third Applicant YAEL SUPER Fourth Applicant SHULVO INVESTMENTS PTY LTD (IN LIQUIDATION) Fifth Applicant ROOSEYCORP PTY LTD ACN 125 400 080 (ATF NORLEX SUPER FUND) Sixth Applicant TECHNICAL INVESTING PTY LTD ACN 111 646 032 (ATF TECHNICAL INVESTING ABSOLUTE RETURN FUND) Seventh Applicant KAS DEVELOPMENTS PTY LTD ACN 065 305 204 Eighth Applicant NEIL MOUNT AND GEOFFREY JONES (ATF NEIL MOUNT SUPERANNUATION FUND ACCOUNT) Ninth Applicant MDS TILING PTY LTD ACN 096 842 152 Tenth Applicant PETER GEOFFREY TURNER AND ZENA TURNER (ATF THE P&Z SUPER FUND) Eleventh Applicant CHRISTINE HILDEBRAND Twelfth Applicant CHRISTOPHER HO Thirteenth Applicant IATRIX ENTERPRISES PTY LTD ACN 113 233 159 Fourteenth Applicant TPC PTY LTD ACN 000 823 414 (ATF THE ADAM FREIER FAMILY TRUST) Fifteenth Applicant PETER COPE PTY LTD ACN 123 888 586 (ATF COPE FAMILY SUPERANNUATION FUND) Sixteenth Applicant HAMMOND ROYCE CORPORATION PTY LTD ACN 005 562 050 (ATF LEN DAVID SUPER FUND) Seventeenth Applicant HAYSON BLOODSTOCK PTY LTD ACN 108 655 367 Eighteenth Applicant HAYSON SUPER INVESTMENTS PTY LTD ACN 108 655 376 Nineteenth Applicant 242 CAPITAL PTY LTD ACN 123 073 754 (ATF 288 SUPERANNUATION FUND) Twentieth Applicant QUATRO FINANCIAL SERVICES PTY LTD ACN 108 057 870 (IN LIQUIDATION) Twenty-First Applicant JADWIGA MAJ Twenty-Second Applicant ROLAND HELBY Twenty-Third Applicant CHRISTOPHER PERDIS Twenty-Fourth Applicant PETER HALL (ATF SANDRA & PETER HALL TRUST) Twenty-Fifth Applicant CLARE PLUMBING SERVICES SUPER FUND ACCOUNT PTY LTD ACN 003 814 257 Twenty-Sixth Applicant VICPAR HOLDINGS PTY LTD ACN 113 077 419 (ATF VICPAR TRUST) (IN LIQUIDATION) Twenty-Seventh Applicant ANDREW GEORGE Twenty-Eighth Applicant C A ARCHER HOLDINGS PTY LTD ACN 131 711 898 (ATF THE CA MELBOURNE SUPER FUND ACCOUNT) Twenty-Ninth Applicant CYNTHIA ARCHER Thirtieth Applicant ROSS GEORGE Thirty-First Applicant DAVID AZAR Thirty-Second Applicant BRETT JOHNSON Thirty-Third Applicant WOODVEST PTY LTD ACN 001 659 892 (ATF WOODVEST PTY SUPERANNUATION FUND ACCOUNT) Thirty-Fourth Applicant TIM STAR Thirty-Fifth Applicant ANNE AZAR Thirty-Sixth Applicant RICHARD AZAR Thirty-Seventh Applicant CRANPORT PTY LTD ACN 003 854 000 Thirty-Eighth Applicant SOLOMONS & SHAW PTY LTD ACN 089 034 060 Thirty-Ninth Applicant CHAGALL INTERNATIONAL PTY LTD ACN 084 160 583 Fortieth Applicant MARIANNE DOWNS Forty-First Applicant STEVEN AND GLENDA SKEELS Forty-Second Applicant ANDREW RANDALL Forty-Third Applicant RYAN CROSS Forty-Fourth Applicant SIMON MCLACHLAN Forty-Fifth Applicant JOYBECK PTY LTD ACN 050 236 863 (ATF BLACK FAMILY TRUST) Forty-Sixth Applicant BRETT TYACK Forty-Seventh Applicant JTW TRADING PTY LTD ACN 105 305 333 Forty-Eighth Applicant DRCW TRADING PTY LTD ACN 105 303 777 Forty-Ninth Applicant LAURAINE WORTHINGTON Fiftieth Applicant APPLIKOTE PTY LIMITED ACN 010 446 269 Fifty-First Applicant PETER GIBSON AND KYLIE RUSSELL Fifty-Second Applicant ANDREW HARE (ATF HALES DOUGLAS HARE SUPERANNUATION FUND) Fifty-Third Applicant BRETT MATTHEW LOUDEN & MELANIE JOY LOUDEN Fifty-Fourth Applicant ROGAN YATES Fifty-Fifth Applicant HOMEBOY PTY LTD ACN 123 378 512 Fifty-Sixth Applicant KENOATH PTY LTD ACN 074 397 667 Fifty-Seventh Applicant CHARMAINE PAYTEN Fifty-Eighth Applicant HELEN AND RICHARD PERESE Fifty-Ninth Applicant SHARPAZZ PTY LTD ACN 958 037 665 Sixtieth Applicant JUSTINE ASHTON Sixty-First Applicant TRANSWORLD CHEMICAL (AUST) PTY LTD ACN 005 625 981 Sixty-Second Applicant CHRISTOPHER SPURRIER Sixty-Third Applicant MISTYGLARE PTY LTD ACN 089 670 888 Sixty-Fourth Applicant DOUG AND LYNETTE ELLEN PADDON (ATF PADDON FAMILY SUPER FUND) Sixty-Fifth Applicant SIEGFRIED LINK Sixty-Sixth Applicant IAN MILLER Sixty-Seventh Applicant LEE MILLER Sixty-Eighth Applicant VERONIQUE GUICHON Sixty-Ninth Applicant AND: BELL POTTER SECURITIES LIMITED ACN 006 390 772 Respondent JUDGE: EDMONDS J DATE OF ORDER: 14 DECEMBER 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The respondent's costs thrown away by the amendments to the statement of claim filed 6 October 2010 by reason of the filing of a further amended statement of claim be taxable and payable by the first applicant forthwith. 2. The respondent's costs of its application dated 27 September 2011 for an order under s 33N of the Federal Court of Australia Act 1976 (Cth) be taxable and payable by the first applicant forthwith. 3. Costs of the hearing on 1 November 2012 be costs in the cause. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1310 of 2010 BETWEEN: JILLIAN ANNETTA MEADEN First Applicant DAVID DARVILL Second Applicant ELRYG NOMINEES PTY LTD (ATF THE ELRYG NOMINEES SUPERANNUATION FUND) Third Applicant YAEL SUPER Fourth Applicant SHULVO INVESTMENTS PTY LTD (IN LIQUIDATION) Fifth Applicant ROOSEYCORP PTY LTD ACN 125 400 080 (ATF NORLEX SUPER FUND) Sixth Applicant TECHNICAL INVESTING PTY LTD ACN 111 646 032 (ATF TECHNICAL INVESTING ABSOLUTE RETURN FUND) Seventh Applicant KAS DEVELOPMENTS PTY LTD ACN 065 305 204 Eighth Applicant NEIL MOUNT AND GEOFFREY JONES (ATF NEIL MOUNT SUPERANNUATION FUND ACCOUNT) Ninth Applicant MDS TILING PTY LTD ACN 096 842 152 Tenth Applicant PETER GEOFFREY TURNER AND ZENA TURNER (ATF THE P&Z SUPER FUND) Eleventh Applicant CHRISTINE HILDEBRAND Twelfth Applicant CHRISTOPHER HO Thirteenth Applicant IATRIX ENTERPRISES PTY LTD ACN 113 233 159 Fourteenth Applicant TPC PTY LTD ACN 000 823 414 (ATF THE ADAM FREIER FAMILY TRUST) Fifteenth Applicant PETER COPE PTY LTD ACN 123 888 586 (ATF COPE FAMILY SUPERANNUATION FUND) Sixteenth Applicant HAMMOND ROYCE CORPORATION PTY LTD ACN 005 562 050 (ATF LEN DAVID SUPER FUND) Seventeenth Applicant HAYSON BLOODSTOCK PTY LTD ACN 108 655 367 Eighteenth Applicant HAYSON SUPER INVESTMENTS PTY LTD ACN 108 655 376 Nineteenth Applicant 242 CAPITAL PTY LTD ACN 123 073 754 (ATF 288 SUPERANNUATION FUND) Twentieth Applicant QUATRO FINANCIAL SERVICES PTY LTD ACN 108 057 870 (IN LIQUIDATION) Twenty-First Applicant JADWIGA MAJ Twenty-Second Applicant ROLAND HELBY Twenty-Third Applicant CHRISTOPHER PERDIS Twenty-Fourth Applicant PETER HALL (ATF SANDRA & PETER HALL TRUST) Twenty-Fifth Applicant CLARE PLUMBING SERVICES SUPER FUND ACCOUNT PTY LTD ACN 003 814 257 Twenty-Sixth Applicant VICPAR HOLDINGS PTY LTD ACN 113 077 419 (ATF VICPAR TRUST) (IN LIQUIDATION) Twenty-Seventh Applicant ANDREW GEORGE Twenty-Eighth Applicant C A ARCHER HOLDINGS PTY LTD ACN 131 711 898 (ATF THE CA MELBOURNE SUPER FUND ACCOUNT) Twenty-Ninth Applicant CYNTHIA ARCHER Thirtieth Applicant ROSS GEORGE Thirty-First Applicant DAVID AZAR Thirty-Second Applicant BRETT JOHNSON Thirty-Third Applicant WOODVEST PTY LTD ACN 001 659 892 (ATF WOODVEST PTY SUPERANNUATION FUND ACCOUNT) Thirty-Fourth Applicant TIM STAR Thirty-Fifth Applicant ANNE AZAR Thirty-Sixth Applicant RICHARD AZAR Thirty-Seventh Applicant CRANPORT PTY LTD ACN 003 854 000 Thirty-Eighth Applicant SOLOMONS & SHAW PTY LTD ACN 089 034 060 Thirty-Ninth Applicant CHAGALL INTERNATIONAL PTY LTD ACN 084 160 583 Fortieth Applicant MARIANNE DOWNS Forty-First Applicant STEVEN AND GLENDA SKEELS Forty-Second Applicant ANDREW RANDALL Forty-Third Applicant RYAN CROSS Forty-Fourth Applicant SIMON MCLACHLAN Forty-Fifth Applicant JOYBECK PTY LTD ACN 050 236 863 (ATF BLACK FAMILY TRUST) Forty-Sixth Applicant BRETT TYACK Forty-Seventh Applicant JTW TRADING PTY LTD ACN 105 305 333 Forty-Eighth Applicant DRCW TRADING PTY LTD ACN 105 303 777 Forty-Ninth Applicant LAURAINE WORTHINGTON Fiftieth Applicant APPLIKOTE PTY LIMITED ACN 010 446 269 Fifty-First Applicant PETER GIBSON AND KYLIE RUSSELL Fifty-Second Applicant ANDREW HARE (ATF HALES DOUGLAS HARE SUPERANNUATION FUND) Fifty-Third Applicant BRETT MATTHEW LOUDEN & MELANIE JOY LOUDEN Fifty-Fourth Applicant ROGAN YATES Fifty-Fifth Applicant HOMEBOY PTY LTD ACN 123 378 512 Fifty-Sixth Applicant KENOATH PTY LTD ACN 074 397 667 Fifty-Seventh Applicant CHARMAINE PAYTEN Fifty-Eighth Applicant HELEN AND RICHARD PERESE Fifty-Ninth Applicant SHARPAZZ PTY LTD ACN 958 037 665 Sixtieth Applicant JUSTINE ASHTON Sixty-First Applicant TRANSWORLD CHEMICAL (AUST) PTY LTD ACN 005 625 981 Sixty-Second Applicant CHRISTOPHER SPURRIER Sixty-Third Applicant MISTYGLARE PTY LTD ACN 089 670 888 Sixty-Fourth Applicant DOUG AND LYNETTE ELLEN PADDON (ATF PADDON FAMILY SUPER FUND) Sixty-Fifth Applicant SIEGFRIED LINK Sixty-Sixth Applicant IAN MILLER Sixty-Seventh Applicant LEE MILLER Sixty-Eighth Applicant VERONIQUE GUICHON Sixty-Ninth Applicant AND: BELL POTTER SECURITIES LIMITED ACN 006 390 772 Respondent JUDGE: EDMONDS J DATE: 14 DECEMBER 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 1 November 2012, I heard an application by the respondent that certain costs orders I had made in its favour be taxable and payable forthwith. Chronologically, these concerned costs orders made: (1) On 24 February 2011, ordering the first applicant to pay the respondent's costs of bringing a motion for orders that the first applicant provide the respondent with further and better particulars of her statement of claim previously requested in correspondence from the respondent's solicitors. (2) On 2 May 2012, ordering the first applicant to pay the respondent's costs of its application for an order under s 33N of the Federal Court of Australia Act 1976 (Cth) that the proceedings no longer continue as representative proceedings under Pt IVA of that Act. (3) On 1 November 2012, ordering the first applicant to pay the respondent's costs thrown away by the amendments to the statement of claim filed 6 October 2010 by reason of the filing of a further amended statement of claim foreshadowed in anterior orders made the same day. 2 In opposing the application, counsel for the first applicant referred me to an unreported judgment of Sackville J in Australian Agricultural Co Ltd v AMP Life Ltd [2003] FCA 1134 (17 October 2003) in which AMP sought a similar order under O 62 r 3 of the Federal Court Rules 1979 (Cth) ("FCR"), in particular under sub-r (2). At [12] of his Honour's reasons, reference was made to earlier decisions of single judges of the Court in the following terms: In Life Airbag Co of Australia Pty Ltd v Life Airbag Co (New Zealand) Ltd [1998] FCA 545, Branson J said this about FCR, O 62 r 3: "Order 62 rule 3 does not give any indication of the matters to which the Court is to have regard in determining whether to order that certain costs be paid forthwith notwithstanding that the proceeding is not concluded. Olney J in Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297 at 312 expressed the view that – 'the discretion should be exercised in favour of a party who establishes that the demands of justice require that there be a departure from what appears to be the general practice envisaged by the rule, namely, that an order for costs of an interlocutory proceeding shall not entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded.' In Allstate Life Insurance Co v Australia & New Zealand Banking Group Limited (No 14) (Lindgren J, 18 August 1995, unreported) his Honour expressed the view that the provision of the Federal Court Rules allowing orders that costs be paid forthwith is 'possibly under utilised'. His Honour indicated that where the final determination of a proceeding was 'far away', it might be appropriate for use to be made of O 62 r 3. In Allstate Life Insurance Co v Australia & New Zealand Banking Group Limited (No 13) (Full Federal Court, 17 August 1995, unreported) the Court, in considering the costs of an interlocutory appeal, said: 'The litigation is complex. It is unlikely that final judgment will be given until late 1996 or even later. The successful parties to the appeals before this Court will therefore, in the ordinary course of events, not recover their costs for a long time. It would be wrong if the successful parties do not enjoy the fruits of their order for costs for such a long time. The parties entitled to the benefit of the order for costs which this Court has made in appeals from interlocutory orders should not be deprived of that benefit until the case has been finally disposed of.'" 3 In the course of opposing the respondent's application, counsel for the first applicant made the following points: (1) The applicants had agreed to give security for costs of the proceedings and a bank guarantee for $240,000 was to be handed over the following week. (2) All that I had determined to date was the most appropriate vehicle for the determination of the dispute, not that there was no cause of action for misleading or deceptive conduct or market manipulation. (3) The essence of the first applicant's case, as originally instituted, remains the essence of the case today; everything flows from the publication of the 10 company updates. 4 In conclusion counsel contended that nothing had been put by the respondent to displace the ordinary rule; nothing had been put which would require the demands of justice to go beyond what had already been ordered, namely, a costs order in the respondent's favour. 5 I agree with these submissions so far as the costs order of 24 February 2011 is concerned, namely that concerning the respondent's motion for further and better particulars of the first applicant's statement of claim. It is difficult to conceive how justice demands that this costs order should be the subject of the further order sought by the respondent. 6 The two remaining costs orders are not as easy of resolution. Counsel for the respondent put the following points in support of his application: (1) The respondent will likely be out of pocket for its costs for a very long time; the fact that there is, in the face of the order for security for costs, little or no risk that the costs will not ultimately be paid, is not to the point. (2) In response to the first applicant's point that all I had decided to date went to the appropriateness of the vehicle for determination of the dispute, the case as previously pressed has, in large part, been abandoned, so what is now left is a very small subset with a different group of people; what has happened to date is, in large part, redundant. (3) The presence of a litigation funder weighs on the respective interests of the respondent and the litigation funder as to who should be out of pocket pending the end of the proceedings. (4) Not only is what has happened largely redundant, but what is left is exclusive reliance on written representation which is entirely different from the case that was initially pressed. 7 I agree. 8 I am of the view that the respondent should not be out of pocket for the costs orders made in its favour on 2 May and 1 November 2012; justice demands that, in the circumstances to which I have referred, principally by way of the respondent's submissions, the further orders sought should be made save in respect of the costs order made on 24 February 2011. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. Associate: Dated: 14 December 2012