FEDERAL COURT OF AUSTRALIA Ritson v Commissioner of Police, New South Wales Police Force (No 2) [2019] FCA 1069 Appeal from: Application for a lump sum costs order: Ritson v Commissioner of Police, New South Wales Police Force [2017] FCCA 1204 File number: NSD 1029 of 2017 Judge: ROBERTSON J Date of judgment: 9 July 2019 Catchwords: COSTS – where costs order in favour of the present applicant – whether appropriate to make a lump sum costs order in a particular amount – whether set-off against a costs order in favour of the present respondent in other proceedings appropriate – whether disqualifying delay in seeking set-off – whether set-off may amount to a preferential payment if bankruptcy proceedings commenced by the respondent against the applicant – against which costs order in favour of the respondent should the set-off order be made Cases cited: Aristocrat Technologies Australia Pty Ltd v Allam [2017] FCA 812 Miller v DPP (No 2) [2004] NSWCA 249 Re Shaw; Ex parte Andrew v Australia and New Zealand Banking Group Ltd (1977) 31 FLR 118 Dal Pont GE, Law of Costs (4th ed, LexisNexis Butterworths, 2018) at [8.16] Date of hearing: 9 July 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 9 Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondent: Mr P Afshar Solicitor for the Respondent: Coleman Greig Lawyers ORDERS NSD 1029 of 2017 BETWEEN: BRENDAN RITSON Applicant AND: COMMISSIONER OF POLICE, NEW SOUTH WALES POLICE FORCE Respondent JUDGE: ROBERTSON J DATE OF ORDER: 9 JULY 2019 THE COURT ORDERS THAT: 1. Subject to order 2, all of the costs the subject of the orders made by Robertson J on 5 October 2017 be fixed in the amount of $5,190 (Ritson's Costs). 2. If the applicant obtains a refund of his filing fees in the present proceedings, the sum of $5,190 in Order 1 is reduced by the amount of that refund, with effect from the date of these orders. 3. The whole of Ritson's Costs be set off against the costs ordered by Garling J on 21 December 2018 (that had been made in the amount of $6,000). 4. The applicant is prohibited from taking any steps to enforce Ritson's Costs against the respondent. 5. The respondent is prohibited from enforcing the costs orders made by Garling J up to the amount of Ritson's Costs. 6. There be no order as to the costs of the applicant's interlocutory application filed on 22 May 2019, with the effect that each party pays his costs of that application. 7. There be no order as to the costs of the respondent's interlocutory application filed on 8 July 2019, with the effect that each party pays his costs of that application. 8. The applicant's interlocutory application filed on 22 May 2019 is otherwise dismissed. 9. The respondent's interlocutory application filed on 8 July 2019 is otherwise dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT ROBERTSON J: 1 The parties have been unable to agree on the mechanics to give effect to the costs order I made on 5 October 2017 in allowing Mr Ritson's appeal from the judgment of the Federal Circuit Court of Australia: Ritson v Commissioner of Police, New South Wales Police Force [2017] FCA 1192. The amount of costs in issue is a maximum of approximately $5,000. On the last occasion the matter was before the Court, on 29 May 2019, I indicated to the parties that they should be able to resolve the question of the quantum of costs so as to enable a lump sum costs order to be made and the further question of set-off given that the Commissioner has costs orders in his favour in other proceedings involving the Commissioner and Mr Ritson. As it is, a further one and a half hours of argument have been necessary. 2 The matters remaining in issue are, first, whether the fixing of the lump sum amount of $5,190, which is otherwise agreed, should be delayed in light of what Mr Ritson says is his application to the Court for a refund of the filing fees in the present proceedings which comprise a substantial amount of the costs claimed, those filing fees being said to be in the amount of $4,790. I do not have before me the basis of that application and I make no assessment of the likelihood of its success but it seems to me that if Mr Ritson is successful in that application, in whole or in part, that can be accommodated in the form of orders rather than by bringing the matter back before me at further expense to the parties in relation to a relatively modest amount. It seems to me that the Court should order that the lump sum be $5,190 subject to the applicant obtaining a refund, in whole or in part, of his filing fees. If such a refund is obtained then the fixed sum should be reduced accordingly. For example, if Mr Ritson is successful in obtaining a refund in the amount of $4,790 then the lump sum costs order in the present proceedings would be $400. I prefer this approach to the delay and expense of relisting the matter on a date after the determination of Mr Ritson's application to the Court for a refund of his filing fees. 3 The second matter in issue is whether it is appropriate that the whole of Mr Ritson's costs in the present proceedings should be set off either at all or against the costs order made by Garling J in the Supreme Court of New South Wales on 21 December 2018 in the amount of $6,000 or a costs order made, also by Garling J, on 27 September 2013 in the amount of $43,966.79. 4 I am satisfied this Court has power to order a set-off of costs orders when it is equitable to do so, even if the orders are made in different proceedings or courts: see, eg, Miller v DPP (No 2) [2004] NSWCA 249 at [23]-[24] per Young CJ in Eq; Aristocrat Technologies Australia Pty Ltd v Allam [2017] FCA 812 at [14] per Perram J. The matter is discussed in Dal Pont GE, Law of Costs (4th ed, LexisNexis Butterworths, 2018) at [8.16]. There was no dispute before me as to the availability of this power and the arguments of the parties were therefore addressed to the Court's discretion. 5 Mr Ritson submitted, first, that there had been disqualifying delay on the part of the respondent, referring to the judgment of Sheller JA in Miller at [8] where his Honour said that he was persuaded "that the respondent having taken no steps to file a memorandum for assessment of costs over the last three years should not now be able to claim a set off. Such delay should be discouraged. Therefore I would not, as a matter of discretion, allow the set off claimed." I am satisfied that there is no disqualifying delay on the part of the respondent once Mr Ritson had taken steps to have the costs order in his favour in this proceeding quantified in May 2019. The facts in Miller are distinguishable. 6 Mr Ritson submitted, second, that a set-off order should not be made as it might constitute a preferential payment if bankruptcy proceedings were commenced against him, and referred to Re Shaw; Ex parte Andrew v Australia and New Zealand Banking Group Ltd (1977) 31 FLR 118. All this Court knows is that the respondent takes the position that Mr Ritson has committed an act of bankruptcy, on 6 June 2019, and the respondent proposes to present a creditor's petition based on that act of bankruptcy. I would not, in the exercise of the Court's discretion, decline to order set-off against the possibility that a sequestration order may be made in the future. The court sitting in bankruptcy may deal with this issue if it then arises. 7 Mr Ritson submitted, third, that if there was to be a set-off it should be against the 27 September 2013 costs order of Garling J as that was the starting point for the present proceedings. I note that there are many costs orders made against Mr Ritson in his proceedings against the respondent Commissioner. In my opinion it is appropriate to make that set-off order in relation to the costs ordered by Garling J on 21 December 2018 in the amount of $6,000. That order of Garling J is the only costs order in relation to which Mr Ritson has exhausted his appeal rights and which has no potential collateral effect – on any view, it will not affect the bankruptcy notice which is the subject of ongoing proceedings including in this Court: see, eg, Ritson v Commissioner of Police, New South Wales Police Force (No 3) [2019] FCA 853. And it is also an order in a lump sum closest in quantum to the maximum amount in the present proceedings. Given the apparently increasing number of disputes between the parties it is appropriate to give specificity to what otherwise, I would have thought, would be plain as a matter of principle, that is, that there should be a set-off. 8 The orders I propose are as follows: 1. Subject to order 2, all of the costs the subject of the orders made by Robertson J on 5 October 2017 be fixed in the amount of $5,190 (Ritson's Costs). 2. If the applicant obtains a refund of his filing fees in the present proceedings, the sum of $5,190 in Order 1 is reduced by the amount of that refund, with effect from the date of these orders. 3. The whole of Ritson's Costs be set off against the costs ordered by Garling J on 21 December 2018 (that had been made in the amount of $6,000). 4. The applicant is prohibited from taking any steps to enforce Ritson's Costs against the respondent. 5. The respondent is prohibited from enforcing the costs orders made by Garling J up to the amount of Ritson's Costs. 6. There be no order as to the costs of the applicant's interlocutory application filed on 22 May 2019 with the effect that each party pays his costs of that application. 7. There be no order as to the costs of the respondent's interlocutory application filed on 8 July 2019 with the effect that each party pays his costs of that application. 9 Those orders have the effect of dealing with Mr Ritson's interlocutory application filed on 22 May 2019, which I otherwise dismiss. Similarly, the respondent's interlocutory application of 8 July 2019 is otherwise dismissed. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson. Associate: Dated: 9 July 2019