FEDERAL COURT OF AUSTRALIA Langbein v Mottershead Investments Pty Ltd (No 2) [2020] FCA 188 Appeal from: Mottershead Investments Pty Ltd v Aircraft Support Industries Engineering Pty Ltd (in liquidation) and Ors [2019] FCCA 1375 File number: NSD 1157 of 2019 Judge: STEWART J Date of judgment: 19 February 2020 Date of publication of reasons: 24 February 2020 Catchwords: PRACTICE AND PROCEDURE – security for costs of appeal – respondent's application for increase in security previously ordered – provision for costs of senior counsel – previously rejected – no change in circumstances justifying reopening previous decision – fact of appellant briefing senior counsel not relevant change in circumstances – application dismissed Legislation: Federal Court Rules 2011 (Cth) Sch 1, 3 Cases cited: Langbein v Mottershead Investments Pty Ltd [2019] FCA 1619 Lumley Life Ltd v IOOF of Victoria Friendly Society (unreported, Federal Court of Australia, 23 April 1992, Case No. G354/1989) Stanley v Phillips [1966] HCA 24; 115 CLR 470 Date of hearing: 19 February 2020 Registry: New South Wales Division: General National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Category: Catchwords Number of paragraphs: 21 Counsel for the Appellant: J T Johnson Solicitor for the Appellant: JT Law Counsel for the Respondent: S Bell Solicitor for the Respondent: Terrett Lawyers ORDERS NSD 1157 of 2019 BETWEEN: MARK CALVIN LANGBEIN Appellant AND: MOTTERSHEAD INVESTMENTS PTY LTD ACN 119 740 304 Respondent JUDGE: STEWART J DATE OF ORDER: 19 FEBRUARY 2020 THE COURT ORDERS THAT: 1. The respondent's interlocutory application filed on 11 February 2020 is dismissed. 2. The costs of the interlocutory application referred in Order 1 are costs in the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Delivered ex tempore) STEWART J: 1 This is an interlocutory application in an appeal from the Federal Circuit Court. The respondent in the appeal previously applied for security for costs for the appeal. See Langbein v Mottershead Investments Pty Ltd [2019] FCA 1619. I ordered that the appellant give security for the respondent's costs in the appeal in the sum of $30,000. That security was subsequently furnished. 2 The respondent now applies to increase that sum by a further $15,750. That additional sum has the following elements. 3 First, the respondent seeks the sum of $3,150 in respect of costs thrown away by an amended notice of appeal filed by the appellant. The respondent contends that the amended notice of appeal entirely replaces the first notice of appeal, which has now become redundant. On the Court granting leave for the amended notice of appeal to be filed, an order was also made that the appellant pay the costs thrown away. 4 The respondent seeks to justify the sum claimed with reference to the costs of a solicitor and of junior counsel conducting correspondence, conferences and attendances amounting to five hours each. That time is not sought to be justified in any further way. It is not explained how that time was spent. 5 In my experience, it is common for a notice of appeal to be amended, and even to be amended in a form that results in an essentially new notice of appeal. The amended notice of appeal was filed at a time prior to the appeal books or submissions being prepared. Notice of it was also given some months before a notice of contention was filed. In the circumstances, it is not apparent what work the respondent reasonably undertook in relation to the original notice of appeal that became wasted on the filing of the amended notice of appeal, or why that work is not covered by the original estimate of work in respect of which an amount of security for costs has already been awarded. 6 In those circumstances, I am not persuaded that an increase in security for costs on account of the amended notice of appeal is justified. Of course, that does not prevent such costs as are properly claimable being claimed on taxation in due course, regardless of the outcome of the appeal. 7 Secondly, the respondent seeks the sum of $12,600 in respect of senior counsel. Previously I disallowed the costs of senior counsel in addition to junior counsel from the respondent's schedule of estimated costs on the appeal on the basis that I was not satisfied that it was justifiable to brief senior counsel. 8 The respondent seeks to reopen that issue on the grounds that the appellant has now indicated that it will brief senior counsel – what is sauce for the goose is sauce for the gander is the approach that is urged on me. 9 Costs as between party and party are defined in Schedule 1 to the Federal Court Rules 2011 (Cth) (FCR) as being only the costs that have been "fairly and reasonably incurred". Further, Schedule 3 to the FCR in item 16.1 provides that an amount may be allowed for counsel's fees according to the circumstances of the case. That amount may be assessed by reference to the National Guide to Counsel Fees. 10 In Lumley Life Ltd v IOOF of Victoria Friendly Society (unreported, Federal Court of Australia, 23 April 1992, Case No. G354/1989) Lockhart J said the following with regard to the costs of senior and junior counsel (at 4): The Federal Court is at the threshold of new Commonwealth law and there are very few contested cases which have come before me for hearing in nearly 13 years on this Bench where the attention of senior counsel would not have been justified. This is a s 52 case and the legal principles which govern s 52 are generally well-established, but there are still grey areas which will call for future decisions of principle. The factual issues in the present case were complex and legal issues were not easy. There was no novel point, but there were points of importance and there was a volume of material to be handled in the case. It is true that the total claim for damages by Lumleys was $137,000, but the basic case was over an injunction and the injunction of course was the only matter in issue in the interlocutory proceedings. It is true that only one counsel was briefed by Lumley, namely, junior counsel, but that says nothing as to whether it was proper for IOOF (or Lumley for that matter) to retain two counsel. The taxing officer erred in principle in not allowing senior counsel's fees. 11 Lockhart J referred to Stanley v Phillips [1966] HCA 24; 115 CLR 470 with regard to the principles governing counsel's fees on taxation. At that time the rule was that senior counsel could not appear except if accompanied by a junior so the question of the justification for briefing senior counsel was sometimes expressed in terms of whether it was justified that two counsel (i.e. a senior and a junior) were briefed. Relevant considerations are nevertheless illuminated. 12 In that case, Barwick CJ (at 477) said that in his opinion there had not been any rule in Australia, at least not since the time of the First World War, "that it is, in general, proper that two counsel should be employed" in cases in the superior courts. In light of the rule to which I have referred, I understand that to be saying that there is no rule that it is necessarily justified to brief senior counsel in the superior courts. 13 So, what does that mean for the present case? 14 First, the fact of the appellant employing two counsel is irrelevant. In the event that the appellant succeeds and gets a costs order in his favour, he may or may not be able to claim the costs of two counsel on assessment. That will be a matter for the taxing officer on that occasion. What another party has chosen to do is not to the point. 15 Secondly, I do not think that Lockhart J should be understood to have said that senior counsel is justified in every case in the Federal Court. That arises from the fact that his Honour went on to consider the legal and factual complexity of the case and the volume of material. That would otherwise have been unnecessary. It is also to be taken from what Barwick CJ said in Stanley's case to which Lockhart J specifically referred. 16 Thirdly, I previously decided that senior counsel was not justified for the purposes of security for costs – obviously leaving that question open when it comes to taxing costs in due course. The respondent has not brought forward anything new to justify that decision being reopened, other than the fact that the appellant is apparently briefing senior counsel. As I have said, that is not a relevant factor. 17 Fourthly, it was suggested on behalf of the respondent in oral submissions that the amended notice of appeal may have broadened the scope or complexity of the appeal. I am not persuaded by that. 18 In the circumstances, I am not satisfied that there is any basis to reopen what I previously decided. 19 The application to increase the security must therefore be dismissed. 20 The costs of this application are to be costs in the cause. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stewart. Associate: Dated: 24 February 2020