Federal Court of Australia Jadwan Pty Ltd v Rae & Partners (a firm) (No 6) [2021] FCA 542 File number(s): TAD 28 of 2018 Judgment of: WHEELAHAN J Date of judgment: 19 May 2021 Catchwords: PRACTICE AND PROCEDURE – appellant's applications for an extension of time within which to file an application for review of a Registrar's lump sum costs assessment, and a stay on the enforcement of a costs order in favour of the fifth respondent – fifth respondent's application for payment from monies held as security for costs of the costs as assessed by the Registrar and interest – where no reason or evidence given by appellant explaining the delay in filing and serving the application for a review of the Registrar's costs assessment – where the appellant did not raise certain arguments before the Full Court or the Registrar in respect of costs – where the fifth respondent's costs as assessed do not otherwise appear to be unreasonable in the circumstances – appellant's applications dismissed – order made that the fifth respondent's costs as assessed by the Registrar and interest thereon be paid. Legislation: Federal Court of Australia Act 1976 (Cth), s 35A(1)(h) and (5) Federal Court Rules 2011 (Cth), rr 3.01(b), 3.11, 40.34(2) and 40.35, item 221 of Schedule 2 Cases cited: Bechara v Bates [2021] FCAFC 34 Hinchcliffe v Carroll [1969] VR 164 Nangus Pty Ltd v Charles Donovan Pty Ltd [1989] VR 184 Paciocco v Australia & New Zealand Banking Group (No 2) [2017] FCAFC 146; 253 FCR 403 Statham v Shephard (No 2) (1974) 23 FLR 244 Van Eeden v Henry [2005] NSWCA 14; 62 NSWLR 301 Division: General Division Registry: Tasmania National Practice Area: Other Federal Jurisdiction Number of paragraphs: 27 Date of hearing: 19 May 2021 Counsel for the Appellant: Ms M Dulhunty Solicitors for the Appellant: Keypoint Law Counsel for the Fifth Respondent: Mr S B McElwaine SC ORDERS TAD 28 of 2018 BETWEEN: JADWAN PTY LTD Appellant AND: RAE & PARTNERS (A FIRM) First Respondent WILSON DOWD (A FIRM) Second Respondent TOOMEY MANING & CO (A FIRM) (and others named in the Schedule) Third Respondent order made by: WHEELAHAN J DATE OF ORDER: 19 MAY 2021 THE COURT ORDERS THAT: 1. Of the sum provided by the appellant as security for the costs of the fifth respondent and held by Keypoint Law as trustee pursuant to the orders made by Justice O'Callaghan on 26 September 2018, there be paid to the practitioner for the fifth respondent the amount of $48,539.16, plus interest thereon pursuant to s 52 of the Federal Court of Australia Act 1976 (Cth), in satisfaction of the lump sum costs determination made by Registrar Stone on 25 March 2021. 2. The appellant pay the fifth respondent's costs of the applications heard on 19 May 2021, fixed in the sum of $3,500, which sum is also to be paid from the monies held on trust referred to above. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Ex tempore, revised from the transcript.) WHEELAHAN J: 1 On 29 May 2020 and following the dismissal of an appeal, the Full Court addressed the question of costs of the appeal on the papers after receiving written submissions from the parties. The Full Court made the following orders as to the costs of the appeal – 1. The appellant pay the respondents' costs of the appeal to be assessed in a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth). 2. It is directed that a Registrar of the Court is to determine the amount of the respondents' costs in such manner as the Registrar deems fit, and shall then make an order fixing the amount of those costs, which are to be payable within 28 days of such orders. 2 In making a lump sum costs order, the Full Court referred to the court's Costs Practice Note, GPN-Costs, which states at [4.1] that – The Court's preference, wherever it is practicable and appropriate to do so, is for the making of a lump-sum costs order. 3 The Full Court also cited Paciocco v Australia & New Zealand Banking Group (No 2) [2017] FCAFC 146; 253 FCR 403 at [20], where the court stated the following – There is no particular characteristic that a case must possess for it to be suitable for the making of a lump sum costs order. Particular circumstances that may make a lump sum order especially appropriate include where in a large and complex commercial matter it would save the time, trouble, expense and aggravation of a taxation; where a taxation would require the parties to consume additional time and incur additional expenditure prolonging already protracted litigation; and generally to avoid an ongoing, counter-productive dispute as to costs, in the interests of achieving finality. 4 In making a reference to a Registrar to assess the costs of the appeal in a lump sum, the Full Court at [12] identified the powers in s 35A(1)(h) of the Federal Court of Australia Act 1976 (Cth) and r 3.01(b) of the Federal Court Rules 2011 (Cth) in conjunction with item 221 of Schedule 2 of the Rules. 5 The appellant has given security for the fifth respondent's costs of the appeal in the sum of $75,000 pursuant to an order of a judge of the court made on 26 September 2018. The form of security ordered was that there be a deposit in a controlled money account in the name of the appellant's solicitor as trustee for the appellant and the fifth respondent. 6 By order made 25 March 2021, a Registrar of the court assessed the fifth respondent's party and party costs of the appeal in the sum of $48,539.16. In making that assessment the Registrar did not accept the fifth respondent's claim for party and party costs in the sum of $53,932.40. The Registrar gave written reasons for the assessment. In those written reasons the Registrar addressed each of four objections which the appellant had advanced in relation to the fifth respondent's claim for costs, namely – (1) the claims for typing at $130 per hour should be disallowed; (2) the claim for about 30 hours for the preparation of written submissions was excessive; (3) the costs associated with reading the principal decision of the Full Court and advising the client in relation thereto were not party and party costs; and (4) the costs incurred after the appeal was dismissed were not recoverable as costs of the appeal. 7 These objections were contained in an affidavit of the appellant's solicitor dated 11 March 2021 which was filed for the purpose of the assessment of the fifth respondent's costs. That affidavit had been filed pursuant to orders of the Registrar made 5 February 2021, which provided for the provision of material by both the fifth respondent and the appellant in relation to the assessment of the fifth respondent's costs. 8 The Registrar accepted some of the appellant's objections, but rejected others. The Registrar disallowed the claims for typing and, on a broad brush basis, reduced the allowance for attendances on the grounds that some attendances would not be recoverable at the full rate, or that the time taken for certain tasks may have been excessive. The Registrar did not accept that the time claimed for preparing submissions should be reduced to the extent claimed by the appellant, having regard to their length and to the multiple grounds of appeal that had been raised. Otherwise, the Registrar did not accept the general submission that all costs subsequent to 9 April 2020 were not recoverable as costs of the appeal, noting that the Full Court's orders of 9 April 2020 left outstanding the question of costs to be considered on the papers, which involved further work, and stated the costs of reading the Full Court's decision and advising the client were capable of being claimed as party and party costs. However, the Registrar considered that some discreet items referrable to work undertaken after 9 April 2020 may not be recoverable on taxation on the basis that they were not properly costs of the appeal. 9 Under r 3.11 of the Federal Court Rules, the appellant had 21 days within which to apply to the court under s 35A(5) of the Act for a review of the exercise of the Registrar's power. That 21 day time limit was noted at the foot of the Registrar's order of 25 March 2021. No application for review was filed within the 21 day period. On 26 April 2021 the appellant lodged with the court a document titled "Application for review of Lump Sum Costs Determination". The document cited r 40.34(2), which relates to a review of a taxation of costs. Had a taxation of costs taken place before the Registrar, then r 40.34(4) of the Federal Court Rules required that an application for review be filed and served within 28 days of the certificate of taxation. Further, an application for review of a taxation requires identification of items in a bill that are subject to challenge, and a party is not permitted to raise any ground of objection not taken in that party's notice of objection filed in the taxation. 10 The appellant's application lodged on 26 April 2021 sets out five grounds of challenge to the Registrar's assessment of costs and alleges error by the Registrar. Of particular note is that the application raises issues that were not raised by the appellant before the Registrar, including a claim that the evidence of the fifth respondent's costs before the Registrar was not sufficiently detailed, and a claim that there had been duplication of costs because the first to third, fourth and fifth respondents to the appeal had similar interests, which the Registrar had failed to take into account. As developed in argument before me, the appellant's claim as to duplication involves an allegation that it was not reasonable for the three groups of respondents to be separately represented. The appellant's application also sought a stay of execution under r 40.35 of the Federal Court Rules, which relates to a stay of execution following a taxation. 11 The court gave notice to the parties by an email dated 7 May 2021 that the matter would be listed at 10.15 am on 19 May 2021 for the hearing of the application for a stay, and for case management of the review application. Due to a typographical error, the email was not sent to the appellant's solicitor on 7 May 2021, which was a Friday, and was resent on Monday, 10 May 2021. In response to that email, Mr McElwaine SC, who appeared for the fifth respondent, advised that he had not been served with any such application by the appellant. He also gave notice that at the interlocutory hearing the fifth respondent would apply for an order that there be paid from the sum provided as security the amount of $48,539.16 plus interest thereon. The solicitors for the appellant responded to the email, advising that the application had not been served, and sought that the application be listed on or about 2 June 2021 to give the appellant the opportunity to serve the application on the fifth respondent and for it to respond. No explanation was given in the response as to why the application had not been served on the fifth respondent. 12 In view of the application by the fifth respondent for the payment of monies to satisfy the assessment of costs, I determined that the interlocutory application would proceed for that purpose and the parties were advised accordingly by email from my chambers on 13 May 2021. In that email, the court also drew the parties' attention to the time limits that apply to applications for review of a Registrar's exercise of power and of the taxation of costs. 13 I was informed at the hearing that the appellant subsequently served its application on the fifth respondent on Friday, 14 May 2021. 14 At the hearing, counsel for the appellant made two oral applications – (1) an application for an extension of time within which to seek a review of the Registrar's assessment of costs of 25 March 2021; and (2) an application for a stay. 15 The oral applications were foreshadowed in written submissions filed on behalf of the appellant late yesterday. Senior counsel for the fifth respondent did not object to the court proceeding to hear the oral applications, which he opposed. 16 The appellant's application for an extension of time to apply for a review of the Registrar's assessment was sought on the basis that there were serious and genuine issues raised by the application for review. In summary, the following submissions were advanced. First, it was submitted that the order of the Full Court should be interpreted so that it required that the costs of all the respondents should be determined together, and not separately. Second, it was submitted that an issue arose as to whether the three groups of respondents to the appeal acted reasonably in having separate representation. Counsel submitted that the Registrar did not appear to have considered this issue. I pause to observe that it was not an issue that the appellant had raised before the Registrar. The appellant then developed to some extent submissions directed to the question as to the circumstances in which it would be unreasonable for parties with parallel interests to have separate representation. The instances cited by counsel for the appellant included those where there was no possible conflict of interest between the parties in the presentation of their cases: Statham v Shephard (No 2) (1974) 23 FLR 244 at 246-247 (Woodward J); Van Eeden v Henry [2005] NSWCA 14; 62 NSWLR 301 at [51], [59], [63], [69], [70] (Spigelman CJ, with whom Sheller JA and McColl JA agreed); Hinchcliffe v Carroll [1969] VR 164. To these cases might be added the observations of Young CJ in Nangus Pty Ltd v Charles Donovan Pty Ltd [1989] VR 184 at 185-186 relating to the importance of the court having for its own protection the assistance of independent counsel for parties whose interests are not identical. 17 Counsel for the appellant also submitted that time would be saved if the assessments of all the respondents' costs were considered together. As that submission was developed, it was not clear how, if at all, an application for review of the Registrar's decision of 25 March 2021 would achieve that end. 18 There was no affidavit evidence before the court explaining the reasons for which the appellant had not filed an application for review of the registrar's assessment within time or explaining why the appellant had not served the application until 14 May 2021. I could speculate that those advising the appellant erroneously thought that the appropriate course was to seek a review of the Registrar's assessment as if there had been a taxation of costs, but there was no explanation by evidence as to why, even on this assumption, the document was filed late and why it was not served until 14 May 2021. The most that was before the court was a written submission that referred to the fact that following the Registrar's order of 25 March 2021, "there was the Easter break as well as school holidays". There was also a submission advanced by counsel for the appellant that the solicitor for the appellant had failed to do anything with the application, which I understood to mean than that the solicitor had failed to serve the application. 19 If the court were to extend the 21 day time period within which to review the registrar's exercise of power, the review would be a hearing de novo: Bechara v Bates [2021] FCAFC 34. The appellant would not necessarily be bound by the objections raised before the Registrar in the way that a party would be bound upon review of a taxation of costs. Therefore, I do not approach the appellant's application on the premise that it would be necessarily precluded upon review from raising new issues. However, I have decided to refuse the appellant's application to extend the time within which to make an application to review the exercise of power, and I do so for the following reasons. 20 First, there is no satisfactory explanation supported by evidence directed to the reasons for which the appellant did not file an application within time. 21 Second, I reject the submission that the orders of the Full Court required that the assessment of all the respondents' costs should occur together and not separately. There is nothing in the text of the orders of the Full Court to support that construction and nor is it supported by the context in which the orders were made. The context included that there were three groups of respondents that were separately represented on the appeal and in respect of whom separate sums on account of security for costs had been ordered. There was no submission advanced on behalf of the appellant before the Full Court that the costs of the respondents should be assessed together. There was nothing about the context to indicate that there should be any departure from the ordinary position that the respondents could have their costs assessed separately. No submission to the contrary appears to have been made to the Registrar before she proceeded to assess the fifth respondent's costs. 22 Third, in the context that the respondents sought an order from the Full Court that costs be awarded in a lump sum, no submission was made by the appellant to the Full Court that there should be any reduction in the costs of the respondents on account of any duplication arising from the representation of the respondents on appeal, and no claim was made to the Full Court that the representation of the parties had been unreasonable. The only submission made was that the respondents' costs should be reduced by one-third on the ground that the respondents had failed on some issues before the Full Court. 23 Fourth, the appellant did not raise the question of duplication before the Registrar upon the assessment. As I have indicated, subject to what follows, this alone would not necessarily preclude the appellant from raising for the first time an issue on review, but it is material to the discretionary decision whether to permit an extension of time. In my view, it would undermine the object of the orders of the Full Court that costs be assessed in a lump sum to permit the appellant to raise completely new arguments that could and should have been raised before the Full Court in response to the respondents' applications for costs to be awarded in lump sums. As indicated in the Full Court's reasons for judgment by its reference to the Costs Practice Note and to Paciocco v Australia & New Zealand Banking Group (No 2), the object of the order was to save time and expense and avoid the further protraction of the litigation. 24 Fifth, putting the above issues to one side, there appears to me to be nothing unreasonable about the quantum of costs of the fifth respondent assessed by the Registrar having regard to the length of the hearing of the appeal, and to the complexity of the factual and legal issues raised. Contrary to a claim advanced on behalf of the appellant, it was entirely appropriate for the Registrar to have regard to the Full Court's principal reasons in appraising the complexity of the appeal. 25 For the forgoing reasons I refuse the appellant's application for an extension of time within which to apply for a review of the Registrar's assessment of the fifth respondent's costs of the appeal. 26 It follows that the premise for the appellant's application for a stay falls away. However, I can indicate that if I had granted an extension of time to the appellant to apply for a review of the assessment of costs, I would not have stayed the order for payment. No sufficient reasons were advanced as to why the fifth respondent should not have the fruits of the judgment for costs and, in any event, a question arises as to this court's power to make an order contrary to the order of the Full Court, which required that the costs be paid within 28 days of assessment. There is no reason why the amount of the costs assessed in the sum of $48,539.16 should not be paid from the sum held on trust as security for the fifth respondent's costs together with interest on that sum, which the parties accepted should run from 25 March 2021, being the date of the Registrar's assessment. 27 I will make orders substantially in accordance with paragraph 1 of the orders sought by Mr McElwaine's letter to the court of 13 May 2021. [Discussion ensued in relation to the costs of the applications.] I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan. Associate: Dated: 21 May 2021 SCHEDULE OF PARTIES TAD 28 of 2018 Respondents Fourth Respondent: JANET KAY HOGAN AS THE EXECUTRIX OF THE ESTATE OF THE LATE JOHN MICHAEL JOGAN Fifth Respondent: WORSLEY DARCEY & ASSOCIATES