Federal Court of Australia Australian Communications and Media Authority v Jones (No 5) [2023] FCA 1455 File number: QUD 129 of 2022 Judgment of: THOMAS J Date of judgment: 23 November 2023 Catchwords: PRACTICE AND PROCEDURE – costs – interlocutory application filed by the third respondent dismissed – not contested that costs order should be made – whether indemnity costs should be assessed on a lump sum basis – whether costs should be paid forthwith or at conclusion of matter Legislation: Federal Court of Australia Act 1976 (Cth) Federal Court Rules 2011 (Cth) Cases cited: Australian Communications and Media Authority v Jones (No 3) [2023] FCA 511 Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) (2021) 151 ACSR 26; [2021] FCA 246 Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union (No 4) [2018] FCA 684 Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International B.V. (No 5) [2018] FCA 19 LFDB v MS S M (No 2) [2018] FCA 2062 Rafferty v Time 2000 West Pty Ltd (ACN 127 893 270) (No 3) (2009) 257 ALR 503; [2009] FCA 727 Raffin v Modern Assets Australia Pty Ltd [2023] FCA 1130 Watson v Kriticos (Costs Payable Forthwith) [2022] FCA 4 Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 39 Date of last submissions: 2 June 2023 Date of hearing: Determined on the papers Counsel for the Applicant: Mr D Roche with Mr M Pulsford Solicitor for the Applicant: Australian Government Solicitor Counsel for the Third Respondent: Mr SW Trewaves ORDERS QUD 129 of 2022 BETWEEN: AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY Applicant AND: RHYS EDWARD JONES First Respondent DIVERSE LINK PTY LTD ACN 641 292 088 Second Respondent BRENTON LEE BUTTIGIEG (and another named in the Schedule) Third Respondent order made by: THOMAS J DATE OF ORDER: 23 NOVEMBER 2023 THE COURT ORDERS THAT: 1. The third respondent pay the applicant's costs of and incidental to the interlocutory application filed by the third respondent on 9 March 2023, fixed in the sum of $22,867.14, within fourteen (14) days. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THOMAS J: INTRODUCTION 1 By an interlocutory application filed on 9 March 2023 (Interlocutory Application), the third respondent (Mr Buttigieg) sought orders that the applicant's (the Australian Communications and Media Authority (ACMA)) concise statement dated 19 April 2022 be struck out and that the ACMA, be required to file and serve a statement of claim in its place. 2 On 23 May 2023, I made orders dismissing the Interlocutory Application: Australian Communications and Media Authority v Jones (No 3) [2023] FCA 511 (Jones). 3 I also ordered that the parties file submissions on the question of costs. The parties filed written submissions in accordance with my orders. 4 For the reasons set out below, I am of the view that Mr Buttigieg should pay the costs of the ACMA fixed in the sum of $22,867.14, payable within 14 days. THE PARTIES' SUBMISSIONS 5 In its written submissions relating to the Interlocutory Application, the ACMA foreshadowed that, if the Interlocutory Application was dismissed, it would seek an order that its costs be payable on an indemnity basis from 13 March 2023 (when its legal representative, the Australian Government Solicitor, first wrote to Mr Buttigieg setting out why the Interlocutory Application should be dismissed) and dispensing with r 40.13 of the Federal Court Rules 2011 (Cth) (Rules) so that the ACMA's costs could be taxed immediately. 6 Rather than pressing for an order in those terms, the ACMA sought a lump sum costs order in the sum of $22,867.14 for the costs incurred between 9 March 2023 and 5 April 2023. 7 Mr Buttigieg does not dispute that he should pay the ACMA's costs. However, Mr Buttigieg submitted that he should only pay ACMA's costs of the Interlocutory Application on a standard basis, to be agreed or assessed, or, alternatively, the enforcement of any lump sum costs order be stayed until the final resolution of the matter. LEGAL PRINCIPLES 8 The power to award cost is in s 43(1) of the Federal Court of Australia Act 1976 (Cth), which relevantly provides: The Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which this or any other Act provides that costs must not be awarded … 9 The discretion to award costs on a basis other than on a standard basis, including on an indemnity basis, is "unfettered, save that it must be exercised judicially and not arbitrarily or capriciously": Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union (No 4) [2018] FCA 684 at [96] (per Middleton J). See also Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) (2021) 151 ACSR 26; [2021] FCA 246 at [7] (per Wigney J). 10 Rule 40.02 of the Rules relevantly provides: A party or a person who is entitled to costs may apply to the Court for an order that costs: (a) awarded in their favour be paid other than as between party and party; or (b) be awarded in a lump sum, instead of, or in addition to, any taxed costs; or (c) be determined otherwise than by taxation. (notes omitted) 11 In LFDB v MS S M (No 2) [2018] FCA 2062, Markovic J summarised the principles applying to the Court's power to order lump sum costs, and to the quantification of costs where such an order is made, as follows: 6 The Court's power to order lump sum costs is discretionary and may be exercised whenever the circumstances warrant it: Su v Australian Fisheries Management Authority (No 3) [2008] FCA 2018 at [1] (Reeves J). 7 A Full Court of this Court (Allsop CJ, Besanko and Middleton JJ) in Paciocco v ANZ (No 2) (2017) 253 FCR 403 at [16]-[17] explained the following in relation to the Court making orders for lump sum costs: 16 On 25 October 2016 the Chief Justice issued the Central Practice Note: National Court Framework and Case Management (CPN-1) ('Central Practice Note') and the Costs Practice Note (GPN COSTS) ('Costs Practice Note'). The Central Practice Note states that the determination of the quantum of costs of a successful party (in a proceeding) should not be delayed and, to this end, the Court will, where appropriate, facilitate the making of lump sum costs orders. The Costs Practice Note provides that the Court's preference, wherever it is practicable and appropriate to do so, is to make a lump sum costs order so as to finalise costs and avoid potentially expensive and lengthy taxation hearings. It makes clear that the Court should now proceed on the basis that taxation "should be the exception" and confined to matters which are unable to be determined otherwise: Costs Practice Note at [3.3]. The guiding principles are to reduce delay and cost when quantifying costs: Costs Practice Note at [3.1]. 17 The Costs Practice Note provides for the Court to make use of sophisticated costs orders and procedures, and to take such steps as it considers necessary to ensure that it has the requisite level of detail to make a costs determination that is fair, logical and reasonable and to avoid orders that lead to potentially expensive and lengthy taxation hearings: Costs Practice Note at [3.3]. 8 In Bitek Pty Ltd v IConnect Pty Ltd (2012) 290 ALR 288; [2012] FCA 506 at [18] Kenny J said the following in relation to the determination of the appropriate quantum of a lump sum costs order: 18 The starting point for the fixing of costs is the charges rendered by the applicant's solicitors: Beach Petroleum at FCR 124; ALR 165 and Hamod v New South Wales [2011] NSWCA 375 at [820] per Beazley JA (with whom Giles and Whealy JJA agreed). The sum of costs fixed should also be proportionate to the nature, including the complexity, of the case: see Canvas Graphics Pty Ltd v Kodak (A'asia) Ptd Ltd [1998] FCA 23. As Beazley JA said in Hamod, at [820], citing, among others, Beach Petroleum at FCR 123; ALR 164: [820] The approach taken to estimate the costs to be ordered must be logical, fair and reasonable … This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment … [Citations omitted.] 12 Rule 40.13 of the Rules provides: If an order for costs is made on an interlocutory application, the party in whose favour the order is made must not tax those costs until the proceeding in which the order is made is finished. Note: The Court may order that costs of an interlocutory application be taxed immediately. 13 In Rafferty v Time 2000 West Pty Ltd (ACN 127 893 270) (No 3) (2009) 257 ALR 503; [2009] FCA 727 (Rafferty), Besanko J identified the "general rule" that costs are not payable immediately as serving the following purposes (at [20]): First, it avoids multiple taxations in a proceeding. Second, it avoids the apparent unfairness which may arise where, at an early stage of a proceeding, a party who is ultimately successful is required to pay costs to a party who is ultimately unsuccessful. Finally, it prevents interlocutory proceedings being used as a weapon to exhaust the financial resources of one of the parties. 14 It is well settled that the Court has the power to depart from the general rule: Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International B.V. (No 5) [2018] FCA 19 (FKP v Spirits) at [7] (per Perram J). 15 The principles relevant to when a court may exercise its discretion to depart from the general rule were identified by Perram J in Watson v Kriticos (Costs Payable Forthwith) [2022] FCA 4 at [7]: The exercise of the discretion may be justified in a number of circumstances, including where (FKP v Spirits at [9]): (a) the final determination of the proceeding is far away: Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 13) [1995] FCA 1459 at [5]; (b) a party has been required to incur significant costs over and above those which it would have incurred had the opposing party acted in handling the proceeding with competence and diligence: Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545; (c) following a successful amendment application, a case is essentially a new proceeding: McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 at [19] and [40]; (d) a discrete issue has been resolved: Australian Flight Test Services v Minister for Industry, Science and Technology [1996] FCA 1425 at [7]; or (e) there is some reason to think that interlocutory disputation is draining the ability of one side to conduct the litigation: Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd [2016] FCA 37 at [12]. 16 The unreasonableness of the conduct of the party against which the order is sought is also a significant factor: Rafferty at [21]; Raffin v Modern Assets Australia Pty Ltd [2023] FCA 1130 at [25] (per McEvoy J). DISPOSITION 17 My view is that this is a matter where it is appropriate to order that the ACMA's costs of the Interlocutory Application should be fixed in a lump sum, assessed on a standard basis up to and including 15 March 2023 and on an indemnity basis from and including 16 March 2023, to be payable within 14 days. 18 The reasons why such an order is appropriate in this matter are as follows. 19 The relevant history of the proceedings is as follows: (a) On 19 April 2022, these proceedings were commenced by originating application and a Concise Statement. (b) On 29 June 2022, I conducted a case management hearing. At that hearing the first respondent (Mr Jones) sought directions for the ACMA to file a statement of claim and for the matter to proceed by way of pleadings. (c) At that case management hearing, counsel for Mr Buttigieg submitted that proceeding by concise statement and response was appropriate. (d) At that hearing, I concluded that it was appropriate that the matter proceed by concise statements with the ability of the respondents to seek particulars. Directions were made enabling Mr Jones to serve a request for particulars, for the ACMA to file answers to the request, for all the respondents to file and serve concise responses, and for the ACMA to file and serve any reply. (e) On 13 July 2022, Mr Jones served a request for particulars. The ACMA provided an answer to that request on 27 July 2023. (f) Mr Buttigieg did not seek any particulars from the ACMA of the matters raised in its concise statement. (g) The times specified to comply with the directions made on 29 June 2022 were extended a number of times. (h) On 26 September 2022, Mr Buttigieg changed lawyers. (i) On 26 September 2022, consent orders were made for the parties to exchange proposed categories of discovery and for agreed discovery to be provided. (j) On 13 October 2022, Mr Buttigieg filed a concise response. The ACMA filed a concise reply on 27 October 2022. (k) On 29 November 2022, Mr Buttigieg's solicitors first raised with the ACMA the issue as to whether the matter should proceed by way of pleadings and not concise statements. (l) On 2 December 2022, Mr Jones filed an application for discovery. (m) On 16 February 2023, the ACMA filed amended particulars. (n) On 20 February 2023, orders were made by consent for the ACMA to serve any affidavit evidence on which it proposed to rely at the liability hearing as well as any expert evidence. The ACMA was also ordered to make standard discovery. (o) On 7 March 2023, the first and fourth respondents filed an amended concise response. (p) On 9 March 2023, Mr Buttigieg filed the Interlocutory Application. (q) On 13 March 2023, the Australian Government Solicitor wrote to Mr Buttigieg's solicitors setting out the reasons why the Interlocutory Application would fail (13 March Letter). The 13 March Letter requested Mr Buttigieg's solicitors to advise by 3.30 pm on 14 March 2023 whether they would press the Interlocutory Application. (r) On 15 March 2023, the matter was listed for a case management hearing and I ordered that Mr Buttigieg and the ACMA file written submissions in relation to the Interlocutory Application. (s) On 20 March 2023, the Australian Government Solicitor wrote to Mr Buttigieg's solicitors clarifying the basis of the claim made against Mr Buttigieg (20 March Letter). 20 On 5 April 2023, I heard the Interlocutory Application. 21 On 23 May 2023, I dismissed the Interlocutory Application. My reasons for doing so were as follows: 68 The potential imposition of civil penalties upon Mr Buttigieg is a "serious" matter, as the term was used by Greenwood ACJ in ASIC v Bettles. There is no doubt that, in such circumstances, procedural fairness requires that Mr Buttigieg is aware fully of the case he has to meet. However, the entitlement to procedural fairness does not mean that a statement of claim is required in lieu of a concise statement. 69 The key question is whether Mr Buttigieg has been made fully aware of the case against him. 70 In this case, the stage which the proceedings have reached is relevant to that question. The way in which cases operate in this Court is through a structured case management process designed to achieve the overarching purpose of the civil practice and procedure provisions which is, of course, to facilitate the just resolution of disputes according to law, as quickly, inexpensively and efficiently as possible (s 37M of the Federal Court of Australia Act 1976 (Cth)) 71 As issues arise, they are dealt with as part of the case management process as the matter progresses. Thus, specific concerns can be dealt with in a timely, specific and efficient way which avoids unnecessary cost for the parties. The supervised case management process ensures that parties are afforded procedural fairness. 72 The use of a concise statement is complementary with the way in which matters are conducted in this Court and consistent with the overarching purpose. 73 Previously, through his former representatives, Mr Buttigieg indicated to the Court that the filing of a Concise Response would be the appropriate course to follow. No question was raised as to the adequacy of the way in which the case was outlined against him. He filed a Concise Response and the ACMA has filed a Concise Reply. These steps are all relevant to the question raised by Mr Buttigieg. 74 Mr Buttigieg joined with the other parties in agreeing to orders relating to delivery of evidence by the ACMA and provision of discovery. 75 At this stage in the proceedings, the nature of the ACMA's case against Mr Buttigieg has been provided through its Concise Statement combined with the Concise Reply, Further Particulars and letter dated 20 March 2023. 22 As shown by the history of this matter set out above, and as identified in Jones, it is apparent that the Interlocutory Application was brought by Mr Buttigieg at a time when: (a) the proceedings were at a relevantly advanced stage; (b) I had previously rejected an application for a statement of claim to be served; (c) Mr Buttigieg had earlier agreed to the matter proceeding by way of concise statement and had in fact filed a concise response; and (d) the case against Mr Buttigieg was sufficiently clear from the concise statement combined with the concise reply, further particulars and the 20 March Letter. 23 In light of these matters, I consider that the bringing of, and continuing with, the Interlocutory Application was unreasonable. It is appropriate that the costs of the ACMA be paid, within 14 days, as a lump sum assessed on a standard basis up to and including 15 March 2023 (the date of the case management hearing) and on an indemnity basis from and including 16 March 2023. QUANTUM OF THE FIXED COSTS 24 The costs claimed by the ACMA are set out in the affidavit of Mr Garey filed 26 May 2023, which was prepared as a Costs Summary in compliance with the Court's Costs Practice Note, GPN-Costs (Costs Summary). 25 The ACMA has sought to recover the following by way of a fixed sum for its costs: (a) for the period 9 March to 15 March 2023: legal fees of $4,851.45 and disbursements of $2,682.45 (totalling $7,553.90) discounted by 30%, being legal fees of $3,396.02 and disbursements of $1,877.72 (totalling $5,273.74); and (b) for the period 16 March to 5 April 2023: legal fees of $6,982.00 and disbursements of $12,556.22 (totalling $19,548.22) discounted by 10%, being legal fees of $6,283.80 and disbursements of $11,309.60 (totalling $17,593.40); and (c) the total claimed is $22,867.14 (being legal fees of $9,679.82 and disbursements of $13,187.32) reduced from $27,102.12, a reduction of approximately 15% overall. 26 There is a differentiation in the discount over the two periods suggested up to 15 March 2023 and post-15 March 2023. I assume the different discount rates suggested reflect the different bases upon which the costs have been claimed (standard and indemnity basis). 27 The disbursements consist of "other disbursements" of $196.00 and counsel's fees of $12,991.32. The ACMA briefed two counsel whose fees were calculated as follows: (a) $2,719.39, at a rate of $178.03 per hour and $1,068.18 per day; and (b) $10,271.93, at a rate of $393.94 per hour and $2,363.64 per day. 28 Mr Garey deposed that: (a) the ACMA is not claiming more than the ACMA is liable to pay for costs and disbursements; (b) the calculations made are correct; (c) the matters noted are a fair and accurate summary of the costs and disbursements that the ACMA is entitled to claim; and (d) the amounts claimed are capable of further verification through source material (such as file records, tax invoices and receipts for payment) should such material be required to be produced by the Court; and (e) the legal work claimed was undertaken by the following persons: Solicitor Level Hourly Rate Hours Matthew Garey Senior Executive Lawyer $395.00 6.6 Sarah Tormey Senior Lawyer $320.00 13.5 Amelia Telec Senior Lawyer $320.00 3.3 Kirsty Gan Lawyer $245.00 18.7 Caley Bawden Lawyer $245.00 12.3 29 Mr Buttigieg submitted that: (a) the evidence led by the ACMA in support of its costs submissions was devoid of any source information by which any meaningful assessment of the reasonableness of the costs claimed could be undertaken; (b) the Interlocutory Application was argued in less than two hours and involved a discrete legal issue, and therefore the Australian Government Solicitor's claim that 54.4 hours were spent by solicitors in relation to the Interlocutory Application appeared excessive. No explanation had been given as to why such an extraordinary amount of time was spent on a single discrete issue that did not involve any evidence; and (c) the use of two counsel was excessive. DETERMINATION OF COSTS PAYABLE 30 I am of the view that the Costs Summary, though lacking in some details, is sufficient to allow the Court to determine whether the costs claimed are reasonable. 31 The total hours claimed by the ACMA are 54.4. As shown by the summary set out above, the work undertaken was spread across a number of authors of varied seniority and charge out rates. 32 The Interlocutory Application was argued almost entirely on the form of the concise statement filed and the relevant case law. Little, if any, evidence was relied upon. 33 I accept the submissions of Mr Buttigieg that, in the circumstances, the total of 54.4 hours, even though at relatively modest rates, does seem on the high side. 34 Based upon the hours and rates in evidence from Mr Garey, the total "legal fees" for the 54.4 hours is $15,578.00. This figure is more than the pre-discounted figure of $11,833.45 claimed by the ACMA. 35 There is a discount of the total "legal fees" of $15,578.00 (the sum of the "legal fees") to the pre-discounted figure of $11,833.45 (being the amount before applying the 30% and 10% reductions). The latter figure is a reduction of approximately 25%. 36 I consider this sum to be reasonable. 37 I do not consider that the use of two counsel was unnecessary. Further, the fees claimed for counsel, totalling $12,991.32, are not excessive and I note that the fees claimed have also been discounted by 10% and 30%. 38 There is no explanation as to how the additional outlays of $196.00 are calculated, but I am prepared to accept the evidence of Mr Garey that these outlays were incurred. 39 In the circumstances, I assess the costs of the ACMA on a lump sum basis to be as follows: Legal Fees $ 9,679.82 Counsel Fees $ 12,991.32 Outlays $ 196.00 Total $ 22,867.14 I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Thomas. Associate: Dated: 23 November 2023 SCHEDULE OF PARTIES QUD 129 of 2022 Respondents Fourth Respondent: BRISBANE POKER PTY LTD (ACN 636 038 269)