Federal Court of Australia Masters v Lombe (liquidator), in the matter of Babcock & Brown Limited (in liq) (Application to vary timetable) [2025] FCA 9 File number(s): NSD 2525 of 2013 NSD 947 of 2014 NSD 501 of 2015 NSD 1915 of 2019 NSD 1929 of 2019 NSD 1930 of 2019 Judgment of: CHEESEMAN J Date of judgment: 17 January 2025 Date of publication of reasons: 20 January 2025 Catchwords: PRACTICE AND PROCEDURE – application on the papers to vary timetable for reference to inquire into lump sum costs determinations by Judicial Registrar acting as a Referee – no question of principle – application successful in limited respect. Cases cited: Masters v Lombe (liquidator), in the matter of Babcock & Brown Limited (in liq) (Lump Sum Costs) [2024] FCA 1336 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 12 Date of last submission/s: 17 January 2025 Date of hearing: Determined on the papers Counsel for the Plaintiffs / Costs Respondents: Mr G McDonald Solicitor for the Plaintiffs / Costs Respondents: Harrow Legal Solicitor for the Defendant / Cost Applicant: Joseph Scarcella, Johnson Winter Slattery ORDERS NSD 2525 of 2013 IN THE MATTER OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) BETWEEN: MICHAEL MASTERS and others Plaintiffs AND: DAVID LOMBE IN HIS CAPACITY AS LIQUIDATOR OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) Defendant NSD 947 of 2014 IN THE MATTER OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) BETWEEN: BRUCE BROOME and others Plaintiffs AND: DAVID LOMBE IN HIS CAPACITY AS LIQUIDATOR OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) Defendant NSD 501 of 2015 IN THE MATTER OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) BETWEEN: SARAH WILHELM and others Plaintiffs AND: DAVID LOMBE IN HIS CAPACITY AS LIQUIDATOR OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) Defendant NSD 1915 of 2019 IN THE MATTER OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) BETWEEN: MICHAEL MASTERS and others Appellants AND: DAVID LOMBE IN HIS CAPACITY AS LIQUIDATOR OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) Respondent NSD 1929 of 2019 IN THE MATTER OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) BETWEEN: BRUCE BROOME and others Appellants AND: DAVID LOMBE IN HIS CAPACITY AS LIQUIDATOR OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) Respondent NSD 1930 of 2019 IN THE MATTER OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) BETWEEN: SARAH WILHELM and others Appellants AND: DAVID LOMBE IN HIS CAPACITY AS LIQUIDATOR OF BABCOCK & BROWN LIMITED (IN LIQUIDATION) Respondent order made by: CHEESEMAN J DATE OF ORDER: 17 JANUARY 2025 THE COURT ORDERS THAT: 1. The time in order 6 of the orders made by the Court on 21 November 2024 be extended to 7 March 2025. 2. The time for compliance with direction 1 made by the Referee on 5 December 2024 be extended to 27 January 2025. 3. The parties are to apply promptly to the Referee for any consequential variation of the balance of the directions made by the Referee on 5 December 2024. 4. Any dispute in relation to documentary production be the subject of application to the Referee in the first instance. 5. The costs respondents pay the costs of the costs applicant in respect of their application to vary the timetable. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT CHEESEMAN J: 1 These reasons assume familiarity with my decision in Masters v Lombe (liquidator), in the matter of Babcock & Brown Limited (in liq) (Lump Sum Costs) [2024] FCA 1336 (the Lump Sum Costs Judgment). I will not repeat the detail of those reasons. 2 For the reasons given in the Lump Sum Costs Judgment, I ordered that costs orders made in three related proceedings on 18 October 2019 and in three related appeals on 3 September 2019 be determined on a lump sum basis, with a Registrar of the Court acting as a Referee to provide a report to the Court quantifying the lump sum costs in each of the six proceedings by no later than 28 February 2025. I ordered that the inquiry be conducted in the manner which, in the Referee's opinion, is the most efficient and practical in order to quantify the lump sum determinations with as little formality and expense as is reasonably possible. I further ordered that the Referee may make such directions as the Referee considered appropriate in order to effect the lump sum determinations in accordance with the orders I had made. 3 Further to these orders, and to give effect to the reference, Judicial Registrar Segal has given directions in relation to the inquiry. Those directions involve, amongst other things, the provision of further evidentiary materials limited in page length, and the provision of submissions (also limited in page length), and the opportunity for an oral hearing if one or both parties request such a hearing to occur. 4 By email dated 14 January 2025 to my Associate and the Assistant to Registrar Segal, copied to the Costs Applicant, the Costs Respondents' solicitor said: On 21 November 2024, Her Honour made Orders in respect of a lump sum determination of costs, for a Registrar to be appointed referee to quantify the costs and, most relevantly, by no later than 28 February 2025, for that Referee to give the Court a written report. On 5 December 2024 the Referee, being Registrar Segal, made orders directing the parties to file evidence and submissions, so that he could comply with that deadline of 28 February 2025. The Plaintiffs as the Costs Respondent will not be able to comply with the timetable ordered by the Registrar/Referee. The reasons can be explained in an affidavit and are not appropriate to debate in this email, which seeks a relisting, The Plaintiffs, as Cost Respondents, have been directed to file material by this coming Monday, 20 January 2025, which date cannot be met. Any variation of that order is likely to necessitate a variation to the whole timetable. The Plaintiffs seek a variation of the orders, such variation to the effect of extending the timetable. The proposed Orders/Directions are attached. 5 By their proposed orders, the Costs Respondents seek, amongst other things, to recast the existing timetable with the result that the Costs Respondents would have effectively a further month to provide any Costs Response materials and the date for the Referee to report would be pushed back by a month. In addition, the Cost Respondents sought orders in relation to document production. 6 On the same day as my Associate received the Costs Respondents' solicitor's email, I made orders to facilitate this issue being determined efficiently and quickly. The Costs Applicant's solicitor subsequently confirmed that the Costs Applicant opposed the extension being given. 7 The Costs Respondents' solicitor was informed by my chambers that the Costs Respondents should proceed on the basis that the existing timetable would apply if and until any further order of the Court. 8 Each camp has filed short written submissions and a supporting solicitor's affidavit to enable the issue to be determined on the papers. The last of this material was received shortly before 4pm on 17 January 2025. Having reviewed this material, I am not inclined to vary the timetable in the manner sought by the Costs Respondents. I am not satisfied that it is in the interests of justice to do so. Having regard to the fact that the Costs Respondents have had the Costs Applicants' Costs Summaries since April 2024 and have been on notice since 21 November 2024 that the Referee would be required to report by no later than 28 February 2025, I am unable to accept as sufficient the explanation given by the Costs Respondents' solicitor as to the Costs Respondents' purported inability to comply with the timetabling orders made by the Referee on 5 December 2024. 9 The Cost Respondents have brought this application very late and only shortly before the date on which they are required to provide any Costs Response materials. As a result, it is unavoidable that the Costs Respondents will learn of the outcome of their application after close of business hours on Friday, 17 January 2025, and in the absence of any further order being made they will be required to comply with the existing timetable which requires any Costs Responses to be provided on Monday, 20 January 2025. I am loathe to reward the Cost Respondents for the approach they have taken, particularly in circumstances where they have been informed to continue to seek to comply with the existing timetable. However, given that the Costs Applicant has quite properly acknowledged that he can point to no substantive prejudice, I regard it as appropriate to extend by a period of one week only the time by which the Costs Respondents are to provide any Costs Response affidavit. Accordingly, the Cost Response affidavit will now be due on or before 27 January 2025. I will make a corresponding variation to order 6 made on 21 November 2024 with the effect that the Referee will be required to report by no later than 7 March 2025. 10 Any other changes to the directions given by the Referee ought be made by the Referee. The parties should apply promptly to the Referee for any consequential changes to the Referee's directions. The dispute in relation to the production and redaction of documents, if it is to be agitated, must be the subject of an application for directions before the Referee in the first instance. The Referee has control of the process by which the reference is to be conducted. 11 The Costs Respondents have succeeded in obtaining a very limited extension of the timetable over the Costs Applicant's opposition, largely as a result of pragmatic considerations. In the circumstances, the Costs Respondents should pay the Cost Applicant's costs in connection with this application. 12 On 17 January 2025, I made orders accordingly, a copy of which were provided to the parties by email on 17 January 2025, at which time the parties were informed that given the hour these reasons would be published on Monday, 20 January 2025. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman. Associate: Dated: 20 January 2025