FEDERAL COURT OF AUSTRALIA

Martin v Norton Rose Fulbright Australia (No 2) [2020] FCAFC 42

ORDERS

THE COURT ORDERS THAT:

1.    The order for costs in favour of the respondent made in these proceedings on 18 December 2019, be awarded in a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth).

2.    The Registrar is directed to determine the quantum of the respondent’s costs in such a manner as the Registrar deems fit including, if thought appropriate, on the papers.

3.    At the conclusion of this process the Registrar is to make orders about the payment of the respondent’s costs in the sum or sums determined, to be payable within 28 days of such orders.

4.    The respondent’s costs of and incidental to the application for a lump sum cost order are to be paid by the applicant as part of the costs of the proceedings.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    On 18 December 2019, the Court published reasons for judgment in relation to this matter: Martin v Norton Rose Fulbright Australia [2019] FCAFC 234 (Martin v Norton Rose).

2    The Court ordered as follows:

1.    The application for an extension of time within which to file a notice of appeal dated 10 October 2019 be refused.

2.    The application to adduce further evidence on the appeal dated 5 November 2019 be refused.

3.    The applicant pay the respondent’s costs of and incidental to the following:

(a)    the application for leave to appeal dated 25 February 2019;

(b)    the application for an extension of time within which to file a notice of appeal dated 10 October 2019;

(c)    the application to adduce further evidence on appeal dated 5 November 2019; and

(d)    the application to amend the application for an extension of time in which to file a notice of appeal dated 26 November 2019.

4.    With respect to the costs referred to in order 3, the respondent’s application for a lump sum costs order is noted and the following directions are made:

(a)    the respondent file and serve any evidence and written submissions (limited to seven pages) in support of such application on or before 31 January 2020;

(b)    the applicant file and serve any evidence and written submissions (limited to seven pages) in response on before 7 February 2020;

(c)    the respondent file and serve any evidence and written submissions (limited to three pages) in reply on or before 12 February 2020;

(d)    the application be determined on the papers.

3    These reasons, which should be read together with the reasons for judgment dated 18 December 2019, address the issue of costs.

4    At the time of delivery of the judgment the applicant submitted that he should have had an opportunity to make submissions as to costs, and stated that as he had not had an opportunity to read the judgment, he wished to reserve his position in that respect, but no objection was made to the proposed timetable “if that’s the way in which the matter must proceed”.

5    As a consequence, on 2 January 2020, the following letter was sent to the parties:

Dear Practitioners

SAD 40 of 2019 — Thomas Patrick Martin v Norton Rose Fulbright Australia

I refer to the reasons for judgment delivered and orders made on 18 December 2019.

The Court is prepared to consider written submissions from the applicant, should he wish to make them, on whether the costs orders should be discharged or varied. The applicant may make any such submissions in his written submissions identified in Order 4(b) of the orders made on 18 December 2019. The page limit will be increased to 10 pages to allow him to so do. The respondent may respond in its written submissions identified in paragraph 4(c). The page limit will be increased to 6 pages to allow it do so.

The Court will consider submissions filed and served in accordance with the above. The timetable referred to in Order 4 of the orders of 18 December 2019 remains in place.

The Court will make orders in Chambers as follows:

1. The page limit in order 4(b) of the orders made on 18 December 2019 be increased to 10 pages.

2. The page limit in order 4(c) of the orders made on 18 December 2019 be increased to 6 pages.

6    Further correspondence from the applicant was received by the Court, inter alia, requesting various extensions to the timetable. The respondent filed submissions and evidence in support on 31 January 2020. On 19 February 2020, the applicant filed submissions and a notice of objection in relation to the respondent’s application for a lump sum costs order without an oral hearing, contending that, without an oral hearing, he would be deprived of the opportunity to test the affidavit evidence relied on by the respondent. The notice of objection is confined to the quantum of any lump sum order.

7    In summary, the applicant’s submission is that this matter ought to be listed for oral hearing and not be decided on the papers; if an oral hearing is listed he foreshadows an application for the Court to recuse itself on the grounds of actual or apprehended bias; that no costs order ought to have been made, and costs should be reserved for the determination of the substantive hearing; and if a costs order is made, it ought not be a lump sum order.

8    The applicant only briefly addressed the issue of whether a costs order should be made. The applicant contended that the question of costs should be reserved for determination of the substantive proceedings “on the basis that if the allegations are found proven, then the conduct of the Respondents in defending these proceedings ought be considered a deliberate obstruction of the victim of their fraud from obtaining relief, and furthermore, a fraud on justice on the Court, such that my conduct of the proceedings was wholly justified in the attainment of justice” (without alteration).

Consideration

9    A preliminary issue is whether, in light of the applicant’s notice of objection, this matter should be listed for oral argument. As noted above, the notice of objection only provides as a reason for oral argument the denial of the ability to challenge the quantum of a lump sum order, if that order were made. For the reasons below, this Court will not decide the issue of quantum.

10    The Court is satisfied that the determination of this matter would not be aided by an oral hearing. The parties have provided detailed written submissions. As will be apparent from the reasons below, the applicant’s submission in relation to the order for costs plainly is insufficient in this case to alter the application of ordinary principles. Moreover, the principle concern appears to be with the applicant’s loss of ability to challenge the respondent’s evidence, but, for the reasons below, the applicant is not prejudiced in this case. The Court notes that this approach also has the benefit of saving further costs being incurred. The issue of costs is to be determined on the papers: s 43 of the Federal Court of Australia Act 1976 (Cth) (Federal Court of Australia Act).

11    The principles regarding the award of costs are well established. Ordinarily, a successful party is entitled to an award of costs in its favour in the absence of special circumstances justifying some other order: see Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at [11] per Black CJ and French J; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67] per McHugh J, [134] per Kirby J; Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [6]–[7] per Emmett, Kenny and Middleton JJ.

12    It is important to recall that normally this Court should be in a position to deal with the question of costs in its judgment, unless there is a particular reason to reserve that question for later and separate consideration: Tristar Steering and Suspension Australia Ltd v Industrial Relations Commission of NSW (No 2) [2007] FCAFC 95; (2007) 159 FCR 274 at [26] per Buchanan J (Kiefel and Gyles JJ agreeing); Thomas v Commissioner of Taxation (No 2) [2017] FCAFC 144 at [5] per Dowsett, Perram and Pagone JJ.

13    In this context, as observed by Wilcox J (Moore and Lindgren JJ agreeing) in Australian Competition and Consumer Commission v Daniels Corporation Pty Ltd [2001] FCA 936 at [9]:

… Normally, the matter of costs will be dealt with, one way or the other, at the time when judgment is delivered. This statement applies to both trials and appeals. The exception is where some specific arrangement or request is made in regard to costs. To demonstrate this is the position, it is sufficient for me to refer to what was said by a Full Court in Preston Erection Pty Limited v Speedy Gantry Hire Pty Limited [1999] FCA 122. In that case, which happened to be a patent case, a request was made to the Court, after delivery of judgment, to re-open the matter for the purpose of dealing with costs. That request was refused. In delivering reasons for refusal, the Court said (at paras 4-5):

“It was open to the respondent on the hearing of the appeal to advance argument that, in the event of the appeal succeeding, the appellants should not receive all their costs of the trial. Or the respondent could have requested that, in the event of the appeal succeeding, it be given leave to put further submissions as to costs. Neither course was adopted. As we have said, a respondent is at risk of having to meet the appellant's costs of the appeal and the trial, should the appeal succeed. We do not accept that patent cases are in a special category in this respect. In the present case the appellants explicitly sought an order for the costs of the appeal and the trial.

Accordingly, we do not consider it appropriate to take the exceptional course of an appeal court setting aside an order to enable a party to advance an argument which was open to it, but not advanced on the hearing of the appeal itself.”

14    The applicant did not make any submissions as to costs at the substantive hearing of his application for an extension of time in which to file a notice of appeal from an interlocutory order made by the primary judge. He had an opportunity to do so. As the reasons delivered on 18 December 2019 reflect, that application was refused, the applicant’s conduct of the matter being such as to warrant that conclusion, and, in any event, as there concluded, there were insufficient prospects of success to warrant the extension: Martin v Norton Rose at [50].

15    There is no reason why costs should not follow the event. The reason suggested by the applicant in his written submission, in the circumstances of this appeal, is certainly not a basis. There is no basis to vary the order that the applicant pay the costs of the respondent.

16    The issue then is whether a lump sum order should be awarded, as sought by the respondent.

17    In Paciocco v Australia and New Zealand Banking Group Limited (No 2) [2017] FCAFC 146; (2017) 253 FCR 403 (Paciocco) at [13]–[20], the Full Court (Allsop CJ, Besanko and Middleton JJ) set out the principles to be applied in relation to the decision whether to make a lump sum costs order as follows:

13. The Court has a general discretion to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth) (the ‘Federal Court Act’). Under s 43(3), the Court may, among other things:

(a) make an award of costs at any stage in a proceeding, whether before, during or after any hearing or trial;

   …

   (d) award a party costs in a specified sum;...

14. Section 43 of the Federal Court Act is supported by r 40.02(b) of the Federal Court Rules 2011 (Cth) (the ‘Rules’), which provides:

A party or a person who is entitled to costs may apply to the court for an order that costs:

…

(b) be awarded in a lump sum, instead of, or in addition to, any taxed costs;...

15. The purpose of such a rule is “to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”: see Beach Petroleum NL v Johnson (No 2) [1995] FCA 1250; (1995) 57 FCR 119 (‘Beach Petroleum’) at 120.

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].

18    While this appeal does not have the features of a large and complex matter of the nature referred to in Paciocco, nonetheless, it is appropriate to make a lump sum order. There is nothing about this case which would render that approach unsuitable. Rather, this is a matter which has a protracted history, and as observed in the reasons of 18 December 2019, the applicant’s conduct of the matter “is such as to be properly characterised as conduct more directed to delaying the resolution of interlocutory disputes and conduct directed to ensuring that the proposed final hearing in about March 2020 is delayed”: Martin v Norton Rose at [48].

19    That said, the quantum of the order, which appears to be the matter of most concern to the applicant, is a matter of dispute and can be resolved by a Registrar of this Court in such manner as the Registrar deems fit. The power of the Court to direct a Registrar to determine the quantum of a costs order is contained in s 35A(1)(h) of the Federal Court of Australia Act and r 3.01(1)(b) and Schedule 2, Item 221 of the Federal Court Rules 2011 (Cth) (see Paciocco at [39]). The Court notes that the applicant had an opportunity to provide information to challenge the affidavit evidence filed by the respondent, but did not do so. In any event, by referring the issue of quantum to the Registrar, the applicant is not prejudiced. The Registrar’s inquiry would determine those disputes genuinely raised on the material, bearing in mind that the respondent’s entitlement to costs has been determined by this Court. The Registrar can give such directions (if any) to the parties as the Registrar considers fit, in order to identify or narrow the issues genuinely in dispute in determining the quantum of those costs. 

20    The alternative to a lump sum order is that the costs be agreed or taxed. Given the history of the matter, and the challenge to quantum, there would be no agreement. This process is likely to be less efficient than that proposed.

21    Given these conclusions, the foreshadowed application for disqualification if there is to be an oral hearing does not arise. In any event, the Court notes that the only proposed basis for that application is the applicant’s dissatisfaction with the Court’s conduct of the matter and the rejection of his submissions, as reflected in the reasons for judgment. Nonetheless, considering the relevant principles as set out in Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 (Johnson v Johnson) and affirmed in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337, there would have been no proper basis to the application. The test for determining whether a judge should be disqualified by reason of apprehended bias is “whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide”: Johnson v Johnson at [11]. That observer is amongst other things: (1) taken to be reasonable; (2) does not make snap judgments; (3) knows commonplace things and is neither complacent or unduly sensitive or suspicious; (4) has knowledge of all the circumstances of the case; and (5) is an informed one who will have regard to the fact that a judicial officer’s training, tradition and oath or affirmation, equip the officer with the ability to discard the irrelevant, the immaterial and the prejudicial. That a judge has made a previous decision on issues in a matter does not “mean either that [the judge] will approach the [other] issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that [the judge’s] previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that [the judge] will approach the issues in this way”: In Re JRL; Ex parte CJL [1986] HCA 39; (1986) 161 CLR 342 at 352. An application based on the applicant’s disagreement with the Court’s decision or conduct on the substantive hearing of the matter, if it were to be made, is not a proper basis in this case to disqualify the Court from determining the issue of costs arising from the decision.

Conclusion

22    There is no basis to vary the order that the applicant pay the costs of the respondent. The order for costs in favour of the respondent made in these proceedings on 18 December 2019 is to be awarded in a lump sum, in an amount to be assessed by a Registrar of this Court. The making of such an order simply resolves the question left open by Order 4 of the orders made on 18 December 2019, and provides the mechanism whereby the quantum of the lump sum is to be resolved.

Associate:

Dated:    17 March 2020