Federal Court of Australia

HBSY Pty Ltd v Lewis (Costs) [2025] FCAFC 80

ORDERS

THE COURT ORDERS THAT:

1.    The appellant pay the respondent’s costs of the appeal (which do not include the respondent’s costs of the application for an extension of time to appeal).

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

REASONS FOR JUDGMENT

THE COURT:

1    On 3 April 2025, we published our reasons for judgment in HBSY Pty Ltd v Lewis (No 2) [2025] FCAFC 44 (HBSY No 2) dismissing the appellant’s appeal against the decision of the primary judge. This judgment relates to the issue of the costs of the appeal.

2    Definitions adopted in HBSY No 2 will also be adopted in these reasons.

Background

3    The relevant background is set out in HBSY No 2 at [8]–[16].

4    In HBSY HCA, by order 3 of its orders dated 9 October 2024, the High Court of Australia ordered that (High Court orders):

The first defendant pay the plaintiff’s costs in the Full Court of the Federal Court of Australia and in this Court.

5    In HBSY No 2, we observed at [110] that:

Ordinarily, having dismissed the appeal we would order that HBSY pay Geoffrey’s costs of the appeal. However, in HBSY HCA the High Court ordered Geoffrey to pay HBSY’s “costs in the Full Court of the Federal Court of Australia and in this Court”. That order appears to cover the whole of the costs of the proceeding in this Court, even though a substantial part of the argument was directed at the substantive issues in the case (which had not been decided and did not reach the High Court). It is not for us to decide that an order of the High Court was made per incuriam. We will therefore make no order as to costs.

6    After the delivery of HBSY No 2, the parties sought to be heard further on the question of costs and were ordered to file written submissions addressing that question. The costs issue is to be determined on the papers.

7    Geoffrey submits that order 3 of the High Court orders only refers to the costs that HBSY incurred in relation to its application for an extension of time to file a notice of appeal in the Federal Court dated 2 September 2022, and not to the costs that HBSY incurred in relation to the substantive appeal. Geoffrey seeks his costs as the successful party in the appeal.

8    HBSY contends that order 3 refers to all of the costs that HBSY incurred in the substantive appeal before this Court, and says that is also the conclusion reached by this Court at [110] of HBSY No 2. Therefore, HBSY alleges that the power to make the costs order sought by Geoffrey must be pursuant to r 39.04 of the Federal Court Rules 2011 (Cth). That rule provides that:

The Court may vary or set aside a judgment or order before it has been entered.

9    However, notwithstanding the comments made at [110], HBSY No 2 did not determine whether the High Court orders covered the entire question of costs. The orders made in connection with HBSY No 2 were silent on the issue of costs, and thus there is no order of this Court that needs to be set aside before an order concerning the costs of the appeal can be made. Further, the observations at [110] did not purport conclusively to determine any issue: that paragraph stated that the High Court order appeared to cover the whole of the substantive appeal before this Court and noted that it was inappropriate to decide whether an order of the High Court was made per incuriam.

10    The issue is therefore a question of the construction of order 3 of the High Court orders, which was left open by HBSY No 2. It is not necessary to vary HBSY No 2 as HBSY contends.

11    HBSY also advanced submissions in reply on the basis of correspondence between the solicitors for Geoffrey and the High Court registry in relation to the High Court orders. Geoffrey seeks leave to file submissions in response on that limited issue. However, as will become apparent, it is not necessary for further submissions to be received from Geoffrey.

Consideration

12    The materials that a court is permitted to use when construing court orders were set out in Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 8) [2025] FCA 20 at [33]–[34] (Markovic J):

… It is clear based on the authorities that where orders are ambiguous a court may have regard to the judgment to which those orders are intended to give effect in resolving the ambiguity: see Athens v Randwick City Council (2005) 64 NSWLR 58 at [129]–[140]; Lim v Comcare [2019] FCAFC 104; (2019) 165 ALD 217 at [40]–[42]. Where that is so, the judgment to which the orders are intended to give effect is the primary point of reference for the court: see Athens at [140].

There is also ample authority for the proposition that where a court construes orders that are ambiguous, it may have regard to surrounding circumstances in doing so: see Shout Rocks Cafes Pty Ltd v City of Port Philip [2018] VSC 120 at [14]; Nokia Corporation v Liu (2009) 179 FCR 422 at [30]–[31]. Relevantly, a court may have regard to the proceedings giving rise to the judgment and in particular the pleadings which defined the issues to be resolved: Athens at [140]; Hamersley Iron Pty Ltd v National Competition Council [2008] FCA 598; (2008) 247 ALR 385 at [85]–[86].

(Emphasis omitted.)

13    At first glance, order 3 might appear to be a complete determination of the question of costs in the entire proceeding: the order refers to Geoffrey paying the costs of HBSY “in the Full Court of the Federal Court of Australia”.

14    However, other aspects of the High Court orders bear noting. The High Court did not make any orders determining any aspect of the substantive appeal. Rather, order 2 issues a writ of mandamus directing that the Full Court “hear” HBSY’s appeal from the whole of the primary judgment. This contemplates that there may have been preliminary or further steps in the appeal to be completed by the Full Court. Order 2 also requires the Full Court to “determine” HBSY’s appeal. When a court determines an appeal, it has jurisdiction to determine which party (if any) should pay costs: Federal Court of Australia Act 1976 s 43(1). This supports a construction that order 3 does not make a final costs order in relation to the substantive appeal but rather relates to the costs flowing from HBSY’s successful application for the extension of time to appeal.

15    This interpretation is also consistent with the HBSY HCA judgment to which the High Court orders are intended to give effect. The only matter dealt with in HBSY HCA was whether this Court erred in determining that it would not grant HBSY’s extension of time application because it did not have jurisdiction. The majority of the High Court stated at [73] that:

This case concerns the scope of the appellate jurisdiction of the Full Court of the Federal Court of Australia … to hear and determine an appeal …

16    The High Court did not refer to the hearing before this Court on 2 and 3 May 2023, nor mention steps taken in the substantive appeal. Indeed, the only reference that the majority of the High Court made to what transpired before this Court was that “[t]he Full Court dismissed the plaintiff’s application for an extension of time to appeal as incompetent”. No reasoning was provided in HBSY HCA as to why any costs order would deal with the substantive appeal, particularly in circumstances where the appeal had not yet been determined. The conclusion that order 3 relates only to the costs of the application for an extension of time is thus supported by the subject matter of HBSY HCA.

17    HBSY submits that the surrounding circumstances support a conclusion that order 3 refers to the costs of the substantive appeal before this Court. HBSY relies on the fact that, in written submissions filed in the High Court proceeding, Geoffrey submitted that if the matter was to be returned to the Full Court for determination, the “Court should not make any costs orders in relation to the Federal Court proceedings”. Geoffrey did not make additional oral submissions on costs.

18    Following the delivery of HBSY HCA on 9 October 2024, the solicitors for Geoffrey sent correspondence to the Principal Registrar of the High Court seeking clarification of the scope of order 3 and whether it intended to cover costs in the substantive appeal before this Court. However, Geoffrey subsequently agreed to final orders in the form made by the High Court, and those orders were authenticated on 4 November 2024.

19    However, this background does not assist HBSY’s construction. The fact that Geoffrey agreed to the entry of order 3 does not change its meaning. Consenting to order 3 does not mean that Geoffrey consented to any particular interpretation of order 3. It is entirely consistent with Geoffrey’s position that he may have formed the view that order 3 did not apply to the substantive appeal, and this was the basis for him consenting to that order in those terms.

Conclusion

20    It is therefore appropriate to make an order that costs follow the event. Geoffrey should have his costs of the appeal, except for his costs relating to the application for an extension of time to appeal.

Associate:

Dated:    13 June 2025