FEDERAL COURT OF AUSTRALIA

Eat Media Pty Ltd v Mulready Media Pty Ltd (No 2) [2010] FCA 392

Citation:	Eat Media Pty Ltd v Mulready Media Pty Ltd (No 2) [2010] FCA 392

Parties:	EAT MEDIA PTY LTD (ACN 121 658 795) v MULREADY MEDIA PTY LTD (ACN 108 019 941) AND ANOR

File number:	NSD 654 of 2009

Judge:	FLICK J

Date of judgment:	22 April 2010

Catchwords:	PRACTICE AND PROCEDURE – order for costs in a gross sum – further order sought seven months after initial costs order – non-compliance with Case Management Practice Note

Legislation:	Federal Court of Australia Act 1976 (Cth), s 37M Civil Procedure Act 2005 (NSW), s 98(3) and (4) Federal Court Rules (Amendment) 1998 (No. 224) Federal Court Rules,O 62 r 4(2)(c) and r 4(3), O 35 r 7(2) Practice Notice CM 4 Supreme Court (General Civil Procedure) Rules 2005 (Vic), r.63.07

Cases cited:	Australian Competition and Consumer Commission v Black on White Pty Ltd [2004] FCA 363, 138 FCR 314, cited Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (In liq) [2008] FCA 874, discussed Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 1387, 95 FCR 114, cited Australian Competition and Consumer Commission v Woolworths (South Australia) Pty Ltd [2003] FCA 530, 198 ALR 417, cited Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, applied Boyapati v Rockefeller Management Corporation (No 2) [2008] FCA 1375, 78 IPR 600, cited Burrell v The Queen [2008] HCA 34, 238 CLR 218, cited BZAS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 449, cited Capital Webworks Pty Ltd v Adultshop.Com.Limited & Ors [2002] FCA 389, 116 FCR 255, cited Datadot Technology Ltd v Alpha Microtech Pty Ltd [2003] FCA 1449, cited D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12, 223 CLR 1, cited Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916, cited Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd [2008] FCA 1051, 249 ALR 371, cited Hamod v New South Wales (No 13) [2009] NSWSC 756, cited Idoport Pty Ltd v National Australian Bank Ltd [2007] NSWSC 23, cited Lawrance v Commonwealth of Australia (No 2) [2008] FCA 1060, cited Mei Ying Su v Australian Fisheries Management Authority (No 2) [2008] FCA 1485, 251 ALR 135, discussed Moss v Insurance Australia Ltd [2005] FCA 87, cited Nine Films & Television Pty Ltd v Ninox Television Ltd [2006] FCA 1046, cited Owston Nominees No 2 Pty Ltd v Branir Pty Ltd [2003] FCA 629, 129 FCR 558, cited Salfinger v Niugini Mining (Aust) Pty Ltd (No 5) [2008] FCA 1119, cited Seven Network Ltd v News Ltd [2007] FCA 2059, cited Sony Entertainment (Aust) Ltd v Smith [2005] FCA 228, cited Su v Australian Fisheries Management Authority (No 3) [2008] FCA 2018, cited SZCAJ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 779, cited SZLKH v Minister for Immigration and Citizenship [2008] FCA 745, cited SZNSL v Minister for Immigration and Citizenship [2009] FCA 1543, cited The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] QSC 84, 2 Qd R 356, cited Venus Adult Shops Pty Ltd v Fraserside Holdings Ltd (No 2) [2007] FCAFC 41, cited Yau’s Entertainment Pty Ltd v Asia Television Ltd [2002] FCAFC 378, cited

Date of hearing:	22 April 2010

Place:	Sydney

Division:	GENERAL DIVISION

Category:	Catchwords
Number of paragraphs:	34

Solicitor for the Applicant:	Mr N Mattock, Marque Lawyers

Solicitor for the Respondents:	Mr M Peadon of PricewaterhouseCoopers

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY
GENERAL DIVISION	NSD 654 of 2009

BETWEEN:

EAT MEDIA PTY LTD (ACN 121 658 795)

Applicant

AND:

MULREADY MEDIA PTY LTD (ACN 108 019 941)

First Respondent

DUNCAN JOHN MULREADY

Second Respondent

JUDGE:	FLICK J
DATE OF ORDER:	22 APRIL 2010
WHERE MADE:	SYDNEY

BY CONSENT, THE COURT FURTHER ORDERS THAT:

1. In accordance with Order 62 rule 4(2)(c) of the Federal Court Rules the Court orders that the gross sum of costs to be paid by the Respondents to the Applicant pursuant to Order 2 made on 21 September 2009 be $45,000.

2. The outstanding amount of $30,000 be made by the following instalments:

(a) $10,000 to be paid on or before 20 May 2010;

(b) $10,000 to be paid on or before 20 June 2010; and

THE COURT NOTES THAT:

1. The sum of $15,000 has already been paid by the Respondents to the Applicant.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY
GENERAL DIVISION	NSD 654 of 2009

BETWEEN:

EAT MEDIA PTY LTD (ACN 121 658 795)

Applicant

AND:

MULREADY MEDIA PTY LTD (ACN 108 019 941)

First Respondent

DUNCAN JOHN MULREADY

Second Respondent

JUDGE:	FLICK J
DATE:	22 APRIL 2010
PLACE:	sydney

REASONS FOR JUDGMENT

1 This proceeding was commenced on 2 July 2009. An Application and a Statement of Claim were filed alleging (inter alia) a contravention of s 52 of the Trade Practices Act 1974 (Cth).

2 Declaratory relief was granted on 31 August 2009 and on 21 September 2009 orders were made dismissing a Further Amended Application and ordering the Respondents to pay the costs of the Applicant of and incidental to the proceeding. The orders then made have not been entered.

3 Nothing more was heard from the parties until 16 April 2010 when a letter was forwarded to the Court by the solicitors who had acted for the Applicant. The letter sought an order as to costs and invoked O 62 r 4(2)(c) of the Federal Court Rules. The order sought is that costs be fixed in the gross sum of $45,000 and that that sum be paid by way of four instalments during the period from April to July 2010.

4 Order 62 r 4 provides as follows:

Taxed costs and other provisions

(1) Subject to this Order, where by or under these Rules or any order of the Court costs are to be paid to any person, that person shall be entitled to his taxed costs.

(2) Where the Court orders that costs be paid to any person, the Court may further order that as to the whole or any part of the costs specified in the order, instead of taxed costs, that person shall be entitled to:

(a) a proportion specified in the order of the taxed costs; or

(b) the taxed costs from or up to a stage of the proceedings specified in the order; or

(d) a sum in respect of costs to be ascertained in such manner as the Court may direct.

(3) The Court may make an order under subrule (2) at any time, whether or not an order that costs be paid to a person has previously been made or entered.

Rule 4(3) was inserted into the Federal Court Rules by way of Federal Court Rules (Amendment) 1998 (No. 224). The Explanatory Statement provided at the time simply explained the reason for the amendment as follows:

... There has been some doubt as to whether once an order for costs has been entered the Court has power to set aside or vary it. The effect of this amendment is that the Court will be able to make an order that a specified gross sum be paid instead of tax [sic] costs even where an order for costs to be paid to a person has previously been made and entered.

That explanation confirms the existence of the power but says nothing as to the circumstances in which the discretionary power may be exercised.

5 Notwithstanding the apparent simplicity of the application being made, it is necessary to separately address the nature of the discretionary power invoked and the facts which it is jointly said justify the making of the order now sought.

6 That which has the potential to distinguish this case from others that have invoked O 62 r 4(2)(c) is the time at which the order is sought – namely a period of approximately seven months after the order for costs was made.

Rules 4(2)(c) and 4(3) — General Principles

7 The discretion conferred by O 62 r 4(2)(c) has been frequently invoked. The purpose of the rule is “to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120 per von Doussa J. See also: Seven Network Ltd v News Ltd [2007] FCA 2059 at [3] per Sackville J. It is not a rule, however, confined to complex litigation: Sony Entertainment (Australia) Ltd v Smith [2005] FCA 228 at [189] per Jacobson J. There is “no particular characteristic of a case which must exist before a gross sum costs order can be made”: Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 at [23] per Mansfield J. It is a power, by way only of example, which has frequently been exercised during the course of considering an appeal in migration cases involving the refusal of protection visas: e.g. BZAS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 449; SZCAJ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 779; SZLKH v Minister for Immigration and Citizenship [2008] FCA 745; SZNSL v Minister for Immigration and Citizenship [2009] FCA 1543. The underlying premise in migration cases for exercising the power may be the appropriateness of such an order being made where a migrant appellant is frequently unrepresented (and may even fail to appear at the hearing) and where the quantum of the costs order sought by a respondent Minister is self-evidently justifiable.

8 The fact that an order is sought after judgment has been delivered does not preclude the power now being exercised. Rule 4(3) expressly provides that an order may be made “whether or not an order that costs be paid … has previously been made or entered”: cf. Salfinger v Niugini Mining (Aust) Pty Ltd (No 5) [2008] FCA 1119 at [17] per Heerey J. See also: Lawrance v Commonwealth of Australia (No 2) [2008] FCA 1060.

9 The conferral of a power to vary an order or make a further order, even after an order has been entered, is not unique to O 62 r 4(2). One other instance may be found in O 35 r 7(2). Authorities that have considered the circumstances in which that power may be exercised have stressed the need to exercise “great caution” and the need for there to be “quite exceptional” circumstances before the power is exercised: Capital Webworks Pty Ltd v Adultshop.Com.Limited & Ors [2002] FCA 389, 116 FCR 255; Yau’s Entertainment Pty Ltd v Asia Television Ltd [2002] FCAFC 378; Venus Adult Shops Pty Ltd v Fraserside Holdings Ltd (No 2) [2007] FCAFC 41 at [6] to [10] per French and Kiefel JJ. Generally speaking, it has been said that “the jurisdiction is not to be exercised unless it can be shown that, without fault on the applicant’s part, he or she has not been heard on the relevant question”: Australian Competition and Consumer Commission v Black on White Pty Ltd [2004] FCA 363 at [14], 138 FCR 314 at 318 per Spender J.

10 The same degree of caution which must be exercised, however, when invoking O 35 r 7 may not be as self-evidently appropriate when applying O 62 r 4(2)(c). The latter power is a power clearly intended to facilitate and give practical effect to the ability of a party to quickly and inexpensively recover costs. The same degree of “caution” when exercising the power conferred by O 62 r 4(2)(c) may in some cases frustrate – rather than facilitate – the administration of justice.

11 When the power conferred by O 62 r 4(2)(c) is exercised, the task undertaken by the Court is thus “one of estimation or assessment and not of arithmetic calculation or precision”: Nine Films & Television Pty Ltd v Ninox Television Ltd [2006] FCA 1046 at [8]. Tamberlin J there further observed that the rule “contemplates the application of a much broader brush than that applied on taxation. The approach must be logical, fair and reasonable”. Although a “broader brush” may be applied, the discretion to make a lump sum order – no less than the general discretion to order costs – “must be exercised judicially and in accordance with principle”: Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd [2008] FCA 1051 at [23], 249 ALR 371 at 377 per Finn J. By way of example, in circumstances where a party did not oppose fixing costs in the sum of $183,000, but where the Court was not prepared to assess costs in that amount, an order was made for the payment of costs fixed in the sum of $70,000: Moss v Insurance Australia Ltd [2005] FCA 87 per Jacobson J.

12 Irrespective of an express power, the common law also recognises limited circumstances in which an order can be altered after it has been entered. In Owston Nominees No 2 Pty Ltd v Branir Pty Ltd [2003] FCA 629, 129 FCR 558 at 569, Allsop J reviewed the common law position and said:

[27] Thus, the common law appears to recognise, relevantly, at least four relevant possible bases for the exercise of power to deal with entered orders (i) ambiguity, invoking the need for construction, (ii) where the order does not reflect what the court decided, (iii) where something is to be added not dealt with by the court, which circumstance is probably limited to “ancillary” or “consequential” matters, and (iv) a supplemental order, the need for which arises from circumstances occurring after the order was made. …

His Honour left aside the slip rule, fraud and self-executing orders.

13 But any power to vary an order after it has been made or make any further order is necessarily an encroachment upon the principle as to the finality of litigation. In D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12, 223 CLR 1, Gleeson CJ, Gummow, Hayne and Heydon JJ thus observed:

Finality

[34] A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances. That tenet finds reflection in the restriction upon the reopening of final orders after entry and in the rules concerning the bringing of an action to set aside a final judgment on the ground that it was procured by fraud. The tenet also finds reflection in the doctrines of res judicata and issue estoppel. Those doctrines prevent a party to a proceeding raising, in a new proceeding against a party to the original proceeding, a cause of action or issue that was finally decided in the original proceeding. It is a tenet that underpins the extension of principles of preclusion to some circumstances where the issues raised in the later proceeding could have been raised in an earlier proceeding. (citations omitted)

The “principle of finality serves as the sharpest spur to all participants in the judicial process, judges, parties and lawyers alike, to get it right the first time. Later correction of error is not always possible. If it is possible, it is often difficult and time-consuming, and it is almost always costly”: Burrell v The Queen [2008] HCA 34 at [16], 238 CLR 218 at 223 per Gummow ACJ, Hayne, Heydon, Crennan and Kiefel JJ.

14 The very conferral of the power conferred in O 62 r 4(2)(c) (as supplemented by r 4(3)), however, necessarily recognises that there are circumstances in which it is appropriate for the power to be exercised. The terms of r 4(3) of the Federal Court Rules may be compared with the power conferred as follows by s 98(3) and (4) of the Civil Procedure Act 2005 (NSW) upon the Supreme Court of New South Wales:

(3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.

(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:

(a) costs up to, or from, a specified stage of the proceedings, or

(b) a specified proportion of the assessed costs, or

(d) such proportion of the assessed costs as does not exceed a specified amount.

In applying the New South Wales provision, the Supreme Court of that State seems to have applied much the same general principles as have been applied by this Court: Idoport Pty Ltd v National Australian Bank Ltd [2007] NSWSC 23 at [9] per Einstein J; Hamod v New South Wales (No 13) [2009] NSWSC 756 at [3] to [4] per Harrison J. A similar approach has also been pursued in Queensland: e.g. The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] QSC 84 at [7] to [8], [2009] 2 Qd R 356 at 362 per Martin J. See also: Supreme Court (General Civil Procedure) Rules 2005 (Vic), r.63.07.

15 The power conferred by O 62 r 4(2)(c) must also now be exercised in a manner consistent with s 37M of the Federal Court of Australia Act 1976 (Cth), sub-section (1) of which provides as follows:

The overarching purpose of civil practice and procedure provisions

(1) The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:

(a) according to law; and

(b) as quickly, inexpensively and efficiently as possible.

16 Given the nature of the power conferred, it is perhaps not surprising that O 62 r 4(2) and (3) confers the power in discretionary terms – the Court “may” make an order.

Rules 4(2)(c) and (3) — The Exercise of the Power

17 The power conferred to make an order that costs for a “gross sum” be paid after an order has already been made for the payment of costs is a power which has been exercised from time to time.

18 Examples of the power being exercised show it being exercised in a manner which relieves one (or perhaps both) of the parties from the costs and expense associated with taxation of a prior order as to costs and being exercised in a manner which facilitates the party in whose favour a prior costs order has been made in fact receiving the benefit of that prior order in a timely and meaningful fashion.

19 One instance where an exercise of the power was contemplated occurred in Boyapati v Rockefeller Management Corporation (No 2) [2008] FCA 1375, 78 IPR 600. The respondents were there found to have infringed the applicants’ copyright. The respondents’ conduct was also found to be such as to warrant an order that costs be taxed and paid forthwith and that 50% of the costs were to be paid on an indemnity basis. But liberty was granted to thereafter apply for an order pursuant to O 62 r 4(2)(c). In doing so, Kenny J concluded:

[42] The applicants also seek liberty to apply for an order that the costs in their favour be fixed in a gross sum in accordance with O 62 r 4(2)(c) of the Rules. They note (and the respondents do not dispute) the second respondent’s current status as an undischarged bankrupt. They also note (and the respondents do not dispute) that the first respondent is a foreign corporation registered to conduct business in Australia without obvious assets in Australia. As already observed, the costs involved are likely to be substantial. Having regard to the course of the proceeding to date, it may reasonably be assumed that taxation will be drawn-out and expensive. The applicants may well be obliged to meet the entire financial burden. In these circumstances, the applicants have liberty to apply for an order that the costs in their favour be fixed in a gross sum in accordance with the Rules.

An instance when the Court was called upon to make an order pursuant to O 62 r 4(2)(c) after an order for costs had previously been made came before Reeves J. In Mei Ying Su v Australian Fisheries Management Authority (No 2) [2008] FCA 1485, 251 ALR 135 at 165, delivered in October 2008, His Honour made an order for costs. A subsequent application was made in December 2008 to then fix a gross sum. His Honour declined to do so: Su v Australian Fisheries Management Authority (No 3) [2008] FCA 2018. The dearth of material upon which the application was based, however, made it unnecessary for His Honour to discuss any generally expressed principle. See also: Datadot Technology Ltd v Alpha Microtech Pty Ltd [2003] FCA 1449. And in Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (In liq) [2008] FCA 874 an order was made that the costs payable by the third to sixth respondents be assessed as a gross sum. There was thereafter the intervening bankruptcy of two of the respondents. Notwithstanding the general proposition that “one cannot pursue a matter in court against the debtor once bankruptcy ensues” and that “the appropriate thing to do is to file a proof of debt”, Gyles J concluded that an order should be made pursuant to O 62 r 4(2)(c). In so concluding, His Honour said:

[7] To lodge a proof of debt in each of the bankrupt estates would, first of all, require a proof of debt to be prepared. Secondly, it would require the trustee to consider that proof of debt and that would require some investigation. All of that seems to me to be time and money which should not be spent. It is unlikely to be recovered from anybody and, as the Court has had to do the work, it seems pointless to have it repeated. None of the relevant parties appear to oppose the orders. It seems to me that there will be unnecessary duplication if leave is not granted. Furthermore, the quantification of costs, the question that arises here, is very much a matter for the Court and Court officials and those with the knowledge of the way these things are done. The trustees in bankruptcy would have no particular qualifications to assess the situation. So as a matter of substance, I am satisfied that the orders should be made as sought.

The width of the power conferred by O 62 r 4(2)(c) is underlined by the preparedness of His Honour to make such an order on the facts of that case.

20 Even though there have thus been instances where the power to make an order has been exercised after an order has previously been made, there remains an absence of guidance as to the more general principles to be now applied. It would thus be imprudent to attempt any exhaustive identification of factors relevant to the exercise of the discretion. Necessarily these will have to be worked out over time and in a context where there have been more fully developed submissions than have now been advanced. But some of these factors, it is considered, would include:

· the need for finality in litigation;

· whether or not the order sought to be varied has in fact been entered;

· the length of time that has expired between the time when the order was first made and the time when the further order is sought;

· the reasons for any delay in making the application;

· the reasons why an order was not sought pursuant to O 62 r 4(2)(c) at the outset of the proceedings;

· whether or not the parties have in fact previously advanced submissions as to the appropriate order to be made as to costs and, if so, why any application for an order pursuant to O 62 r 4(2)(c) was not then canvassed;

· if the application is based upon facts or circumstances which have taken place subsequent to the order first being made, the nature of those facts and circumstances; and

· whether the parties consent to the further order being made.

The consent of the parties, it is jointly contended by the parties to this proceeding, is a matter of importance. Reference was thus made to O 35 r 10A of the Federal Court Rules which permits a Judge of the Court to “make an order in accordance with the terms of a written consent of the parties”. In the context of that rule it has been observed that there is “an important public policy in the court encouraging fair and appropriate settlement of litigation”: Australian Competition and Consumer Commission v Woolworths (South Australia) Pty Ltd [2003] FCA 530 at [21], 198 ALR 417 at 424. There is also “a general principle of judicial restraint in the scrutiny of proposed settlements”: Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 1387 at [37], 95 FCR 114 at 131 per French J.

21 Given the absence of any substantive submissions in the present proceeding as to the principles to be applied, or reference by the parties to any relevant authorities in either Australian State jurisdictions or those perhaps in the United Kingdom, no more than very tentative views are now expressed. It may even be undesirable to have attempted any identification of the factors that will be relevant to the exercise of the discretion to order that costs be fixed in a “gross sum” where the power is invoked after an order for costs has previously been made. Perhaps the discretion otherwise conferred by O 62 r 4(2)(c) should itself be unconstrained by whether the order is sought before or after an order for costs has otherwise been made.

22 In circumstances where a discretion has been conferred by the Federal Court Rules in unconfined terms, the discretion itself should obviously not be unnecessarily fettered by any prescriptive identification of considerations relevant to its exercise. The discretion should remain free to be exercised by reference to the facts and circumstances of a particular case, and in a manner which both facilitates the recovery of costs and promotes the proper administration of justice.

The Agreed Statement of Facts

23 As a general proposition, it is not considered that the mere fact that parties consent to an order being made pursuant to O 62 r 4(2)(c) is a sufficient reason in itself for acceding in all cases to a joint application. Agreement to a “gross sum” will probably in all cases necessarily avoid the delay and expense in taxation of a costs order. To accede to a proposition that the parties can at any time merely agree to the making of such an order and thereby invariably give effect to their agreement is a proposition which is rejected. To accede to such a proposition would be to deny to this Court the discretion conferred by the Federal Court Rules. Litigation does not always involve such “after sales service”.

24 But any discretion must necessarily be exercised by reference to the peculiar facts and circumstances presented for resolution.

25 When the matter was first mentioned this morning, the parties were informed that the difficulties which needed to be addressed centred upon:

· non-compliance with Practice Notice CM 4;

· the absence of any factual basis, either set forth in an affidavit or by way of an agreement as to facts, upon which the discretion was to be exercised; and

· the principles to be applied where the discretion was to be exercised after an order for costs had previously been the subject of argument and judgment and where the issue of an order under O 62 r 4(2)(c) had not previously been canvassed.

The opportunity was extended to the parties to have the matter stood over to a future date so that these issues could be more fully addressed. Understandably, in order to minimise costs, that opportunity was rejected and the matter was stood down for a short period of time so that the parties could formulate a response to the issues that had been raised.

26 Practice Notice CM 4 requires an application under r 4(2)(c) to be accompanied by an affidavit stating:

2. An application under paragraph 4(2)(c) must be accompanied by an affidavit stating:

(a) the amount of the gross sum sought to be specified in the order; and

(b) how the gross sum has been arrived at and how it is justified.

27 After a short adjournment, the parties handed up a statement of “Agreed Facts” which provided as follows (without alteration):

Agreed Facts

1. On 14 September 2009 the parties appeared before the Court on an argument as to costs of the proceedings.

2. On 14 September 2009 the parties argued for competing costs orders and consequently were unable to seek a specific gross sum until the extent of any costs order was known.

3. A costs order was made in the Applicant’s favour on 21 September 2009.

4. On 13 October 2009 the Applicant wrote to the Respondent seeking to resolve the costs order by consent.

5. The total amount of costs incurred by the Applicant was $67,832.14 (including counsel’s fees and disbursements)

6. Between 13 October 2009 and 22 February 2010, the parties engaged in correspondence in an attempt to resolve the costs order.

7. A final agreement for costs to be resolved was made on 30 March 2010.

8. A Deed was signed between the parties setting out the agreed costs award at $45,000 payable in instalments of:

(a) $15,000 on or before 20 April 2010.

(b) $10,000 to be paid on or before 20 May 2010.

(d) $10,000 to be paid on or before 20 July 2010.

9. The purpose of entering into the Deed, which sought an order be made under Order 62 Rule (4)(2)(c), was so that the parties could achieve finality as to the amount and payment regime for costs without the time, expense and uncertainty of a taxation process.

10. In exchange for the Applicant agreeing a payment by instalments plan, the Respondent’s agreed to an order being made under Order 62 Rule (4)(2)(c) so that fresh proceedings pursuant to the Deed would not have to be commenced by the Applicant if there was default in payment by the Respondents.

11. Both parties in these proceedings are small businesses with limited resources.

12. The Respondents have paid the first instalment as agreed.

28 That statement of “Agreed Facts”, it is considered, provides a basis upon which the discretion may now be exercised to give effect to the agreement of the parties.

29 The statement of “Agreed Facts” sufficiently explains the reasons for the apparent delay in approaching the Court for an order pursuant to O 62 r 4(2)(c). Time was necessarily expended in negotiating the agreement now reached. Indeed, the time taken may well be less than the time otherwise involved in a formal process of taxation of costs. And, although some reservation is expressed as to why an order pursuant to O 62 r 4(2)(c) was not previously sought in September 2009, there is some merit in the parties first resolving whether any costs order at all should be made and, if so, on what basis before turning attention to the quantum of any costs that may be payable.

30 Although initial reservation was expressed as to the quantum of costs set forth in the “Agreed Facts”, oral submissions focussed attention upon the fact that the proceeding had as at September 2009 reached the point where there had been an earlier interlocutory hearing and where pleadings had been amended, discovery completed and affidavits filed. Most of the costs to be involved in a contested hearing, it was submitted, had by then already been incurred. Given the steps that had been taken, the fees claimed may well fall within the range of what would otherwise be expected and what would otherwise be regarded as “logical, fair and reasonable”. Compliance with Practice Notice CM 4 is, in the present proceeding, dispensed with.

31 Moreover, given the consent of the parties, it is perhaps prudent not to too carefully scrutinize the agreement reached. And that agreement does avoid the time and expense otherwise to be incurred in a taxation of costs.

32 Since the application for a further order to be made was one jointly made by the parties, it is not considered appropriate to make an order as to costs.

ORDERS

33 By consent, the Court further orders that:

2. The outstanding amount of $30,000 be made by the following instalments:

(a) $10,000 to be paid on or before 20 May 2010;

(b) $10,000 to be paid on or before 20 June 2010; and

34 The Court notes that:

1. The sum of $15,000 has already been paid by the Respondents to the Applicant.

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

Associate:

Dated: 27 April 2010

Top