FEDERAL COURT OF AUSTRALIA

Coshott v Coshott (No 2) [2019] FCA 403

ORDERS

Arising out of proceedings involving the parties listed in the Schedule

THE COURT ORDERS THAT:

1.    The interlocutory respondent, Mrs Coshott, pay:

(a)    the interlocutory applicant, Mr Prentice, his costs of and incidental to his interlocutory application;

(b)    the interlocutory applicants, Messrs Barry and Board, the sum of $15,377.97 in respect of their joint interlocutory application; and

(c)    the interlocutory applicant, Mr Barry, additionally the sum of $15,701.97 as to his individual interlocutory application.

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

REASONS FOR JUDGMENT

BROMWICH J:

1    On 20 October 2017, I delivered judgment in Coshott v Coshott [2017] FCA 1239. On the same day, I made orders for payments to be made to the interlocutory applicants out of moneys paid into Court. On the topic of costs, I said (at [32] to [33]):

Given that the principal authority by which it is clear that the trustees for sale could validly be garnisheed by the applicants, Coshott v Learoyd, involved Mrs Coshott herself, the opposition both to payment out of Court and to the issue of a further garnishee order was clearly devoid of merit. In those circumstances, there does not seem to be any reason why the interlocutory applicants should be out of pocket by having to litigate for what should have been routine relief. A similar view was taken, albeit in relation to an appeal that also involved Mrs Coshott, the trustees for sale, and Mr Prentice: see Coshott v Crouch at [58]-[59]. However, Mrs Coshott has not been given an opportunity to make any submissions as to why indemnity costs are not appropriate.

The appropriate course is to order Mrs Coshott to pay the applicants’ costs, and to make provision for determination both of the basis for those costs and of the quantum of those costs, the latter by a Registrar of the Court.

2    Consequent upon the above observations as to costs, I also made procedural orders for the interlocutory applicants to file and serve any affidavit in support of costs being awarded on an indemnity basis, supported by short submissions and an affidavit constituting a cost summary in accordance with paragraphs 4.10 to 4.12 of the Court's Costs Practice Note (GPN-COSTS). Those orders were duly availed of by the interlocutory applicants, being Mr Barry and Mr Board in combination as to their joint interlocutory application, and also Mr Barry separately as to his individual interlocutory application. The remaining interlocutory applicant, Mr Prentice, did not seek indemnity costs and accordingly he should have the benefit of an ordinary costs order against Mrs Coshott.

3    A further part of the procedural timetable as to costs provided the interlocutory respondent, Mrs Coshott, the opportunity to file and serve corresponding affidavit and submission material opposing lump sum costs being awarded on an indemnity basis. No such material was filed by or on behalf of Mrs Coshott.

4    Finally, the procedural orders provided that, in the absence of any agreement having been reached on the quantum of the costs order to be made and notified by email to my associate by the given deadline, the appropriate lump-sum figure for the interlocutory applicants’ costs would be referred to a registrar for determination.

5    Joint submissions were made on behalf of Mr Barry and Mr Board in respect of their joint interlocutory application and also Mr Barry’s individual interlocutory application. The joint submissions acknowledged that the ordinary rule is that the Court will award costs on a party/party basis, but cited authority by which this may be departed from when the circumstances warrant it: see Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, Bookarelli Pty Ltd v Katanga Developments Pty Ltd (No 2) [2017] NSWCA 94, and Coshott v Barry & Board [2017] NSWSC 1435. Those submissions also point out that in Bookarelli it was observed (at [12]) that the circumstances that warrant departure from the ordinary rule are not closed and the exercise of the discretion to award indemnity costs is not confined to particular categories of cases in which such orders have been made in the past: see also NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480, 109 FCR 77 at [53].

6    The submissions for Messrs Barry and Board asserted that the circumstances that warrant a departure from the general rule in this case include the following:

(1)    the proceedings were manifestly devoid of merit, as I determined in the passage of my judgment at [32], reproduced above at [1];

(2)    Mrs Coshott, properly advised, should have known that she had no chance of success;

(3)    Mrs Coshott rejected invitations made on 18 March 2016 on behalf of the Messrs Barry and Board that she consent to the orders for payment out before costs were incurred;

(4)    Mrs Coshott in her unsigned submissions filed on 28 April 2017 relied upon a ground to the effect that there was no debt to which a garnishee order could be attached, and two other grounds that were abandoned (namely asserting various set-offs against the creditors' judgment debts and asserting that the judgment for Mr Barry in the 2012 Local Court proceedings had been set aside);

(5)    Mr Barry filed and served an affidavit sworn 22 May 2017 deposing to the existence of the judgment debts underlying the garnishee orders, together with other costs orders against Mrs Coshott in relation to any set off issue in the judgment debt in his favour, and establishing that the judgment in the Local Court proceedings was not set aside as asserted by Mrs Coshott in her unsigned submissions;

(6)    on 31 May 2017, Mr Barry served two sets of submissions for the respective interlocutory applications, citing a number of authorities concerning the issue of whether there was a debt to which a garnishee order could attach;

(7)    Mrs Coshott subsequently filed an outline of submissions on 4 September 2017 abandoning the second and third grounds referred to at (4) above, and instead asserted that there was no debt, the payment of funds into court did not make Mrs Coshott a debtor to the Court, and the funds in Court are Mrs Coshott’s funds and should be paid to her with costs against the interlocutory applicants;

(8)    on 9 October 2017, three days before the hearing, Mrs Coshott gave notice requiring Mr Barry to attend for cross-examination; and

(9)    on 11 October 2017, Mrs Coshott served an affidavit by her solicitor, Mr Prassas, annexing a number of bank statements from the Trustees for Sale, without ever subsequently identifying the purpose of that affidavit.

7    I accepted each of those submissions. I was satisfied that, individually and certainly collectively, the points made as outlined above afforded ample grounds for Mrs Coshott to be ordered to pay the costs of the interlocutory applications brought by Messrs Barry and Board on an indemnity basis. On that basis I referred the costs material to a Registrar to determine the appropriate lump-sum figure for the interlocutory applicant and applicants’ costs on the indemnity basis so determined.

8    A registrar duly determined that the appropriate lump sum on an indemnity basis was:

(1)    for the interlocutory applicants, Stephen Michael Barry and Martin Board, the sum of $15,377.97 in respect of their joint interlocutory application; and

(2)    for the interlocutory applicant, Mr Barry, separately the sum of $15,701.97 as to his individual interlocutory application.

9    I accept the registrar’s determination as being appropriate. I will therefore order Mrs Coshott to pay those amounts.

Associate:

Dated:    26 March 2019

SCHEDULE OF PARTIES