Federal Court of Australia

Karpik v Carnival plc (The Ruby Princess) (Stay Application Costs) [2021] FCA 1290

ORDERS

THE COURT ORDERS THAT:

1.    The respondents pay the applicant’s costs of the amended interlocutory application filed 28 June 2021.

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

REASONS FOR JUDGMENT

(Revised from the transcript)

STEWART J:

1    On 20 September 2021, I made orders dismissing the stay and associated relief sought by the respondents in their amended interlocutory application filed on 28 June 2021. I must now deal with the question of the costs of that application. The respondents accept that as the substantially unsuccessful party, they should, in accordance with the usual rule, bear the costs.

2    The plaintiff is dissatisfied with that position. She submits that, because the relief sought by the respondents was final in nature, I should order that the costs of the interlocutory application be taxed immediately as allowed by the note to r 40.13 of the Federal Court Rules 2011 (Cth). That is an exception to the rule itself, which provides:

If an order for costs is made on an interlocutory application, the party in whose favour the order is made must not tax those costs until the proceeding in which the order is made is finished.

Note:     The Court may order that costs of an interlocutory application be taxed immediately.

3    The rule applies to interlocutory applications, as indeed the respondents’ application was. The question of the extent to which the relief sought was final in nature is a separate question and one to be considered as a factor to take into account in considering whether or not to exercise the discretion rather than being one which would displace the application of the rule itself.

4    The applicable principles can be briefly stated. The discretion should only be exercised where the moving party “establishes that the demands of justice require that there be a departure from what appears to be the general practice envisaged by the rule”: Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd [1992] FCA 423; 36 FCR 297 at 312 per Olney J. The party who seeks an order that the costs of an interlocutory application be payable forthwith bears the onus of demonstrating a good reason why a departure from the ordinary rule is justified: The Owners – Strata Plan No 87231 v 3A Composites GmbH (No 2) [2020] FCA 333 at [33] per Wigney J.

5    In exercising the discretion, the court should bear in mind the “twin policy considerations” underlying r 40.13, namely, (1) that the court should avoid exposing the parties to the perils of multiple taxation proceedings, and (2) that there may be subsequent events in the conduct of the proceedings that may generate costs orders going in the opposite direction and in respect of which setoffs may ultimately be available: Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International BV (No 5) [2018] FCA 19 at [8] per Perram J. The latter consideration recognises that it is usually inappropriate to require the unsuccessful party on an interlocutory application to pay costs immediately as they may ultimately succeed in the substantive proceeding: Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 4) [2013] FCA 567 at [29] per Barker J.

6    Further, although past cases may reveal considerations that may, in an appropriate case, justify departure from the ordinary rule, they should not be viewed as establishing immutable or rigid rules that dictate the exercise of the discretion in a later case: 3A Composites at [34]-[35].

7    The applicant identifies a number of factors which she submits justify departure from the usual rule. They are as follows.

8    First, as previously mentioned, she submits that although the relief sought by the respondents was sought in an interlocutory application, the nature and substance of that relief was, at least in part, final relief.

9    Secondly, she submits that the judgment relates to the determination of a discrete and self-contained question, which will not have a bearing on the determination of further issues in the proceeding. See Coretell at [31].

10    Thirdly, she submits that the costs are significant and that there is likely to be a delay in the conclusion of the proceeding.

11    Fourthly, she submits that this is not a case where the court might decline to make an order for costs be paid forthwith out of a concern that the order itself might jeopardise the respondent’s ability to defend the claims.

12    In my view, those factors are insufficient to displace the usual rule.

13    First, the interlocutory application did not determine any discrete substantive issue in the case and in that sense did not give rise to any relevant final relief. It dealt with procedural questions not finally dispositive of any rights of the parties. As I have said, r 40.13 applies to interlocutory applications of which this was one.

14    Secondly, the proceedings are not at a particularly early stage such that the applicant will have to wait a very long time within the context of the nature of this proceeding before she can either tax and recover costs or there might be setoff against any costs order made. In that respect, discovery and the serving of evidence is well-advanced, there is soon to be a mediation and the trial is one year away. The downside of the diversion of attention and resources, the expense created by the taxation of costs at this stage, and, in particular, the risk of multiple taxations and the possibility of future of competing costs orders is not outweighed by the disadvantage to the applicant in having to wait.

15    Thirdly, the fact of the costs being significant, which I accept, is not relevant to the exercise of discretion.

16    Fourthly, and relatedly, the applicant’s case is a funded class action, meaning that her ability to continue to prosecute her case to full effect is not dependant on having her costs taxed now.

17    In the result, I will order that the respondents pay the costs of their amended interlocutory application filed on 28 June 2021. Those costs include the costs of the argument on costs.

Associate:

Dated:    22 October 2021