Federal Court of Australia

Hillier v Martin (No 16) [2022] FCA 1155

ORDERS

THE COURT ORDERS THAT:

1.    Rule 40.13 of the Federal Court Rules 2011 (Cth) be dispensed with.

2.    The non-party, Thomas Patrick Martin, pay the applicant’s costs of and incidental to the interlocutory application filed 21 July 2022 by Thomas Patrick Martin on a party-party basis.

3.    The costs referred to in order 2 herein be assessed on a lump sum basis.

4.    The matter be referred to a Registrar to fix a lump sum in order 3 herein.

5.    Thomas Patrick Martin is to pay the lump sum fixed in accordance with order 4 herein within 28 days of the Registrar fixing the lump sum.

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

REASONS FOR JUDGMENT

O’SULLIVAN J:

1    This is an application by the applicant for costs following the Court dismissing an interlocutory application filed by Thomas Patrick Martin (Mr Martin) on 21 July 2022 on the basis Mr Martin had no standing to bring the application: Hiller v Martin (No 13) [2022] FCA 939. The applicants seek that their costs be assessed on a lump sum basis and that Mr Martin pay those costs forthwith. Mr Martin is a non-party to the proceedings.

Principles – costs payable by a non-party

2    It is well-settled that pursuant to s 43 of the Federal Court of Australia Act 1976 (Cth), the Court has a discretion to order costs against a non-party in appropriate circumstances: Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178; Caboolture Park Shopping Centre Pty Ltd (In Liq) v White Industries (QLD) Pty Ltd [1993] FCA 667; (1993) 45 FCR 224; Gore v Justice Corp Pty Ltd [2002] FCAFC 354; (2002) 119 FCR 429; Kebaro Pty Ltd v Saunders [2003] FCAFC 5; Life Therapeutics Ltd v Bell IXL Investments Ltd (No 2) [2008] FCAFC 158; (2008) 170 FCR 595.

3    The jurisdiction to order costs against a non-party “must be exercised judicially and in accordance with general legal principles pertaining to the law of costs”: Knight, p 192.

4    In Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 10) [2009] FCA 498, [20], Collier J reviewed a number of authorities dealing with orders for costs against non-parties. Her Honour noted that the exercise of such a discretion is approached with caution; indeed, it has been described as rare and exceptional: Vestris v Cashman (1998) 72 SASR 449, p 467; Kebaro [103]. Whether the discretion is exercised depends on the circumstances of each case, as it is a fact-specific jurisdiction: Kebaro [69]. Collier J proceeded to set out a number of principles guiding the approach of the Court when considering whether costs should be awarded against a non-party. Those principles are directed generally at a non-party’s role in the proceedings and in particular, where that non-party has played an active role in the conduct of the litigation and has an interest in the subject matter of the litigation: Mason CJ and Deane J in Knight, p 192. Another principle relevant to the exercise of the discretion is that there must be a real link between the non-party and the proceedings which is material to the issue of costs: Bischof v Adams [1992] 2 VR 198, p 204-205; Kebaro [70].

Principles – costs payable forthwith

5    In Watson v Kriticos (Costs Payable Forthwith) [2022] FCA 4, [4]-[7] Perram J set out some of the factors which may justify the exercise of the discretion to order that costs be assessed and be payable forthwith:

4.    Rule 40.13 of the FCR is in these terms:

40.13 Taxation of costs awarded on an interlocutory application

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.

5.    The notation refers to a discretion in the Court’s hands to dispense with r 40.13. Probably, that discretion is sourced not in the notation itself but rather in the provisions of r 1.34 or r 1.35 but there is no doubt that the discretion exists: Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International B.V. (No 5) [2018] FCA 19 (‘FKP v Spirits’) at [6].

6.    The principles governing the exercise of the discretion are similarly well-established. As a general proposition, the discretion should be exercised in favour of a party who establishes that the demands of justice require a departure from the ordinary rule embodied in r 40.13: FKP v Spirits at [7]; Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297 at 312 per Olney J. Always to be borne in mind, however, are the twin policy considerations underpinning r 40.13: first, that it is generally undesirable that the parties should be exposed to multiple taxation processes during the life of one proceeding; and second and relatedly, that during the balance of the litigation, costs orders may be made in the opposite direction which will normally be capable of being set-off against earlier costs orders.

7.    The exercise of the discretion may be justified in a number of circumstances, including where (FKP v Spirits at [9]):

(a)    the final determination of the proceeding is far away: Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 13) [1995] FCA 1459 at [5];

(b)    a party has been required to incur significant costs over and above those which it would have incurred had the opposing party acted in handling the proceeding with competence and diligence: Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545;

(c)    following a successful amendment application, a case is essentially a new proceeding: McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 at [19] and [40];

(d)    a discrete issue has been resolved: Australian Flight Test Services v Minister for Industry, Science and Technology [1996] FCA 1425 (sic) 288 at [7]; or

(e)    there is some reason to think that interlocutory disputation is draining the ability of one side to conduct the litigation: Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd [2016] FCA 37 at [12].

6    In Watson v Kriticos (Costs of Summary Judgment Application) [2021] FCA 917, [23]-[26] Perram J noted:

23    The ordinary rule is that costs cannot be taxed or assessed until the determination of the proceeding: FCR r 40.13. Relevant matters include the possibility that costs orders made in favour of one party in the course of a proceeding may be set off against costs orders made in favour of the other and the desirability of avoiding multiple taxations: Capic v Ford Motor Company of Australia Limited (Costs Forthwith) [2019] FCA 1065 (‘Capic’) at [17]. The ordinary rule may be departed from where a party has engaged in unreasonable behaviour which has caused the other party to incur additional expenditure which would have not have been incurred if the other party had acted with competence and diligence: Capic at [18]. It is also relevant to take into account the length of time between when the costs order is made and when the costs might finally be taxed, ie, how long the matter will take to get to trial and judgment. On the other hand, a costs payable forthwith order is not to be seen as akin to an indemnity costs order.

Consideration

7    Mr Martin is legally qualified. The application was unusual in that as a non-party he applied to re-open argument on a joinder application that had been heard and upon which the decision had been reserved. Mr Martin sought an order that he be allowed to make submissions and tender evidence at a re-opened argument.

8    During the course of the argument as to whether he had standing, Mr Martin, who appeared for himself, was given the opportunity to put before the Court authorities in support of his contention that he had standing. He cited two authorities, neither of which assisted his case.

9    This application should not have been brought. It was necessary for the applicant’s solicitors to work on the application and for Counsel to argue the point of standing, thereby putting the applicant to cost and expense. Further, the application was a discrete issue that has been resolved: Australian Flight Test Services v Minister for Industry, Science and Technology [1996] FCA 288.

10    Mr Martin is to pay the applicant’s costs of and incidental to the interlocutory application to be assessed as a lump sum by a Registrar on a party-party basis and pay those costs by on or before 28 days from the fixing of the lump sum.

Associate:

Dated:    20 September 2022