Federal Court of Australia

Frigger v Banning (No 14) [2024] FCA 66

ORDERS

THE COURT ORDERS THAT:

1.    The applicants' application for interlocutory orders dated 3 November 2023 is refused.

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

ORDERS

THE COURT ORDERS THAT:

1.    The applicants do pay the respondents' costs of and incidental to the application for interlocutory orders dated 3 November 2023, such costs to be assessed on a lump sum basis by a Registrar and to be paid forthwith in accordance with these orders.

2.    The respondents do file and serve an affidavit stating the amount of costs sought pursuant to these orders and the matters relied upon by them to support the lump sum assessment pursuant to these orders.

3.    Within 10 days of being served with the affidavit pursuant to order 2, the applicants do file and serve any affidavit as to matters relied upon by them as to the quantum of the costs to be assessed pursuant to these orders.

4.    Once the time provided for in order 3 has passed, a Registrar of the Court do make the lump sum assessment pursuant to these orders on the papers and deliver notice of the assessment to the parties.

5.    Within 10 days of delivery of the notice of assessment, the applicants do pay the amount of the assessment to the solicitor for the respondents.

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

REASONS FOR JUDGMENT

COLVIN J:

1    Mrs and Mr Frigger are very persistent litigants in this and other courts. In 2015, they commenced proceedings in this Court against four respondents. In those proceedings they sought relief concerning a deed of company arrangement as well as in respect of cost orders made against them in seven separate proceedings in the Supreme Court of Western Australia, two proceedings in the District Court and one proceeding in the Magistrates Court. They also sought to recover the costs of a liquidator appointed to Computer Accounting & Tax Pty Ltd, a company that had been controlled by Mrs and Mr Frigger.

2    There were a number of attempts by Mrs and Mr Frigger to plead their case in the proceedings in this Court. I described the history of those attempts up until 30 July 2019 in my reasons in Frigger v Banning (No 8) [2019] FCA 1319. On 2 September 2020, the proceedings were dismissed on application by the respondents: Frigger v Banning (No 11) [2020] FCA 1257. At that time, I ordered Mrs and Mr Frigger to pay the costs of the proceedings including reserved costs to be assessed if not agreed. I also made orders permitting the respondents to seek costs on a lump sum basis in accordance with the Court's Cost Practice Note (GPN-COSTS). In the result, the respondents have not taken that course. Instead, they have filed a bill for taxation of the costs as ordered.

3    Before a Registrar of the Court acting as a taxing officer, Mrs and Mr Frigger objected to the amounts claimed by the respondents in their bill of costs on the basis of alleged breach of the indemnity principle. The Registrar formed the view that any such objection was required to be raised with the Court by way of interlocutory application but reserved liberty to apply to reinstate the hearing of the taxation. Given the state of the authorities there was indeed some uncertainty as to the appropriate course where a claim of that kind was raised at the time of taxation. In the result, I determined that the Registrar had authority to determine whether the indemnity principle had been met and the matter was returned to the Registrar on that basis: Frigger v Banning (No 13) [2023] FCA 923 at [20] (noting the subsequent reference to that issue in Harvard Nominees Pty Ltd v Dimension Agriculture Pty Ltd (in liq) [2023] FCAFC 140 at [56]).

4    When the matter came back before the Registrar, a number of procedural issues were identified. After hearing from the parties, the Registrar allowed an application by the respondents for leave to amend the bill of costs. In written reasons provided by the Registrar to the parties, the Registrar explained that leave was given because of the following:

At the hearing, I was informed by counsel for the Respondents that the reason only some claims were included in the Bill was because they were seen as likely sufficient, after taxation, to enable the Respondents to receive the security for costs paid into Court by the Applicants. At the time the Bill was filed, the Respondents intended that the balance of their costs under the costs orders would be obtained by lodging a proof of debt in the Applicants' bankruptcies. The Respondents no longer seek to recover of their costs directly in this way.

5    The Registrar determined that the taxation process should be reset with a fresh estimate to be undertaken (being the first step in the taxation process under Division 40.2 of the Federal Court Rules 2011 (Cth)).

6    Relevantly for present purposes, the Registrar made 'orders' (expressed to be orders of the Court) to the following effect:

(1)    the respondents have leave to file and serve an amended bill of costs in the form of a draft bill that had been provided to the Registry on 16 October 2023;

(2)    the estimate of the approximate total for which, if the amended bill of costs was taxed, the certificates of taxation would be likely to issue is $106,987.09;

(3)    any notice of objection to the bill be filed and served by 8 March 2024;

(4)    any notice of response by the respondents be filed and served by 15 March 2024; and

(5)    the proceedings be relisted for taxation on 25, 26 and 27 March 2024.

7    Mrs and Mr Frigger took issue with the genuineness of the basis upon which the respondents sought to persuade the Registrar to allow an amendment to the bill of costs and a resetting of the taxation process. They went so far as to allege that the orders made by the Registrar were obtained by the fraud of the respondents. They maintained that the real reason for seeking to amend the bill of costs was that the respondents had been served with a notice of objection to the previous bill to which they did not respond within time and that, in consequence, pursuant to r 40.27(2) of the Rules the respondents were not permitted to attend the taxation of the bill. That rule provides:

If a notice of objection has been filed, only the party who has filed the notice of objection and a party who has filed a notice of response under this Division may attend the taxation.

8    Mrs and Mr Frigger brought an interlocutory application by which they sought an order setting aside the order of the Registrar allowing the respondents to file an amended bill of costs and for the taxation process to recommence. After receiving submissions, I determined that the interlocutory application should be dismissed and indicated that I would publish my reasons. These are my reasons for refusing the interlocutory application.

9    It was said that the interlocutory application was brought pursuant to r 39.05(c) of the Rules. That rule provides: 'The Court may vary or set aside a judgment or order after it has been entered if … it is interlocutory'. The terms 'judgment' and 'order' are defined in a manner that makes clear that they are referring to judgments and orders of the Court, that is to say judgments and orders made in the exercise of judicial power. They are terms that may apply to registrars exercising delegated judicial power. Further, s 35A(3) of the Federal Court of Australia Act 1976 (Cth) confers upon registrars the powers under the rules that refer to the Court.

10    However, a registrar acting as a taxing officer under Division 40.2 of the Rules exercises an administrative power, not delegated judicial power. Therefore the 'orders' made by the Registrar in the present case were administrative. The distinction is significant and has consequences for the extent to which and manner in which a party may seek to raise before a Judge a complaint about what has occurred before the Registrar acting as a taxing officer.

11    If an order is made for payment of a party's costs then the costs must be taxed in accordance with Part 40, that is by a registrar acting as a taxing officer: see r 40.12. The position is different if an order is made by the Court which itself provides for the manner in which the costs awarded to a party are to be determined, as is contemplated by the broad terms of r 40.02 which provides:

A party or a person who is entitled to costs may apply to the Court for an order that costs:

(a)    awarded in their favour be paid other than as between party and party; or

(b)    be awarded in a lump sum, instead of, or in addition to, any taxed costs; or

(c)    be determined otherwise than by taxation.

12    So, in cases where the order provides for the assessment of costs to be undertaken on a lump sum basis 'instead of, or in addition to, any taxed costs' or for costs to 'be determined otherwise than by taxation' (such as in the case where the assessment is referred to a referee) then the assessment must be undertaken in the manner provided for by the order. A registrar acting pursuant to any such order must comply with its terms.

13    Further, in the case of a lump sum assessment undertaken by a registrar pursuant to an order for costs to be assessed on a lump sum basis, there is a form of delegation of the judicial power to determine the quantum of costs (rather than an exercise of the power of a taxing officer to assess the quantum of costs as ordered). Consequently, an assessment undertaken pursuant to such an order may be the subject of an application for review de novo by a judge: see my reasoning in Caratti v Commissioner of the Australian Federal Police [2021] FCA 1067 at [4]-[6] (nothing that the same analysis would not apply where a registrar acts as a referee because a referee submits a report which the Court then considers at a hearing for the purpose of deciding whether to accept the report in whole or in part).

14    Further, in a case like the present where the Registrar exercises an administrative power as a taxing officer then the assessment is undertaken on the basis of the availability of the review procedure described in r 40.34. Consistently with general principle, where there is an available merits review procedure, usually the Court will not entertain any application for judicial review unless and until the available review procedure has been availed of by the applicant.

15    In the above circumstances, I formed the view that there were a number of reasons why the interlocutory application ought to be refused.

16    Firstly, the interlocutory application was misconceived. It sought to treat the 'orders' made by the Registrar as if they were interlocutory orders made in the exercise of delegated judicial power which were orders to which r 39.05(c) of the Rules applied. They were not. They were administrative orders made by an officer of the Court in the capacity of a taxing officer for the purposes of the Rules. Accordingly, they must be challenged, if at all, by some form of judicial review application.

17    Secondly, even if (contrary to the above) the orders made were 'interlocutory', the complaint made by Mrs and Mr Frigger concerned a procedural determination made by the Registrar as a taxing officer as to the appropriate manner in which to undertake the taxation. It did not involve the making of any final assessment and it did not foreclose the raising of any objection to the quantum of costs claimed. In those circumstances, it was appropriate for the application to be refused on the basis that the 'orders' did not have any substantive consequence.

18    Thirdly, the provisions that entrust the task of taxation to a registrar acting as a taxing officer must confer upon the registrar the implied power to supervise the conduct of the taxation including by allowing a party to amend a bill as delivered (with a consequential resetting of the taxation process).

19    Fourthly, the reasons given by the Registrar were to the effect that in circumstances where the respondents no longer intended to seek to recover part of the costs the subject of the relevant costs order by lodging a proof of debt, they should be allowed to claim all the costs in the taxation. The alleged 'fraud' concerned statements by counsel for the respondents made to the Registrar to the effect that there had been negotiations with the trustee in bankruptcy as to payment of costs. It was alleged that there had been no such negotiations. The evidence on the interlocutory application showed that a proof of debt had been lodged by the respondents as to the relevant costs and there had been attempts to discuss the proof. The reasons by the Registrar did not refer to any claim as to whether there had been negotiations. Rather, they rested upon the change in intention of the respondents. The change in intention did not depend upon whether or not there had been actual negotiations with the trustee. In those circumstances it had not been demonstrated that the alleged fraud if established (as to the merits of which I express no view) was the reason why the Registrar had allowed the amendment.

20    For those reasons, as to the application to set aside the orders allowing the amendment to the bill of costs and resetting the taxation, I formed the view that the appropriate course was to allow the taxation to be completed according to such procedure as the Registrar may determine to be appropriate and then for issues that are said to have substantive significance to be raised in an appropriate manner.

21    The interlocutory application also sought an order permanently staying the taxation on the grounds that the respondents' have no liability to pay their lawyers costs. The submissions by Mrs and Mr Frigger in support of that part of the application sought to characterise the evidence that the respondents have no liability to pay the costs sought as 'overwhelming'. It was further alleged that there was a 'further fraud' committed by the respondents signing the certification that they are not claiming more than they are liable to pay for costs and disbursements. As has been mentioned I have already determined that the Registrar has power to determine those matters and it is appropriate for them to be considered by the Registrar. In substance, the application by Mrs and Mr Frigger sought to revisit that issue without any good reason as to why the Court should do so.

22    Finally, I observe that in cases where fraud is alleged as the basis for setting aside a perfected judgment of a court then the appropriate course is for independent proceedings to be commenced so as to permit the issue to be properly defined, fought out, and determined: Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receivers & Managers Appointed) [2018] HCA 12; (2018) 264 CLR 165 at [32]. If allegations of fraud are to be maintained then they must be advanced by an appropriate form of application that is adequately particularised. The Court will then be in a proper position to adjudge whether it is appropriate to entertain the application. Therefore, for that additional reason, the interlocutory application was not an appropriate way to raise claims that were based upon allegations that the Registrar's 'orders' had been procured by fraud.

23    The respondents sought an order that the costs of the interlocutory application be paid by Mrs and Mr Frigger and that such costs be determined on a lump sum basis by a Registrar of the Court. The making of such an order was opposed. I indicated that I would determine the question of costs when I delivered my reasons for dismissing the interlocutory application.

24    Mrs and Mr Frigger, having been unsuccessful on the application, sought to deploy their claims to the effect that the indemnity principle had not been met in relation to the costs the subject of the bill of costs that is before the Registrar, in opposition to an order that they pay the costs of their unsuccessful interlocutory application.

25    Mrs and Mr Frigger bear the onus of establishing that the respondents had no liability for their costs: Marsh v Baxter [No 2] [2016] WASCA 51 at [37]. I am not persuaded that the matters referred to by Mrs and Mr Frigger discharged their onus. None of those matters related to the present instructions as to the interlocutory application brought by Mrs and Mr Frigger. For that reason alone, they were insufficient to discharge the onus. In addition, for the following reasons, they did not assist Mrs and Mr Frigger.

26    Reliance was placed upon the statements made in other proceedings as to the raising of invoices and charges for work done. They were to the effect that liabilities to pay costs to counsel and the instructing solicitor were accruing on the basis that invoices would be rendered in the future. They were not statements that indicated that there was no liability for legal costs.

27    Copies of invoices by counsel that were relied upon in the taxation before the Registrar were produced. It was said that they were not claimed as disbursements that had been paid. It was submitted that it should be inferred that there is no liability to pay those invoices. The fact that they have not been paid does not mean that there is no liability to pay them.

28    Reliance was placed upon the transcript of a hearing before the Court of Appeal of Western Australia in 2017 in which it was alleged that counsel for the respondents had stated that they were acting pro bono for one of the respondents. I was not persuaded that a statement made in 2017 might be probative of the position that now pertains in relation to the costs of the interlocutory application almost five years later. Further, the solicitor on the record had deposed that at no time had he or counsel agreed to act for the respondents on a pro bono basis.

29    Accordingly, the application having been unsuccessful it is appropriate for costs to be ordered to be paid by Mrs and Mr Frigger. The respondents sought orders for those costs to be assessed on a lump sum basis by a Registrar. Having regard to the history of this proceeding, I am persuaded that it is appropriate for orders to be made by which the quantum of those costs may be assessed and determined by a Registrar on a lump sum basis and for the costs to be paid forthwith. I will make orders to that effect.

Associate:

Dated:    8 February 2024