Federal Court of Australia

Directed Electronics OE Pty Ltd v Isuzu Australia Limited (No 3) [2024] FCA 1413

ORDERS

THE COURT ORDERS THAT:

1.    The first respondent pay the applicant’s costs of and incidental to:

(a)    the first respondent’s interlocutory application dated 22 June 2021, on a party party basis; and

(b)    reviewing and considering the affidavit of Ms Emma Lee-Anne Iles affirmed 2 August 2024, on an indemnity basis.

2.    The amount of such costs be determined by a Registrar immediately on a lump sum basis and to be payable forthwith after such determination.

3.    Orders 1 and 2 above be stayed until 28 days after the appeal in Federal Court proceeding VID 1179 of 2024, Isuzu Australia Limited v Directed Electronics OE Pty Ltd, is determined.

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

REASONS FOR JUDGMENT

ROFE J:

1.    Introduction and background

1    These reasons address the costs arising from Isuzu Australia Limited’s interlocutory application filed 8 August 2021, the subject of my earlier reasons in Directed Electronics OE Pty Ltd v Isuzu Australia Limited [2022] FCA 254 (Prior Judgment) and Directed Electronics OE Pty Ltd v Isuzu Australia Limited (No 2) [2024] FCA 1198 (Stay Judgment). These reasons assume familiarity with the matters set out in those decisions and the terms adopted there will be used herein.

2    I heard Isuzu’s Application pursuant to ss 23 or 31A of the FC Act or r 26.01(1)(d) of the FC Rules, or the Court’s implied or inherent jurisdiction, to dismiss or permanently stay the 2020 Proceeding on 14 September 2021 (First Hearing). Following this, I delivered the Prior Judgment on 23 March 2022 staying the Application until 28 days after the Liability Judgment in the 2017 Proceeding was handed down.

3    The Liability Judgment was delivered by Beach J in the 2017 Proceeding on 24 November 2022, with Directed being largely successful. Thus, the stay on the Application lifted on 22 December 2022. Since that time, this proceeding has been listed for case management hearing before me on 13 March 2024 (March 2024 Listing) and subsequently listed for a further interlocutory hearing on 30 August 2024 (Second Hearing) for Isuzu to reagitate the Application. On 17 October 2024, I published the Stay Judgment dismissing the Application.

4    The only issue remaining on the Application is costs. The parties were provided an opportunity to file submissions in relation to costs within 14 days of the delivery of the Stay Judgment, being 31 October 2024. The parties availed themselves of this opportunity and submitted competing positions as to how the costs of the Application should be dealt with. While Directed advances that costs should follow the event, it seeks that some of those costs be paid on an indemnity basis, and that its costs overall be payable forthwith. On the other hand, Isuzu maintains that costs should be awarded as costs in the cause. Shortly after the parties filed their respective submissions on costs, the solicitors for Isuzu contacted my chambers requesting an opportunity to file supplementary submissions maintaining that Directed had not previously foreshadowed making an application for indemnity costs. They sought an opportunity to address this in the supplementary submissions, having not done so in its initial submissions. I granted this request. Further to this, Directed made a similar request seeking leave to file its own supplementary submissions in response which I allowed.

5    In determining the costs of the Application, I have had regard to both sets of submissions filed by Directed and Isuzu as well as the matters surrounding the Application.

2.    Outcome of the Application

6    The background of the 2017 Proceeding and the 2020 Proceeding are set out in the Prior Judgment (at [10]–[22]) and relevantly, more recent developments which provide further context to the Application are set out in the Stay Judgment (at [6]), and these matters will not be repeated here.

7    The stay of the Application was initially ordered to meet the “hypothetical” concern that Directed might be unsuccessful in the 2017 Proceeding and seek to re-litigate the same issues in this proceeding: Stay Judgment at [122]. Notwithstanding, Directed was overall successful in the 2017 Proceeding and the matters on which it did not succeed, being the novation of the Hanhwa Enterprise Agreement, and no exclusivity term in the implied Hanhwa Korea Agreement, had no material impact on the issues in either proceeding as Beach J found there was an implied Hanhwa Korea Agreement containing duty of confidence and good faith terms: Liability Judgment at [2338] (per Beach J).

8    In conclusion, when determining the Application, I considered that it was premature in circumstances where the 2020 Proceeding had not yet been case managed in any meaningful way to progress this matter: Stay Judgment at [39]–[43]. The 2020 Proceeding has only reached the close of pleadings, as only recently a Defence to the Further Amended Statement of Claim was filed by Isuzu on 29 November 2024. No case management steps have been taken to prepare this matter for a trial in the near future.

3.    Directed’s position on costs

3.1    Directed’s proposed orders

9    Directed submits that it successfully resisted the Application which sought dismissal or a permanent stay of the proceeding, and that costs should follow the event. Directed contends that the following cost orders should be made:

The Respondent pay the Applicant’s costs of and incidental to the Respondent’s interlocutory application dated 22 June 2021:

(a)    up to and including 29 February 2024, on a standard basis; and

(b)    between 1 March 2024 and the date of the making of these orders, on an indemnity basis,

the amount of such costs to be determined by a Registrar immediately on a lump sum basis and to be payable forthwith after such determination.

3.2    Costs following the event

10    Directed submits that Isuzu’s Application involved an ‘all or nothing’ approach seeking a dismissal or permanent stay, which failed.

11    Directed contends that, as the wholly successful party, it should receive its costs and the amount of those costs should be determined by a Registrar on a lump sum basis. Directed further submits that its costs should be payable forthwith as the Application was concerned with a discrete issue in advance of a final hearing — the outcome of which did not turn on any assessment of whether Directed will ultimately succeed in its claims in this proceeding. Directed’s approach is influenced by the comments of Henry J in Cohen v Double Bay Bowling Club (No 2) [2019] NSWSC 1732 at [21], made in the course of ordering that costs be payable forthwith following a failed abuse of process application. Directed submits that, similar to the case in Cohen at [22] and [39], the matters raised by the Application were “discrete, separately identifiable and different” from the main proceedings which continue.

3.3    Indemnity costs

12    Directed also seeks to have its costs payable on an indemnity basis from 1 March 2024 until the delivery of these reasons. Directed contends that indemnity costs are justified during this window as, in its view, the conduct of Isuzu during this time fell short of meeting the statutory obligations and principles which govern case management procedures in the Court: ss 37M (in particular sub-ss 37M(1)(b) and (2)) and 37N of the FC Act and the Central Practice Note: National Court Framework and Case Management (CPN-1).

13    Directed submits that Isuzu’s conduct fell short of its obligations under the FC Act and CPN-1 by delaying the proceeding through the running of a meritless procedural application. Given this impugned conduct, Directed argues that the Court should exercise its discretion pursuant to s 37N(4) of the FC Act to order indemnity costs against Isuzu. In support of this contention, Directed gave the following examples of Isuzu’s conduct.

14    First, following the delivery of the Liability Judgment in the 2017 Proceeding on 24 November 2022, Directed filed and served a document outlining its position in relation to pleading amendments on 29 February 2024 (February Notice). In particular, the February Notice stated that Directed would amend its pleading to remove points on which it lost in the 2017 Proceeding. Directed submits that, having regard to the February Notice, Isuzu should have appreciated that any further pursuit of the Application was futile and should not have been further pressed.

15    Second, when pressed as to why the Application should not be dismissed at the March 2024 Listing, Isuzu indicated that it would pursue the Application on “new matters” which required consideration of Directed’s pending Further Amended Statement of Claim. In light of the February Notice and Directed’s proposed amended statement of claim submitted on 24 April 2024 — regarding which Isuzu indicated no objection to the granting of leave for its filing — Directed contends that it should have been evident to Isuzu that there were no new matters to be raised in support of the Application. Despite Isuzu’s indication that it would be agitating new matters in support of the Application, its written submissions filed on 2 August 2024 were largely a reiteration of the submissions previously before this Court at the First Hearing: Stay Judgment at [21]. Directed submits, and I accept, that the only substantive new point raised in those written submissions was one that relied on evidence available to Isuzu at the First Hearing, regarding Directed’s knowledge of the solvency of the Hanhwa Parties. Further to my observations in the Stay Judgment (at [44]–[45]) that this point was not raised at the First Hearing as it suited Isuzu not to do so at that time, Directed maintains that it was unmeritorious and thus, should not have been run at the Second Hearing.

16    Third, contrary to my directions at the March 2024 Listing that no further evidence could be filed unless Isuzu relisted the matter, which was accepted by Isuzu at the time, Isuzu proceeded to file an affidavit from its solicitor, Ms Emma Lee-Anne Iles, affirmed on 2 August 2024 (Iles Affidavit). The document was 460-pages in length and included 21 annexures. Directed submits that this affidavit was not seriously relied on by Isuzu at the hearing; its purpose described briefly and in vague terms. Directed contends that the Iles Affidavit should not have been filed.

17    Finally, Directed submits that its concerns regarding delays arising from an apparently futile Application, as conveyed during the March 2024 Listing, were realised. The Second Hearing was short, with minimal opening oral submissions from Isuzu. Directed submits that, as the Second Hearing progressed, it became apparent that Isuzu had almost entirely deviated from its written submissions (but did not formally abandon them, thus still requiring Directed to address them orally). Isuzu instead changed its focus to one of case management. Directed contends that it received no prior notice of the change in direction by Isuzu. Indeed, Directed requested to have the matter stood down for a short period during the Second Hearing so that Isuzu’s new point could be considered and appropriately addressed at the hearing.

18    Directed submits that the issue of case management was an issue which could have been raised by Isuzu prior to the March 2024 Listing, but was not. Directed maintains that, had this matter been raised in a timely manner, the proceeding could have been appropriately case managed much earlier and it would have avoided the need for the Second Hearing and the associated six-month delay, the Iles Affidavit or Isuzu’s written submissions. Directed submits that Isuzu has provided no explanation for its change of direction, and it is a matter which must weigh in favour of an award of indemnity costs in favour of Directed.

3.4    Costs payable forthwith

19    Directed further contends that, in the interests of justice, its costs should be assessed on a lump sum basis made payable forthwith. While the ordinary process is for costs to be awarded at the conclusion of proceedings, Directed maintains that the matters here warrant a departure from the ordinary process.

20    First, Directed, again relying on Cohen at [39], argues that the Application involved discrete issues from the main proceeding and as such, the present costs should not be lumped with any costs order down the track for the substantive trial. The parties are still at the stage of finalising their pleadings and the final determination of this proceeding is in reality still far away.

21    Second, Directed maintains that it ought to receive its costs now as it is reasonable to infer that defending this interlocutory dispute has had an effect on Directed’s ability to conduct the litigation, albeit Directed has been able to meet its obligations including a costs order payable to the Gridtraq Parties in the 2017 Proceeding. Directed submits there is no suggestion that Isuzu would suffer hardship from having to pay Directed’s costs now.

22    Lastly, Directed contends that there is a broader utility in making interlocutory costs payable forthwith as it encourages parties to either resolve or narrow interlocutory disputes due to the immediacy of a costs award, and abandon of hopeless and unmeritorious points.

4.    Isuzu’s position on costs

23    On the other hand, Isuzu contends the appropriate course is for the parties’ costs to be costs in the cause and advances the following form of proposed order:

The parties’ costs of the interlocutory application filed by Isuzu on 23 June 2021 be costs in the cause.

24    In Isuzu’s view, given that the Application was dismissed as it was pressed prematurely, this gives rise to the natural inference that the issues regarding a potential abuse of the process have not been resolved. Further, while I had determined that it was premature to determine or dismiss the Application prior to the handing down of the Liability Judgment in the Prior Judgment, there had been no criticism at that time that the Application had been brought prematurely. Isuzu was successful in the Prior Judgment in establishing that there were significant areas of overlap that created the possibility of substantially re-litigating points in the 2017 Proceeding, or the possibility of inconsistent findings between the two proceedings, and while not ultimately successful, Isuzu contends that its Application was not frivolous or unfounded.

25    It is acknowledged that the Stay Judgment expressly left open the opportunity for Isuzu to file a further application for dismissal or permanent stay of proceedings in the event that a material risk of prejudice to Isuzu exists despite such case management. In such circumstances, Isuzu claims that awarding costs in the cause would avoid the risk of future costs orders going in the opposite direction, citing my findings in Care A2 Plus Pty Ltd (Receiver Appointed) v The a2 Milk Company Limited [2024] FCA 782 at [24].

26    Like Directed, Isuzu acknowledges that the final outcome of this matter is still far away. Isuzu submits that if it is ultimately successful in this proceeding, in its view, it would be unjust if it was not able to recover its costs of the Application.

27    Following the handing down of the liability and quantum judgments in the 2017 Proceeding during 2022 and 2023, Directed had indicated that it intended to amend its pleading in the 2020 Proceeding. While Directed has criticised Isuzu’s conduct and particularly its desire to reagitate the Application in the face of pleading amendments, Isuzu submits that it acted reasonably in requesting that the further hearing of the Application take place after Directed had filed its Further Amended Statement of Claim, and Isuzu had provided its proposed Defence. Isuzu contends that this approach was appropriate in circumstances where the extent to which Isuzu wished to challenge findings made in the 2017 Proceeding could only be understood by reference to contested facts and issues as disclosed by the updated pleadings.

28    For these reasons, Isuzu submits that ordering costs in the cause is the fairest option which results in a just outcome for both parties.

4.1    Indemnity costs

29    In its supplementary submissions, Isuzu contends that it did not fail in complying with its obligations pursuant to s 37M of the FC Act. In advancing this point, Isuzu maintains that the Application was not ripe for determination at the March 2024 Listing as further steps were required from both parties before the Court could assess the scope for inconsistent findings in the 2017 Proceeding and the 2020 Proceeding.

30    Isuzu maintains that during the period for which indemnity costs are sought by Directed, it did not act in any manner to deliberately delay the 2020 Proceeding or the conduct of the Application. Between the March 2024 Listing and the Second Hearing, the parties were engaged in exchanging and filing amended pleadings. These amendments sought to clarify the position of the matter following the findings of Beach J in the Liability Proceedings. The amendments were both complex and lengthy, requiring sufficient time for careful scrutiny.

31    Isuzu further submits that these efforts were driven by two competing concerns:

(1)    the need to address the hypothetical risk underlying the Application — namely, that Directed might attempt to relitigate issues it had already lost in the 2017 Proceeding; and

(2)    the requirement to ensure that the pleadings were sufficiently advanced in the event the 2020 Proceeding progressed, thereby maintaining momentum in the principal proceeding.

32    Balancing these priorities required an appropriate amount of time to pass such that these procedural steps could be adequately undertaken during this period.

33    In addressing the Iles Affidavit, Isuzu submits that it recognised that leave was required for it to rely on this affidavit and hence, to avoid the time and expense of a separate listing, it had foreshadowed its intention to seek leave at the Second Hearing beforehand. Although no formal application was made on the day, the affidavit was ultimately read and relied on at the hearing, albeit, Isuzu accepts, minimally.

34    Isuzu further claims that the Iles Affidavit was indeed relevant to its written and oral submissions and while lengthy, it annexed various documents which were already in the possession of Directed, along with procedures for subpoenaing and leading evidence from overseas witnesses. Given this, and the fact that Directed did not file any evidence in response, Isuzu asserts that no extraordinary circumstances exist in relation to the Iles Affidavit such that it warrants the departure from the ordinary rule as to costs.

4.2    Costs payable forthwith

35    Isuzu resists any order requiring costs to be payable forthwith as in its view, the matters here do not require a departure from the standard position contained at r 40.13 of the FC Rules, which provides the following:

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.

36    Isuzu cautions that any such order would expose the parties to multiple taxations in circumstances where the trial of the principal proceeding may result in “costs orders in the opposite direction”: Care A2 at [24].

5.    Relevant principles

37    It is well established that s 43(2) of the FC Act confers a wide discretion on this Court in orderings costs in a proceeding, which is largely unfettered save that it must be exercised judicially: Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 at [3] (per Nicholas, Beach and Burley JJ). In exercising the discretion to award costs pursuant to s 37N(4) of the FC Act, the Court is required to take into account any failure of a party in complying with the overarching purpose of the civil procedure provisions. Further, s 43(3)(b) empowers the Court to order costs at any stage in a proceeding, whether before, during or after any hearing or trial.

38    Complementary to the provisions of the FC Act, Pt 40 of the FC Rules sets out the Court’s procedure in relation to costs. Rule 40.04 sets out the default position in ordering costs arising from interlocutory applications:

40.04    Costs on interlocutory application or hearing

If no order for costs is made on an interlocutory application or hearing, the costs of the application or hearing:

(a) if an order is made in favour of any party―follow the event; or

(b) if no order is made in favour of any party―are taken to be costs in the cause of the successful party to the proceeding.

39    While the FC Rules set out the default position on various procedures, departure from these positions may be appropriate when regard is had to the particular circumstances of a matter: Murdoch v Private Media Pty Ltd (No 2) [2022] FCA 1607 at [10] (per Wigney J); Lanzer v Australian Broadcasting Corporation (No 2) [2021] FCA 1321 at [17] (per Nicholas J).

40    It is a well-accepted proposition that an award of indemnity costs is not punitive. The award is designed to compensate a party fully for its costs when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs; LFDB v SM (No 2) [2017] FCAFC 207 at [7] (per Besanko, Jagot and Lee JJ). Relying on the findings in Ragata Developments Pty Ltd v Westpac Banking Corporation (No G255 of 1991) (1993) 217 ALR 175 at 178–9 (per Davies J), and more generally, Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 at [3]–[5] (per Jagot, Yates and Murphy JJ), the Full Court in LFDB observed at [7] that, consistent with facilitating the overarching purpose, circumstances where an indemnity costs award may be appropriate include where a proceeding is unduly prolonged by groundless contentions.

41    Case management principles are essential for the effective administration of justice. When parties fail to act in accordance with these principles, such conduct should not be easily dismissed — especially as delays affect not only the parties involved, but also other proceedings before the Court. Dilatory parties monopolising the Court’s limited resources and time hinder timely hearings for others, undermining the efficient function of the justice system. In such circumstances, special costs orders may be warranted to express the Court’s disapproval and intolerance for such conduct.

42    In Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175, French CJ considered the repercussions of delays and other inefficiencies on scarce public resources, and observed at [5] that:

In the proper exercise of the primary judge’s discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system…

43    The Full Court in Graham Barclay Oysters Pty Ltd v Ryan (No 2) [2000] FCA 1220 (per Lee, Lindgren and Kiefel JJ) considered whether the award of indemnity costs was appropriate in a class action proceeding in connection with how an unsuccessful party ran their case and held at [13] that:

While the special circumstances in which indemnity costs may be ordered are not to be circumscribed, in all the cases in which they have been ordered of which we are aware, the party ordered to pay them has been guilty of conduct having a relevant connection with the litigation which has been unreasonable or has otherwise attracted criticism. …

6.    Consideration

44    Directed has been successful in opposing the Application, and thus should be awarded its costs of the Application. It is then necessary to consider whether Directed’s costs should be awarded on an indemnity basis, and also whether its costs should be determined as a lump sum which is to be payable forthwith.

45     The Court has wide powers in awarding costs. While this proceeding was commenced in August 2020, given its ties with the 2017 Proceeding, I considered that it could not progress until the 2017 Proceeding had been substantively heard and determined, including its appeal which was dismissed by the Full Court on 6 September 2023: Directed Electronics OE Pty Ltd v Gridtraq Australia Pty Ltd [2023] FCAFC 149.

46    As such, even though this proceeding has been on foot for four years, two of these years must be discounted when considering Isuzu’s conduct in apparently facilitating this delay. I note that the delay in listing the Second Hearing was partly due to the availability of the senior counsel for both parties, each having respective conflicting commitments and availability in the lead up to 30 August 2024, such that they had no mutual availability prior to this date.

47    I do not consider Isuzu’s first agitation of the Application amounted to frivolous conduct which entangled the parties in unnecessary litigation such that it unduly delayed the proper conduct of the matter. By the Application, Isuzu sought to remove the (albeit at that stage, hypothetical) risk of Directed circumventing previous determinations by reintroducing issues earlier adjudicated by Beach J in the 2017 Proceeding, on which it had been unsuccessful. I also consider that it was appropriate for Isuzu to take time to review the amended pleadings and reevaluate its position on the basis of Directed’s revised case, having regard to the findings of Beach J in the Liability Judgment.

6.1    Whether indemnity costs should be awarded against Isuzu

48    Having regard to the principles formulated at common law, it follows that in order for indemnity costs to be awarded here, Isuzu must have, in connection with the litigation, acted in a manner that was so egregious and unreasonable that it caused some irreparable element of unfair prejudice to Directed.

49    I consider that Isuzu’s failure to put Directed on notice that it would pivot its case on the Application at the Second Hearing towards case management was not satisfactory. Ambushing a party at the hearing and deviating from the arguments expected to be advanced as propounded in written submissions does not constitute appropriate notice of the case the other side is to meet. Further, favourable consideration must be given to the fact the Directed decided to meet this new case at the Second Hearing after taking instructions during a brief adjournment instead of opting to delay the hearing further, to a potentially later date, so as not to delay the matter any further which would lead to the parties incurring additional costs.

50    It is correct that the Iles Affidavit was not seriously relied upon by Isuzu at the Second Hearing. While Isuzu contends that many documents annexed to the Iles Affidavit were already in the possession of Directed and it had foreshadowed its application to rely on that evidence prior to the Second Hearing, this in itself does not ameliorate the wasted costs and expenses incurred by Directed in reviewing and considering the Iles Affidavit. In filing that affidavit, Isuzu ignored my express direction at the March 2024 Listing that no further evidence could be filed without it relisting the matter to explain why that evidence was necessary. There is nothing to be made from the fact that Directed did not file any evidence in response to the Iles Affidavit. That decision cannot be viewed unfavourably, when considering that any such effort would be aimed at responding to material that may or may not be admitted into evidence.

51    The Iles Affidavit had to be reviewed and considered by Directed in preparation for the Second Hearing. Even if some of the material annexed to the Iles Affidavit was previously known, it was still necessary for Directed to read the material and consider to what issue that material was relied upon. Significant preparation time and effort would have been saved by Directed’s solicitors and counsel if the Iles Affidavit had not been filed.

52    I do not consider that Isuzu’s further agitation of the Application and failure to give proper notice of the case it would run at the Second Hearing was conduct that amounted to an irreparable element of unfair prejudice against Directed. While the conduct was less than satisfactory, I do not consider that it is so egregious that it demands the need for an award of indemnity costs. However, I consider that Directed should receive its costs associated with the review and consideration of the Iles Affidavit on an indemnity basis.

53    I consider that an ordinary award of costs is appropriate in the circumstances and as such, I will make orders for costs, aside from those associated with the review and consideration of the Iles Affidavit, to be paid on a party party basis.

6.2    Whether costs should be assessed on a lump sum basis payable forthwith

54    The making of a lump sum order for costs of the Application is consistent with the approach of the Full Court in Paciocco v Australia and New Zealand Banking Group Ltd (No 2) (2017) 253 FCR 403 at [13]–[20] (per Allsop CJ, Besanko and Middleton JJ), which instructed that taxation should be the exception and confined to matters which cannot be determined otherwise.

55    Despite Isuzu’s reliance on my findings in Care A2 in support of its position, the circumstances of that matter are notably different to the case here. There, the matter was significantly progressed and scheduled to commence trial approximately three months later. Pleadings had closed and the parties were engaged in preparations in the lead up to trial. No such circumstance exists here. The trial is still a distant reality and equally, costs arising from the conduct of the substantial hearing is an even further reality given that, in the ordinary sense, the taxation process takes place after the conclusion of the matter, which may well include any appeals.

56    The issues in the Application are separate and distinct from the issues in the substantive proceeding. Since the 2020 Proceeding is still in its early stages, any costs from the Application remain separate and manageable. Ordering costs to be taxed at this point would not overly complicate the taxation process, such that it would be an inefficient use of both Court and party resources: cf Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International BV (No 5) [2018] FCA 19 at [8] (per Perram J).

57    I consider that ordering Directed’s costs to be assessed in a lump sum is the most efficient approach to resolve the issue, as it minimises further procedural delays and aligns with both the Costs Practice Note (GPN-COSTS), as well as the overarching purpose in s 37M of the FC Act: Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd (Trustee), in the matter of Amazonia IP Holdings Pty Ltd (No 2) [2024] FCA 1042 at [42] (per Needham J).

58    I also consider that following determination of the lump sum, the costs should be payable forthwith.

59    Directed, as a privately owned company, would be negatively impacted in the long term by being deprived of its costs now and forced to wait until the resolution of the substantive proceeding — which at present is not advanced beyond the pleadings stage, and also which has already been on foot for a considerable time. There is nothing to suggest that Isuzu would be harmed by being required to pay Directed’s costs now.

60    As Directed contends, there is also a broader utility in making the costs of interlocutory applications payable forthwith. The possibility of such an order encourages parties to either resolve or narrow interlocutory disputes due to the immediacy of a costs award, and to abandon hopeless and unmeritorious points. The payment of the costs of such disputes at, or shortly after the hearing of the application, means that those costs are not postponed until the end of the case where they are lost in the overall determination of the costs of the proceeding.

7.    Conclusion

61    I will make orders requiring Isuzu to pay Directed’s costs of the Application (aside from the costs associated with reviewing, considering and preparing to respond to the Iles Affidavit which are to be paid on an indemnity basis) on a party party basis, the amount of such costs to be determined by a Registrar immediately on a lump sum basis and to be made payable forthwith after such determination.

62    As Isuzu has recently commenced proceeding VID 1179 of 2024, seeking leave to appeal the Stay Judgment, I will stay the orders until 28 days after the determination of that proceeding.

Associate:

Dated:    9 December 2024

SCHEDULE OF PARTIES