Federal Court of Australia

Michael Wilson & Partners Ltd v Porter (No 5) [2025] FCA 5

ORDERS

THE COURT ORDERS THAT:

1.    The application by the applicant to further extend the time within which any application pursuant to r 28.67(1) of the Federal Court Rules 2011 (Cth) (Application to Extend Time) for any order other than an order that the report be adopted may be filed be determined on the papers.

2.    The Application to Extend Time is refused.

3.    Upon the bringing of an application by the respondents for an order pursuant to s 54A of the Federal Court of Australia Act 1976 (Cth) in respect of the referee report dated 18 November 2024, it be ordered that the referee report be adopted and the quantum of the costs that the applicant was ordered to pay to the respondents by orders dated 28 February 2024 be fixed in the amount of $16,322.38.

4.    There be leave to the respondents to make an application for the purposes of order 3 by email to the associate to the case managing judge.

5.    No further document may be filed in these proceedings by the applicant without leave first having been obtained from the case managing judge.

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

REASONS FOR JUDGMENT

COLVIN J:

1    Michael Wilson & Partners Ltd was ordered to pay the costs of and incidental to its interlocutory application for an extension of time in which to seek a review of an assessment of costs undertaken by a registrar of this Court. The costs order was in favour of the respondents to that extension of time application, Mr Jason Lloyd Porter and Mr Richard Moretti, who had been appointed as local representatives of a trustee in bankruptcy.

2    To ensure efficiency in the assessment of the costs as ordered and having regard to the events that had transpired, orders were made for those costs to be assessed by a registrar acting as referee: Michael Wilson & Partners Ltd v Porter (No 4) [2024] FCA 163 at [37]. Those orders provided for the costs to be quantified on a lump sum basis by a registrar acting as referee after receiving written submissions and any affidavit from the parties in accordance with a timetable to be set by the registrar. They also provided, subject to further order, that the question whether the registrar's report should be adopted would be considered by the case managing judge on the papers that were before the registrar acting as referee without the filing of additional papers.

3    In accordance with those orders, the respondents provided an affidavit of costs summary seeking costs of $16,322.38. The affidavit deposed that total costs incurred were $18,792.68. They also made written submissions.

4    Although orders were made by the registrar providing for affidavits and written submissions with respect to the costs assessment to be filed and served by the applicant by 4 November 2024, Michael Wilson & Partners did not file any papers for the registrar to consider.

5    I have been provided with the registrar's report as referee. The registrar has concluded that the claims made by the respondents (as applicants for costs) have been made out and has accepted that (a) the amount is not excessive and is proportionate and represents fees fairly and reasonably incurred; (b) the costs sought were necessarily incurred; and (c) there is an appropriate discount for party and party costs.

6    Rule 28.67(1) of the Federal Court Rules 2011 (Cth) provides that after a report of a referee has been given to the Court, a party may, on application, ask the Court to do any of the following:

(a)     adopt, vary or reject the report, in the whole or in part;

(b)     require an explanation by way of a further report by the referee;

(c)     remit on any ground, for further consideration by the referee, the whole or any part of the matter that was referred to the referee for inquiry and report;

(d)     decide any matter on the evidence taken before the referee, with or without additional evidence;

(e)     give judgment or make an order in relation to the proceeding or question.

7    On 27 November 2024, I ordered that any application pursuant to r 28.67(1) for any order other than an order that the report be adopted shall be filed and served on or before 4 December 2024 (Deadline Order). I further ordered that if no such application is filed then the question whether the report shall be adopted and the orders consequent upon the determination of the question will be dealt with by the case managing judge on the papers that were before the registrar. I also ordered that if an application was filed then further case management orders as to the hearing of the application would be made having regard to the nature and terms of the application.

8    A copy of those orders was provided to Michael Wilson & Partners by email. A copy of the referee’s report was also emailed by my associate to Michael Wilson & Partners on that date.

9    On 5 December 2024, Mr Michael Wilson deposed an affidavit in support of an application seeking an extension of the time specified in the Deadline Order until 17 February 2025. In the affidavit he said that Michael Wilson & Partners had not received a copy of the referee’s report before it was emailed on 27 November 2024. He also said that he had been ‘rather ill, indisposed, away from the office and off work sick since 15.11.24 with a very nasty and rather severe case of broncho-pneumonia’ and that he had been advised by his doctor that he would not be able to resume his normal work duties until ‘mid/late January 2025’. He referred to medical reports attached to his affidavits.

10    The medical reports did not support the matters deposed to by Mr Wilson. They were to the effect that Mr Wilson had been diagnosed with a rather serious bout of winter flu and bronchitis. There was no suggestion of pneumonia. He was described as suffering from an acute chest infection when examined. The reports were to the effect that Mr Wilson had been too unwell to travel to Australia. One medical report dated 28 November 2024 stated that Mr Wilson was at that time fit to travel but had been unfit to travel when examined on an earlier date.

11    An earlier report dated 15 November 2024 by a different practitioner was to the effect that Mr  Wilson was, at that time, not fit to travel and that ‘he must take some time off work and to rest and recuperate from today, 15.11.24 while he is sick and for the next 1,5-2 weeks or so, until such time as his health improves and he is fit again, well-enough and able to travel’.

12    Taken together, those reports are to the effect that Mr Wilson had recovered from his illness by the end of November 2024.

13    The affidavit and an application for an extension of time to the Deadline Order were accepted for filing on 10 December 2024. Having considered the terms of those documents, I made the following orders:

1.    The time for any application pursuant to r 28.67(1) of the Federal Court Rules 2011 (Cth) as provided for in order 1 of the orders dated 27 November 2024 be extended until 4.00 pm AWST on 19 December 2024.

2.    Any affidavit and outline of submissions in support of the interlocutory application for an extension of time for any such application until 17 February 2025 be filed and served on or before 17 December 2024.

3.    After 17 December 2024, the case managing judge will make further orders as to the hearing and determination of the interlocutory application, including as to whether the interlocutory application will be determined on the papers.

4.    Submissions filed in accordance with these orders shall be no more than 3 pages, size 12 font, 1.5 line spacing, 2.5 cm margins and shall be signed by counsel.

14    That is to say, I extended until 19 December 2024 the time for Michael Wilson & Partners to bring any application pursuant to r 28.67(1) for an order other than an order that the referee’s report be adopted. Even accepting that Mr Wilson was unwell until the end of November 2024 that provided him with a considerable period in which to raise any issue with the referee’s report, bearing in mind that the report was of narrow compass and was concerned with a relatively modest sum within the scheme of the affairs of Michael Wilson & Partners: see my observations in Michael Wilson & Partners Ltd v Porter (No 4) at [34]-[35].

15    Further, Michael Wilson & Partners is a corporate entity that has conducted proceedings in this Court. It must conduct those proceedings through legal representatives who have been admitted to practice in Australia. The extent of what may be a reasonable period of time to be allowed to undertake the simple task of raising any reason as to why a referee’s report as to the assessment of a modest amount of legal costs should not be accepted is to be adjudged in that context.

16    In his affidavit, Mr Wilson deposes to being an employee of Michael Wilson & Partners and to being authorised to make the affidavit on its behalf. He also says that he is domiciled in Australia and that he is a legal practitioner admitted to practice in Australia. Documents that he has caused to be filed for Michael Wilson & Partners in the proceedings have been signed by him as ‘Solicitor & Corporate Legal Representative’.

17    In his affidavit Mr Wilson makes reference to the fact that Michael Wilson & Partners is located overseas as being relevant to the application to extend the time specified in the Deadline Order, as well as to his own illness as ‘corporate solicitor and legal representative’.

18    No written submissions have been provided in support of the application for an extension.

19    Accordingly, there is nothing beyond what is said in Mr Wilson’s affidavit that is advanced to support the application for an extension.

20    In my view, as explained below, the material in the affidavit falls well short of raising any basis for the extension sought. In those circumstances, nothing would be served by requiring the respondents to file any answering material or by convening an oral hearing of the extension application.

21    For those reasons, I will order that the application for an extension of the time specified in the Deadline Order (subsequently extended to 19 December 2024) be dealt with on the papers.

22    For the following reasons, the application for an extension of time is refused:

(1)    On the affidavit material, Mr Wilson’s ill-health had ceased by the end of November 2024;

(2)    No order has been made that would allow Michael Wilson & Partners to conduct the proceedings other than by a solicitor in the jurisdiction;

(3)    Mr Wilson purports to be such a solicitor;

(4)    Given the very confined nature of the subject matter of the referee’s report, the period until 19 December 2024 was ample for a competent solicitor to prepare any application pursuant to r 28.67(1);

(5)    Michael Wilson & Partners has not indicated any substantive reason that might form some kind of arguable basis for the making of any order other than an order that the referee’s report be adopted;

(6)    The affidavit of Mr Wilson does depose to Michael Wilson & Partners not having received a copy of the directions made by the referee for the filing of submissions. It is not said that the applicant was unaware of the steps being taken by the referee or that there were matters that Michael Wilson & Partners proposed to raise with the referee. However, even assuming that to be the case, in order to support the application to extend time it would be necessary to point to some relevant evidence or to some substantive argument that may have been advanced before the referee that may have caused the referee to reach a different conclusion. That is to say, there would need to be some basis that might support the possibility that the referee’s analysis could be called into question before the Court would consider not adopting the referee’s report. No such matters have been identified or even hinted at by Michael Wilson & Partners;

(7)    The referee’s report concerns a relatively modest sum having regard to the financial standing of Michael Wilson & Partners. The costs order having been made, there is an entitlement to costs. At best any objection that might be raised at this point could only affect a fraction of the amount determined by the referee, being an amount of a few thousand dollars. Accordingly, there can be no substantive prejudice to Michael Wilson & Partners if time is not extended;

(8)    The proposed extension of time would further delay the respondents in recovering costs pursuant to an order that was made to avoid further conduct by Michael Wilson & Partners to obfuscate and delay; and

(9)    The history of the behaviour of Michael Wilson & Partners in the conduct of these proceedings as recorded in the decisions published in these proceedings counts against the grant of any indulgence to Michael Wilson & Partners.

23    Accordingly, the question whether the referee’s report should be adopted is to be addressed in circumstances where there is no application by Michael Wilson & Partners to the effect that the referee’s report not be adopted.

24    The authorities as to the procedure to be followed in considering whether to adopt the report of a referee were recently summarised by Jackson J in Finnegan v Washington (No 4) [2024] FCA 1054 at [23]ff in terms that I gratefully adopt.

25    On my consideration of the affidavit and the registrar's report there is ample support for the conclusions reached by the registrar. I am unable to discern any error of law in the registrar's approach. The registrar has the appropriate expertise to undertake the costs assessment. The amounts involved are not substantial when measured against the costs that would be incurred in convening a further formal hearing.

26    In those circumstances, no purpose would be served by requiring any formal application with supporting submissions as to why the report should be adopted. For those reasons, upon application by the respondents for an order that the report be adopted I will order that the quantum of costs be fixed in the amount assessed by the registrar acting as referee and I will give leave for the application to be made by email to my associate.

27    Adoption of the referee report will bring to an end these proceedings. However, given the history of the conduct of Michael Wilson & Partners as outlined in the decisions delivered in these proceedings, I consider it prudent and appropriate to order that no further document may be filed in these proceedings by Michael Wilson & Partners without leave first having been obtained from the case managing judge.

Associate:

Dated:    13 January 2025