Federal Court of Australia

Condari Pty Ltd v Haus Group Australia Pty Ltd [2025] FCA 65

ORDERS

THE COURT ORDERS THAT:

1.    The applicant pay on an indemnity basis the respondent’s costs of and incidental to:

(a)    the applicant’s interlocutory application filed 15 November 2024; and

(b)    the costs thrown away due to the vacation of the trial, which was set to commence on 2 December 2024 on an estimate of four days.

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.

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

REASONS FOR JUDGMENT

ROFE J:

1.    Introduction

1    These reasons deal with the parties’ costs arising from the “Application to Review a Registrar’s Decision” filed by the applicant on 15 November 2024, and the costs incurred by reason of the trial date being vacated.

2    The Application was not limited to the request for review of Registrar Ellis’ decision made on 6 November 2024 and additionally sought for the following interlocutory orders to be made:

1.    The trial listed for five [sic] days commencing 2 December 2024 is vacated.

2.    The Applicant is to file any updated expert reports by 14 February 2025.

3.    The Respondent is to file any expert reports in response to those filed by the Applicant under order 2 by 18 April 2025.

4.    The order of NJR Ellis made 6 November 2024 insofar as it refuses leave to the Applicant to issue a subpoena to Phillip Ross is set aside.

5.    Leave is granted to the Applicant to issue a subpoena to Phillip Ross within 14 days of this order.

6.    The matter is listed for case management hearing on a date not before 22 April 2025.

7.    Costs of this application to be paid by the Respondent.

3    I heard the Application on 19 November 2024. In addition to the Application being a third attempt to have the subpoena addressed to Phillip Ross issued, the applicant also raised concerns about the respondent’s discovery and expert evidence. These issues are discussed below.

4    At the hearing it became clear that the applicant was not ready to proceed with the trial on the scheduled date for commencement. While I granted the request to vacate the four-day trial, set to commence on 2 December 2024, I otherwise dismissed the Application.

5    At the end of the hearing of the Application I noted that I would seek submissions from the parties as to the costs thrown away by reason of vacating the trial date and why there should not be an order that the applicant pay the respondent’s costs on an indemnity basis. The respondent’s counsel foreshadowed that the respondent would make an application for the costs to be made payable forthwith. In addition to an order vacating the trial, and scheduling a case management hearing, I made an order in the following terms:

3. By 4.00 pm on 27 November 2024, the applicant file and serve its submissions in relation to costs thrown away by reason of the vacating of the trial dates, not exceeding five pages in length. These submissions should address why costs should not be awarded on an indemnity basis against the applicant and be made payable forthwith.

(Emphasis added.)

6    I have considered the parties’ competing submissions. For the reasons that follow, I consider that the applicant should pay the respondent’s costs of the Application, and the respondent’s costs thrown away by reason of the vacation of the trial on an indemnity basis, payable forthwith.

2.    Background

7    It is unnecessary for me to delve into the pleaded facts of this matter, however, I will make some brief observations about the conduct and progress of the case to date.

8    The applicant, an Australian manufacturer and seller of high-end rangehoods, has operated its business for over 30 years under the brand names “Qasair” and “Condor”. Qasair rangehoods are designed for indoor kitchens, while Condor rangehoods are intended for outdoor kitchens. The applicant does not own the registered trade marks for these brand names but instead uses them under a licence agreement granted by JayKaye Pty Ltd and Qasair Australia Pty Ltd.

9    JayKaye and Qasair Australia are the joint owners of the following trade marks over class 11 goods:

(a)    the following device mark registered under Australian Trade Mark No. 658098:

(b)    the word mark “CONDARI” registered under Australian Trade Mark No. 2183893; and

(c)    the following device mark registered under Australian Trade Mark No. 2183895:

10    On the other hand, the respondent imports rangehoods manufactured and assembled overseas, under the brand name “Whispair”. Catering to the global market, the respondent conducts its business through online retail, where internet advertising plays a significant role in its business.

11    The applicant commenced this proceeding on 31 March 2021, when it filed an “Urgent application before start of a proceeding”, seeking injunctive relief against the respondent. The injunctive relief sought was premised on the applicant’s claims that the respondent had used the terms “Qasair” and “Condari” as keywords in its online advertising on the ‘Google’ search platform.

12    Subsequently, the applicant commenced proceedings seeking, amongst other relief, declarations that the respondent has infringed the registered trade marks, engaged in misleading or deceptive conduct contrary to the provisions of the Australian Consumer Law (as set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth)) and engaged in the tort of passing off.

13    Over the lengthy and, at times, glacial progress of this matter, the parties have engaged in several interlocutory disputes regarding the amendment of pleadings as well as attending mediation.

14    Having been concerned for some time about the leisurely progress of this matter, on 30 April 2024, I set this matter down for a four-day trial commencing on 2 December 2024, which for the reasons discussed below, has now been vacated.

3.    The Application

15    The applicant invested significant effort in pursuing subpoenas ahead of the intended trial dates. On 2 October 2024, the applicant lodged requests for leave to issue three subpoenas, including relevantly one addressed to the Chief Commissioner of Victoria Police and another to Mr Ross, a former director and owner of Franke Australia. I refused leave to issue the subpoenas addressed to these two people, finding the requests to be irrelevant to any issue in the proceeding. When notifying the parties of this decision, I indicated that if the applicant wished to persist, it could file submissions in support of the request. The respondent would be given an opportunity to respond, and the matter could then be determined by a Registrar.

16    The applicant continued to seek leave to issue the subpoenas, prompting referral of the matter to Registrar Ellis for determination. Before the Registrar, the parties relied on their written submissions and the applicant further relied on the 30 October 2024 affidavit sworn by Paul O’Connell, director of Clutch Media and the former proprietor of a Retravision store in Narre Warren. The respondent objected to the acceptance of Mr O’Connell’s affidavit as evidence, asserting that leave had not been granted for its filing. Registrar Ellis allowed for the affidavit to be filed and read the material into evidence.

17    After considering the material before her, Registrar Ellis dismissed the application for leave to issue the subpoenas and provided reasons for this decision to the parties on 6 November 2024. Notably, the Registrar remarked the following at [18]–[22] of her reasons regarding her consideration of the subpoena addressed to Mr Ross:

[18]    It is clear that the documents which are sought under subpoena are not relevant to a fact in issue in the proceeding. Franke Australia is not a party to the dispute, nor is it referred to in the pleadings or the evidence of Mr Hocking. Mr Hocking’s credit also is not a fact in issue in the proceeding. This is not a case where he is a respondent and an allegation of a serious nature, for example, participation in fraudulent conduct, has been made against him.

[19]     Secondly, even if credit of a witness was a basis on which subpoenas could be issued in this proceeding, the submissions do not set out any instances of Mr Hocking having a direct conflict of evidence with any of the applicant’s witnesses, such that the trial judge will need to make specific findings as to credit.

[20]    Thirdly, if findings of credit need to be made in relation to those parts of Mr Hocking’s evidence which are relevant and not directly contradicted, the fact that Mr Hocking was involved in a legal dispute with a company that is not a party to these proceedings is, of itself, not a matter that gives rise to any suspicion that Mr Hocking is not a creditworthy person Many people are parties to legal disputes. It is invariable that the other party to the dispute has a poor opinion of them. That alone does not give rise to a suspicion that they are not a credible person.

…

[22]     Accordingly, no purpose would be served if these subpoenas were issued and, in those circumstances, I decline to grant leave to issue these [two] subpoenas.

18    Despite the Registrar’s clear reasoning, the applicant proceeded with the Application to set aside the Registrar’s orders made on 6 November 2024, insofar as it refused leave to the applicant to issue a subpoena to Mr Ross. The applicant remained persistent in obtaining leave to issue a subpoena for Mr Ross to attend court to give oral evidence as well as to produce documents of the following description:

all documents in relation to all and any disputes between he and Franke Australia with or regarding, Dane Hocking or Whispair products including all records, court documents and settlement agreements.

19    As set out at [17] above, the applicant contends that the documents sought from Mr Ross are relevant to the credit of Dane Anthony Hocking (Mr D.A. Hocking), the sole director of the respondent and a witness in the proceeding. According to the applicant, the proceeding pertains to the fraudulent use by the respondent of the applicant’s trade marks. The applicant contends that the documents sought evince evidence of a “similar type of fraudulent conduct by Mr [D.A.] Hocking” in another case, and that without those documents the applicant will be deprived of its ability to attack Mr D.A. Hocking’s credibility.

20    This matter is a straightforward trade mark infringement proceeding with related allegations of misleading or deceptive conduct and passing off. Mr D.A. Hocking is not a party to the proceeding and there is no pleaded allegation of fraud. I agree with Registrar Ellis’ reasons for dismissing the applicant’s Application for leave to issue to the subpoena to Mr Ross. Accordingly, I have not changed my view that the subpoena to Mr Ross is irrelevant to any issue in the proceeding and hence, I dismissed the Application on 19 November 2024.

4.    The parties’ submissions on costs

21    The parties submitted competing positions on costs, both seeking indemnity costs against the other. Each party alleges that the other has acted in a manner so unreasonable that it necessitates indemnification. I will now turn to each issue raised in the submissions.

5.    Applicant’s allegations of deficient discovery by the respondent

22    The applicant submits that the respondent ought to bear the applicant’s costs in circumstances where, in its view, the conduct of the respondent has fallen to a level of such unreasonableness that it has led to the parties incurring unnecessary costs.

23    The respondent’s impugned conduct is alleged to be its failure to provide the applicant with full and proper discovery. This allegation arises from the affidavit of Christopher Lee Hocking (Mr C.L. Hocking), an employee of the respondent, affirmed on 30 September 2024 (the Hocking Affidavit). The Hocking Affidavit is said to contain an admission that contradicts the materials discovered. This alleged admission is supposedly found at [24(a)(i)] of the Hocking Affidavit, where Mr C.L. Hocking deposes:

20. Over the following few years (until I left Haus in December 2020):

a.    I managed Haus’ Google Ad Campaign. The extent of this was the telephone calls with the Google Account Manager as described above and making their recommendations (other than to their suggested increases in our budget spend). I would manually type in (or delete) the keyword suggestions proposed by the Google Account Manager. With regard to:

…

ii.    the word ‘Qasair’ and ‘Qasair Rangehood’, I recall (although I do not recall the exact date) typing those words into the Google Ad Campaign. When I did so, I said to the Google Account Manager that this suggestion was not our brand (being Haus or Whispair). The Google Account Manager said to me that it did not matter and said words to the effect that ‘everyone did it’…

24    I shall refer to the above extract from the Hocking Affidavit as the Alleged Admission henceforth.

25    For context, the “Google Ad Campaign” references the respondent’s engagement in Google’s marketing service so that consumers searching for its products online would be shown the respondent’s advertisements in search results with a link to their website. While Mr C.L. Hocking was unable to recall how the respondent’s Google Ad Campaign was selected, he deposes that he initially selected keywords specifically related to the respondent, such as “Whispair”, “Rangehoods”, “Kitchen” and “Extraction”. Mr C.L. Hocking, along with Mr D.A. Hocking, would attend regular meetings with a Google Account Manager, as organised by Google, to review the success of chosen keywords. The chosen keywords will be referred to as the “Google Adwords”.

26    It is the applicant’s position that until the Alleged Admission was made, the applicant had understood from the respondent’s discovered material that no use of “Qasair” as a keyword or within any of the respondent’s advertisements occurred until about May 2019, and its current pleadings reflect this date.

27    Moreover, the applicant seeks to further demonstrate the respondent’s failure to provide full and proper discovery by drawing attention to the following two expert reports filed by the respondent:

(a)    the affidavit of Michael Simonetti, Founder and Managing Director at AndMine, affirmed on 14 October 2024 (the Simonetti Affidavit); and

(b)    the affidavit of Michael Smith, Chartered Accountant and Director at CFAS Advisory, affirmed on 28 October 2024 (the Smith Affidavit).

28    Each of these affidavits is alleged to contain information that has not been previously discovered.

29    The applicant asserts that Appendices 1 to 13 of Mr Simonetti’s expert report, annexed to the Simonetti Affidavit, contain information that has not been previously discovered. Furthermore, the Appendices include at least four hyperlinks, with the documents accessible via those hyperlinks also undiscovered. The applicant additionally claims that the Appendices contain at least four graphs, which likewise have not been disclosed. In relation to the Smith Affidavit, the applicant contends that Appendix 5, which provides a breakdown of sales through web sales, direct sales, retail sales, and commercial sales, has not been disclosed. Similarly, Appendix 3, item 12 refers to the ‘Revenue by Sales Channel’ worksheet, which has also not been discovered.

30    In light of the above, the applicant submits that vacating the impending trial dates was necessary to afford its own experts sufficient time to properly review the material which has only now come to its attention. Additionally, the applicant argues that it will need to seek further expert advice regarding the materials allegedly undisclosed by the respondent once those documents are discovered. The applicant maintains that its experts will need to determine whether additional information is required from the respondent. Moreover, the experts must investigate whether the respondent’s use of the disputed marks and names commenced prior to May 2019.

31    On the other hand, the respondent submits that the Alleged Admission, and the Hocking Affidavit more generally, are not inconsistent with the “Qasair” keyword not having been used by the respondent in its Google Ad Campaign until about May 2019. The respondent elaborates by noting that that the Hocking Affidavit states that keywords were only selected from July 2017, not July 2016. Further, Mr C.L. Hocking specifically deposes he has no recollection of when he entered the words “Qasair” and/or “Qasair Rangehoods” after July 2017 into the respondent’s Google Adwords. The invoices relating to expenditure on the Google Ad Campaign from November 2016, as contained in annexure “CLH-2” to the Hocking Affidavit, were discovered on 22 October 2021. Consequently, the respondent asserts that Mr C.L. Hocking’s evidence does not introduce new issues or alter the timeframes relevant to the proceeding. Therefore, the respondent maintains that the applicant has failed to identify any material inconsistency with Mr C.L. Hocking’s evidence, as no such inconsistency exists.

32    In addressing the applicant’s allegations that it did not make full and proper discovery, the respondent explained that the information which the applicant claimed to be new was indeed not. The respondent provided the following information in support of this assertion:

(a)    Discovery was provided by the respondent, based on categories of documents agreed between the parties and pursuant to the various discovery made by this Court. The discovery provided detailed financial records for the respondent, and the respondent’s Google reports from May 2015 to May 2021. Further, Appendix 5 of the Smith Affidavit is derived from annexure “DAH-16” to the confidential affidavit of the director of the respondent, Mr D.A. Hocking, affirmed 30 September 2024. Annexure DAH-16 was a document created for the purposes of this proceeding, which is explained in that affidavit.

(b)    All of the material referred to in the Simonetti Affidavit is information contained in the Google Adwords account for the respondent:

(i)    the Appendices to Mr Simonetti’s expert report are printouts of the Google Adwords account data;

(ii)    the graphs in Mr Simonetti’s expert report are graphical representations of the Google Adwords account data (i.e., screen captures); and

(iii)    the links in Mr Simonetti’s expert report set out information from the Google Adwords account data manipulated by Mr Simonetti and presented in spreadsheets.

(c)    All records of the Google Ad Campaign and account operated by the respondent (including records of keywords used) between May 2015 to May 2021 were provided to the applicant in October 2021. The respondent goes so far as to point that this is acknowledged by the applicant’s expert, Lance Gordon, in his expert report dated 31 October 2023 at [7.27]–[7.30].

33    According to the respondent, the applicant has had the relevant documents in its possession since October 2021. As such, the respondent submits that the sole reason underpinning the applicant’s request for an adjournment was that the applicant was unprepared for the impending trial, rather than any deficiencies in discovery which have surprised the applicant so close to trial.

5.1    Consideration

34    I do not accept the applicant’s assertions that the respondent has failed to provide full and proper discovery to the extent that it has caught the applicant off guard in the lead up to trial. I am satisfied, based on the references provided by the respondent, that the applicant should have been, and had the opportunity to be, sufficiently apprised of the matters now being claimed as new well before the trial date.

35    The applicant’s claims that it was unaware of material and information previously filed suggests, instead a failure on its part to adequately prepare for the trial. This unpreparedness has left the applicant struggling to address information that it should have anticipated had the information previously been reviewed. In light of the applicant’s lack of readiness, which has necessitated the rescheduling of the trial to a date currently unknown, I am of the view that the applicant should bear the respondent’s costs associated with this delay and thrown away by reason of the vacation of the trial date. This outcome is not the result of any alleged failure on the part of the respondent but rather the consequence of the applicant’s own shortcomings in adequately reviewing the discovered documents and preparing its case in a timely manner.

36    The Court’s resources have been unnecessarily expended in managing the resulting delay, further underscoring the need for the applicant to bear the respondent’s costs incurred.

37    Further, in the lead up to the trial, the applicant shifted its focus in seeking to issue subpoenas against the Chief Commissioner of Victoria Police and Mr Ross in an attempt to adduce character evidence regarding the credibility of Mr D.A. Hocking, who has made four affidavits in this proceeding. Not accepting my original refusal to issue on the basis of irrelevance, the applicant continued to seek leave before a Registrar, and then to review the Registrar’s refusal. This pursuit was a baseless and hopeless endeavour, particularly given that the reasons and submissions provided by the applicant in support of these subpoenas were irrelevant to the matters pleaded in the case.

38    The issues regarding the respondent’s discovery were again raised at a case management hearing on 6 February 2025. At the hearing, the applicant’s counsel made bare assertions in oral submissions about documents the applicant claimed had not been previously discovered, both in the lay and expert evidence. The primary focus of these submissions was on the expert evidence as the applicant pressed for information alleged to be given to the respondent’s experts, which was not discovered to the applicant. The applicant asserted this information was essential for it to formulate its case regarding the extent of damages suffered as a consequence of the respondent’s conduct.

39    Regarding the expert evidence, the applicant contends that the respondent’s experts created reports based on data which was not made available to the applicant’s own experts. At this point, it is worth noting the provisions of the Court’s Expert Evidence Practice Note (GPN-EXPT), specifically, [5.2]–[5.3] which provide the following:

5. Contents of an Expert's Report and Related Material

…

5.2 In addition, the contents of such a report must also comply with r 23.13 of the Federal Court Rules. Given that the requirements of that rule significantly overlap with the requirements in the Code, an expert, unless otherwise directed by the Court, will be taken to have complied with the requirements of r 23.13 if that expert has complied with the requirements in the Code and has complied with the additional following requirements. The expert shall:

…

(c) sign the report and attach or exhibit to it copies of:

(i) documents that record any instructions given to the expert; and

(ii) documents and other materials that the expert has been instructed to consider.

5.3 Where an expert's report refers to photographs, plans, calculations, analyses, measurements, survey reports or other extrinsic matter, these must be provided to the other parties at the same time as the expert's report.

40    In line with the Court’s expectations as articulated in the GPN-EXPT, the respondent’s counsel maintained that all material referenced by their experts in their reports has been duly discovered. Officers of the Court have a duty not to mislead the Court and, in the absence of explicit evidence to the contrary, counsel’s advice and assurance to the bench should be accepted. Any challenge by the applicant as to the veracity of the respondent’s assurance must be supported with evidence which identifies the basis for the applicant’s claim. In the absence of any evidence, I am left to conclude that these assertions are without foundation. The applicant’s counsel argued that compiling evidence in support of an application for further discovery would entail unnecessary work and additional costs. Nevertheless, if the applicant is seeking further discovery orders, it must demonstrate to the Court that such orders are warranted.

6.    Whether costs should be awarded on an indemnity basis and made payable forthwith

41    As I have determined that the applicant should bear the respondent’s costs of the Application and those thrown away by reason of the vacation of the trial, I will now consider the basis on which these costs should be awarded. While both parties sought for indemnity costs to be awarded against each other, I will only consider the respondent’s written submissions on the award of indemnity costs. I will proceed in this manner for the following reasons.

42    Following the determination of the interlocutory hearing of the Application on 19 November 2024, I foreshadowed an order for indemnity costs against the applicant for the respondent’s costs thrown away, both orally and in the form of the above order, thus putting the applicant on notice of that possibility. Notwithstanding, and rather oddly, the applicant appears to have misunderstood this notice, and made submissions that the applicant should be entitled to its costs thrown away by reason of the vacation of the trial, and that these should be paid by the respondent on an indemnity basis. The applicant has not made submissions addressing why the costs it may be ordered to pay should not be on an indemnity basis or made payable forthwith. Having determined that the applicant is required to pay the respondent’s costs thrown away, it is unnecessary to dwell upon the applicant’s submissions pertaining to the respondent being made to pay the applicant’s costs on an indemnity basis.

43    I will now set out the respondent’s position on indemnity costs.

44    Even if it is accepted that the Hocking Affidavit contains evidence of new material not previously available to the applicant, which the respondent strenuously denies, the respondent argues that the applicant has failed to explain why its contemplation of further amendments to its pleadings have only been foreshadowed in the week before the commencement of the hearing and not, shortly after receipt of the Hocking Affidavit which was filed and served on the applicant’s solicitors on 30 September 2024.

45    The respondent additionally maintains that in the applicant’s bid to issue subpoenas, the applicant made baseless allegations, that a director of the respondent had engaged in fraudulent conduct. Arguments premised on these supposedly baseless allegations were not only irrelevant to any issue between the parties, and as such a waste of time, they are also scandalous and made without any apparent proper basis. As noted above, this is a trade mark infringement proceeding, with related allegations of misleading or deceptive conduct and passing off, and no pleaded allegation of fraud.

46    The applicant’s poor conduct has not only been confined to the events leading up to trial. The respondent contends that from the outset, the applicant has caused delays in this proceeding and increased the costs incurred by the respondent. In support of this position, the respondent outlines the following matters:

(1)    The pleadings initially filed by the applicant were objectionable and incomplete and the respondent made a request for particulars by correspondence and then formally in June 2021. The applicant did not respond. The applicant proposed an amended pleading in October 2021. This document failed to remedy the defects identified by the respondent within the original pleading and the respondent did not consent to leave to file the amended document. The applicant made a formal application for leave to file an amended statement of claim on 15 December 2021.

(2)    No amended statement of claim was provided and a fresh application seeking leave to file an amended statement of claim was made by the applicant in April 2022. This application was dismissed by Registrar Luxton, with orders made for the applicant to pay the respondent’s costs of and incidental to the April 2022 application.

(3)    The applicant made a further application to amend its statement of claim on 19 August 2022. This application was heard on 10 March 2023 and dismissed. The applicant was ordered to pay the respondent’s costs of and incidental to the 19 August 2022 application.

(4)    On 4 May 2023, the applicant filed, without leave, an amended statement of claim. On 23 May 2023, Registrar Luxton made orders granting leave to the filing of the amended statement of claim and ordered the applicant to pay the respondent’s costs thrown away by reason of the amendments.

(5)    On 4 September 2023, the applicant advised the respondent that it wished to abandon aspects of its claim, thereby making further amendments to its pleading. The respondent asked the applicant to provide an amended pleading setting out the claim now sought to be pursued. The applicant refused to provide any amended form of pleading.

(6)    On 30 April 2024, the Court ordered that the applicant file and serve a further amended statement of claim which reflected the applicant’s case as described by their correspondence on 4 September 2023.

(7)    The applicant filed its (current) further amended statement of claim on 4 May 2024 and at the hearing on 19 November 2024, indicated that it was contemplating further amending its claim.

6.1    Consideration

47    It is well settled that the Court has a wide discretion in awarding costs in proceedings. I have recently summarised the common law principles governing this discretion, including the award of indemnity costs, in Directed Electronics OE Pty Ltd v Isuzu Australia Limited (No 3) [2024] FCA 1413 at [37]–[43] and I adopt those principles herein.

6.1.1    Indemnity costs

48    The common law principles dictate that, in order for indemnity costs to be awarded against the applicant here, it must have acted in a manner so egregious and unreasonable that it caused some irreparable element of unfair prejudice to the respondent: Graham Barclay Oysters Pty Ltd v Ryan (No 2) [2000] FCA 1220 at [13] (per Lee, Lindgren and Kiefel JJ).

49    I consider that the applicant’s pursuit of unwarranted interlocutory applications seeking the issuance of irrelevant subpoenas and reagitating discovery issues has unnecessarily complicated litigation and thus, unduly prolonged the proceeding with groundless contentions: LFDB v SM (No 2) [2017] FCAFC 207 at [7] (per Besanko, Jagot and Lee JJ).

50    Allowing this proceeding to continue as it has without indemnifying the respondent — who has not contributed to the delay — for its costs in relation to the Application and costs thrown away by reason of the vacation of the trial would, in my view, result in an irreparable element of unfair prejudice to the respondent. This prolonged delay has placed an unjust burden on the respondent, who has been compelled to bear the financial and procedural consequences of a matter that it has had no hand in prolonging.

51    The respondent submits, and I accept, that the applicant has provided no sensible reason for why it was not prepared to commence the trial in December 2024. The applicant has also failed to adequately explain why it needs to yet again amend its pleadings and only appears to have sought to explore this option so close to the commencement of the trial.

52    Given the (at the time) impending trial, the respondent naturally spent a significant amount of time and money and expended significant resources in preparing for trial. All of this work is now wasted given that the trial of the matter is now indefinitely delayed, and the applicant has foreshadowed its intention to amend its claim yet again, which, if granted leave to do so, would lead to the fourth iteration of the document.

6.1.2    Costs payable forthwith

53    The standard disposition under the Federal Court Rules 2011 (Cth) regarding taxation for costs of interlocutory applications provides:

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.

54    The twin policy underpinning the intention of r 40.13 is set out in Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International BV (No 5) [2018] FCA 19, where Perram J explained at [8] that:

… the Court should avoid exposing the parties to the perils of multiple taxation proceedings (Vasyli v AOL International Pty Ltd [1996] FCA 804) and should keep in mind that subsequent events in the litigation may generate costs orders going in the opposite direction and in respect of which set-offs may ultimately be available (Bailey v Beagle Management Pty Ltd [2001] FCA 60; (2001) 105 FCR 136 at 145 [37]). 

55    Notwithstanding, I consider that a departure from the default position is justified in this instance, given that the interests of justice necessitate such a course. As formulated by Nicholas J in Lanzer v Australian Broadcasting Corporation (No 2) [2021] FCA 1321 at [17]:

[i]t is not necessary to support or justify the costs decision in this case by reference to any “usual rule”. Every case will depend on its facts… justice requires that costs of the interlocutory application follow the event in this case.

56    The applicant has a history of failing to comply with orders, filing and withdrawing interlocutory applications and repeatedly amending its claim. The applicant has repeatedly failed to comply with timelines set by the Court, failed to properly plead its case, repeatedly sought to amend its claims and pursued unmeritorious interlocutory applications (for example, by seeking orders to dispense with confidentiality undertakings or seeking the issue of plainly irrelevant subpoenas). Each of these actions has had the (wholly foreseeable) effect of delaying the resolution of issues between the parties.

57    The respondent has indicated that the costs it has incurred to date are significant. Without an order for the costs to be made payable forthwith, the respondent will continue to carry the burden of these costs orders while it waits for the proceeding to be heard, which now is delayed indefinitely. The applicant should not be permitted to gain any advantage by reason of its failure to properly and promptly prosecute its case and the respondent should not have to bear the burden of the applicant’s failings.

58    It remains unclear whether the applicant’s lack of preparedness for trial stems from deliberate strategy or is the result of poor time management. Regardless, such conduct is not tolerated by the Court, particularly when it undermines the principles embodied in s 37M of the Federal Court of Australia Act 1976 (Cth).

7.    Conclusion

59    I will make an order requiring the applicant to pay the respondent’s costs of the Application and the costs thrown away by reason of the vacation of the trial on an indemnity basis. Further, I will also make orders that 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.

Associate:

Dated:    7 February 2025