Federal Court of Australia

Frigger v Banning [2025] FCA 535

ORDERS

THE COURT ORDERS THAT:

1.    By 20 June 2025, the applicants provide security for the first, second and fourth respondents’ costs of the application for leave to appeal in the amount of $11,000 by payment into court or by the provision of an unconditional bank guarantee from an Australian trading bank in a form approved by a registrar of the Court.

2.    These proceedings be stayed pending the provision of security.

3.    The applicants pay the first, second and fourth respondents’ costs of the interlocutory application for security for costs filed on 24 January 2025.

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

REASONS FOR JUDGMENT

MCDONALD J:

Introduction

1    The applicants, Angela Frigger and Hartmut Frigger, have applied for leave to appeal against an interlocutory judgment of Colvin J, Frigger v Banning [2024] FCA 1207 (Security Judgment). In the Security Judgment, Colvin J determined that the Friggers should be required to provide security for costs, in the amount of $10,000, in connection with their application for the Full Court of the Federal Court to review a taxation of costs.

2    The first, second and fourth respondents have applied for an order that the Friggers give security for their costs of defending the application for leave to appeal. This judgment addresses that application. The third respondent, Ann Marion Campbell-Smith in her capacity as executor of the estate of Donald Campbell-Smith, has not appeared and, at a case management hearing held on 4 February 2025, Mrs Frigger accepted that the third respondent was named in error. It is not clear whether the third respondent has been served with the proceedings but, in any event, she has not taken an active role. It will be convenient to refer to the first, second and fourth respondents collectively as “the respondents”.

3    For the reasons that follow, I have decided that the Friggers should be required to provide security for the respondents’ costs of defending their application for leave to appeal against the Security Judgment. The amount of security will be fixed at $11,000.

Background

4    In the Security Judgment, Colvin J described previous litigation by the Friggers in the following terms (at [7]-[13]):

Mrs and Mr Frigger are prodigious litigants in this and other courts over two decades. In most instances, they have conducted the proceedings as litigants in person. Much of it has involved the respondents in some way.

The genesis for the litigation conducted by Mrs and Mr Frigger was described by the Court of Appeal in Western Australia in Frigger v Professional Services of Australia Pty Ltd [No 2] [2016] WASCA 68 and Frigger v Professional Services of Australia Pty Ltd [2022] WASCA 119. The latter is a decision in which security for costs was ordered to be paid by Mrs and Mr Frigger in respect of an appeal brought by them against some of the respondents and others (including counsel for the respondents in these proceedings).

In 2018, sequestration orders were made in respect of the estates of Mrs and Mr Frigger: Kitay, in the matter of Frigger (No 2) [2018] FCA 1032. Those estates are still being administered by their trustee in bankruptcy. However, they have been discharged from bankruptcy.

The bankruptcy of Mrs and Mr Frigger arose from their failure to pay costs in earlier court proceedings in an amount of about $61,000. The petition was supported by other creditors who claimed to have unpaid costs orders against Mrs and Mr Frigger. One of the matters advanced in opposition to the application for sequestration orders (and not accepted) was alleged fraud in the conduct of the taxation fixing the amount of costs due pursuant to those orders.

There have been very substantial proceedings heard and determined by this Court as to the extent of the property being administered by the trustee in bankruptcy of the estates of Mrs and Mr Frigger: Frigger v Trenfield (No 10) [2021] FCA 1500; Frigger v Trenfield (Application for Stay Pending Appeal) [2021] FCA 1605; Frigger v Trenfield (No 3) [2023] FCAFC 49 and Frigger v Trenfield (Application for Release from Undertaking) [2023] FCA 1284.

Mrs and Mr Frigger are now pursuing proceedings for the removal of the trustee in bankruptcy in which they claim that the trustee is not entitled to remuneration by reason of the arrangements made with her employer as to fees and as to remuneration for administration of the estates: Frigger v Trenfield (Application to Amend) [2024] FCA 508.

The above brief summary is by no means comprehensive as to the extent of proceedings brought by Mrs and Mr Frigger in this and other courts.

5    In action no WAD 607 of 2015, the Friggers were ordered to pay the costs of the respondents. A registrar of the Court estimated that the taxed costs would be $106,987.09. The Friggers objected to that estimate. Accordingly, in July 2024, a taxation of costs was conducted, and the total costs were taxed at $160,098.41.

6    In their review of all 598 items in the amended bill of costs, the Friggers sought to raise what Colvin J described (at [2] of the Security Judgment) as “an army of arguments in an effort to resist paying any costs”. The arguments noted by Colvin J included that:

(a)    the respondents were not permitted to attend the taxation;

(b)    the respondents’ response to the grounds of objection should be removed from the Court file;

(c)    the retainer agreements of the respondents’ lawyers were either not in existence or were void;

(d)    the respondents’ counsel had entered into impermissible direct retainers and had taken steps to conceal that fact;

(e)    a charge obtained from one of the respondents to secure payment of legal fees was a sham for the purpose of defeating that respondent’s creditors; and

(f)    by filing notices indicating that they would abide by court orders, or by failing to file a notice of appearance, in proceedings in the Supreme Court of Western Australia, the respondents had made admissions that entitled the Friggers to recover any amounts assessed under costs orders in action no WAD 607 of 2015 as damages in the Supreme Court proceedings.

7    The Friggers have indicated that, in the taxation review before the Full Court, they wish to advance an argument to the effect that the costs which were the subject of the taxation are not recoverable from them because, they contend, the respondents’ solicitor and counsel had either no retainer or no valid retainer in respect of those costs. The Friggers also say that they made an argument to similar effect before Colvin J, in opposition to the order for security for costs which his Honour made in the Security Judgment, but that he did not address that argument. That is a central ground on which they seek to appeal against the Security Judgment.

8    The Friggers similarly contend, on the present application, that the respondents’ solicitor and counsel have either no retainer or no valid retainer in relation to the costs of the present application for leave to appeal and the proposed appeal. The Friggers contend that the respondents’ application for security for costs should be refused because it has not been established that any costs of the respondents would be recoverable against the Friggers in the event that the respondents were successful in resisting the application for leave to appeal or were successful on the appeal.

Principles relevant to an application for security for costs on an application for leave to appeal

9    Section 56 of the Federal Court of Australia Act 1976 (Cth) relevantly empowers the Court to order an applicant in a proceeding in the Court to give security for the payment of costs that may be awarded against them of such amount, at such time and in such manner and form as the Court directs. The purpose served by an order for security for costs is “to ensure that a successful respondent to a claim will have a fund available within the jurisdiction of the Court against which the respondent, if successful in defence, can enforce a judgment for costs in the respondent’s favour”: Federal Commissioner of Taxation v Vasiliades (2016) 344 ALR 558; [2016] FCAFC 170 at 579 [72] (Kenny and Edelman JJ).

10    The power of the Court in relation to security for costs is broad and unfettered. The outcome in each case must depend on the circumstances of the particular case: Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 at 4; Madgwick v Kelly (2013) 212 FCR 1; [2013] FCAFC 61 at 4 [6]. The discretion is to be exercised having regard to whether the interests of justice would be best served by making or refusing the order: Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405 at 411.

11    If the applicant in a proceeding is an individual (or, as here, two individuals), it will usually be necessary for the respondent who seeks security for costs to point to something beyond a concern that a costs order will not be met due to the applicant’s impecuniosity: Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [32]-[33]. However, the position is different when considering an application for security for the costs of an appeal, because an appellant has already had the benefit of a decision of a court. Consequently, on an appeal, “[i]f there is a substantial risk that, if successful, the respondent will be deprived of costs, that outcome would clearly be unjust”: Dye v Commonwealth Securities Ltd [2012] FCA 992 at [28]; see also Tait v Bindal People [2002] FCA 322 at [2]-[4]; Tran v Commonwealth (2009) 111 ALD 111; [2009] FCA 921 at 112-13 [4]-[6].

12    The same approach applies when considering an application for security for costs in relation to an application for leave to appeal: Croker v Deputy Registrar of the High Court of Australia [2003] FCA 628; Patdith Services Pty Ltd v Mitronics Corporation Pty Ltd [2016] FCA 1315 (Patdith) at [25].

Procedural history and failure of the respondents to file further evidence and submissions

13    On 24 January 2025, the respondents filed an affidavit sworn by their solicitor in support of their interlocutory application for security for costs. The affidavit explained the basis on which security was sought, including by reference to affidavit material that had previously been relied on by the respondents in the proceedings before Colvin J.

14    On 4 February 2025, I made the following orders:

1.    By 18 March 2025, the applicants refile the affidavit of Hartmut Hubert Josef Frigger dated 6 January 2025, with corrections.

…

3.    By 25 March 2025, the first, second and fourth respondents file and serve any further affidavit evidence on which they intend to rely in connection with their application for security for costs.

4.    By 11 April 2025, the applicants file and serve any affidavit evidence on which they intend to rely in connection with the application for security for costs.

5.    By 17 April 2025, the first, second and fourth respondents file and serve written submissions in support of their application for security for costs.

6.    By 2 May 2025, the applicants file and serve written submissions in relation to the respondents’ application for security for costs.

7.    By 9 May 2025, the first, second and fourth respondents file and serve any written submissions in reply.

15    In an affidavit affirmed by Mr Frigger on 6 January 2025, he had referred to two particular documents as intended annexures, but had incorrectly annexed two different documents. The reason for making order 1 was to enable the intended annexures to Mr Frigger’s affidavit to be put before the Court. On 18 March 2025, Mrs Frigger filed an affidavit affirmed by her in which she identified and annexed the documents which Mr Frigger had failed to annex to his affidavit of 6 January 2025. This was not strictly in compliance with the terms of order 1 (which contemplated the re-filing of Mr Frigger’s affidavit with the correct documents annexed), but was directed to, and was adequate to achieve, the purpose underlying the making of that order.

16    The respondents did not file any further affidavit evidence by 25 March 2025. In not doing so, they were not in breach of any order, as order 3 only required the respondents to file further evidence if there was any further evidence on which they intended to rely. The Friggers did not file any affidavit evidence by 11 April 2025. In not doing so, they also were not in breach of any order.

17    The respondents did not file any written submissions on the application for security for costs by 17 April 2025. In failing to do so, they were in breach of order 5. The respondents did not communicate with the Court at that time to seek a variation of the orders made on 4 February 2025 or to explain why they did not file written submissions as required by order 5.

18    On 27 April 2025, the Friggers filed written submissions. In those submissions, the Friggers contend that the respondents’ application for security for costs should be dismissed, including by reason of the failure of the respondents to file affidavits and written submissions in accordance with the Court’s orders. Those written submissions also address the reasons why the Friggers contend that the respondents’ application for security for costs should be refused on its merits.

19    On 2 May 2025, the respondents filed written submissions in response to the written submissions filed by the Friggers. At the outset of those submissions, the respondents state:

In this case the Respondents were not in a position to know or understand what evidence or arguments were to be put up against their application for security for costs until after the filing of the submissions of the Applicants dated 27 April 2025 because the affidavit sworn 18 March 2025 raises nothing of relevance to the retainer in this appeal.

20    The Friggers submit that the failure of the respondents to file written submissions in support of their application for security for costs by 17 April 2025 is fatal to the application and that the application should be dismissed. I do not accept this submission. Although it is unsatisfactory that the respondents did not file written submissions in accordance with the orders made on 4 February 2025 or seek a variation of the orders, the basis on which security for costs is sought is sufficiently apparent from the affidavit of their solicitor filed on 23 January 2025. Further, for reasons explained below, I consider that it is in the interests of justice that the Friggers be required to provide security for the costs of their application for leave to appeal.

21    The affidavit filed by the respondents on 24 January 2025 in support of the application for security for costs makes it clear that they have always sought to rely upon the affidavit material that was relied on in support of the application for security for costs made by them in action no WAD 607 of 2015, which led to the Security Judgment, and to rely on the findings of Colvin J in the Security Judgment. The Friggers were aware of that evidence and were aware that it was being relied on by the respondents. It is unduly technical to claim that that material is not before the Court when it is material that was filed in support of the very decision from which the Friggers now seek leave to appeal. At the case management hearing on 4 February 2025, no suggestion was raised by the Friggers that the approach taken by the respondents, of referring to material filed in the proceedings before Colvin J, was unfair or unacceptable to them. Order 3 of the orders made on 4 February 2025, allowing the respondents an opportunity to file further affidavit evidence in support of their application for security for costs, was not made so that material that had already been filed in the proceedings before Colvin J could be re-filed in the proceedings before me; it was to allow the respondents to supplement that evidence if they saw fit to do so.

22    On 6 May 2025, I made an order in chambers which made it clear that certain affidavits relied on by the respondents which had been filed in action no WAD 607 of 2015 would be taken to have been filed in these proceedings and relied on by the respondents in support of their application for security for costs. I also made an order giving the Friggers leave to file, by 20 May 2025, any further written submissions on which they intended to rely, including any submissions in reply to the submissions filed by the respondents on 2 May 2025. Those orders were designed to ensure that it was clear what evidence would be considered on the respondents’ application for security for costs, and to ensure that the Friggers had an opportunity to make submissions in relation to that evidence, as well as in response to the submissions advanced by the respondents. On 20 May 2025, the Friggers filed further written submissions.

The Friggers should be required to provide security for costs

The Friggers’ financial position

23    In the Security Judgment, Colvin J said (at [19]-[20]):

It is not suggested by Mrs and Mr Frigger that they lack access to funds to meet an order for security. The affidavit by the solicitor for the respondents sworn in support of the security for costs application deposes that other than funds in the superannuation fund “belonging” to Mrs and Mr Frigger, he is not aware of any assets other than those in the control of a trustee in bankruptcy of the estates of Mrs and Mr Frigger upon which execution could be made for payment of any costs ordered to be paid. This is not disputed by Mrs and Mr Frigger.

Mrs and Mr Frigger have retired. They have access to their superannuation funds. Further, they do not suggest that they could not access funds required to provide security if security was ordered. The difficulty for creditors is in executing against those superannuation funds.

24    The Friggers have not submitted that this finding was wrong, and have not advanced any evidence on the present application to contradict the proposition that they are able to access funds in their superannuation account for the purpose of providing security for costs.

25    To allow the Friggers to prosecute their application for leave to appeal from the Security Judgment without requiring them to provide security for costs would effectively enable them to put the respondents to the cost of defending the application for leave to appeal (and, if leave were granted, the appeal) without any assurance to the respondents that they would be able to recover their costs if they are successful on the application for leave to appeal (or on the appeal).

26    The Friggers submit:

The respondents must do more than simply assert there is reason to believe the Friggers will be unable to pay the respondents[’] costs. The affidavit needs to address the Friggers’ assets and liabilities, income and outgoings.

They submit that the affidavit evidence adduced by the respondents has failed to do this.

27    I do not accept that it is necessary, in every case where an order for security for costs is sought, that the party making the application adduce detailed evidence of the other party’s assets, liabilities, income and outgoings. The evidence adduced by the respondents is that the Friggers have failed to pay costs orders previously made against them in favour of the respondents.

28    The Friggers have been declared bankrupt (and subsequently discharged from bankruptcy) and the evidence is that their trustee in bankruptcy has not yet declared any dividend to creditors, and that the respondents’ solicitor is not aware of any assets of the Friggers that are outside the control of their trustee in bankruptcy upon which execution could be made for payment of any order for costs that might be made on the Friggers’ application for leave to appeal. The evidence of the respondents supports the view that the Friggers have the capacity to pay costs owed by them from their superannuation fund but have refused to do so.

29    The Friggers submit that the assertion of the respondents’ solicitor that he is unaware of any assets against which a costs order could be enforced is “evasive and unsupported”. They submit that the respondents ought to have requested information from the Friggers as to their assets. The evidence of the respondents’ solicitor is simply that he is unaware of any enforceable assets. Given that the Friggers are retired, that they are recently discharged bankrupts, and that the assets of their bankrupt estate are still within the control of their trustee in bankruptcy, there is a sufficient basis to infer, in the absence of clear evidence to the contrary, that the respondents are likely to experience difficulty enforcing any costs orders against the Friggers.

30    The Friggers submit that the assertion of the respondents’ solicitor that their trustee in bankruptcy has not declared a dividend is “misleading”. They submit that the respondents’ solicitor failed to supply tax invoices for the debts he claimed in response to a request from the trustee and that “no dividend is payable to the Respondents because their claims were unsubstantiated and rejected”. The evidence of the respondents’ solicitor is that the trustee in bankruptcy has not yet declared any dividend to creditors, not just that the trustee has not declared dividends to the respondents or the respondents’ solicitor. Consequently, the assets of the Friggers’ bankrupt estates are not available to satisfy any costs order that may be made against them, and it is unclear whether there will be any of those assets remaining after the payment of the costs of the trustee in bankruptcy. I take this aspect of the evidence of the respondents’ solicitor into account on the basis that that is its relevance for present purposes.

31    The Friggers do not deny that they have failed to pay previous costs orders made in favour of the respondents, but they claim that none of the alleged debts arising from previous costs orders are legally enforceable, for various reasons. I do not find it necessary to consider whether any or all of those reasons are correct. Even on the assumption that there are no past costs orders enforceable against the Friggers, other than the costs order that was the subject of the taxation in action no WAD 607 of 2015 (the enforceability of which may depend on arguments to be advanced by the Friggers on the review before the Full Court, should it proceed), I would regard the circumstances as weighing in favour of requiring that the Friggers provide security for the costs of their application for leave to appeal.

32    As Colvin J said in the Security Judgment (at [22]), “the litigation history of Mrs and Mr Frigger supports the concern that the respondents will face considerable difficulty in seeking to recover costs pursuant to any order for costs that might be made in these proceedings”. The same remains true in relation to the application for leave to appeal. I accept that, if an order requiring the provision of security for costs is not made, it is unlikely that the Friggers will pay any adverse costs order that may be made in connection with their application for leave to appeal (or, if leave is granted, the appeal).

33    These considerations support the conclusion that an order that the Friggers provide security for the respondents’ costs of the application for leave to appeal should be made.

Submission that the respondents will have no liability for the fees of their lawyers

34    The Friggers contend that I should not make an order for security for costs on the respondents’ present application unless I am satisfied that the retainers of the respondents’ solicitor and counsel are valid and legally effective. That is because the indemnity principle means that, even if the Friggers were ultimately ordered to pay the respondents’ costs of the application for leave to appeal, the respondents could only recover costs for which they had a liability to their own lawyers: see, eg, Frigger v Professional Services of Australia Pty Ltd (No 6) [2024] FCA 1320 (Professional Services) at [20].

35    There is no direct evidence before me of the terms of any retainer between the respondents and their solicitor in connection with the Friggers’ application for leave to appeal. However, on an application for security for costs, the Court should usually proceed on the basis that a party that is represented in the proceedings will be liable to its lawyers for costs, in the absence of evidence to the contrary. A party seeking security for costs is not required to adduce evidence of the existence and terms of its retainer with its lawyers unless there a sufficient evidential basis to suggest that that is not the case: see Professional Services at [20], [29].

36    The Friggers rely on the following statement of Pritchard J in Hancock Prospecting Pty Ltd v Hancock (No 3) [2016] WASC 423 at [59]:

The presumption as to the existence of a retainer (which arises when a solicitor acts for a client with the client’s knowledge and assent) may be displaced by evidence inconsistent with the existence of a retainer. In that event, the evidentiary onus will shift to the client to demonstrate the terms of the retainer with his or her solicitors.

37    I accept that the Friggers did raise the issue of whether the respondents have a liability to pay their lawyers’ fees at the case management hearing held on 4 February 2025. However, the mere fact that the issue was raised, or that an assertion was made that the respondents’ lawyers did not or might not have a valid retainer, is not sufficient to require the respondents to adduce evidence of their retainer or retainers with their lawyers.

38    The Friggers submit that they have adduced evidence sufficient to displace the presumption that the respondents’ lawyers are acting pursuant to a valid retainer. They submit that the evidence shows that the respondents have no enforceable liability to their own lawyers.

39    In relation to the respondents’ solicitor, the Friggers rely upon a letter from the solicitor addressed to Feutrill J and dated 16 February 2023 in connection with action no WAD 126 of 2022. In relation to this letter, the Friggers submit:

[The respondents’ solicitor] swore he had “not issued invoices” in WAD 607/2015 because he did not wish to incur GST unless assured of payment; all work remains “work-in-progress and no invoices are produced because none have been rendered yet”.

40    I note that the Friggers appear to have relied on a similar argument in Professional Services. The relevant part of the respondents’ solicitor’s letter dated 16 February 2023 was set out in the reasons of Feutrill J in his Honour’s judgment in that case at [26]:

... In the case of the solicitors acting, both this firm, and its predecessor firm Eastwood Sweeney Law, operate on an accrual basis whereby tax is paid on accounts once rendered. Accordingly, all work done in relation [to] that action remains work in progress and no invoices are produced because none have been rendered yet.

41    Accepting that the respondents’ solicitor stated that he had not (presumably as at around 16 February 2023) issued invoices in action no WAD 607 of 2015, that statement is not evidence of the fact that the respondents would incur no liability to their solicitor; at best it would be evidence that any liability for solicitors’ fees remained contingent upon the issue of invoices by the solicitor. The operation of the indemnity principle, even in connection with recovery of costs pursuant to a costs order does not depend on whether an invoice has been rendered: eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (2015) 90 NSWLR 451; [2015] NSWCA 284 at 457-8 [24]-[25] (Basten JA; Beazley P agreeing). The capacity of a party to obtain an order for security for costs certainly does not depend upon the party already being liable for the costs to which the security relates; indeed, in the ordinary course, most costs for which security is sought will be anticipated future costs that will not yet have been incurred.

42    I reject the Friggers’ submission that the letter of 16 February 2023 provides any support for the proposition that the respondents will incur no liability for fees charged by their solicitor in connection with the Friggers’ application for leave to appeal. Nothing in that letter suggests that the respondents’ solicitor is not entitled to charge the respondents for legal costs, or that the respondents would not be liable to pay legal costs, in respect of action no WAD 607 of 2015, let alone in respect of the present application for leave to appeal.

43    The respondents’ solicitor has filed a notice of acting in the present proceedings. There is no evidence to support an inference that he does not have a valid retainer with the respondents for the payment of his fees in the present proceedings. There is no evidence “inconsistent with the existence of a retainer” in respect of the application for leave to appeal. I am satisfied that fees charged to the respondents by their solicitor are likely to be costs of a kind that would be recoverable if the Friggers are unsuccessful on their application for leave to appeal, or on the proposed appeal, and are ordered to pay the respondents’ costs.

44    In relation to the respondents’ counsel, the evidence on which the Friggers rely is a statutory declaration made by the respondents’ counsel on 14 June 2016 in support of a caveat lodged on the same day. The statutory declaration annexes a copy of a Deed of Charge over property in Western Australia, dated 27 May 2016, between the first respondent, Ms Banning, as chargor and the respondents’ counsel as chargee. The statutory declaration, caveat and Deed of Charge are annexed to an unsworn affidavit of Mrs Frigger dated 27 July 2019, which is itself annexed to an affidavit of the respondents’ solicitor dated 13 September 2024 that was sworn in support of the respondents’ application for security for costs before Colvin J, which is in turn annexure HF-5 to the affidavit of Mr Frigger sworn on 6 January 2025 and filed in these proceedings.

45    The Deed of Charge includes a recitation that the respondents’ counsel had “in the capacity of a barrister, provided legal services to [Ms Banning and various related parties] … and, rendered accounts to [Ms Banning] for those services pursuant to written Retainer Agreements dated at various times … which remain unpaid”. The Deed of Charge further recites that Ms Banning agreed to execute the Deed of Charge to secure the repayment of the past and future fees of the respondents’ counsel pursuant to the retainer agreements. In the Deed of Charge, Ms Banning acknowledged her indebtedness (as at 27 May 2016) to the respondents’ counsel.

46    The retainer agreements referred to in the Deed of Charge are retainer agreements that were in existence in 2016 and there is no reason to suppose that any of them is the retainer agreement relevant to the present application for leave to appeal. It may be that the “future fees” that are secured by the Deed of Charge include fees of the respondents’ counsel relating to the present application, but that is not clear. Assuming it remains in force (as to which there is no evidence), the Deed of Charge does not itself demonstrate that the respondents have no liability to pay the fees of the respondents’ counsel in connection with the present application; on the contrary, if anything, the terms of the Deed of Charge suggest that Ms Banning, at least, is likely liable for the payment of those fees.

47    The basis on which the Friggers submit that the Deed of Charge establishes that the respondents have no liability for the legal fees of their counsel in relation to the present application for security for costs is that the Deed of Charge refers to retainer letters entered into directly by the respondents, or at least by Ms Banning, with the respondents’ counsel. As I understand the Friggers’ submission, it is, first, that this supports an inference that the respondents’ counsel has a direct retainer with the respondents (or at least with Ms Banning), and secondly, that any such retainer is void.

48    I accept that the terms of the Deed of Charge suggest that there were, prior to 27 May 2016, certain retainer agreements in existence which were entered into directly by Ms Banning and the respondents’ counsel. Those retainer agreements would not seem to relate to the present application for leave to appeal from the Security Judgment, which was not commenced by the Friggers until 1 November 2024. It is doubtful whether the terms of the Deed of Charge, referring to a retainer agreement that was in effect in 2016, provides a sufficient basis to infer that the respondents’ counsel’s retainer in relation to the Friggers’ application for leave to appeal is a direct retainer with Ms Banning.

49    The Friggers submit that the respondents’ counsel, at the hearing of 4 February 2025, stated that the respondents do not rely on the direct retainer with their counsel in this proceeding. The Friggers submit that this “was effectively an admission that his direct retainer is void and unenforceable”. I do not accept this submission. The only point being made by the respondents’ counsel was that there was no evidence that the direct retainer referred to in the Deed of Charge governed the respondents’ liability for his fees in connection with the present proceedings, and that the evidence of the earlier existence of the direct retainer was therefore irrelevant. To be clear, I have not treated the submission of the respondents’ counsel as positive evidence that he is acting in the present proceeding on the basis of a different retainer.

50    The Friggers submit that “[d]irect retainers are prohibited by WA Bar Association Barristers Conduct Rules, rendering any such agreement void and unenforceable”. In support of this submission, the Friggers rely on a statement found on the website of the Western Australian Bar Association (WABA), which relevantly states as follows:

What is a “Direct Brief”? and Who can Directly Brief?

While barristers are typically engaged by law firms, many corporations, non-legal professionals and government departments and agencies are engaging the Bar directly to great effect. Direct briefing provides the opportunity to increase the speed and cost efficiency with which advice is given and matters are resolved.

A “direct brief” is one from the ultimate client to a barrister without using an external solicitor to do the briefing.

This is an option available to: in-house lawyers; corporations; government departments and agencies; and other professionals such as patent attorneys, accountants, town planners and insolvency practitioners.

Direct briefing is a good option to get advice directly, whether or not the subject matter is litigious. Further, even if the matter is the subject of legal proceedings, in-house counsel with a current practising certificate or government solicitors, can brief a barrister directly to appear and advise. …

51    This statement does not support the conclusion that any retainer between the respondents (or Ms Banning) and the respondents’ counsel is “void and unenforceable”, for the following reasons.

52    First, the statement identifies the concept of a “direct brief” to which it refers as “one from the ultimate client to a barrister without using an external solicitor to do the briefing”. Whatever the respondents’ contractual arrangements may be, it is clear that the respondents’ counsel has been appearing in the proceedings on the instructions of the respondents’ solicitor. This is not a “direct brief” as described on the web page, because the respondents are “using an external solicitor to do the briefing”. There is no evidence to suggest, and no reason to suppose, that the respondents’ counsel will not continue to act on that basis.

53    Secondly, while the respondents’ counsel practises as a barrister in Western Australia, there is no evidence before the Court as to whether he is a member of the WABA. The WABA is a voluntary association and a legal practitioner may practice as a barrister in Western Australia without becoming or remaining a member of the WABA. The rules of the WABA are not in evidence before me.

54    Thirdly, the Friggers have not identified any basis on which it should be concluded that statements on the WABA website have the force of law, or any relevant normative force. At best, the statement relied on may be understood as containing an implicit suggestion that members of the public should not expect to be able to brief a barrister directly in relation to litigation. There is nothing in the statement to suggest that directly briefing a barrister is unlawful or illegal in any sense relevant to the validity or enforceability of costs agreements.

55    Even if it were to be assumed that the respondents’ counsel is a member of the WABA, and even if the rules of the WABA required its members not to enter into retainer agreements directly with clients, that would not lead to the conclusion that a retainer agreement between the respondents’ counsel and his client was unenforceable or void for illegality. It might potentially mean that a member of a voluntary association had acted in a manner that was inconsistent with its rules; the consequences (if any) of any non-compliance with the rules of the WABA would be a matter between the WABA and its members.

56    Fourthly, the legal profession in Western Australia is regulated by the Legal Profession Uniform Law (WA) (being Schedule 1 to the Legal Profession Uniform Law Application Act 2014 (Vic), as applied and modified by the Legal Profession Uniform Law Application Act 2022 (WA)) (Uniform Law). In s 6(1) of the Uniform Law, “barrister” is defined to mean “an Australian legal practitioner whose Australian practising certificate is subject to a condition that the holder is authorised to engage in legal practice as or in the manner of a barrister only”. “Australian legal practitioner” means “an Australian lawyer who holds a current Australian practising certificate”, and “Australian lawyer” means “a person admitted to the Australian legal profession in this jurisdiction or any other jurisdiction”. “Sole practitioner” is defined to mean “an Australian legal practitioner who engages in legal practice on his or her own account”. The definition of “law practice” includes “a sole practitioner”. A person who practises at the bar is a “sole practitioner” and is, therefore a “law practice” for the purposes of the Uniform Law.

57    The Uniform Law contemplates that a law practice may retain another law practice on behalf of a client: see, eg, ss 171(3), 175(1) and (2), 177(2), 180(1)(c). That is the way in which barristers are commonly retained by solicitors. Section 180(1) of the Uniform Law provides:

180    Making costs agreements

(1)    A costs agreement may be made—

(a)     between a client and a law practice retained by the client; or

(b)    between a client and a law practice retained on behalf of the client by another law practice; or

(c)    between a law practice and another law practice that retained that law practice on behalf of a client; or

(d)    between a law practice and an associated third party payer.

58    Section 180(1) of the Uniform Law thus expressly contemplates that a costs agreement may be made directly between a client and a law practice retained by the client (paragraph (a)); between a client and a law practice retained on behalf of the client by another law practice (paragraph (b)); or between two law practices (paragraph (c)). The language of s 180(1) is permissive: costs agreements of these three kinds are consistent with the Uniform Law.

59    So, even if the respondents’ counsel has a direct agreement with Ms Banning in respect of his fees in connection with the Friggers’ application for leave to appeal, it does not follow that it is inconsistent with the legislation that regulates costs agreements in Western Australia. It is not illegal by reason of the fact that it was an agreement entered into between client and barrister, and it is not void for that reason.

60    Fifthly, the relevant professional rules applicable to barristers practising in Western Australia are the Legal Profession Uniform Conduct (Barristers) Rules 2015 (WA). Those rules do not appear to contain a prohibition on barristers entering into costs agreements directly with their clients. Relevantly:

(a)    limits on the practice of barristers are identified in rr 12 and 13, such that, if there were a prohibition on barristers being engaged directly by clients or contracting with clients for the payment of their fees, one would expect it to appear in one or other of those rules;

(b)    r 21 provides that “[n]othing in these Rules shall be taken to oblige a barrister to accept instructions directly from a person who is not a solicitor”, implicitly recognising that, although a barrister is not obliged to accept instructions directly, they may do so, at least in some circumstances;

(c)    the terms of r 22 plainly contemplate that a barrister may “accept instructions directly from a person who is not a solicitor or officer of a government department or agency whose usual duties include engaging lawyers”;

(d)    r 105 provides that a barrister may refuse or return a brief to appear before a court if (among other things) the brief is not offered by a solicitor, the instructing solicitor does not agree to be responsible for payment of the barrister’s fee, or the solicitor does not comply with a request for appropriate attendances by the solicitor, solicitor’s clerk or client representative for certain purposes; and

(e)    the rules contain several express references to costs agreements (see paragraphs (d) and (m) of r 105, and r 106), but no statement that a barrister must not enter into a costs agreement with a client.

61    Even assuming that the respondents’ counsel does have a retainer agreement that was entered into directly with Ms Banning, the Friggers have not established that a direct retainer agreement between the respondents and their counsel would be unenforceable.

62    Finally, the Friggers also submit:

Absent written costs disclosure under s 174 of the Legal Profession Uniform Law (WA), the Respondents “are not liable to pay legal costs until they have been assessed” (s 178). No cost disclosure has been adduced.

63    Section 178 of the Uniform Law is irrelevant to the question of whether the respondents would incur a liability to pay their lawyers’ fees in the sense relevant to an application for security for costs. If there is no written costs disclosure, the respondents would be liable to pay legal costs, in whatever amount was ultimately assessed, but only after they have been assessed: that is the effect of s 178. In any case, I am not prepared to assume, or find, that there is no written costs disclosure merely because the respondents have not adduced it in evidence. An applicant for security for costs is not obliged to produce such evidence.

Merits of the application for leave to appeal and the proposed appeal

64    It is appropriate for the Court to undertake a preliminary assessment of the merits of the relevant claim in considering a security for costs application, where it is practical to do so: Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317; [2003] FCAFC 153 at 375 [252] (Finkelstein J; Branson J agreeing); Burgess v Centrelink (2007) 159 FCR 500; [2007] FCA 595 at 503 [15], 504 [19]. In this case, that means making a preliminary assessment of the strength of the Friggers’ application for leave to appeal against the Security Judgment.

65    One of the factors relevant to the strength of an application for leave to appeal against an interlocutory decision is the merits of the proposed appeal. The Friggers contend that the merits of their proposed appeal are strong and that this weighs in favour of refusing to make an order for security for costs.

66    The central argument which the Friggers seek to advance on their proposed appeal against the Security Judgment is that Colvin J should not have ordered them to provide security because the respondents had not established that their solicitor and counsel were acting pursuant to a valid retainer, and thus had not established that the respondents would actually incur any debt to their lawyers which could be recovered from the Friggers if the respondents obtained an order for costs in their favour. An argument to the same effect has been advanced by the Friggers in response to the respondents’ present application for security for costs, and I have addressed it at [34]-[63] above. Given my conclusions regarding that argument, it seems to me that the Friggers’ proposed appeal enjoys limited prospects of success.

67    Even if the Friggers were able to satisfy the appellate court that Colvin J had misunderstood or overlooked a submission that they made to him (by treating the enforceability of the retainers only as an issue relevant to the merits of the review of the taxation rather than as an issue relevant to the respondents’ application for security for costs), such that it fell to the appellate court to re-exercise the discretion for itself, it seems highly improbable that the appellate court would hold that the retainers relating to the proposed review of the taxation were invalid or unenforceable. Given the strength of the considerations in favour of ordering that the Friggers provide security, it is highly likely that the appellate court would, like Colvin J, require the Friggers to provide security for the respondents’ costs of the taxation review. For these reasons, my impression, based on the material before me, is that it is highly improbable that the Friggers’ proposed appeal from the Security Judgment could or would succeed.

68    Further, there are strong considerations that would weigh against a grant of leave to appeal against the Security Judgment, even if it were assumed that the proposed appeal would enjoy good prospects of success if leave were granted.

69    The Court is generally reticent to grant leave to appeal from interlocutory decisions concerning matters of practice and procedure, including decisions about security for costs: see Oswal v Federal Commissioner of Taxation [2015] FCA 1366 at [33]; Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400. The power to grant leave to appeal is exercised so as to promote the overarching purpose of the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: Federal Court of Australia Act, s 37M(3); Nationwide News Pty Limited v Rush [2018] FCAFC 70 at [2]-[4].

70    The prospect of the Full Court hearing an interlocutory appeal on the question of whether Colvin J erred in the discretionary decision to require the Friggers to provide security for costs for a review of a taxation which would itself be heard by the Full Court is unattractive. Such a course would be inefficient. The Friggers’ proposed appeal from the Security Judgment would not resolve all of the issues which they seek to argue on the review of the taxation. The costs of the application for leave to appeal and an appeal to the Full Court would likely be comparable to the costs of the review of the taxation itself. The amount of security ordered by Colvin J is relatively modest, and there is no evidence that the requirement to provide security would have the effect of preventing the Friggers from prosecuting the review of the taxation. If the Friggers were ultimately successful on the review of the taxation, it is improbable that any adverse costs order would be made against them. The prejudice to them of having to provide the security as ordered by Colvin J is relatively small.

71    Finally, the Friggers submit that the substantive issue of whether the indemnity principle is engaged, which they seek to agitate on their proposed appeal against the Security Judgment, is essentially similar to an issue that arises on the Full Court review of the taxation. This is said to weigh in favour of the grant of leave to appeal. On the contrary, the most efficient way to have that issue resolved by the Full Court (along with the other issue the Friggers raise on the taxation review) was plainly for the Friggers to provide the security that was ordered by Colvin J and to proceed with their Full Court review.

72    These considerations suggest that the prospects of leave to appeal being granted are not strong. I do not regard the merits of the application for leave to appeal, or the proposed appeal, as weighing against requiring the Friggers to provide security for costs.

Conclusions

73    For the reasons I have given, it is appropriate to exercise the discretion to make an order requiring the Friggers to provide security for the respondents’ costs of the Friggers’ application for leave to appeal against the Security Judgment. The respondents should not be required to respond to the Friggers’ application for leave to appeal without costs protection.

74    I am conscious that, if I order that the Friggers provide security for costs on the application for leave to appeal, it is possible that they might then seek leave to appeal against that order, just as they have sought leave to appeal against the orders made by Colvin J in the Security Judgment. This presents the spectre of an endless cycle of orders for security for costs and applications for leave to appeal from orders for security for costs. That is obviously unattractive, but it provides no reason to decline to order that the Friggers provide security for costs where the respondents have applied for security and I have otherwise determined that it is appropriate that it be provided. In circumstances where there are already substantial costs orders standing against the Friggers in favour of the respondents, the respondents should not be required to respond to further applications by the Friggers without an assurance that any further costs orders in their favour will be practically capable of being enforced.

75    I note that the Friggers object to [4] of the affidavit of the respondents’ solicitor filed on 24 January 2025. I make it clear that I have not had regard to the contents of that paragraph.

Quantum of security to be provided

76    The respondents seek an order that security for their costs of the application for leave to appeal be provided in the amount of $23,000. The affidavit of the respondents’ solicitor identifies the actual costs incurred by the respondents to date and explains the basis for his estimate of further costs in relation to the application for leave to appeal and the appeal. The actual and estimated fees include fees relating to the present application for security for costs.

77    In Patdith, Markovic J considered applications seeking orders for security for costs in relation to both an application for leave to appeal and the appeal that would follow should leave be granted. Her Honour said the following in relation to the Court’s power to order security for costs in relation to an appeal for which leave had not yet been granted (at [21]):

… I do not agree that I can make orders in relation to a proceeding not yet commenced. In my view, applications for security in relation to the appeal are premature and the Court does not have power to make such an order in the circumstances of this case. The appropriate time for [respondents to an application for leave to appeal] to seek an order in relation to security for costs of the appeal is once a notice of appeal is filed, should leave be granted.

78    The respondents did not develop any argument in relation to the question of whether the power of the Court to order an applicant for leave to appeal to provide security for costs extends to ordering security for the costs of the potential appeal as well as the application for leave to appeal itself. For the purposes of the present application, I proceed on the basis that the Court, at this stage, should only order that the Friggers provide security for the costs of the application for leave to appeal (including the costs of the present application for security for costs).

79    I accept that the Friggers are highly litigious and that the future course of the proceedings is not predictable. I am satisfied that the estimates of the respondents’ solicitor in relation to the time required to respond to the application for leave to appeal (excluding the costs of any future appeal) appear reasonable. Based on the scale provided for in Schedule 3 of the Federal Court Rules, the relevant estimated costs are $12,740.

80    The Friggers submit that a requirement that they provide security in any amount greater than $3,000 would “effectively terminate” their appeal, and that this would be contrary to the principle that “poverty should be no bar to litigation”. There is no evidence in support of this assertion. The evidence before the Court is that the Friggers are able to access assets in their superannuation fund. Should they not proceed with their application for leave to appeal, that will be due to their decision not to provide security for costs, not poverty.

81    Applying a broad brush, I consider it appropriate to fix the amount of the security at $11,000. The security should be provided by way of payment of money into court or by way of an unconditional bank guarantee, and not merely by way of an undertaking as the Friggers submit; that is the most appropriate way to ensure that any costs order made against the Friggers will be satisfied.

Conclusion

82    I will order that the Friggers provide security for costs in the amount of $11,000. The respondents having been successful on their application for security for costs, which the Friggers opposed, the Friggers should pay the respondents’ costs of that application.

Associate:

Dated:    23 May 2025

SCHEDULE OF PARTIES