Federal Court of Australia
Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd (Trustee), in the matter of Amazonia IP Holdings Pty Ltd (No 5) [2025] FCA 965
File number: | QUD 578 of 2023 |
Judgment of: | WHEATLEY J |
Date of judgment: | 15 August 2025 |
Catchwords: | PRACTICE AND PROCEDURE – Costs – Where most of the Respondents’ amended concise statement was struck out as an abuse of process – Successful party’s application for indemnity costs – Whether indemnity costs appropriate – Indemnity costs ordered. |
Legislation: | Federal Court of Australia Act 1976 (Cth) ss 37M, 37N, 43 Federal Court Rules 2011 (Cth) rr 40.01, 40.02, 40.03, 40.04, 40.13 |
Cases cited: | Azaria Family Day Care Pty Ltd v Secretary, Department of Education and Training [2018] FCA 1640 Barrett Property Group Ltd v Metricon Homes Pty Ltd (No 2) [2007] FCA 1823 Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; [2019] HCA 29 Birketu Pty Ltd v Atanaskovic (2025) 99 ALJR 321; [2025] HCA 2 Cachia v Hanes (1994) 179 CLR 403; [1994] HCA 14 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 DHP19 v Secretary of the Department of Health (No 2) [2019] FCA 1531 DSE (Holdings) Pty Limited v InterTAN Inc (2004) 51 ACSR 555; [2004] FCA 1251 Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564; [2004] NSWSC 664 Hockey v Fairfax Media Publications Pty Ltd (No. 2) (2015) 237 FCR 127; [2015] FCA 750 Hughes v Western Australia Cricket Association (Inc) [1986] ATPR 40-748; [1986] FCA 465 Impiombato v BHP Group Limited (No 2) [2025] FCAFC 28 James v Commonwealth Bank of Australia (No 2) [2015] FCA 599 Jianshe Southern Pty Ltd v Turnbull Cooktown Pty Ltd (No 2) [2007] FCA 903 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 LFDB v SM (No 2) [2017] FCAFC 207 Malone v B&M Aboriginal Corporation (In Administration) (No 2) (2025) 309 FCR 35; [2025] FCAFC 51 Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Mukiza [2022] FCAFC 105 Morara Pty Ltd v Kingslane Property Investments Pty Ltd (No 2) [2022] WASC 372 Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd (Trustee), in the matter of Amazonia IP Holdings Pty Ltd (No 3) [2025] FCA 661 Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd (Trustee), in the matter of Amazonia IP Holdings Pty Ltd [2024] FCA 845 Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 Re DG Brims and Sons Pty Ltd (1995) 16 ACSR 559; [1995] QSC 53 Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd (No 2) [2017] FCAFC 158 Seven Network Ltd v News Ltd (2009) 182 FCR 160; [2009] FCAFC 166 Tenser v Quigley [2016] FCAFC 178 Trojan Equity Ltd v CMI Ltd (2011) 87 ACSR 144; [2011] QSC 346 |
Division: | General Division |
Registry: | Queensland |
National Practice Area: | Commercial and Corporations |
Sub-area: | Corporations and Corporate Insolvency |
Number of paragraphs: | 38 |
Date of last submissions: | 20 June 2025 (Applicant) 2 July 2025 (Respondents) |
Date of hearing: | Heard on the papers |
Counsel for the Applicant: | Mr MA Taylor |
Solicitor for the First, Second, Fourth and Fifth Respondents: | Mr J Sarai from Safe Harbour Lawyers |
ORDERS
QUD 578 of 2023 | ||
IN THE MATTER OF AMAZONIA IP HOLDINGS PTY LTD ACN 159 920 877 AND ANOTHER | ||
BETWEEN: | NORDEN HOLDINGS PTY LTD ACN 164 389 100 ATF THE NORDEN FAMILY TRUST Applicant | |
AND: | MARTENS INVESTMENTS PTY LTD ACN 602 144 703 ATF THE DF MARTENS FAMILY TRUST First Respondent DWAYNE FREDERICKS MARTENS Second Respondent AMAZONIA IP HOLDINGS PTY LTD ACN 159 920 877 (and others named in the Schedule) Fourth Respondent |
order made by: | WHEATLEY J |
DATE OF ORDER: | 15 August 2025 |
THE COURT ORDERS THAT:
1. The First and Second Respondents pay the Applicant’s costs of and incidental to the strike-out application (Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd (Trustee), in the matter of Amazonia IP Holdings Pty Ltd (No 3) [2025] FCA 661) on an indemnity basis, such costs to be taxed if not agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
WHEATLEY J:
INTRODUCTION
1 On 19 June 2025, I delivered the following judgment, Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd (Trustee), in the matter of Amazonia IP Holdings Pty Ltd (No 3) [2025] FCA 661 (Strike-out Judgment) on the Applicant’s interlocutory application to seek to strike-out certain parts of the Respondents’ amended concise statement (RCS) in response to the Applicant’s amended concise statement (ACS). The effect of the orders made was that almost all of the parts of the RCS which were sought to be struck-out, were struck out (Orders). The underlying basis of striking out those paragraphs was that they sought to relitigate facts and findings already determined (and as such that constituted an abuse of process) in the Separate Question Judgment: Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd (Trustee), in the matter of Amazonia IP Holdings Pty Ltd [2024] FCA 845, Needham J.
2 The Applicant submits it was entirely successful in its application, and given the basis upon which it was successful, seeks indemnity costs.
3 For the purposes of this judgment, unless otherwise indicated, I shall refer to the First, Second, Fourth and Fifth Respondents as the Respondents. This judgment does not concern the Sixth Respondent.
4 The Respondents submit that while the strike-out application was determined in the Applicant’s favour, the appropriate costs order is (in a cascading order of preference):
(a) costs reserved;
(b) costs in the proceedings; or
(c) the Applicant be awarded its costs on a party and party basis only.
5 For the reasons given below, I am satisfied that the appropriate order as to costs is that the First and Second Respondents pay the Applicant’s costs of and incidental to the Strike-out Judgment on an indemnity basis, such costs to be taxed, if not agreed.
BACKGROUND
6 On 1 August 2024, after a hearing on 24 July 2024, her Honour Justice Needham delivered the Separate Question Judgment, on the following Separate Question:
Were the Applicant’s shares in the Fourth and Fifth Respondents validly transferred to the First respondent on or about 27 June 2023?
No.
7 There was no appeal from the Separate Question Judgment. Subsequent to that, the parties amended their concise statements.
8 Relevantly, the Respondents’ RCS was filed on 17 March 2025. The Applicant lodged an application to strike-out various parts of the RCS on 1 April 2025.
9 That strike-out application was heard on 28 April 2025 and the Orders were made on 19 June 2025. The balance of this judgment assumes a familiarity with the Strike-out Judgment. On this basis, it is unnecessary to repeat any further matters of background canvassed in the Strike-out Judgment.
APPLICANT’S SUBMISSIONS
10 The Applicant submits that as it was entirely successful in seeking to strike-out the identified parts of the RCS, on the basis that the Respondents were wrongfully seeking to relitigate the Separate Question, this is a matter where it is appropriate to order costs on the indemnity basis.
11 With reliance on Re DG Brims and Sons Pty Ltd (1995) 16 ACSR 559; [1995] QSC 53 at 591-592, Byrne J and Morara Pty Ltd v Kingslane Property Investments Pty Ltd (No 2) [2022] WASC 372 at [74], Hill J, the Applicant submitted that the costs should be ordered against the First and Second Respondents only. In the context of this proceeding, it effectively being a shareholder dispute, it was submitted that it would generally be oppressive for the company (or companies), being the Third and Fourth Respondents, to expend funds on the proceedings.
12 Further, by reference to Seven Network Ltd v News Ltd (2009) 182 FCR 160; [2009] FCAFC 166 at [1102], Dowsett and Lander JJ and Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 at 231, Sheppard J, the Applicant submitted that this was an appropriate case where, pursuant to r 40.02 of the Federal Court Rules 2011 (Cth) (FCR), costs on an indemnity basis should be ordered. This was on the basis that had the Respondents been properly advised, they would have known that there was no chance of success in relation to relitigating the matters the subject of the strike-out application, which were determined in the Separate Question Judgment. The reasoning and the findings of fact and law, it is submitted, were clearly articulated by Needham J. The Applicant observes that the same solicitors and counsel have been engaged for the Respondents.
RESPONDENTS’ SUBMISSIONS
13 The Respondents refer to the broad discretion conferred by s 43 of the Federal Court of Australia Act 1976 (Cth) (FCA) (also with reference to Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [67], McHugh J and Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 at 543–544, Mason CJ) and submitted that the discretion conferred by that provision is guided by Pt 40 of the FCR, particularly noting rr 40.01, 40.03 and 40.04.
14 The Respondents submit that the costs of this interlocutory application should either be reserved or made costs in the cause, because:
(a) the application turned on arguable issues of law and procedure and while parts were struck-out, it was not on the basis that such matters were scandalous, frivolous or manifestly untenable;
(b) the dispute is ongoing, and the Respondents will be seeking leave to further amend. As such, related issues may be revisited;
(c) the strike-out application did not give rise to an “event” in the relevant sense (Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564; [2004] NSWSC 664, Austin J);
(d) the Respondents did not act unreasonably, oppressively or in abuse of process, but rather advanced a tenable position in good faith. The Court’s decision to strike-out part of the RCS was to prevent abuse of the process;
(e) the Respondents’ conduct in defending the strike-out application does not warrant a deviation from the general rule under r 40.01 of the FCR.
15 The Respondents further submitted that deciding costs for each interlocutory application can fragment the proceedings and result in an inconsistent approach. It was submitted that reserving the costs would allow the Court to consider the entire context of the case, including the final judgment. This, it was submitted, would assist in determining the question of costs. It was added that deciding costs comprehensively at the end of the proceedings is also more efficient.
16 The Respondents also submitted that courts have consistently held that even where a pleading is struck-out, that does not always result in that party having costs awarded against it or on an indemnity basis. Although it can be accepted that even where a pleading is struck-out indemnity costs does not always follow, as a matter of course, no authority was provided to support the position that such a course was appropriate in the circumstances of this case.
17 Finally, but only in the alternative, the Respondents submitted that if costs are to be awarded, they should only be on the usual party and party basis in accordance with r 40.01 of the FCR.
CONSIDERATION
Legal Principles – Costs
18 Section 43 of the FCA provides the Court with a “broad and ample” discretionary power to award costs: DSE (Holdings) Pty Limited v InterTAN Inc (2004) 51 ACSR 555; [2004] FCA 1251 at [14], Allsop J; Tenser v Quigley [2016] FCAFC 178 at [26], Nicholas, Katzmann and Markovic JJ. The power “must be exercised judicially, not arbitrary or capriciously or on grounds unconnected to the litigation” but having regard to the relevant principles and justice of the particular circumstances of the case involved: Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Mukiza [2022] FCAFC 105 at [4], Markovic, Thawley and Cheeseman JJ. The Court must take “into account any failure by a party to comply with the overarching purpose of the civil procedure provisions”, being to “facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible”: s 37N(4) and s 37M(1) of the FCA Act; LFDB v SM (No 2) [2017] FCAFC 207 at [7], Besanko, Jagot and Lee JJ; also see Australian Competition and Consumer Commission (ACCC) v Colgate-Palmolive Pty Ltd (No 5) (2021) 151 ACSR 26; [2021] FCA 246 at [6]-[9], Wigney J.
19 With reference to s 43 of the FCA and Oshlack (among other cases), the Full Court in Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd (No 2) [2017] FCAFC 158 at [9]-[11], Greenwood, Rares and Moshinsky JJ summarised the principles as follows:
9 Section 43(3)(e) of the Federal Court of Australia Act 1976 (Cth) provides that an award of costs may be made in favour of, or against, a party whether or not that party is successful in the proceeding. The approach usually taken is that costs follow the outcome of an appeal: see Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 327 ALR 192 at [6] per French CJ, Kiefel, Nettle and Gordon JJ; see also Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61 at [303]; Oshlack v Richmond River Council (1998) 193 CLR 72 at [66]-[68].
10 In Queensland North Australia Pty Ltd v Takeovers Panel (No 2) (2015) 236 FCR 370, Dowsett, Middleton and Gilmour JJ, after referring to Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 and State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174, said at [11] that these decisions treat the success or failure of the relevant party as being the starting point in consideration of the question of costs, but contemplate at least three distinct categories of situation in which a successful party might be deprived of costs, or even ordered to pay the costs of the other side. These were identified as follows:
“One such category is where the applicant has been only partially successful in that it has not obtained all of the relief sought. The second category is where a party has succeeded in obtaining the relief sought, but has not succeeded on all bases (factual or legal) upon which it sought such relief. Of course, it is possible that a particular outcome will fall into both categories. A third category involves consideration of the successful party’s conduct of the case.”
11 After referring to the decision of Finkelstein and Gordon JJ in Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107, Dowsett, Middleton and Gilmour JJ in Queensland North Australia then said at [18]:
[Section 43 of the Federal Court of Australia Act] does not mention costs following the event. In Ruddock, Bowen Investments and Sportsbet, the Court proceeded on the basis that ordinarily, the successful party may reasonably expect to receive its costs, whether that outcome be described as costs following the “event” or otherwise. The question of costs is within the Court’s discretion. As we have said, relevant factors include the extent of a party’s success, the extent of its success or failure on individual issues and its conduct of the proceedings.
20 Usually, but not by way of a rigid rule, costs follow the event, such that the discretion to award costs is exercised in favour of a successful party: Malone v B&M Aboriginal Corporation (In Administration) (No 2) (2025) 309 FCR 35; [2025] FCAFC 51 at [6], O’Bryan, Halley and Horan JJ. A successful litigant will usually receive their costs, in proportion to their degree of success, which can result in a successful party being deprived of costs on issues failed upon or ordered to pay some of the costs of an unsuccessful party, on that issues approach: Hughes v Western Australia Cricket Association (Inc) [1986] ATPR 40-748; [1986] FCA 465 at 48,136, Toohey J; Hockey v Fairfax Media Publications Pty Ltd (No. 2) (2015) 237 FCR 127; [2015] FCA 750 at [37], White J; Tenser at [27]. However, the mere fact that a court does not accept all of a successful party’s arguments on costs does not necessarily make it appropriate to apportion costs on an issues basis: Impiombato v BHP Group Limited (No 2) [2025] FCAFC 28 at [13], Beach and O’Bryan JJ.
21 Costs are compensatory in nature, not punitive: Latoudis at 543, 563 and 567; Seven Network at [1099]; Hockey at [37]; Tenser at [27]. Costs are usually awarded by way of partial indemnity for professional costs actually incurred, they are not intended to be a full and comprehensive amount of compensation for any loss suffered by the litigation: Cachia v Hanes (1994) 179 CLR 403; [1994] HCA 14 at 410-411, Mason CJ, Brennan, Deane, Dawson and McHugh JJ; Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; [2019] HCA 29 at [22], Kiefel CJ, Bell, Keane and Gordon JJ; Birketu Pty Ltd v Atanaskovic (2025) 99 ALJR 321; [2025] HCA 2 at [14] and [17], Gageler CJ, Gordon, Edelman, Gleeson and Beech-Jones JJ.
22 The ordinary position, as is also reflected in r 40.01 of the FCR, is costs on a party and party basis. The discretion to depart from that ordinary position requires some special or unusual feature or that the justice of the case requires such a departure: Seven Network at [1102]; Colgate at [8]; Cussons at 230-231. The categories where the Court will depart from the ordinary position are not closed: Seven Network at [1102]; Jianshe Southern Pty Ltd v Turnbull Cooktown Pty Ltd (No 2) [2007] FCA 903 at [32]. Various categories were identified in Cussons at 233-234, the principles of which were distilled in Barrett Property Group Ltd v Metricon Homes Pty Ltd (No 2) [2007] FCA 1823 at [4], as follows:
• the making of allegations of fraud knowing them to be false, and the making of irrelevant allegations of fraud;
• evidence of particular misconduct that causes loss of time to the Court and to other parties;
• the commencement or continuation of proceedings for an ulterior motive;
• wilful disregard of known facts or clearly established law;
• the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and
• an imprudent refusal of an offer to compromise.
23 Dowestt and Lander JJ (with whom Manfield J relevantly agreed at [1] and [67]) in Seven Network at [1102] described the exercise of the discretion to depart from the usual position as follows:
1102 Usually costs are ordered on a party and party basis but if there is “some special or unusual feature in the case to justify the Court exercising its discretion” costs may be ordered on some other basis: Preston v Preston [1982] 1 All ER 41 at 58. There must, however, be some justification to depart from the ordinary rule. The discretion to depart from an order for party and party costs will not be exercised unless there is some special or unusual feature or the justice of the case so requires: Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727. The categories of case in which it might be appropriate to do so are not closed: Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225. An applicant who should have known that his or her proceeding was foredoomed to failure could be obliged to pay costs on an indemnity basis: Smolle v Australia and New Zealand Banking Group Ltd (No 2) [2007] FCA 1967. A clearly hopeless proceeding may mean that the unsuccessful applicant should be subjected to an order for indemnity costs. An applicant who persists in prosecuting a proceeding without regard to the evidentiary difficulties in the case may be called upon to pay costs on some basis other than the usual basis: Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685. Specific examples of cases which might attract the exercise of the discretion to award indemnity costs were given by Sheppard J in Colgate-Palmolive Company v Cussons Pty Limited 46 FCR at 233.
24 In Morningstar at [177], after hearing four interlocutory applications, Austin J determined that the costs of those application be costs in the cause. There was partial success by both sides in relation to those applications. However, it is apparent that Austin J ordered that the costs of the motion in the Federal Court be assessed and paid forthwith (at [176] and [178] and order (4)(a)).
25 Relevantly, Austin J observed as follows at [170]-[173]:
170 The Morningstar interests submit that as the Federal Court proceeding is at an end, the time has come for the costs of that proceeding to be assessed and paid. Alternatively, if the court takes the view that the Federal Court proceeding has, in effect, merged into the Supreme Court proceeding in which the same issues are raised, and those issues cannot be said to have been determined, the Morningstar interests urged the court to exercise its discretion under Part 52A rule 9 to order that the relevant costs be assessed and paid forthwith.
171 The circumstances in which the court should make such an order under Part 52A rule 9 were considered by Barrett J in Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1, at [10]. His Honour cited the observation of the Court of Appeal of New South Wales in Horrobin v Australia & New Zealand Banking Group Ltd (unreported, 6 June 1997, per Priestley JA) that an order will be made if the costs relate to a discrete aspect of the litigation which is “sufficiently self-contained and detached or detachable from the proceedings yet to be heard, whether between the same or associated parties, as to make it seem just for an actual payment to be made in the meantime”. These observations were subsequently applied by Sackville J in Australian Agricultural Co Ltd v AMP Life Ltd [2003] FCA 1134. For both Barrett J and Sackville J it was a relevant consideration that the final determination of the proceeding would be likely to take a considerable period of time.
172 I do not accept the first alternative submission of the Morningstar interests, that an order for immediate assessment and payment is appropriate simply because the Federal Court proceeding has come to an end. The issues between the parties in the Federal Court proceeding are continued in the cross-claim in the proceeding in this court, which is substantially identical with the Federal Court claim. If what had been resolved were simply a step along the way to the final resolution of the proceeding, I would not make the order that the Morningstar interests seek.
173 However, in my opinion, the costs of the abuse of process motion are sufficiently self-contained and detached from the remainder of the proceeding that it is appropriate for such an order to be made in this case. As the Morningstar interests submitted, that application has been disposed of and will play no further part in the proceeding. It arose as a procedural challenge to the mechanism that had been adopted to bring all aspects of the dispute before a single court, and it failed. The process which it challenged has now been completed, at all aspects of the dispute are in the one court.
Costs of the Strike-out Judgment
26 The Respondents quite properly accept that the strike-out application was determined in the Applicant’s favour. There is no doubt that is correct. Usually, a successful party will, as an exercise of the Court’s discretion, be awarded its costs.
27 In so far as the Respondents submitted that the exercise of the discretion as to the ordering of costs is “guided” by Pt 40 of the FCR, it is not entirely clear what was meant by the word “guided”. This submission was not developed and it was made without reference to any authority which stated that the exercise of the judicial discretion is “guided” by Pt 40 of the FCR. If it is submitted, as it appears to be, that Pt 40 acts as some sort of fetter on the discretion, I do not accept that submission. Although the discretion is not unconfined, it is a “broad and ample” discretion to be judicially exercised, in relation to awarding costs, on the basis of the principles as set out above under the heading “Legal principles – Costs”.
28 The Respondents submitted that the strike-out application did not give rise to an “event” in the relevant sense, with reference to Morningstar. This appears to be based on the interlocutory nature of the application and that it did not finally determine the proceedings. Although it can be accepted that the strike-out application did not finally determine the proceedings, I do not accept that this means it is not an appropriate matter for the awarding of costs. This is because, as was observed in Sandvik at [11], whether that outcome can be described as “costs following the “event” ” or otherwise, the usual position is that a successful party may reasonably expect its costs. Further, from Morningstar at [171], an order for costs will usually be made if it relates to a discrete aspect of the litigation which is sufficiently self-contained and detached from the proceedings yet to be heard. Both of these observations are relevant and applicable to the strike-out application. The Applicant sought to strike-out particular parts of the RCS. The RCS was amended and filed after the Separate Question Judgment. The particular parts of the RCS sought to be struck-out were on the basis that those parts sought to relitigate matters which were determined in the Separate Question Judgment. After considering the Separate Question Judgment and the RCS, in detail, I accepted the Applicant’s submissions and struck-out almost all of the particular parts of the RCS challenged by the Applicant. This aspect of the litigation is sufficiently self-contained and detached from the final hearing. Irrespective of whether the Respondents or the Applicant are ultimately successful at the final hearing, it will not be on the basis of the matters struck-out from the RCS. Those issues have already been determined in the Separate Question Judgment.
29 The Applicant was successful on the strike-out application. It would usually be entitled to its costs of that application. In this regard, it is also relevant to note the terms of r 40.04 of the FCR. Relevantly, that rule provides the “default position”: James v Commonwealth Bank of Australia (No 2) [2015] FCA 599 at [20], Katzmann J; Azaria Family Day Care Pty Ltd v Secretary, Department of Education and Training [2018] FCA 1640 at [56], Wheelahan J. However, it only operates where no order for costs of an interlocutory application is made: DHP19 v Secretary of the Department of Health (No 2) [2019] FCA 1531 at [4], Thawley J.
30 As identified in Sandvik at [10], there can be circumstances whereby a successful party might be deprived of its costs. Neither of the first two matters identified in Sandvik at [10] apply. The Applicant was almost wholly successful on all bases and obtained the relief sought, being to strike-out those parts of the RCS. The Respondents accept that the strike-out application was determined in the Applicant’s favour. In relation to the third category identified in Sandvik at [10], there is no disentitling conduct of the Applicant which would be relevant to deprive the Applicant from its costs of the strike-out application. Certainly, the Respondents did not seek to make submissions that there was such conduct by the Applicant.
31 For these reasons, I am not persuaded that the costs of the strike-out application should be reserved or be costs in the proceedings. I am satisfied that the Applicant is entitled to its costs of the strike-out application.
32 It is then to determine the basis of those costs and from which party or parties the costs should be payable.
33 In the alternative, the Respondents submitted that should costs be awarded, it should be on the usual basis of party and party. The Respondents submitted that the position they advanced was not unreasonable, untenable or as a result of conduct to warrant a departure from that usual position. Further, the Respondents sought to argue that they did not act in abuse of process, but that the Strike-out Judgment was to prevent an abuse of process. This submission was also not developed to explain this suggested distinction. I do not accept this submission, for the following reasons. At [28] of the Strike-out Judgment, I set out the applicable principles regarding when an attempt to relitigate may constitute an abuse of process. After considering the Separate Question Judgment (Strike-out Judgment at [40]-[52]) and what was determined in the Separate Question Judgment (Strike-out Judgment at [53]-[58]), I rejected the submissions and distinction sought to be raised by the Respondents. At [60] of the Strike-out Judgment, I held that the parties were bound by the judicial determination of those issues, including the finding that there was no agreement, which was final and binding on the parties. Furthermore, I held at [65], [69], [75], [80], [83], [86]-[87] and [89] that the Respondents were seeking to relitigate matters that were necessary and were determined in the Separate Question Judgment. In addition, I held that the approach taken by the Respondents in the challenged parts of the RCS was to invite the Court to make inconsistent findings with those made in the Separate Question Judgment. At [90], I expressly observed that this was a recognised category of an abuse of process.
34 To depart from the usual position that costs be awarded on a party and party basis, some special or unusual feature is necessary. It is trite to observe that indemnity costs are not granted merely for the asking. The categories of case where those special or unusual features have been accepted, although noting that such categories are not closed, include the wilful disregard of known facts, the making of allegations which ought not to have been made and where clearly hopeless matters or matters which, if properly advised, should have known would have had no chance of success. Any or all of these categories are applicable in this case. As explained in the Strike-out Judgment, the Respondents sought to relitigate matters which were the subject of the Separate Question Judgment. Certainly, any properly advised litigant would have understood that position. As such matters were sought to be relitigated, seeking to advance such contentions by way of the RCS and then seeking to defend such pleadings by contesting the strike-out application had no chance of success. On this basis, I do not accept that the Respondents’ position was reasonable or seeking to advance a tenable position.
35 As such, I am satisfied that the circumstances of this case, do provide that special or unusual feature to make an award of costs on an indemnity basis appropriate.
36 Finally, the Applicant sought that any costs order should only be made against the First and Second Respondents. The substantive dispute in the proceedings is regarding the shareholdings of or by the Applicant in the Fourth and Fifth Respondents, being the relevant companies. That is a dispute as between the Applicant and the First and Second Respondents (and now also the Sixth Respondent). Matters regarding oppression under the Corporations Act 2001 (Cth) are alleged by the Applicant. As was observed in the Separate Question Judgment, the Applicant owned 30% of the shares in the Fourth and Fifth Respondents and hence was a minority shareholder. The essence of the dispute is a shareholders’ dispute. Although there is no general rule that the companies that are the subject of the shareholders’ dispute should not expend money on this kind of litigation, where it is a shareholders’ dispute between a majority and minority holding, it seems contrary to the spirit of that quasi partnership to pay the expense of the litigation out of that general fund, being the company: DG Brims at 591-592 and Trojan Equity Ltd v CMI Ltd (2011) 87 ACSR 144; [2011] QSC 346 at [25]-[28], McMurdo J (cited in Morara at [75]). The Respondents advanced no submissions against the Applicant’s position that if costs were awarded, they should be awarded only against the First and Second Respondents.
37 In the particular circumstances of this case and given the nature of the dispute involved in the proceedings, I am satisfied that it would not be appropriate to order that the costs payable on the strike-out application to the Applicant should also be borne by the Fourth and Fifth Respondents. It is the First and Second Respondents, being the parties relevant to the shareholder dispute, who should bear the costs of the application.
38 Finally, usually, pursuant to r 40.13 of the FCR, the costs awarded on an interlocutory application must not be taxed until the proceeding is finalised. No submissions were made by either the Applicant or the Respondents as to why the usual position in this regard should not apply. The matter is currently listed for trial commencing 8 December 2025. Although this may have been the basis as to why no application for the costs to be taxed and payable immediately was made, it is unnecessary to speculate, as no application or submission in this regard was made. As such, the usual position in accordance with r 40.13 will apply.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheatley. |
Associate:
Dated: 15 August 2025
SCHEDULE OF PARTIES
QUD 578 of 2023 | |
Respondents | |
Fifth Respondent: | AMAZONIA GROUP PTY LTD ACN 600 432 997 |
Sixth Respondent: | WESLEY ALAN MARTENS |
Seventh Respondent: | TEASE WINIFRED MARTENS |