Federal Court of Australia

Stillwater Pastoral Company Pty Ltd v Stanwell Corporation Ltd (No 3) [2025] FCA 1433

ORDERS

THE COURT ORDERS THAT:

1.    The Applicant’s interlocutory application filed on 18 September 2025 be dismissed.

2.    The Applicant pay the Respondents’ costs of the application, to be taxed if not agreed.

3.    The Applicant may, by no later than 4.00pm on 25 November 2025, file any further material in respect of the lump-sum costs assessment.

4.    The lump-sum costs assessment be listed for hearing for two days on 1 and 2 December 2025.

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

REASONS FOR JUDGMENT

SARAH C DERRINGTON J:

1    Following judgment in the Initial Trial of this matter delivered on 4 December 2024 (Stillwater Pastoral Company Pty Ltd v Stanwell Corporation Ltd [2024] FCA 1382) and the delivery of reasons determining three questions relating to the costs of the Initial Trial (Stillwater Pastoral Company Pty Ltd v Stanwell Corporation Ltd (No 2) [2025] FCA 316 (Stillwater (No 2))), I made orders on 7 April 2025 for the assessment of the respondents’ costs to be determined on a lump-sum basis in accordance with section 4 of the Court’s Costs Practice Note (GPN-Costs). Timetabling orders were made subsequently with the matter to be listed for hearing not before 11 November 2025.

2    In accordance with those timetabling orders, Stanwell Corporation Ltd and CS Energy Ltd, the respondents, filed their respective Costs Summaries on 13 June 2025 (Affidavit of Kathryn Elizabeth Finlayson (Finlayson Costs Affidavit) and Affidavit of Elizabeth Kaye Poulos (Poulos Costs Affidavit)). On 10 July 2025, the solicitors for Stillwater Pastoral Company Pty Ltd wrote to the respondents’ respective solicitors requesting by 18 July 2025 provision of the source materials verifying the costs and disbursements claimed, including but not limited to: (a) timesheet invoices; (b) counsel fee records; (c) the costs assessors report; (d) disbursement invoices; and (e) any other relevant information forming the basis of the Costs Summary (emphasis added) (together, Source Documents).

3    Neither respondent acceded to that request and in each case cited the terms of GPN-Costs, which provides, relevantly:

Material in Support

4.10     Unless the Court otherwise directs, no formal application for a lump-sum costs order is required. However, in cases where a lump-sum costs procedure is to take place, the Costs Applicant should file an affidavit in support of the lump-sum claim ("Costs Summary") in accordance with the timetable set by the judge. The Costs Summary should succinctly address the relevant matters set out in Part B of "Annexure A - Guide for Preparing a Costs Summary" and must also verify the matters set out in Part A of Annexure A.

4.11     The Costs Summary must be clear, concise and direct and not resemble a bill of costs in taxable form, nor should it contain submissions on the law. The intention of the lump-sum costs procedure is to streamline and expedite the determination or resolution of the quantum of costs question and not to replicate the taxation process.

4.12     Unless leave is given by the Court in advance of filing, the Costs Summary must not exceed 5 pages in length (omitting formal parts) or, in large or complex cases, no more than 10 pages. The Costs Applicant is not required to exhibit to the Costs Summary the source material verifying the costs and disbursements claimed. However, such material must be available at the costs hearing.

Material in Response

4.13     The Costs Respondent may file an affidavit responding to the matters raised in the Costs Summary ("Costs Response") in accordance with the timetable set by the judge.

4.14     Any Costs Response must be clear, concise and direct and briefly summarise the categories of any disputes arising in respect of the Costs Summary. The summary should not resemble formal costs objections (as prepared for a taxation of costs) nor contain submissions on the law. The Costs Response should make clear which of the costs issues arising from the Costs Summary are in dispute and which are not, and should not exceed 4 pages in length (omitting formal parts) or, in large or complex cases, no more than 8 pages.

(Emphasis added.)

4    A further request was made by Stillwater to the respondents on 21 July 2025, which was again refused by CS Energy on 23 July 2025, and by Stanwell on 25 July 2025.

5    On 15 September 2025, Stillwater filed two affidavits by costs expert, Christopher John Grisenti addressing the respondents’ Costs Summaries: the Stanwell Costs Response and the CSE Costs Response. In both, Mr Grisenti opined that, apart from agreeing that each respondent was entitled to claim input tax credits, he had “not been provided with the source material referenced” in the respective affidavits to which the Costs Summaries were annexed and so “cannot provide an independent opinion on … the quantification of the fair and reasonable costs payable pursuant to the 7 April 2025 Orders”.

6    On 18 September 2025, Stillwater filed an interlocutory application seeking inter alia orders requiring each respondent, subject to certain undertakings, to produce the Source Documents prior to the Costs Hearing.

7    Following a hearing on 13 November 2025, I made Orders dismissing the interlocutory application and listing the Costs Hearing before a Registrar of the Court and me for two days commencing on 1 December 2025. These are my Reasons for those Orders.

Background summary

8    Stillwater, on behalf of a class of electricity consumers, prosecuted an Initial Trial in this matter of nine Common Questions directed primarily at determining whether certain conduct alleged to have been engaged in by Stanwell and CS Energy contravened s 46 of the Competition and Consumer Act 2010 (Cth) (CCA). Judgment in the Initial Trial was delivered after seven hearing weeks and found, inter alia, that the alleged contraventions were not established. The Initial Trial occurred against a background of some 16 case management and/or interlocutory hearings between 8 March 2021 and the commencement of the trial on 3 June 2024.

9    In Stillwater (No 2), Stillwater submitted that independent advice had been sought about the quantum of the claim, which advice indicated it could be in the vicinity of $600 million. The matter was hard-fought from the outset. Stanwell’s disclosed documents alone exceed 6,000. Five experts were engaged, who between them produced 13 reports together with a digital visualisation tool “NEM-vis”. As is apparent from the Costs Summaries, numerous lawyers, barristers and solicitors worked on the case for Stanwell and CS Energy. Offers of compromise were made by each of the respondents 10 days before the commencement of the Initial Trial. At that time, Stanwell estimated its costs incurred to date to be “in excess of $12M”; CS Energy estimated its costs incurred to date to be “in excess of $17,000,000”. Stanwell expected it would spend “in excess of $5M” on the Initial Trial; CS Energy’s estimate was “approximately $4 million”: Stillwater (No 2) at [23]. Stillwater’s litigation spend, as reported by the third-party litigation funder, LCM, in its “Half Year Results Presentation 2025” on 18 March 2025, deposed to in the Affidavit of Elizabeth Kaye Poulos dated 29 October 2025 (Sixteenth Poulos Affidavit) at [26], was $38 million.

10    Stillwater has to date provided $8.05 million in security in respect of each respondent’s costs of the Initial Trial in the form of Deeds of Indemnity from AmTrust Europe Limited and, for each respondent, a bank guarantee or payment into Court of $50,000 to secure any costs necessary to enforce the security: Sixteenth Poulos Affidavit at [27].

The basis for the application

11    Stillwater contended that it required the Source Documents prior to the Costs Hearing to afford it “a proper opportunity to prepare a reasonably informed Costs Response, and … for the Court to reach a logical, fair and reasonable approximation of recoverable costs, even on a broad-brush basis” (emphasis in original). It submitted that such a course presented no undue burden to the respondents because they would be required to make the Source Documents available at the Costs Hearing in any event.

12    This submission was, in part at least, based on an assumption that the costs consultants who had assisted each of the respondents with the preparation of their Costs Summaries must have had access to the Source Documents in order to prepare their reports: Stanwell Costs Response at [28]-[29]; CSE Costs Response at [28]. Neither the Finlayson Costs Affidavit nor the Poulos Costs Affidavit deposed to any expert report being prepared for the purposes of the Stanwell and CS Energy Costs Summaries. It is mere supposition on the part of Mr Grisenti that Ms Rosati and Ms Walker had access to the same documents that he claims are necessary in order for him to prepare a Costs Response. In any event, it cannot be said that there is a “denial of procedural fairness” in these circumstances. As is contemplated by GPN-Costs, the Source Documents must be available to be produced at the Costs Hearing, at which time Stillwater will be able to interrogate them should the Court consider it necessary.

13    As to that course, Stillwater submitted that “Neither Stillwater nor the Court could possibly consider, digest and respond adequately to the Source Documents justifying claimed costs of [$38 million] within the limited time available at the hearing”. The Court was therefore urged to adopt the approach of McKerracher J in Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 7) [2018] FCA 1217 and order production of the Source Documents in advance of the Costs Hearing.

The alleged deficiencies in the Costs Summaries

14    As has already been noted, Stillwater relied on the expert opinion of Mr Grisenti contained in the Stanwell Costs Response and the CSE Costs Response to support the application. Mr Grisenti has had no prior involvement with the proceeding. Unlike the solicitors on the record for Stanwell and CS Energy, who have been involved in the proceeding since its inception, the solicitor on the record for Stillwater did not file any affidavit in response to the respondents’ Costs Summaries. That is surprising. The solicitor on the record for Stillwater might be supposed to be best placed to form at least a preliminary view as to the reasonableness of the various categories of costs claimed by the respondents given his intimate involvement across the entire proceeding. Whilst I accept that the assessment of costs properly incurred is not a comparative exercise, the question of whether the combined sum of approximately $37 million incurred by Stanwell and CS Energy is out of all proportion with the $38 million spent by Stillwater is a matter of some relevance and something on which the solicitor on the record, or Stillwater itself, might have been expected to comment when challenging the reasonableness of the respondents’ costs claims.

15    As to both Stanwell and CS Energy, Mr Grisenti challenged the methodology used by the respondents in preparing the Costs Summaries. In the Finlayson Costs Affidavit, Ms Finlayson deposes to all the relevant matters required by GPN-Costs. She further deposes to having summarised the time spent by MinterEllison lawyers in relation to the proceeding by “category of work”. Similarly, in the Poulos Costs Affidavit, Ms Poulos deposes to all the relevant matters required by GPN-Costs and to having summarised the Herbert Smith Freehills Kramer (HSF Kramer) fees incurred by CS Energy by reference to 21 “phase codes”, which accorded with the various phases of the proceeding.

16    Mr Grisenti opined that, in his experience, the breakdown of work required by Part B, [1(f)] of Annexure A to GPN-Costs does not contemplate separating work into phases of the litigation, but rather into (Stanwell Costs Response at [30]; CSE Costs Response at [29]):

types of work such as:

a.    Attendances;

b.    Research;

c.    Drafting correspondence;

d.    Reading correspondence;

e.    Drafting documents;

f.    Reading documents;

g.    Attending trial; and

h.    Clerical attendances.

17    He further opined (Stanwell Costs Response at [31]; CSE Costs Response at [30]):

By separating the costs into these types of categories, the Court can then consider the total time spent on certain tasks. It then allows moderations to be made to each of the separate categories based on a sampling of the file, and to take into account the Scale. By only separating costs to phases, it is impossible to make reductions to apply non-hourly rate-based Scale items. Further, in my opinion it is a less considered view of how costs were incurred, and what is reasonably recoverable.

18    Mr Grisenti did not make any attempt to grapple with the methodology adopted by the respondents. Instead, he explained why he could not offer any opinion on the quantification of the fair and reasonable costs claimed. This approach was surprising given that Stanwell’s Costs Summary, at [17], set out the proportion of time spent, and the professional costs incurred, on each of the categories identified by Mr Grisenti. Further, Annexure A to Stanwell’s written submissions for this hearing provides a comprehensive response to each of Mr Grisenti’s complaints about a lack of information and direct his attention to the relevant content of Stanwell’s Costs Summary. Similarly, Table 8 of the CSE Costs Summary sets out the proportion of fees incurred (as a percentage of overall fees claimed) in respect of, amongst other things, pleadings, security for costs applications and case management hearings (which would necessarily involve drafting documents), client liaison and liaising with the State (which could reasonably be presumed to embrace attendances and reading and drafting correspondence), and attendance at mediation and at trial. The total fees charged have also been broken down by both individual fee earner and by rank and experience: CSE Costs Summary at Tables 5, 6, 11 and 12.

19    Mr Grisenti was also critical of being unable, at this stage of the process, to examine counsel’s fee slips. One reason for this criticism was to ensure there is a sufficient description of the work done “so that, for example, fees are not similar to those noted by the Honourable Justice John Dixon in Bolitho v Banksia Securities Ltd (No 18) (remitter) [2021] VSC 666 [492]”. This is an extraordinary overreach by Mr Grisenti. Bolitho concerned claims of deliberate, fraudulent invoicing by counsel. In circumstances where very senior litigation practitioners have verified counsel’s fees in accordance with GPN-Costs, the implication that there may have been fraudulent invoicing by counsel is to be roundly condemned.

20    I observe that Mr Grisenti did consider he had sufficient information to provide a response in respect of the manner in which Stanwell had assessed its costs thrown away: Stanwell Costs Response at [35]-[42].

Principles relevant to a lump-sum costs assessment

21    The principles relevant to the assessment of a lump-sum costs order are not really in dispute. As McKerracher J observed in Mineralogy at [49]ff, “the cases make abundantly clear, the purpose of the power to make lump sum costs orders is to avoid the expense, delay and aggravation involved in protracted litigation arising out of a taxation: see Paciocco (at [15]) and Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 per von Doussa J (at 120)”.

22    The Full Court reaffirmed the principles in Jadwan Pty Ltd v Rae & Partners (A Firm) [2023] FCAFC 182 at [15] and [19]. The Full Court reiterated that the Court does not apply a process similar to a taxation of costs, but a much broader brush assessment. Of course, the Court must be satisfied that any lump-sum costs order is made on the basis of a logical, fair and reasonable estimate of costs and should be astute to avoid both overstating the recoverable costs and underestimating the appropriate account by applying some arbitrary discount to the amounts claimed: Beach Petroleum at 123. The onus remains on the party seeking its costs to demonstrate that there is a logical, fair and reasonable basis for the order.

23    It is uncontroversial that the power to make an order for lump-sum costs is appropriate for application in a complex case such as this one, and it would be completely pointless if the evidence produced in a lump-sum process was the same as the evidence required in a taxation process. The object of avoiding the need to adduce all that evidence is to save the time and cost to the parties and the public’s resource – the Court.

24    A similar, albeit not exactly analogous, point was raised before Murphy J in Pinnacle Runway Pty Ltd v Triangl Ltd [2022] FCA 1246. In that case, the costs summaries had not yet been filed and the relevant source materials, including tax invoices, itemised narrations and receipts, were sought by the costs respondent pre-emptively in order to verify the apportionment of costs and disbursements incurred between two proceedings. In dismissing that application as premature, his Honour (at [17]) cited the observations of Foster J in Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2014] FCA 346 at [17(e)] that the Court should take a broad brush approach and should avoid in effect carrying out a taxation under the guise of performing a lump-sum costs assessment. His Honour also re-affirmed (at [18]) that GPN-Costs “essentially leaves it to the Court or the Registrar to decide whether it is appropriate to order production of the source materials in order to be satisfied in relation to any disputed matters”.

25    Here, it remains incumbent on Stillwater to identify the categories of costs which it disputes. It has not done so. The question of what, if any, Source Documents are required to be produced is one for the Costs Hearing.

Disposition

26    The approach taken by Stillwater in this interlocutory application is without merit. Not only is it contrary to the Practice Note, but it would also lead to further costs and delay in circumstances where the adequacy of its security is becoming of increasing concern to the respondents on the basis of public announcements by the litigation funder as to its financial position: Sixteenth Poulos Affidavit, Annexure EKP17.

27    The application does not reflect an approach to the resolution of the dispute at a cost that is proportionate to the importance and complexity of the matters in dispute, contrary to Stillwater’s obligations as a party to a civil proceeding before the Court as imposed by ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth).

28    The circumstances in which McKerracher J ordered source materials to be made available prior to the lump-sum costs hearing in Mineralogy were wholly different from those now before me. He had not been the trial judge, nor the case management judge. The reasons for my retaining control of the lump-sum process are explained in Stillwater (No 2).

29    I do not accept that Stillwater does not have available to it sufficient information to prepare an appropriate Costs Response to each of the Costs Summaries prepared by the respondents. For that reason, the matter is set down for hearing on 1 and 2 December 2025, at which hearing I will be assisted by a Registrar, to determine an appropriate lump-sum award in respect of each of the respondents’ claims. Stillwater may file any additional material in response to those claims by 4pm on 25 November 2025.

30    The interlocutory application must be dismissed with costs.

Associate:

Dated:    19 November 2025